The Antidote: Inside the World of New Pharma Read online

  Thomson managed Vertex’s drug discovery machinery in Cambridge even as he built it; promoting from within where possible, shifting around responsibilities, “picturing problems in a more structured manner and making that a template for solutions,” he recalls. As he tried to arrange the pieces to give fabric to an organization that was moving on two tracks—Novartis, and everything else—he also continued to drive the Lilly collaboration, endeavoring to identify and convince key managers in Indianapolis that VX-950 was a developable compound. “We were in their faces, and that made them nervous,” he says. Thomson stopped smoking at work, striving to be less wild man and rogue, more exemplary.

  Sato assigned Murcko overall responsibility for bringing Vertex and Aurora together and assigned Tung to teach Aurora to hunt for drugs. Each welcomed the assignment. Murcko wanted to ensure that Vertex kept expanding its possibilities and didn’t bog down in one approach to drug discovery, even one as powerful as design. Tung remained skeptical of Vertex’s boldest claims for design and was eager to test his own theories outside the mother ship of the Cambridge labs.

  Tung and Murcko alternated weeks in San Diego while Aurora’s senior management team, absorbing the impact of the merger, reshuffled. Landing on top after the shake-up was biologist Paul Negulescu, formerly head of research, who now ran the site for Vertex. Negulescu was even-tempered, deft, strong willed, enthusiastic, and patient, a true believer in Aurora’s high-throughput screening who had joined the company at age twenty-seven fresh from a postdoc in biophysics and immunology. One of Aurora’s first five employees, he’d been hired as director of biology, “which meant director of myself,” he recalls. Now he resolved to “stay through it, make the acquisition a success” by helping make the site fully capable: bringing in PK, pharmacology, and medicinal chemistry to help improve and advance the hits emerging from Aurora’s “cell-based stuff.”

  Negulescu reported to Murcko. “We had a lot of projects, most of them very, very early, and Mark guided us through the culling process,” he recalls. “The one thing I remember about all of those interactions, whatever the purpose of the visit or the topic, there was always the sense that we would make something good happen. I think that’s part of Mark’s genius. He’s a glass-is-half-full person, and you shouldn’t underestimate how important that was. The support, and confidence he gave us just by being here and saying ‘I believe in you guys’ was probably as significant as anything else.”

  Cystic fibrosis was an ion-channel project, one of several types of screens Aurora had developed. After the gene for CF was identified in 1989 by a group co-led by Francis Collins, speculation rose about what it did in the body. Researchers discovered that it encoded for a protein that they chose to name—still with no insight about its function—cystic fibrosis transmembrane conductance regulator (CFTR): literally, the pore-forming protein on certain cell surfaces that lets through charged atoms and molecules and that we know about only because it is broken in people with cystic fibrosis. Soon after, they determined that CFTR channeled chloride ions and water, explaining, ex post facto, how for centuries folk healers diagnosed the disease by licking babies to see if they tasted salty.

  Knowing what CFTR did made it only more daunting as a target. Hedging its strategy, Aurora proposed in its initial agreement with the foundation to pursue alternative pathways as well. But Beall and his medical staff pressed the company hard to focus on the disease at its heart. “I credit Bob with that,” Negulescu says. “He was going around looking for companies not just to work on CF but on CFTR—for CF. He was frustrated by the fact that we knew that CFTR was the defective protein, and we knew that it was a channel, and we knew what was wrong with it, but there was nobody looking at how to fix it. They were looking at alternative channels that one could try to activate to control the symptoms, say, with inflammatory responses. Or how does one interrupt the bacterial environment in the CF lung? Everything but the real issue.”

  Passion is an underrated virtue in drug research. Big Pharma R&D leaders, forever imposing processes and metrics, believe that strategy ultimately prevails; pick an approach, stick to it, be meticulous, you’ll get there. But Beall’s deep conviction that only a drug that hit CFTR could transform the lives of people with cystic fibrosis had inspired a growing faith at Aurora, if not yet at Vertex.

