Guest post by Luke Timmerman, founder and editor of the Timmerman Report, and a regular contributor to Forbes and STAT News.
Scientific entrepreneurs get the glory. Someone has to enter a highly ambiguous situation in the early days of a biotech company, when a million things can go wrong. A million paths may seem viable. Someone has to find a clear way forward to create value.
But if you look closely at biotech entrepreneurs, they come in many different species.
There are academic founders like Bob Langer, Lee Hood, and Tim Springer. They are catalysts, but they don’t quit their day jobs to join little companies full-time.
Then there are the people who go “all-in” with a startup dream, grind through the dicey early days, and mature into corporate leaders as their companies grow. These entrepreneurs-turned-executives include John C. Martin of Gilead Sciences, Leonard Schleifer of Regeneron Pharmaceuticals and Richard Pops of Alkermes.
There are also what you might call “hands-on” venture capitalists. They take raw scientific platforms or promising assets, provide direction, and set the wheels in motion for a company to be built by someone else. Alan Crane of Polaris Partners and Kevin Starr of Third Rock Ventures fit that profile. This is valuable work, but VCs get paid by VC firms.
Today, I’m looking at a different phenotype—the all-in serial biotech entrepreneur with a track record of repeat success. For the purposes of this exercise, in my mind, a serial entrepreneur enters a company at the beginning or at a nascent stage of high ambiguity, and works hard to create value in a do-or-die situation. Then, he or she moves on to do it again, usually within five years or so.
Enough people fit this description that it’s been difficult to whittle down. More than 40 strong nominations came in from the entrepreneurs and investors I surveyed over the past couple weeks. I pressure-tested the nominations and reviewed track records to cut it down to a list of 12 people.
This project is being done in collaboration between Timmerman Report and EBD Group. A few members of this elite group will join me for a panel discussion on what makes a serial entrepreneur tick at EBD’s BioPharm America™ conference in Boston on Sept. 14. Register here.
With that, here are the serial entrepreneurs who made the cut and some comments on what it takes to do this kind of work:
Michael Gilman. Gilman has a hot hand. He was most recently the co-founder and CEO of Cambridge, Mass.-based Padlock Therapeutics. It was sold to Bristol-Myers Squibb for $225 million upfront, and total value of up to $600 million with milestones. That sale, in March, came after just $18 million of venture capital, and about two years of work on a PAD enzyme drug discovery program for autoimmune diseases. Gilman’s previous company, Stromedix, was acquired by Biogen for $75 million upfront and a total deal value of $562 million, milestones included.
Gilman didn’t find his niche until age 50. Years ago, it wouldn’t have occurred to him that he could run a startup working on idiopathic pulmonary fibrosis one day, then move to a different field of biology such as PAD enzymes. He started as an academic scientist at Cold Spring Harbor Laboratory, where his expertise was narrow and deep. He broadened his understanding of industry in senior management positions at Ariad Pharmaceuticals and then Biogen.
Startups required Gilman to get comfortable with not being the domain expert on everything, because no one can be expert on everything. Recruiting—especially in a company with as few as 5–6 people—is essential. “As a younger person, it’s easier to regard things that you’re not good at as flaws and work hard to get better,” Gilman said. “But there comes a time when you need to learn to let go. I’m not a subject matter expert on any scientific topic anymore, but my scientific intuition is still intact. I can listen to a story, even though I don’t know anything about it, and can judge if it’s interesting, feasible. I can spot the logical flaws.”
Since Gilman is between jobs, I had to ask whether he wants to run another startup. “Of course,” he said. “I love doing it. I’m good at it, and I’m grateful for knowing what I’m good at. A lot of people go through life never knowing what they’re good at.”
Nancy Stagliano. Stagliano’s record has come into sharper focus of late. She learned the biotech business, like many other entrepreneurs, at Millennium Pharmaceuticals, starting in the late 1990s. She was a first-time co-founder and CEO at South San Francisco-based CytomX Therapeutics. A co-inventor of the company’s underlying technology, she left in 2011. The company, now led by Sean McCarthy, went public last year and has a market value of $350 million.
