Bioentrepreneur
Supplementary information to “Company founders: voices of experience” from Bioentrepeneur
(http://www.nature.com/bioent) by Laura DeFrancesco, published online March 2004.
Original interviews conducted and edited in 2003 by De Facto Communications plc, No.1
London Wall Buildings, London Wall, London EC2M 5PG, UK.
Email: info@defacto.com
Web: www.defacto.com
The opinions expressed below are those of the contributors alone, and are not
necessarily those of the companies to which they belong, or those of the writers.
The contributors are:
Dr Mark Brann
Dr Colin Dourish
Professor Vidar Hansson
Professor Adrian Hill
Professor Sir David Lane
Dr Ole Jørgen Marvik
Professor Phillip Sharp
Dr Bruno Tocqué
Dr Greg Winter
Bioentrepreneur
Mark Brann, President and CSO founded ACADIA Pharmaceuticals in 1993 based
on technology for the functional analysis of gene products. Before starting
ACADIA, Dr Brann was a tenured Associate Professor at the University of
Vermont. He also directed a research group at the National Institutes of Health
(NIH). He is an inventor on many U.S. patents involving gene-derived drug targets.
ACADIA’s drug discovery programs are aimed at major diseases, such as
glaucoma, chronic pain, schizophrenia and Alzheimer's disease. The Company's
corporate headquarters and biological research facilities are located in San Diego,
California. Its chemistry research facilities are located in Copenhagen, Denmark.
As CSO, my main drive is the scientific development of the company. I gave up the role
of CEO early on, as it is my belief that being CEO entails a fiscal responsibility that gets
in the way of science. There is a conflict of interest, which in my opinion doesn't work in
the long term.
In terms of how the company started, during my days at NIH in the late 1980s, I was
interested in drug discovery and how genetic technologies could impact on the drug
discovery process. I was developing these technologies and wanted to see them rapidly
applied to drug discovery. I had the opportunity of working in large pharma but felt that
an inherent conservatism in these large organisations would delay bringing the
technology to the discovery process. I believed that starting my own company was the
only viable option.
My first attempt at starting a company was during my time at NIH. We actually
developed technology and drug targets but, in retrospect, I really didn't have the
experience or connections at that time to make the company a success. I was able to
raise some money very quickly from investors but this led to a high level of
accountability. The research had long-term goals and a fast return for investors was not
possible. Also, there were major restrictions on what could be done in the private sector
while still working for the NIH. Ultimately, the venture was undercapitalised.
I went on to work at the University of Vermont where I became Associate Professor of
Psychiatry and Pharmacology. There was a great deal more flexibility in the University
environment. I had the freedom to collaborate with companies, essentially working with
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big pharma, but from the outside. This was the route that would lead to what was to
become ACADIA, but development was gradual and more controlled. We started with
just a few people under the name of Receptor Technologies (R-TEC) a spin-out from the
University. We sold our science and it was profitable. The first patent was filed in 1994
and, in 1995, we started building the company based on revenues from commercial
contracts.
I was able to maintain both my academic and commercial interests at this time and acted
as a consultant to many different companies. I had government grants for university
research and revenues from the business through pharma contacts. We were winning
work from companies such as Procter & Gamble, Allergan, Pfizer, Werner Lambert and
Novo Nordisk, work that more than doubled revenues between 1995 and 1996. I hired
John Barberich as CFO in 1996 who was very knowledgeable about biotech and venture
financing. He and I worked as a team, and he helped me to transform the company into
the venture capital backed drug discovery company that it is today.
In 1997, we raised US$13.5 million and this is when ACADIA Pharmaceuticals formally
came into being. We recruited an executive team with significant big pharma and
biotech experience. I resigned from the University and devoted all my time to ACADIA.
I also stopped my consultancy work.
During our quest for funding, we got a call from a trade group in Denmark interested in
biotech companies. I had connections with Denmark through our work with Novo
Nordisk and with Dr Povl Krogsgaard Larsen, a Danish chemist with whom I had
collaborated on many occasions. We decided to pursue the offer. The first round of
financing included US$7 million from the Danish Development Finance Agency, and
US$6.5 million in equity capital from a syndicate of large Danish Institutional investors.
Part of the deal, however, was to set up in Denmark.
We set up a chemistry research facility in Copenhagen at the same time that we set up
the San Diego site in the US. Working from two vastly separated sites, for a small
company with just 25 people, was very difficult. It was hard even when we had 70
employees, and many would have said the global strategy was a mistake, especially as
Danish involvement initially had a significant negative impact on our US financing
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activities. The Danish investors, on the other hand, were patient, loyal and supportive in
a way that the US investors might not have been. Later we raised much more money
from leading institutional investors in both Europe and the US. Now it really runs
smoothly.
In addition to outstanding investors, Denmark also offered us some local expertise,
which would not have been available in the US. Recruitment of chemists with
pharmaceutical experience has been much easier in Denmark than in California. Povl
Krogsgaard Larsen is now on our scientific advisory board.
Compared to the first venture, the development of ACADIA was gradual – a much safer
strategy. I also had a better, more mature perspective, one that had benefited from my
first experience and working with the process as it developed.
