Biotech Firms' Research Chiefs Balance Demands Of Science And Competition

Top scientists from eight companies discuss what it takes to maintain a creative and productive laboratory environment Back in 1983, scientists at Calgene Inc. in Davis, Calif., began to tinker with genetically engineered corn. Their goal at the time - to improve the vegetable's carbohydrate storage as well as its resistance to pests - seemed to make pretty good sense from both the scientific and the business points of view. Just five years later, however - after spending $5 million - Calgene plant pathologist Robert Goodman made a tough call: He decided to abort the whole project. "It wasn't an easy decision to make," says Goodman, who until this summer was Calgene's vice president for research and development. "It was a good commercial opportunity, but we were unable to bring the technology on line fast enough. There were other projects that were closer to market and more certain commercially." Too many opportunities, too little money. It's a dilemma for scientific managers in all sectors. But it is an especially vexing problem for research directors at biotechnology companies like Calgene, where the technology is so promising, the potential market so great, and the competition so keen.These top scientists have landed in management roles because, no matter how financially well-endowed a company may be, good science inevitably is the key to success in biotechnology. Unlike academe, where there is scant pressure to produce a marketable product, and the large pharmaceutical companies, where skillful and costly marketing can bolster the acceptance of a product, "every success or failure in this industry hinges on the science," notes the research director at one young biotech firm. Who are these people holding the reins of leadership in the U.S. biotechnology industry? Where do they come from, where are their companies headed, and how do they plan to get there? The Scientist sought answers to these questions from the directors of research and development at eight leading firms. Comments from these chief scientists reveal a great deal not only about themselves, but also about the environment, pressures, and hiring policies at their firms. They also shed light on the difficulties these directors routinely encounter in managing other scientists in the pursuit for profit in a highly competitive industry in which companies can't afford to make many mistakes. As a group, these scientists represent the cream of their professional generation. In the prime of their careers - their ages range from 40 to 51 - they tout impressive C.V.s with long lists of scientific accomplishments and publications. They were trained in the early years of the biotechnology revolution, having earned their doctoral degrees between 1968 and 1976. And all but one of them is a man. "The startup environment is made tough for women," says one scientific director. But in spite of their similarities, generalizing about what makes a leader in the biotechnology industry is difficult. Training among these scientists ranges from biophysics to medicine to plant virology. Some have academic backgrounds while others come from corporate settings. As managers they range from novice to veteran. In fact, it is rare even to find a match between these scientists' area of expertise and their companies' research. Harvey Berger, who directs monoclonal antibody research at Centocor Inc. in Malvern, Pa., where he is president of R&D, holds an M.D. in internal medicine. Calgene's Goodman says that for many years he steered his company away from his own field of plant virology. And Daniel Vapnek, a microbiologist by training, admits that when he became Amgen's first research director in 1981, he had never even heard of erythropoietin, the recombinant drug that stimulates the production of red blood cells, which the Thousand Oaks, Calif., company hopes will become a blockbuster product. Likewise, their motives for accepting the challenge and risk of directing science at fledgling companies vary. Those who arrived from academia say they resented teaching responsibilities, grantsmanship, and bureaucratic hassles that kept them away from their labs. Two who moved from large pharmaceutical corporations talk about their desire to have a stronger voice in the development of a company. "At Bristol-Myers there were over 200 vice presidents; seven of them in research," says Dale Stringfellow, who for six years was one of those seven scientists before joining Collagen Corp. in Palo Alto, Calif., where he is vice president for R&D. "My impact on the direction the research could go was minimal." What unites them, perhaps, is a desire to see scientific research applied to the needs of society. "It's one thing to write in the significance section of your NIH proposal: `If I work on this for the next 10 years and discover its function, maybe we'll have some new insight into cancer or AIDS,'" says Vicki Sato, vice president of research for Biogen Inc., in Cambridge, Mass. "It's quite another to say: `Look, we've got two or three years to translate this idea into a product candidate that is in the clinic and accessible.' That's a tremendously exciting challenge and, when it works, tremendously gratifying." The directors all expect that their efforts will be successful. And they use words like innovative, independent, and brilliant to describe their colleagues who could make it