Stagliano entered a different situation next. She was CEO of South San Francisco-based iPierian, an induced pluripotent stem cell company that had endured several waves of management turnover. It needed what she calls a “re-start.” Ipierian got focused on diseases related to Tau-protein aggregation. Less than three years later, Bristol-Myers Squibb acquired it for $175 million upfront and total deal consideration of $550 million.
But that deal didn’t give away everything from the iPierian platform. Before the sale, Stagliano and the iPierian board had split off assets directed at the classic complement pathway for the treatment of rare diseases. Those assets became True North Therapeutics. The company released some preliminary, but quite encouraging data from the first five patients at a scientific meeting in June.
Like Gilman, Stagliano said she loves being in a small company like True North, with 17 people zeroed in on a singular goal. She’s not sure she’d want to run a company of more than 50 people.“We’re nimble. We make educated but quick decisions and we act on them,” Stagliano said. “There’s such a thrill in going after something new, and being all-in on that biology, and that platform. I think I'd have a hard time in a big machine, where things don’t move as quickly.…You’re not quite living on the edge all the time.”
Rich Heyman. Aragon and Seragon. These startups were a one-two punch. The San Diego-based entrepreneur sold Aragon Pharmaceuticals and its prostate cancer drug for up to $1 billion to Johnson & Johnson in July 2013. Before that hand-off, Heyman was thinking a step ahead, splitting off a breast cancer asset into a second company, Seragon Pharmaceuticals. The same team stayed intact, kept working, and sold Seragon a year later to Roche/Genentech for up to $1.7 billion.
Heyman is a quiet, thoughtful type in interviews. He’s working these days, once again, with the renowned cancer researcher Charles Sawyers to build another company, South San Francisco-based ORIC Pharmaceuticals. In his late 50s, Heyman keeps going in startups because he enjoys taking relatively raw concepts and giving them direction. “You just have it in your blood or your genes,” he told me last fall. “I love early technology, good science out of academic labs. I’m a scientist at heart.”
Kathleen Sereda Glaub. Glaub worked her way up on the finance side of the house at Genentech and Cell Genesys. Her first big hit as an entrepreneur came at Berkeley, Calif.-based Plexxikon. As president of that small drug developer, she teamed up with scientific entrepreneur Peter Hirth for more than a decade. They created the melanoma drug Zelboraf for melanoma, and sold the company to Daiichi Sankyo for up to $935 million in 2011. Then she started over in another startup, San Mateo, Calif.-based Afferent Pharmaceuticals. That company, with a drug for chronic cough and cough related to idiopathic pulmonary fibrosis, navigated into Phase II clinical trials. Merck came along last month and snapped it up for $500 million upfront and $750 million more in milestone payments.
Peter Van Vlasselaer. An immunologist by training, Van Vlasselaer got his first startup experience at Seattle-based Dendreon. He worked there six years as an early employee and vice president in the 1990s, when the die for its prostate cancer immunotherapy was cast. He moved on to senior vice president level at another small company, Brisbane, Calif.-based InterMune. When given the chance to be a first-time CEO at Mountain View, Calif.-based Avidia, he didn’t blow it. He sold that company, the developer of an IL-6 inhibitor for autoimmune diseases, to Amgen for $380 million in 2006. Proving that wasn’t a fluke, he created value in his next stop. Arresto Biosciences, the developer of an antibody for fibrosis, was acquired by Gilead Sciences for $225 million upfront.
After a brief stint to stabilize iPierian during its upheaval, he jumped into another startup, Redwood City, Calif.-based Armo Biosciences. Before cancer immunotherapy asset values skyrocketed, he and the Armo team were at work developing a recombinant IL-10 molecule from Merck that researchers think has potential to activate killer T-cells. When I interviewed Van Vlasselaer in November 2013 about getting back into cancer immunotherapy, he showed he understood the moment in time: “The whole immunotherapy field has come and gone so many times, and now it’s back. I think it’s back for good,” he said. Prescient words.
Katrine Bosley. Bosley comes from a family of entrepreneurs, so starting companies and taking on the associated risk has always struck her as “normal.” She got her foot in the door of biotech as an admin assistant at a startup, and worked her way around the Boston biotech community in stints at a then-small company (Alkermes), in venture capital (Highland Capital Partners), and then at a mid-sized biotech becoming a bigger, more diversified enterprise (Biogen).