Bioentrepreneur
Dr Colin Dourish is Senior Vice President Research & Chief Scientific Officer at
Vernalis, a biopharmaceutical company with expertise in neuroscience and CNS
medicines. The disease areas on which the company has a focus include
migraine, obesity, Parkinson’s disease, depression and anxiety. Dr Dourish joined
Vernalis in 1999 following the acquisition of Cerebrus, a company he co-founded
in 1995. Previously he worked for Wyeth and Merck Sharp and Dohme. He is
visiting Professor of Psychopharmacology at the University of Durham, visiting
Professor of Neuroscience and Psychological Medicine at Imperial College of
Science Technology and Medicine, and a William Pitt Fellow of Pembroke College
Cambridge.
In 1995, when I was working for Wyeth, the company acquired American Cyanamid and,
as a result, Wyeth had three sites working on CNS research, one in the UK and two in
the US. They decided to amalgamate in the US and the UK research site was closed
down. At that point I made the decision to start Cerebrus with four other ex-Wyeth
colleagues.
The original business plan had a two-part strategy. One part of the plan was to establish
a preclinical contract research business to bring in revenue, which was based around
expertise gained at Wyeth, particularly in models of psychiatric and neurological
disorders. The other part of the business was drug discovery for various CNS disorders,
such as obesity, anxiety, and Parkinson’s disease. With this initial plan, we obtained
funding from VCs, but we only ran the contract business for about 18 months. It was
successful and brought in significant revenue, but as the company grew a conflict of
interest developed between the needs of the contract business and our own drug
discovery and development needs. If we had wanted the contract business to continue, it
would have been necessary to spin it off as a separate company. It was, however,
integral to our own drug discovery operation, so we decided to keep it, but stopped
selling its services.
We didn’t actually take any IP from Wyeth, the projects that we started were based on
our own novel ideas. One idea, involving the role of serotonin 5-HT2C receptors in
feeding and obesity, became the biggest research programme in Cerebrus. Now, with
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Vernalis, we are continuing to develop selective 5-HT2C receptor agonists for obesity in
collaboration with Roche.
My academic and drug discovery research background was very important in securing
funding. VCs are very keen on ideas, IP, and novelty, but they are also interested in
management capabilities. Ideas can go awry and projects may fail, but if you have a
strong management team, it is possible to adapt. I was CEO of Cerebrus for the first
nine months and carried out all the negotiations with VCs to raise the first £2.5 million
investment in 1995. A principal objective for the company during the first nine months
involved recruiting an experienced CEO with a more commercial background. If the
company was going to expand rapidly to a point where it could do an IPO, it needed
someone with extensive commercial expertise. With the help of Schroder Ventures (the
initial VC investor) and Chris Evans, who later started Merlin, the company recruited
Andrew Smith who had been the managing director of SmithKline Beecham in the UK,
and who had a strong sales and marketing background. I then became Head of
Research and subsequently that has been my role in Cerebrus, and in Vernalis.
Although I am Head of Research, it doesn’t mean that I focus only on research. I retain a
significant involvement in the corporate and commercial activities. I think that is common
in small organisations; people wear a lot of different hats. My academic role has
diminished, but I frequently get invited to speak at meetings, especially in the serotonin
and obesity areas, which are my particular speciality.
People often ask why Cerebrus was sold to Vanguard Medica in 1999. The reason was
that it had grown substantially and employed about 100 people. For a private company
that requires substantial funding. We had two further rounds of funding in 1996 and
1997, but by 1999 VCs didn’t want to put more money into the company and were
looking for an exit. The anticipated progression would have been to do an IPO, but in
1999 the IPO window was closed. The only viable option was to sell the company.
The acquisition by Vanguard Medica to create Vernalis was driven by financial
imperatives but also provided business synergies. Vanguard was a development
organisation that had no research capabilities and acquired compounds by in-licensing.
We were largely a research company with a small development group. It was a good
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marriage; our combined skills and expertise strengthened the company. Vanguard, up to
that time, also didn’t have a focus in terms of therapeutic area. The Cerebrus focus
became the combined company’s focus, that is, discovery and development of CNS
products.
The key thing I have learnt over the past six-to-seven years is the importance of having
enough cash in the bank. That has significantly influenced the direction of the company.
When I started out, I was unaware of how much the market could fluctuate, and how
difficult it could be at certain times to raise money. I have learned that it is a good
strategy to raise money even when it is not needed, so that there is always a sufficient
cash cushion for when the market is uncertain. It is also important to stay focused on
specific areas of expertise, and this has been key to our success.
Bioentrepreneur
Prof Vidar Hansson is founder, President, and CEO of Photocure. Located in
Norway, the company develops and markets pharmaceuticals and medical
devices based on its photodynamic therapy technologies for oncology and
dermatology markets. Dr Hansson is also Professor in Medical Biochemistry at
the University of Oslo, a position he has held since 1981.
Photocure was founded in 1993 with the aim of commercialising technologies developed
by the Norwegian Radium Hospital, the largest comprehensive cancer centre in Northern
Europe. I was Chairman of the Board of Directors of the Hospital’s Research Foundation
and was coordinator of its priority programmes in research for new diagnostics and
therapies. Photocure was a spin-out from the Radium Hospital and came out of one of
the seven projects that I was directing.
