Cool is not the word

A lifelong Star Wars fan, Jeff Skolnik sometimes laughs that he has gone over to the 

'Dark Side.’ It is a joke commonplace amongst those who work in the pharmaceutical industry, a sector often treated with as much derision as tobacco manufacture or the arms trade. 

A physician at the Children’s Hospital of Philadelphia, Jeff has also held senior positions at AstraZeneca and Glaxo Smith-Kline, one of the biggest drug companies in the world. His career has not however, been so much about scrabbling to the top of the corporate sector but of trying to find his place in the complicated patchwork of private, public and philanthropic interests that make up medical research in the USA. Three years ago, he left GSK to join a tiny research outfit with a combined workforce of thirty people and he is now vice-president at another Biotech with a similar ‘small is beautiful’ ethos.

The Biotech sector enjoys a rosy image as the ‘counterculture’ of the life-sciences industry so I am interested to find out from Jeff, as an insider, the difference between the myth and the reality. Before we begin, Jeff explains that his opinions are his own, and don’t represent the Pharma or Biotech industries, or that of his current or past companies.  He made me say this, so I guess he is a little bit entrenched in that ‘Dark Side’ after all.

Sitting opposite him in a village coffee shop in Philadelphia, I begin with the  simple question, ‘What is the difference between Pharma and Biotech?’

‘Big Pharma,’ he explains, ‘involves tens of thousands of individuals working for a multinational corporation. Biotechs are  smaller and supposed to be more nimble. Their research is usually at an early phase focusing on a single product which is often not yet on the market.’

There is a more fundamental difference, which is people hear about Biotech and they think of venture capitalism. These companies are often funded by one or two very wealthy individuals wanting to quickly make a lot of money.’

I think it has always been the assumption that Biotech is, cooler is the wrong word, more innovative with their resources because they have less of them.’

People think of Biotechs generating new ideas while Pharma is selling old stuff. But that’s not really true. Plenty of Pharma companies have very robust Research  and Development pipelines. But some of them supplement their R and D by buying out small companies.’

To me one of the quintessential Biotech companies is BioMarin. It’s in the name. It’s based in Marin County, California, a place which has two things for which it is famous, one negative and one positive. The negative one is that it has one of the highest rates of unvaccinated children in the USA; it is located next to San Francisco, the historical epicentre of free thinking ideas. The positive thing is that it is the home of the Skywalker Ranch where George Lucas lives.’

BioMarin generates products for diseases for which there are literally single digit numbers of patients, which is not something a Pfizer or a BMS is going to do. How on earth does a company like BioMarin monetise that? They have an idea. They figure out how to bring it to patients, figure out how to generate revenue and they do it again.’

For some they are heroes because they develop drugs for patients for whom no-one else would generate.’

They are treating diseases for which the answer is far less complicated than for cancer. For diseases like that, if you can supply a missing enzyme, you can cure the disease, and you can charge $450,000 because your drug is literally life -saving. So that’s what they do.’

Companies like BioMarin, he explains, are more likely to apply for the vouchers the federal government offers as incentives for neglected areas of drug development. The US Food and Drug Administration gives priority to a company holding a voucher, which means it can get a product onto the market more quickly. In the world of pharmaceuticals, this can mean significant revenue, particularly as the voucher can  be sold onto another company to apply to another drug. Under the Creating Hope Act, the last voucher sale was for $350 million.

‘Smaller companies are aware of the opportunities a voucher can provide,’ says Jeff. ‘For a big Pharma company, that may be small potatoes but for a small Biotech that would make all the difference. $300 million is a big difference.’

Biotechs are squeezed between tight budgets and a high risk of failure. A start-up may focus on developing a drug from a single molecule and, should the research and development be inconclusive, the company will shutter. I thus ask Jeff what tempted him into this precarious world.

‘Larger companies have struggled with vision, with governance. Why the heck would you spend money on cancer medicine when ulcer medicine is much more profitable?

In a smaller space. If you can convince someone it’s a good idea and you can get funding for it, you can run with it. For me, it has been fundamentally different. I don’t present slides to a governance  body. I get to make decisions.’

In Biotech, you still have to return shareholder value or you don’t exist. We have a choice. We can run out of money and go out of business or we can make medicines that benefit patients’ lives and do it again and again.’

Eventually, I ask him, though do small companies not have to sell up to Pharma? If a Biotech develops a successful drug, does it not need to turn to a major company to manufacture and market it as a commercial product?

‘You don’t have to sell out,’ he says, ‘but at some point you have to scale up. What Big Pharma do best is they commercialise and sell molecules. Biotechs do the R and D better.  At some point, though, if you’re going to sell, by that I mean if you want to get the drug

 to patients, you need to get help, you need to cross over.’

In this world of board room deals, I ask, how can the community have a say so research does not just follow the money, it responds to patient need. Do vouchers make a difference?

‘I am absolutely not convinced the voucher programme has been the answer. There are a couple of successful examples but those drugs might well have been developed anyway.’

He does not show much more enthusiasm for the Race for Children Act that was recently passed by Congress and which places an obligation on companies to research the benefits for children of drugs being developed for adults. His preference, clearly, is for the carrot rather than the stick.

‘Are we  going to hit a company over the head,’ he asks,’ and say you’re going to make a drug whether you like it or not.? Or are we going to give them another shot on a programme with an adult cancer. It won’t generate much money. But rather  than it costing $350 million, we’re going to find a way that the study costs are negligible, regulatory costs are minimal and in return, the company can recoup its outlay.‘

Here, he is moving away from venture capitalism to venture philanthropy, where a charity or public body does not donate money to a research programme, it invests in it, with the proviso the public body gets a return if the project is successful, a return that can be reinvested in more new therapies.

‘For me, it’s all about risk share. It’s my drug. I’ll market it, sell it and make money on it. When I do, I’ll give you your investment back. I’ve argued that’s the best way to do it.’

For Jeff, this is not just about combining the public and the private, it’s about putting together research for adults and children. He talks about Gleevec, the first new agent that was developed for leukaemia, but one that reached adults long before it did children.

‘Why did it take so long to get this into kids?’ he asks. ‘The way we should have approached this from the beginning is that here there are two small opportunities (i.e. one  for adults and one for children); let’s put them together and make one big opportunity. Where there is overlap between the potential of a drug for adults and children, bring the age of entry to the trial down to twelve.’

Jeff and I are both, in fact, members of a working group that aims to do precisely that, make research more age inclusive. When I have presented on the topic I relate how, Chloe, the daughter of a friend was barred from a clinical trial because she was two months short of her eighteenth birthday. When she was old enough, the cancer had progressed to its final stage and soon after she died. One might expect the company that turned Chloe away to be a giant like Pfizer or GSK but that company was in fact BioMarin, a reminder that nothing is simple in the world of the drug industry.

Notes

You can find out more about Creating Hope and the RACE for Children Act from the advocacy group that got them on the statute book, Kids v Cancer.