happen. But words like arrogant, stubborn, and competitive also come to mind, they admit. HARVEY BERGER, 40 President of research and development at Centocor Inc. since 1989. Received M.D. from Yale University in 1977, specializing in internal medicine and radiology. Held academic and clinical positions at Yale and Emory universities until joining Centocor in 1986. Did research in cardiac imaging. "I never expected to leave academic medicine, but I was impressed with Centocor's combination of opportunity, strong products, scientific excellence, and vision." L. PATRICK GAGE, 48 Executive vice president for scientific affairs at Genetics Institute Inc. since November 1989. Earned Ph.D. in biophysics from the University of Chicago in 1969. In 1971, worked at the Roche Institute of Molecular Biology, part of Hoffman-La Roche Inc.; in 1984, became vice president for all the company's exploratory and molecular biology research. Did personal research in bacteriophage genetics. "I think that proteins have an enormous part to play in future pharmaceutical developments, and I hoped to have a larger impact on that at Genetics Institute." ROBERT M. GOODMAN, 44 Vice president for research and development at Calgene Inc. since 1982 (left in June). Received Ph.D. in plant virology from Cornell University in 1973. Joined Calgene after 10 years as a professor at the University of Illinois. Did research in the genetics, molecular biology, and viruses of plants. First to describe the geminiviruses, plant viruses that contain single-stranded DNA. "I had decided never to move to industry. But I needed more space and more funding, and was interested in broadening my scientific horizons. I was also into taking risks." JAMES R. RASMUSSEN, 43 Senior vice president for research at Genzyme Corp. since 1987. Earned Ph.D. in organic chemistry at the Massachusetts Institute of Technology in 1976. Held academic positions at Harvard and Cornell universities until joining Genzyme as a senior scientist in 1984. Did research on the chemistry and biochemistry of glycoproteins and carbohydrates. "I felt I could have a major voice in the decision-making process at such a small company." VICKI L. SATO, 43 Vice president of research at Biogen Inc. since 1986. Earned Ph.D. in biology at Harvard University in 1971, where she taught and ran a lab investigating the mechanisms that regulate the immune response. In 1983, left the university to found Angenics Inc., where she was director of research until joining Biogen in 1984. ."I found the birth of this industry incredibly exciting, because it really was, aside from medicine, the first real application of the biological sciences." DALE STRINGFELLOW, 45 Vice president for research and development at Collagen Corp. since 1988. Earned Ph.D. in microbiology from the University of Utah in 1972. From 1973 to 1982, was scientist and manager for the Upjohn Co. Served as head of preclinical cancer research at Bristol-Myers Co., 1982-1988. Did research in molecular virology and cellular control mechanisms. "I thought at a smaller company I could have a much greater impact." PABLO VALENZUELA, 49 Senior vice president for research and development at Chiron Corp. since 1981. Received Ph.D. in chemistry from Northwestern University in 1970. Held academic positions at Catholic University in Santiago, Chile, and the University of California, San Francisco, until 1981, when he founded Chiron with a group of UCSF colleague. Did research on the purification and properties of RNA polymerase from animal tissues. "A group of us was interested in developing a recombinant DNA vaccine for hepatitis B. But we couldn't do so within a university setting." DANIEL VAPNEK, 51 Senior vice president for research at Amgen Inc. Received Ph.D. in microbiology from the University of Miami in 1968. Held academic positions at Yale University and the University of Georgia until joining Amgen in 1981 as director of research. Did research on DNA replication and genetic recombination. "I was using recombinant DNA techniques in my research, and got very interested in the power of the technology. I wanted to see what the practical applications of the research could be." "The people who report directly to me have pretty strong personalities and ideas," says James Rasmussen, senior vice president for research at Genzyme Corp. in Cambridge, Mass. Adds Pablo Valenzuela, senior vice president for R&D at Chiron Corp. in Emeryville, Calif., "Scientists are very demanding people. You don't manage a scientist by giving orders, you have to manage by persuasion. So the person has to respect you." One way to win that respect is to relieve scientists of such "distractions" as fund raising, public relations, and unnecessary paperwork, they say. These executives also serve as a buffer between the scientists and the business managers, whose eyes are on short-term market goals rather than long-term research goals. "On every one of our projects," says Stringfellow, "I need to educate the businessperson as to the unknowns in a lab experiment that can delay a timetable." Promoting teamwork is another way of keeping such an environment productive, they agree. Goodman has united biochemists, protein chemists, immunologists, molecular biologists, cell biologists, and geneticists in his company's attempt to modify the amount of fat stored in rapeseed. Together the team hopes to identify and purify the key enzyme, clone the gene, put it into