While at the Norwegian Radium Hospital, I was involved in developing a technology
transfer office with the idea of commercialising basic and clinical research. This actually
involved establishing a business at the hospital, so during this period I was getting
relevant experience to start a biotech company.
Although, Photocure was founded in ’93, it had no employees until ‘97. Three of us, Kjetil
Hestdal, Liv Stoettum and myself met as employees of the company on the 2nd January
1997, in a small room in the Radium Hospital. We looked at each other and said, ‘We
are going to make a global pharmaceutical company’. We had no telephones, no
computers or any other essential equipment, but we did have a very strong ambition –
and that is very important to any new company.
When I raised the first NOK50 million for PhotoCure, I went to the Research Council of
Norway and to The Norwegian Industrial Fund (SND) and proposed that if they gave me
NOK25 million, I would raise the further NOK25 million from the investor market. They
didn’t believe that I would be able to do this and so agreed. I then went to VCs and again
proposed that they give me NOK25 million and that I would get the remainder from
governmental sources. Again, they didn’t think it was possible and also agreed, and that
is how we got our first funds. We later raised more than NOK500 million.
Our first product, Metvix for skin cancer, took three and a half years to develop. We now
have approval in 18 countries. To put that into perspective, it takes on average 10.8
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years to bring a product to market in the pharmaceutical environment. If we can go from
research to final product in one third of the time, and at lower costs, there must be
something that we are doing right.
Interaction with academics and clinicians at the Radium Hospital has been very
important to our success. Now we have similar contacts internationally, in Australia,
Europe and the US. We don’t have any internal research capabilities at PhotoCure, but
we have 400-900 people working for us, for varying periods, during a year.
I have been the CEO of PhotoCure since the beginning, and this has given me fantastic
opportunities. The most difficult thing for me with a background as a scientist, is to keep
a strong focus. Balancing business and academic roles is difficult, but you have to
prioritise. In the last six or seven years, business has taken the lead.
I started another biotech company, Lauras, in 2000. Presently, I am the Chairman of the
Board of Directors and we are in the middle of a financing round. The company develops
drugs for immunostimulatory therapy in HIV/AIDS and other immune diseases. By
blocking the function of certain signal molecules in CD4 T- lymphocytes, we have found
that the immune function of HIV infected cells can almost be returned to normal. The
scientific basis for the company came from research in my own laboratory at the
University of Oslo.
As the basis of PhotoCure we have around 20 patents and patent applications.
Intellectual capital is very important in any company, not only in terms of IP, but also in
the people. We always try and get hold of the best people and they need to be
competent, engaged, imaginative and excited by what they are doing. We share
responsibility in the company; there is no hierarchy. I expect everyone to contribute and
we learn from each other. We have incentive schemes through share options, and that
forms the collective reward.
Bioentrepreneur
Co-founder of Oxxon, Professor Adrian Hill is Chairman of the Scientific Advisory
Board. The company develops novel pharmaccines (therapeutic vaccines) for the
treatment of chronic infectious diseases and cancer. Prof Hill is a Wellcome Trust
Principal Research Fellow in the Nuffield Department of Clinical Medicine, and
Professor of Human Genetics at the University of Oxford. He has made important
contributions to both the host genetics and immunology of infectious diseases.
His current major interest is in developing new vaccines against malaria and
tuberculosis.
My situation is unusual as I run two labs; one in immunology and one in genetics, which
both focus on infectious diseases. Oxxon sprang from a finding within the immunology
laboratory. The story started about ten years ago when we began work on a new type of
vaccine to harness the cellular immune system. Most vaccine approaches at that time
aimed to generate antibodies. Our genetic research had shown that the cellular arm of
the immune system was more important than antibodies in inhibiting malaria. We tried a
great many vaccination strategies from peptides, to DNA vaccines, to viral vectors – but
none of them worked. It was only when almost accidentally, we used a combination of
two vaccine types, one after the other, that things started to happen. The combination
vaccines worked really well. We were getting about ten times the response that we had
seen previously. This happened in 1996. We patented our approach and began to think
about setting up the company. The post doc that was involved in the research, Dr Joerg
Schneider, now Oxxon’s Research Director, was a real driving force in setting up the
company. He had a background in cancer research and could see the potential
significance of the work we were doing to that field.
We started setting up the company in 1997. Through the process of talking to a great
many people about exactly how to go about setting up a company, I heard that a former
colleague, Stephen Reeders, was returning from the States, where he had done well in
the venture capital world. Joerg and I went to see him at MVM. Stephen Reeders was
interested and excited about what we were doing – he really understood the science.
That was early 1998, so it had taken six months to find someone who was interested in
investing in us. Joerg and I brought in two other collaborators – Geoffrey Smith an
expert in virology and viral vectors, and Andrew McMichael a senior immunologist
developing HIV vaccines. My interest was in TB and malaria. We were the four co-
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founders; an unusually large team with well-balanced and complementary interests.
Once we had MVM on board the challenge was to get all parties to agree on share
allocation and to bring in the right amount of investment to create a realistic business
plan.
We had to convince our funding agency that we were not going to be distracted by
setting up a company. The Wellcome Trust, which funded the malaria programme, was
also a shareholder in the company as they funded the initial discovery – as did the MRC.