Eager to grow, she took a job as vice president of business development at Waltham, Mass.-based Adnexus Therapeutics, staying through its acquisition by Bristol-Myers Squibb. Her first CEO job was with Waltham, Mass.-based Avila Therapeutics in April 2009. The company had raised a $21 million Series A venture round two years earlier, and had about 30 employees. During the post-financial crisis time, she helped wrap up the Series B investment. She then tirelessly told the story of a covalent-binding small molecule aimed at the Bruton’s tyrosine kinase (BTK). She led the company through key external validations from the Leukemia & Lymphoma Society, Clovis Oncology, and Sanofi. Avila ended up acquired by Celgene in January 2012 for $350 million upfront, plus up to $575 million in milestone payments.
That experience put Bosley in demand for the next thing. But she did something unusual. She took a full six months off. She spent time with family, traveled to Peru, Bhutan, and Papua New Guinea. She carefully evaluated her next step through board work, and as an entrepreneur-in-residence at the Broad Institute. Then the right opportunity knocked. Editas Medicine, an aspiring drugmaker using CRISPR-Cas9 genome editing technology, needed a CEO. The company had raised a $43 million Series A, had 14 employees, and was about six months old. Bosley leaped. Two years later, she led its IPO. Editas, even though it’s still in preclinical development, now has a market value of more than $1 billion.
It would be easy to get carried away with the wide-ranging potential of CRISPR. Bosley’s optimistic like all entrepreneurs. But she also isn’t afraid to talk about how risk and uncertainty go with the territory. Startup life is about adjusting to changing circumstances. “You can’t just be comfortable with uncertainty, you have to actually enjoy it,” Bosley said. “There’s no rulebook or guidebook. How do you figure out what to do? How do you build a team?” As a business strategist, she likes to organize her options into “30-tab spreadsheets” as her friend and fellow entrepreneur Michael Gilman jokes. Some may be less methodical, more intuitive. But Bosley and Gilman show there’s more than one way to be successful in startups.
Randy Scott. The co-founder of Incyte, Genomic Health, and Invitae is one of the most respected entrepreneurs in the genomics and genomic diagnostics business. Incyte morphed into a drug developer in later years, and is now a completely different company worth more than $16 billion. But he was in position to do so because of the value created from its genomics work. Scott’s next act, Redwood City, Calif.-based Genomic Health, blazed a trail with its molecular diagnostic test for breast cancer. His latest venture, San Francisco-based Invitae, is casting a wide net with genomic tests for rare diseases, cancer and cardiovascular disease.
Tillman Gerngross. Gerngross, a professor at Dartmouth College, got his first taste of entrepreneurial success with GlycoFi. That company, which made engineered antibody drug candidates in yeast, was sold to Merck for $400 million in 2006. Determined to do things differently on the next go-round, to make sure antibody technology didn’t get sold and put on ice inside one company (as had happened several times in the past), Gerngross co-founded Lebanon, NH-based Adimab. The idea was to create a freestanding, independent antibody discovery shop that could thrive on licensing its technology to multiple partners. It has done that in spades, with more than 35 partnerships and a reported market valuation of more than $1 billion. Gerngross also likes to keep multiple plates spinning at once. He co-founded Arsanis; oversees tech transfer at Dartmouth; maintains an academic lab; and has a part-time gig as a venture partner with SV Life Sciences.
Troy Wilson. A chemist and lawyer by training, Wilson occupies an unusual spot at the intersection between science and business. He got his first entrepreneurial taste as a co-founder of San Diego-based Ambrx in 2002. He stayed there about four years, and moved on to co-found and lead San Diego-based Intellikine, an early mover in the world of PI3 kinase biology. That company was sold to Takeda Pharmaceuticals for $190 million upfront and $120 million in milestones in 2011. Now he’s the CEO of Kura Oncology, a cancer drug developer that he took public (albeit at a lesser price than hoped).