  Negulescu flew to Cambridge to lay out the goals of the CF program before the scientific advisory board. Murcko, anticipating resistance to Aurora’s approach, cautioned him not to expect a warm reception. What Aurora would do, Negulescu explained, was find compounds to correct each of the two main types of defects. In some cases, there’s sufficient CFTR at the cell surface, but the channels don’t remain open long enough to let the ions and water pass through—so-called gating mutations. In many more patients, the problem is that not enough protein gets to the cell surface, because the protein is improperly folded. When Negulescu said that Aurora was screening for molecules to activate the protein regions responsible for both problems, an advisor muttered, “Fantasy science.” Boger and Sato, sitting in back, said little.

  In April microbiologist Eric Olson took over the CF project. He was unlike Kwong and others who, inspired by the company, chose to join Vertex because that’s where they thought they could do their best work: in Olson’s case, Vertex and CF seemed to come together to select him. A lean, blond, soft-spoken Minnesotan, Olson had worked in antibiotics for sixteen years at Upjohn and Warner-Lambert, recently acquired by Pfizer. He’d become interested in CF through a colleague whose daughter had the disease, and they’d collaborated against pseudomonas, the most common bacteria to attack the CF lung. Living in Ann Arbor, looking a year earlier for a job, he’d interviewed at Vertex for a position as program director, spending an hour with Sato and coming away impressed. Meanwhile, he also interviewed with Negulescu at Aurora, before the merger. He got an offer from Lilly, but heard that Lilly might be soon getting out of anti-infectives.

  “I almost just about didn’t join Aurora because even though they could set up screens, there was no way they could ever make a drug,” Olson recalls. “But I got wind when I was out there that they were in deep discussions to solve that problem. They said, ‘Don’t worry about that.’ I did worry about it, but I really trusted Paul. A couple of weeks later, I was in the airport, going to Iowa, when the thing crosses the news: ‘Aurora bought by Vertex.’ I was so glad, since I’d already gone to Vertex. They each had a piece that I felt could make a big difference.”

  Olson’s group had developed two related approaches to measure CFTR activity. Both employed high-throughput “patch clamp” assays in which swatches of cell membrane are isolated using a micropipette tip, and then hooked up to microelectrodes to gauge the opening and closing rates of individual channels. Screening for molecules to activate CFTR with gating mutations—so-called potentiators—technicians looked for changes in the electrical flow over a two-minute period. For those that might fix the folding problem and get the protein to the surface—correctors—they ran the same experiment but overnight, giving time to allow more protein to activate and get to the membrane. After sifting through tens of thousands of compounds, in June Aurora recorded its first validated hit for a potentiator. The molecule wasn’t potent or specific; much less was it known to be effective, safe, or easy to formulate and manufacture. But it showed that a small molecule could enhance the functioning of CFTR.

  Olson, Negulescu, and the CF team regarded the hit as an important moment, but they neither expected, nor found, real corresponding enthusiasm in Cambridge. Having a hit meant the true start of a project, and Tung and others did what needed doing to move the molecule along. But as seasoned drug hunters they remained skeptical. “They came out and set up all the stuff that had to be set up, but it wasn’t clear what the feeling in Cambridge was,” Olson recalls. “My sense was, ‘Look, the foundation’s covering most of the cost; you guys want to keep doing it, go ahead.’ In the meantime, they were trying to advance all these clinical prog
rams anyway; they weren’t ready to start a bunch of new projects.

  “Let’s put it this way,” he says. “Nobody stopped it.”

  The first annual Liver Meeting® at the John B. Hynes Veterans Memorial Convention Center auditorium in the Back Bay during the first week of November was an attempt by both its sponsors and the city to rename, rebrand, and trademark the half-century-old yearly get-together of the American Association for the Study of Liver Diseases (AASLD), where until the last few years the reigning topic was cirrhosis. They hoped to make the meeting—and the expensively refurbished three-tier conference hall—an important venue in the business of biomedicine. It wasn’t Vertex-Lilly’s VX-950, but another company’s molecule, that stole the show.