It wasn’t until 1999, that the company was incorporated. We literally spent a year getting
all the parties to agree and sign the documents. We were very impatient at the time. It
felt as if our competitors were catching up. Several of the parties involved had no
incentive to move quickly.
In retrospect, the time delay wasn’t all bad as it gave time for our technology to gain
acceptance. It also made it easier in terms of managing my academic workload.
Now that the company has got larger the benefits are two-way. I am getting a great deal
of knowledge of the field, such as manufacturing processes and product development
though the company. This is helpful to our academic research programme. My role has
always been within the Scientific Advisory Board although I was very involved in a
hands-on way with Joerg in getting the company going. I am deliberately not a board
member, as this could represent a conflict of interest for research funded by the charity,
the Wellcome Trust, who support development of our malaria and TB vaccines that are
now in clinical trials in the UK and in Africa. Andrew McMichael is the founders’
representative.
In a situation like ours where there is an interdependence between commercial and
academic interests, it is important to define clearly what each party is doing. We were
lucky in having such as clear division based on our disease interests. It is important for a
small company to keep its founding academics on board. The demarcation between
academic and commercial has to be crystal clear unless people are prepared to leave
the university and join the company. Managing the industry / academic relationship is
very important.
Bioentrepreneur
Professor Sir David Lane, PhD, FRS, FRSE, FRCPath, is founder and CSO of
Cyclacel, a biopharmaceutical company that designs and develops small molecule
drugs to treat cancer and other diseases. Sir David is also Professor of Molecular
Oncology and Director of the Cancer Research Campaign’s Cell Transformation
Research Group at the University of Dundee. He is a member of EMBO and a
Fellow of the Royal Society, as well as a Fellow of the Royal Society of Edinburgh,
the Royal College of Pathologists and a founder member of the Academy of
Medical Science. He has sat on the Scientific Committee of the CRC, the Cell
Board of the MRC and the council of the ICRF. He is perhaps best known for his
discovery of the p53 tumour suppressor gene and is the world's seventh mostcited scientist.
The process of starting a company began when I moved to the University of Dundee. I
was interested in doing something different – engaging more with industry. While at
Dundee I managed to get some research contracts with industry and I found I really
enjoyed the interaction with the pharmaceutical industry. We were generating many
ideas at that time and I realised that simply licensing IP might not be the best option and
started to look at setting up a company. This was around 1993/4. I visited VCs, mostly
in London, but they were not all that encouraging. They advised me to give up my
academic post and move to London. I didn’t want to do either of those things. There
was also quite a bit of tension between the university and the charity funding my
research at that time. I decided to give up, and pursued other industrial contracts. CibaGeigy, as it was, took up an agreement with us. The work went very well and we
generated about £0.5 million for the university. About two years after my first attempt at
starting a company, I felt ready to try again. This time the university was more willing to
give it ago.
We hit many of the same problems. There was the difficulty of persuading VCs that the
combination of areas of research that I wanted to take forward was commercially viable.
The complexity didn’t appeal to them very much. I had help from the University’s
Research and Innovation Services, which was important, and from the Cancer Research
Campaign’s technology transfer company, CRCT. Sue Foden at CRCT played a huge
role in keeping it all going. Both organisations were important in helping me to establish
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the original business plan, and in attracting a key VC, Chris Evans of Merlin Ventures. I
had one of those wonderful meetings with Chris, where he said, “Lets just do it!” Chris
was prepared to give the charity and the university a much bigger stake in the company
in return for their IP than others that we had talked to. That made everyone feel much
more comfortable. Then it was a matter of getting on with the practicalities.
We started from absolutely nothing and there wasn’t much guidance on what you should
do. At that time there was no incubator environment. I got a lot of concerns from people
but not much support. We had problems right from the start, because CRCT had
encouraged me to go in with Allan Balmain, who was interested in gene therapy, with the
aim of broadening our research portfolio. We got on well, but Allan later decided to go
and join Onyx Pharmaceuticals in the US. By that time, we had already employed a
large number of gene therapy scientists and we had a lot of IP associated with Allan,
which was now not readily exploitable. At that stage, if it had been anyone but Chris
funding us, we might have been in considerable trouble. I realise now, that this sort of
situation is very common. You have to be able to adapt to change.
Early on, I decided to hire a CEO and Merlin were supportive of that. Spiro Rombotis
joined us in 1997. He arrived to a situation where we had no premises, just an empty
office. It was quite a different environment from what he had been used to. The decision
to bring in a CEO was based on the fact that I didn’t want to spend all my time in the
company. I wanted to keep my academic interests. I discussed it with Chris and he
supported the decision. We needed someone who could be there all the time and
someone who was also able to talk to investors. Many biotechs make this decision when
they have been going for two or three years, and that can be harder. If you can make the
decision early it is probably better. It was very early for Spiro to come in and therefore
very tough on him, but it worked for Cyclacel.
I still get involved in company decisions and play a substantial role. At the end of the
day, in a company like ours there is a lot going on and what you have to do is make sure
that the science is right – that is still a big area of work. I do less on the financial side
now. When we first started, I was involved in seeing investors but now there aren’t the
issues around scientific due diligence that there were in earlier rounds of fundraising. I
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don’t think I could have done it any other way. One advantage of being slightly removed
from everyday management is that I can be more critical – I have a more objective view.