Wilson also co-founded and leads two other small companies—Wellspring Biosciences, and Avidity Biosciences. Wellspring, a company that includes a few key people Wilson worked with before at Intellikine, is working on a drug aimed at the KRAS gene that has stymied so many companies over the years. It operates largely through a partnership with Johnson & Johnson. Avidity is an antibody-siRNA conjugate technology company that leans heavily on the talents of two senior managers Wilson works with there—Kent Hawryluk and Art Levin.
Wilson said enjoys startups partly because of the science, but also the puzzle of figuring out the right business structure for it at the right time. “Biotech is absolutely a team sport,” Wilson said. “The thing I have a skill for is recruiting great people, helping them set ambitious goals, and challenging them to meet or exceed those goals.” One of Wilson’s investors, Oleg Nodelman of EcoR1 Capital, sees sharp instincts. “Troy has figured out a solid formula and has a great nose for attracting great assets and great people around him,” Nodelman said.
Bruce Montgomery. A pulmonologist by training, Montgomery has made a career out of developing drugs for cystic fibrosis. At Genentech, he worked on developing Pulmozyme. As an entrepreneur, he went on to spearhead development of the inhalable antibiotic, tobramycin, at Seattle-based Pathogenesis. That company was acquired by Chiron (now part of Novartis) for $700 million in 2000. His next act was as co-founder and CEO of Corus Pharma, another developer of an inhalable antibiotic for cystic fibrosis. That was acquired by Gilead Sciences for $365 million in 2006. After a few years in senior management at Gilead, Montgomery started Cardeas Pharma to develop a novel antibiotic for ventilator-associated pneumonia. Clay Siegall, the co-founder and longtime CEO of Seattle Genetics, once called Montgomery “the top biotech entrepreneur in Seattle.”
Montgomery loves a good joke. When I asked him what personality traits are necessary to make it as a serial entrepreneur, his answer was part astute observation/part wisecrack: “I am not sure ‘serial entrepreneurs’ describes the model. Perhaps we are more like the movie industry that moved away from soup-to-nuts studios, to single movies (companies with one focus with everything else outsourced). As for a secret to success, I will also steal from Michelle Obama’s speech, e.g., anything is possible, hard work, and your word is your bond.”
Philippe Dro. Dro has built a track record as one of the strongest serial biotech entrepreneurs in Europe. He was CFO at Switzerland-based Axovan, a developer of an endothelin receptor antagonist acquired by Actelion for $191 million in 2003. Then came Endoart, a developer of remote-control implants for treatment of morbid obesity. Dro, as chairman and CEO, sold that company to Allergan for $97 million in 2007. He followed that up with an even bigger success at Glycovaxyn, a conjugated vaccine company sold for $190 million last year to GSK. Now he’s working at Austria-based Themis Bioscience, a biotech startup aimed at vaccines for infectious tropical diseases. “Philippe is really great, very entrepreneurial, usually helps 2–3 startups at the side at any given moment in time,” said Regina Hodits, a general partner at Germany-based Wellington Partners. “He was instrumental to find a business opportunity for Glycovaxyn and is doing a great job at Themis for us, which was not that easy. He is soft-spoken and charming, but at the same time firm and driven.”
Craig Venter. Being a successful entrepreneur sometimes makes one unpopular. Venter made a lot of enemies in academia when he aimed at dagger at the heart of NIH-funded science in the 1990s, claiming the private sector could sequence the genome better, faster, and cheaper than a government-supported project. At Celera Genomics, Venter rode the go-go wave of the first genomics bubble, creating a lot of paper wealth, for a time. When that company shifted gears into drug development and Venter needed something else to do, he started his own research institute, the J. Craig Venter Institute in San Diego. It now has 250 scientists and staff. That’s a startup of a different kind, but Venter wasn’t done with the corporate world. He co-founded Human Longevity, Inc., which has audacious goals for a new age of genome sequencing and its application to longevity and wellness. HLI raised a $220 million Series B financing in April. If nothing else, that’s proof that Venter, pushing 70, can rally people and money to pursue lofty dreams.
Luke Timmerman will be moderating a panel at BioPharm America in Boston this September 13–15 called “What makes a serial entrepreneur tick and why are they so successful?”