  In four papers describing the discovery, safety, and early antiviral activity of a small-molecule inhibitor of HCV protease, Boehringer Ingelheim’s BILN-2061 proved beyond a doubt what Vertex, Schering, Roche, Merck, and many other companies had claimed on faith for a decade: that by blocking the protease with a selective inhibitor and making it orally available, you could dramatically reduce the amount of virus in patients. In a group comparison with a placebo, an inactive pill, all ten patients taking the drug demonstrated after two days more than a hundredfold decline of HCV RNA in their blood. When they stopped taking the medicine, the numbers returned.

  Whatever the sting of losing an apparent lead in the public race for a cure, Sato, Kwong, and the HCV team were buoyed and influenced far more decisively by Boehringer’s affirmation of the target. They now knew that the first company to bring approved protease inhibitors to the millions of infected and sick people with hepatitis C would usher in a new age of treatment, just as with AIDS. Kwong’s group, still struggling to bioengineer an animal model to resemble the human liver, doubled down. Many, including Kwong herself, also drove “midnight projects”: independent side experiments encouraged and supported by Vertex.

  The rumblings Olson heard about Lilly turned out to be true: after several fitful years of on-again, off-again commitments, and the debacle of losing Agouron’s AIDS drug, the company was pulling out of anti-infectives. Vertex’s main champion in Indianapolis was transferred. Lilly began requesting amendments to its licensing agreement that would put more of the onus—and costs—on Vertex for clinical proof of concept. From Aldrich’s initial hard bargaining to the widespread belief inside Lilly that VX-950 wasn’t druggable, there was little but bad feeling about the program. As Lilly went through its portfolio in the weeks after the Liver Meeting, VX-950 was discontinued.

  With protease inhibition validated by Boehringer’s results, Boger might have felt more liberated and relieved to have the molecule back had he, Sato, Alam, and the scientists been better prepared to meet the costs and risks of going it alone. Pharmacology studies and patient trials were expensive enough; VX-950 cost $2.5 million per kilo to make. The compound was extremely tough to work with. Vertex knew it could be improved, though not, specifically, when, how, or how much. The road ahead would be long, dark. “I don’t think we were being overly optimistic in terms of extrapolating how far we could improve the situation both in the formulation and synthesis,” Thomson says. “But they said, ‘No, given where we are at the moment, we want a calculation that says this has profitable margins, without extrapolating any further progress.’ The program didn’t explode, but we had a stalemate on whether and how to proceed. So the lawyers stepped in to find a solution.”

  Investors and analysts, examining what appeared to be Lilly’s rejection of the molecule, found little upside in their restructured settlement. In exchange for worldwide rights to compounds identified during the collaboration, Vertex granted Lilly a small royalty on future sales, a gesture acknowledging that a Lilly chemist had made the molecule that now was a Vertex asset and would-be product.

  “One of the things that Lilly said in their parting shots is: ‘This is not a negative to you, this is not a negative to the program.’ They told us all the things that we could repeat back to our investors,” Boger says. “But they did make it clear that they did think that 950 wasn’t the drug. It was on its way to a drug. It was a good molecule to go in and test a hypothesis. But it would never be a drug because we would never be able to formulate it, and we’d never be able to manufacture it.”

  CHAPTER 5

  * * *

  JANUARY 6, 2003

  The idiom of the biomedical business shields the user from the grittier realities of the trade. A disease, for instance, is not an illness but a “market opportunity” or else simply an “opportunity.” So is what used to be called a condition, something lamentable but not a sickness: say, erectile dysfunction or wrinkles or baldness. The choicest word in the lexicon is value: the full measure of a product’s usefulness to patients and society, although value also codes for profits, including obscene ones. Speaking with investors you might tell them, “In the coming year, we will add strong value to our business by enlarging our opportunity in erectile dysfunction” so that you can avoid having to say, “Next year we expect to make billions flogging boner pills.”

  The subject on everyone’s mind at this year’s Morgan health care conference in San Francisco was the frenzy in mergers and acquisitions. The M&A cycle in biotech was cresting as companies stepped up their efforts to enhance and expand their pipelines and commercial capabilities and to build up their patent estates. Millennium, hopscotching from gene sequencing to pharmaceuticals, had bought four other companies in the past five years. Boger addressed the trend in his presentation. “As we completed our first decade,” he said, “we found ourselves needing to scale the Vertex discovery engine across multiple gene families. The merger with Aurora Biosciences gave us product buildout capability, cash generation, and additional technology capability. While the deal resulted in an eighteen percent dilution for Vertex, we will recoup by moving the price-earnings [ratio] when the company becomes profitable.”