The company is now at the stage where it is doing wonderful science. I get a lot of
reward and credit. I suspect my academic career may have gone somewhat better if I
hadn’t been involved in a company – but, as you say, it hasn’t been too bad! The cross
flow of information between academia and the commercial sector is very valuable. I do
still get involved in other companies but not through any formal mechanism. I talk to a lot
of people, offer advice, and sit on the board of a couple of VC companies addressing
people like me – a bit of a poacher turned gamekeeper!
Bioentrepreneurs need better mentors. It would have been great if someone had
explained to me exactly how share options work, how capital gains works. When you are
busy it’s quite a hurdle to find these things out for yourself.
If one could create a structure where the interaction between the academic and
commercial sector was better – this would be a great advantage. More would get done
and more wealth would be created. That’s an area where the UK could really make
progress. I profoundly believe that both sectors need each other. In the area of oncology
we are faced with complicated science and a huge unmet need. Its very hard for even
the biggest pharma companies to get access to the kind of ground breaking research
that they need, and academics are never going to be able to develop drugs. Both need
each other to be successful and it’s frustrating that people don’t see this clearly. A
company like Cyclacel raises £40 million, some from outside the country. Half of that is
spent on paying income tax and some of that goes to universities. There are connections
here – people just don’t look at the bigger picture.
Bioentrepreneur
Dr Ole Jørgen Marvik is founder and a member of the Board of Directors of
Affitech. Based in Norway, the company is a human antibody therapeutics
company targeting cancer and infectious diseases. Dr Marvik is a co-founder and
chairman of the Norwegian Bioindustry Association and member of the board of
EuropaBio. He is also involved in the Oslo Research Park, and the Research
Board for Medicine and Health at the Norwegian Research Council. He has helped
to establish Connect Norway, a facilitator organisation for high tech industries,
and is a board member of the Medcoast Scandinavia and Scanbalt initiatives.
Being very academically oriented, I was a rather reluctant entrepreneur. While carrying
out basic research in phage biology, however, I was intrigued by a new approach to drug
discovery called phage display. I realised that the method offered tremendous
commercial opportunities. I probably owe this early commercial awareness to Professor
Bjørn Lindquist at the University of Oslo, who demonstrated to his students an admirable
balance between the love for basic science and a keen eye for potential practical
applications.
The Norwegian Research Council, perhaps surprisingly, encouraged my first steps
towards entrepreneurship. Erling Sundrehagen, the founder of Axis, a company that
would later merge with Shield, was at that time an advisor for the Research Council. He
convinced me that I should write a business plan based on the new combinatorial
libraries. Around the same time I met a young scientist called Martin Welschof at a
conference. He was later to become co-founder, COO and, most recently, has
succeeded me as CEO of Affitech. At that time, he was part of the core group in Prof.
Melvyn Little’s laboratory at the German Research Centre (DKFZ), which made pivotal
contributions to the development of phage display technology. Martin and his colleagues
represented a unique source of state-of-the art expertise in phage display and
recombinant antibodies. During the conference he introduced me to Prof. Little, and we
ended up talking about starting a company together.
Antibodies were clearly an interesting market opportunity, but the idea of starting a
business was challenging. One of the first tasks was to secure our IP portfolio and set up
an agreement for the technology transfer from DKFZ. Fortunately, I was able to get
advice from Eric Rosen, a young lawyer who had been working with Nycomed and was
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in the process of setting up his own consultancy. He became a very valuable mentor.
Early on, one of the most inspiring lessons we learnt was the value of bringing people
together with different backgrounds and skills. Through our meetings, I introduced him,
and his business network, to my scientific colleagues. As a result two other new
biotechnology companies came into being – Genpoint and Polypure.
Affitech was founded in 1997 and this was a time when it was relatively easy to get seed
finance. As a technology platform company our primary objective was to find the right
applications and ways of differentiating ourselves from our competitors. It was a typical
“technology looking for a market” company. While we knew right from the start that our
technology could solve the problem of immunological side effects associated with
previous attempts to make antibody-based drugs, it was difficult to convince the local
investor community that we should focus on therapy. It would be very costly, and at that
time, there were very few antibody drugs on the market.
Norway had a strong tradition in diagnostics, with companies such as Nycomed, Dynal
and Axis and we decided, rather unfortunately, to focus initially on diagnostic
applications. This was another valuable lesson – it is better to be bold and follow the
long-term strategy even when it represents a greater challenge. Technological
opportunities are not open indefinitely, and the most important task for a technology
platform company is to convert its capabilities into products that can sustain the
business over time. When we subsequently got professional biotech investors on board,
they immediately supported the aim of concentrating 100 per cent on building a pipeline
of therapeutic antibodies.
In September 2000, Affitech acquired Actigen Ltd (Cambridge, UK) from Active Biotech
AB (Lund, Sweden). The strategic acquisition provided Affitech with a comprehensive
package of patents related to antibody purification and a second business area that
could generate short-term cash. A year later we established a bridgehead in the USA, in
the form of a subsidiary in the San Francisco Bay area. I had known Rathin Das for
some time. He was a highly experienced biotech executive and I was very pleased when
he accepted the role of heading our business development activities. Despite some
initial concerns about having a member of the senior management on the other side of
the globe, this turned out to be a great success. It is amazing how important it is to have
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a local base in order to attract US interest, and with the time difference, the organisation
is literally able to work around the clock.
My role in Affitech has changed recently, and I am still in the process of getting used to
it. For six years, I was the CEO and managed the company, but in July I decided to take
a position on the Board of Directors and become a senior advisor. Martin Welschof has
taken over as CEO and I have no doubt that the company will continue to grow under his
leadership. Affitech is now in a very favourable position, with strong technology and a
highly skilled international staff. We have finalised three major partnerships for antibody
development during the past three months and I feel it is a good time for me to pursue
new opportunities.
My participation in the Bioindustry Association and the Research Council give me a
great deal of satisfaction. I am passionate about building new enterprise from science,
and bringing together people with different skills for the creation of new companies. I am
currently involved in initiatives such as Life Sciences Norway, which showcase Norway’s
scientific capabilities and aim to bring new opportunities to the Norwegian biotech sector.
If I were to give advice about setting up a company, I would emphasise the importance
of collaboration and finding the right people. I think I have been very fortunate. The fact
that the founding team of Affitech was international has clearly been an advantage.
Biotech is truly an international business and a very social activity, where enthusiasm
and team spirit really count.
Bioentrepreneur
Professor Phillip Sharp, Nobel Laureate, is co-founder, member of the Board of
Directors and Chairman of the Scientific Board at Alnylam Pharmaceuticals, and
co-founder, member of the Board of Directors at Biogen where he served as
Chairman of its Scientific Board. He is also Institute Professor and Director of the
McGovern Institute and member of the Center for Cancer Research at the
Massachusetts Institute of Technology (MIT). Alnylam is developing technology
to specifically silence disease-causing genes using RNA interference.
I was involved in creating Biogen in 1978. There were a number of factors that led to my
decision to start a company. I had made contributions to the purification of restriction
enzymes while I was at Cold Spring Harbor Laboratory in New York. I was also abreast
of RNA technology and I had contributed to that field. As the recombinant DNA debate
arose, I wanted to use these technologies to further research. My first introduction to the
biotechnology enterprise took place when a venture capitalist invited me, as a
consultant, to look at investment in Genentech. Shortly after that, I had conversations
with a colleague, Walter Gilbert of Harvard University (Wally), and with VCs, and we
decided to contact other scientists with the aim of starting the company that was to
become Biogen.
There were eight of us, Wally and myself, Charles Weissmann, Bernard Mach, Heinz
Schaller, Peter Hofshneider, Kenneth Murray, and Brian Hartley – a group of
internationally renowned scientists who saw the potential of genetic engineering to
develop novel therapeutics. Wally Gilbert made the greatest contribution to getting the
company organised. My role involved looking at new technologies and also at
developing sites here in Cambridge. I participated in presentations to potential early
investors. It was the late ‘70s and ‘80s and there was generally a lot of interest.
Recombinant DNA was quite visible as a technology and had great promise in the
pharmaceutical sector. It was an untested technology but the environment was
generally receptive. I have been on the board of Biogen since the ‘80s and served as
Chair of the Scientific Advisory Board for over 15 years succeeding Charles Weissmann.
Biogen now employs around 2,700 people worldwide.
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The reason I started a new company was the discovery of a significant new technology –
RNA interference and the demonstration by Tuschl and colleagues that it could be used
to silence genes in human cells. While in theory it could have been incorporated in
Biogen, it wasn’t appropriate. It required a fresh page. Mature companies are interested
in product development and have an intense need to get products to market. They just
don’t have the time to dabble in new technologies. A new technology requires a great
deal of fine-tuning and established companies cannot devote the resources and time to
cope with the setbacks. That’s what happened with recombinant DNA – large
pharmaceutical companies relied on small ones to carry out development.
When RNA interference emerged in 1998/99, the possible advantages were clear. It
offered a broad new technology with application across many diseases. Development
required a focused team and we needed to raise money. My colleagues at MIT and I
began to make it happen, we found a VC and resources. It was easier the second time
round, there were a lot of differences. The biggest difference was that when Biogen
started, there was no biotechnology – the words ‘biology’ and ‘technology’ had not yet
been amalgamated. We had to employ people that were prepared to take risks, develop
the technology, and have the mind set to make it work.
Now, there are people who have been in the business for 20 years. They have
experience in turning technology into products. There is also a great deal of interest from
large pharma companies who see start-ups as an essential part of the future. The rest of
the experience – getting the technology to work, establishing effective relationships and
demonstrating the effectiveness of the technology, is the same. Alnylam started with a
group of five individuals. Now it has around 60 employees. It has grown very fast.
My first interest has always been as a faculty member of MIT. With Biogen my day-today involvement is in providing scientific advice at board level. My involvement is less
than it was 25 years ago, when the science was just emerging. My focus with Alnylam is
also on the science. That is the exciting thing about new technologies, you have to make
it happen, and that involves motivating people and keeping it moving. I spend some
time advising other companies, but in-depth involvement is restricted to Biogen and
Alnylam, so that I have time for everything else.