  When and if Vertex eventually would earn more than it spent remained anybody’s guess. But that only encouraged someone like Boger to make it sound as if the march to profitability was advancing on schedule, firmly under control. “In the year ahead, we are looking forward to continued progress with our late-stage pipeline, including the launch of 908,” he continued. Glaxo had filed for FDA approval on the reformulated version of Agenerase, and Boger remained dimly hopeful that the molecule formerly known as VX-908—delivered in two small pills twice a day—would stimulate Glaxo to move more aggressively in AIDS, where numerous players were jumping in and experimenting with different combination therapies. “We also expect our partner Aventis to begin a Phase II-b rheumatoid arthritis study of our oral ICE inhibitor pralnacasan.”

  He went on: “We have set aggressive goals for product development in 2003, which we believe will position us to succeed with our long-term corporate and commercial strategies. Specifically, in the coming year, we will commit to two drug candidates to move forward on the path for approval, launch, and commercialization by Vertex. At the same time, we will focus on maintaining a high level of momentum and innovation in our drug discovery organization to generate a continued flow of novel drug candidates in our pipeline. In addition, we will continue to maintain a strong financial profile as we pursue our goals.”

  Boger didn’t discuss what was pressing most on his mind: how to build off the progress in chemogenomics; more specifically, the end-stage negotiations for a second gene-family collaboration in proteases with Glaxo. As with Novartis, Vertex had to show that it was ready to hire another couple of hundred scientists and put them immediately to work. It had leased a new six-floor, 300,000-square-foot facility a mile away in Kendall Square, epicenter of what was now called, a decade after Boger’s talk to the state trade group, the Cambridge “biocluster.” Vertex’s cash burn would soon grow notably larger. Part of Boger’s talent was making investors feel that the hugely speculative, tortuous, open-checkbook process of bringing drugs to patients could be brought under safe, orderly, and predictabl
e restraint.

  CFO Ian Smith was by character and training resistant to Boger’s reality distortion field. Someone needed to be “the brake,” as Aldrich had put it, and Smith, thirty-six, managed the company’s business as he had audited others’ as a partner with Ernst and Young, keenly attending to the underlying hydraulics. He was slim hipped, athletic, over six feet. His flashing smile, clipped accent, frequent out-of-season tan, and toned, dark-haired good looks resembled those of the actor Hugh Jackman. Smith had come to Vertex via an accelerated and incongruous route. As a teenager in England, he grew up above the Queen Victoria Pub in a gritty part of Manchester, preferring soccer and cricket to school. A quick grasp of shapes, numbers, and patterns propelled him to a business degree at a polytechnic. Fearing a return to the rough life he’d escaped, Smith became a chartered accountant. By the time he was thirty, he was living in Boston and advising top executives at Reebok and Staples on their expansion plans. E&Y made him a partner soon after.

  The high-throughput, gene-family approach was proving to work better on paper than in practice, but Vertex was committed to it, and it was Smith’s job to raise and manage the capital that would enable the company to broaden it. He had no background in science, but, having served as outside manager on Millennium’s four acquisitions and been skeptical regarding the Aurora buyout, he doubted the platform’s sustainability as a business model. Like Aldrich, he recognized that the reliance on Big Pharma to fund the biotech industry was coming to an end, and the gene-family model was more of a hypothesis than a proven method for finding drugs. Boger’s enormous claims for it and his thoughtful arrogance, so winning with investors and analysts, challenged Smith to try to rein him in while also teaching himself to show Wall Street he was Boger’s match for projecting confidence in Vertex’s vision. “It was beautiful working with Josh,” he recalls. “You ask Josh what keeps him awake at night, and he goes, ‘We’re not going to achieve everything I think we should achieve.’ I’d look at him and say, ‘Really?’—because I took care of the contingency planning.”