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The work leading to the Nobel Prize was my most significant period. I made major
contributions to discoveries in RNA splicing in the ‘70s and ‘80s, and at the same time
Biogen was developing as an organisation. There is always a trade-off between doing
new science and making a company grow and change. I really enjoyed those conflicts.
There were moments when I could have chosen to devote more time to either academic
or commercial work. Both are interesting, but at the end of the day – both are part of my
life. I feel very privileged to have been able to make an impact on improving other
people’s lives.
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Dr Bruno Tocqué is founder and CEO of ExonHit Therapeutics, a company based
in France and in the USA developing novel pharmaceuticals through its
knowledge of alternative RNA splicing – the process where a single gene can lead
to several proteins. Prior to founding the company, Bruno Tocqué spent 12 years
at Rhône-Poulenc Rorer (RPR) where he was Director of the Department of Gene
Medicine, and Director of the oncology programme for RPR’s gene therapy
division.
While working for RPR as Director of the Gene Medicine Department (GMD) I had two
objectives; to integrate technologies within the company and to deliver validated
strategic targets for the benefit of the different therapeutic programmes within the
company. At the time, the GMD was active on both sides of the Atlantic as it involved
several different stakeholders. We worked with research bodies not only within the
company but with groups from academia, from biotechs and so on. This period was quite
significant for me, as I was operating as a small independent body within a large
organisation. The training it gave me was very useful for when I started my own
company.
My idea for a company came from studying different RNA splice variants. Splicing is a
tightly regulated step that occurs between gene transcription and protein translation and
is the means by which the body is able to generate vast numbers of proteins from just
30-35,000 genes. Splicing alterations can occur as part of disease progression or in
response to certain drugs. Since I was responsible for integrating new technologies, I
knew there was no technology currently available that could systematically compare
splicing alterations. ExonHit was conceived to develop a technology that could do just
that. Right from the start, however, we knew that we ultimately wanted to build our own
product portfolio and become a drug discovery company. This dimension was integrated
in our long-term business plan. We concentrate on cancer and neurodegenerative
disease, which are areas of excellence for the founders. These areas are also related as
they result from either a lack of, or excessive, cell death and we benefit from a certain
amount of cross over in research.
Three of us broke away from RPR in 1997, myself, Laurent Bracco and Fabien
Schweighoffer. We had been working together for ten years and knew each other well.
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We had a combination of scientific and management skills. We were focused on making
the technology a reality and we developed very quickly. We set up in September and the
first round of financing was completed in the following February. It was a relatively easy
period in which to get started; the financial climate was quite favourable. We did,
however, have to go about finding out how to start a company by ourselves. There was
no real help available in France at that time. The situation is completely different today.
I started as CEO and have remained in that position. My colleagues were responsible for
the research, which is the company’s focus. It is a research organisation and 80% of our
budget goes on research. My role became strategic. I was concerned with directing the
growth of the company – deciding which projects we should tackle first, obtaining
finances, keeping the shareholders informed and happy, and ensuring that we were not
over-promising and under-delivering. As a result of my time with RPR, I was well trained
in balancing research objectives and keeping the R&D focused on a limited number of
objectives. My strengths are in prioritisation, and making the decisions that quickly bring
value.
We share responsibility within the company and we are all actively involved in decision
making although the management group is now much larger and consists of eleven
people. The company now employs 75 people.
When you start a company you need to have a clear idea of your objectives and which
domain to exploit. It is also important to take every financing opportunity – you are going
to have to work miracles with very little money.
Bioentrepreneur
Dr Greg Winter, CBE, FRS is co-founder of Domantis, a Director and the Chairman
of the Company’s Scientific Advisory Board. Domantis is a drug discovery and
development company exploiting therapeutic applications of domain antibodies
(dAbs). Dr Winter is also joint Head of the Division of Protein and Nucleic Acid
Chemistry at the Medical Research Council’s (MRC) Laboratory of Molecular
Biology (LMB), and Deputy Director of the MRC’s Centre for Protein Engineering.
He has contributed to more than 15 patents. In recent years over 90% of royalty
income to the MRC has been derived from the exploitation of the Winter patents.
Dr Winter was also a co-founder and Director of Cambridge Antibody Technology
(CAT). Dr Winter first talks about his experiences with CAT, as these directly
influenced decisions with Domantis.
My background is in both protein chemistry and recombinant DNA work. In the early ‘80s
I combined these expertises to develop protein engineering, initially as a means of
understanding the catalytic mechanism of an enzyme. By the mid 1980s I started to
engineer antibodies and developed the technology for making humanised antibodies
from rodent monoclonal antibodies. As a result I became involved with several
companies, such as Scotgen, Unilever, Celltech and Amersham. With Scotgen I had my
first taste of a start-up. I found it very exciting.
What made me consider my own start-up were the possibilities (emerging from our work
at the MRC) of producing fully human antibodies directly, rather than having to humanise
rodent antibodies. I needed more hands at the bench, as there were huge technical
challenges, but there was no prospect of enlarging my group at the LMB. The pressure
of competition made me think about setting up a company as a means of enlarging my
group – which is not the best reason for creating a start-up company. I did also think,
however, that it was a great commercial opportunity.
Two things spurred me on. First, an ex-Amersham scientist, Dr David Chiswell, wanted
to create a company based around the technology that we were developing. I agreed to
help him. Secondly and decisively, an old friend, Dr Geoffrey Grigg, Director of an
Australian company, Peptech, was very excited about my work. He could see the
potential of the technology for making human monoclonal antibodies (MABs). He asked
if Peptech could have the commercial rights to the technology, either directly or as part
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of a start-up company. From then, my role was to persuade the MRC, my employers,
that the start-up route was the most suitable for exploitation of this very early stage
technology. We finalised the whole deal in a few months with Peptech making a seed
investment of £0.75M. Much was achieved on trust but the lack of a clear understanding
of the expectations of each of the parties later caused problems.
We didn’t get any advice in setting up a company. There was really no professional help
available but the MRC, to their great credit, let me get on with it. Now it seems incredibly
amateur, but I have the feeling that you are either an entrepreneur or not, and no
amount of training will turn you into one, although it may well make you a better
entrepreneur than you would have been otherwise.
Our first challenge was in finding competent, trained scientists. We didn’t need middle
managers or PR people. We needed scientists who would be able to pick up and
develop the technologies. We had to get the technology to work first. Another challenge
was money; CAT was always very short of it. Peptech did not wish to inject further cash
into CAT beyond their seed investment and pushed CAT to become self-sufficient
through revenue generating deals. In the end we did a number of such deals, but it took
a long time to land each deal and we were always starved of money.
One of the strokes of good luck was the decision by Mrs Thatcher’s Government to set
up an Interdisciplinary Research Centre in Cambridge on protein engineering, based
around my work and that of Sir Alan Fersht. This provided both space and funding for
the development of the basic technology for making human antibodies, and CAT was
able to focus its efforts on commercial contracts. We were ultimately able to grow the
company.
In 1996, the planning for a listing on the Stock Exchange in ’97 precipitated a lot of
underlying tensions and disagreements within CAT. Several different strategies were
proposed for the future direction of the company, including a merger with Peptech. I
could see both sides of the arguments, and in general favoured an independent listing
but I disagreed with several of the proposed therapeutic targets. I also had my own
group to run in the MRC, and the number of company meetings was having a real
impact on my academic work. In the circumstances I decided to leave the CAT Board. It
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was probably the only thing to do. I felt that my duty had been done. All the scientific
hurdles had been overcome and we had a strong, fully established and highly competent
scientific team and an increasingly professional management, even if it had been built on
a shoe-string. I spent the next few years focusing just on my research.
I set up Domantis because of ‘unfinished business’. Antibody binding sites are made up
of two domains, one from the antibody heavy chain and one from the light chain.
However, in the late 1980s at the MRC we had noticed that single heavy chain variable
domains of antibodies could bind antigen in the absence of the light chain. We had
wondered if we could develop these as small antibody fragment therapeutics but the
isolated single domains proved to be “sticky” and tended to aggregate. A bit later, and
with Ian Tomlinson and Olga Ignatovich who were working with me at the LMB, we
realised that single domains might nevertheless be used as building blocks for novel
dual specificity antibodies.
The situation with IP around single domains was relatively clear-cut. Through our work in
the late 1980s, the MRC owned the granted patents that covered the process for making
single domains and had not licensed the single domain aspects to other companies. We
therefore thought it might be worth setting up a company based on antibody single
domains. My reason for setting up Domantis were more commercial than it had been
with CAT, but the motivation wasn’t money as I had already made a significant amount
from CAT. I felt I was picking up a ball that we had dropped, and we might be able to
develop some novel therapeutics, and do things that couldn’t be done with conventional
antibodies.
By this time (2000), the MRC had a technology transfer group, and they had also set up
a venture fund called Medical Ventures (MVM). MVM have first rights on MRC start-ups
so we didn’t have the freedom to talk to anyone else about our ideas. Fortunately MVM
were very interested and helped to draw up legal agreements, which clarified each
party’s expectations. MVM provided the seed finance of £1M, Ian Tomlinson and myself
had founder’s stakes and the MRC agreed to provide the required IP in return for an
equity stake. We head-hunted a CEO, Robert Connelly. We needed someone with team
building and commercial experience and Bob had it.
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The real breakthrough in the fortunes of Domantis came in 2001 from Peptech. After
leaving CAT I had remained on good terms with Peptech and they now chose to invest
US$ 17M in Domantis. This provided the resources to set up a proper laboratory facility,
and Ian Tomlinson left the LMB and joined the company as CSO. Domantis now has a
staff of over 30 heads and is growing, and has deals with Peptech, Abbott and Imclone. I
have a more strategic role in Domantis than I had in CAT and try not to get too involved
in the details of management decisions.
CAT is by many standards a successful company, but I have always felt that we could
have done much better. However at the time there didn’t seem to be much choice – we
were on a roller coaster and starved of cash and experience. With Domantis we have
had choices; the significant funding from Peptech and broader knowledge of Board and
management gave us that. Compared to the early days of CAT, Domantis is so much
more professional and I am confident that we can make a real go of it.