transgenic plants, and evaluate the result. "I look for people who have a lot of initiative, who are not looking for a lot of support, and who are willing to do a lot of things to make a project work," says Collagen's Stringfellow, who has recently enlisted team members to help manufacture the materials for a clinical study of Contigen, an injectable therapy for incontinence. The product is awaiting registration by the FDA. But a roadblock to teamwork, says Chiron's Valenzuela, is the training that scientists receive. "The American educational system teaches you to be a competitor," he says, pointing out that postdocs working in the same academic labs may be fierce competitors. "Once you hire that person," Valenzuela says, "you have to convince him to work on a team, to share discoveries, to share publications - to share all of the things that scientists don't like to share. And that takes a lot of work." Stringfellow says that one of his junior scientists has returned to academia for just this reason. "He felt the company was stifling him," says Stringfellow. "He wanted to be more independent, and I felt he was not contributing his full ability to the company. In a corporation, you can't have too many mavericks." Besides having to manage talented scientists, the directors say, they also need to keep up with a broad and expanding range of science. "The responsibility to remain current and intellectually useful across such a broad range [of fields] is a tremendous challenge," says Biogen's Sato. Although these scientists don't pretend to have expertise in every discipline they manage, they do need to be familiar enough with each specialty to decide which projects to continue and which to stop. "There are so many opportunities, and unfortunately for most of them you have insufficient data to know which are going to pay off," says L. Patrick Gage, executive vice president for scientific affairs at Genetics Institute Inc. in Andover, Mass. Earlier this year Gage had to decide whether to continue heavily investing in a bone growth factor program. Based on preclinical data that Gage calls "extremely exciting," the company is continuing the project. But given the 50 percent attrition rate for biopharmaceuticals in the development stage, Gage knows that he is taking a big gamble. Most of the directors feel that the broader aspects of their scientific training are valuable - and surprisingly applicable - to a top management position. An openness to the unexpected, commitment, and a sense of ownership of their ideas are important components of their current positions that these scientists say they learned through their formal scientific training. "You have to have had the experience of successes and failures in the lab to really appreciate what the job takes and to be a good manager of science," says Stringfellow. For example, he recalls that when he was working in the lab at Bristol-Myers, his division got quite excited when he thought he had discovered a new growth factor. But when he tried to purify and identify the sample, it turned out to be two known molecules. Now, as Collagen looks for factors that control bone growth, one of his scientists recently made the same mistake. "Experience told me to have the scientist go back and check again," says Stringfellow. "And sure enough, unfortunately, it was something different." The directors all agree that the scientific method is a good guide in handling management problems. Stringfellow recalls being sent to a week-long training course as a freshman manager during which, to his surprise, he was taught the scientific method. "A good manager is a person who can make good decisions and utilize resources well, which is what science teaches you how to do," he says. "It also teaches you to be open and aware, so that when the opportunity presents itself, you can take advantage of it." On the other hand, most of the directors feel that their experience as managers has made them better scientists. Although it has forced them further from the laboratory, the experience has strengthened their organizational skills, improved their ability to focus on goals and objectives, and broadened their perspectives and range of scientific knowledge. It has also taught them to be more targeted in their work. "You have to do something with a product focus to it," says Amgen's Vapnek. "You don't have new people coming [into your lab] all of the time, bringing new ideas, like you do at a university. And there are more restrictions on publication; you have to be more concerned about patent issues." Most of the directors say they miss working in the lab. Many resent spending as much time as they do on the business side of their duties. And those who once worked for larger companies long for the management infrastructure and scientific support facilities previously available to them. For these managers, there is an overriding concern about limited economic resources at their smaller companies. But they all generally accept what many academic scientists fear most about the corporate world - the fact that science can sometimes be held hostage to business concerns. As Chiron's Valenzuela says, "Sometimes in order to survive, R&D is one of the things that gets squeezed." Goodman, however, sees a silver lining in that situation. He recalls that, when he joined Calgene in 1982, the company was "meandering" commercially. And he says that the scientists were among those most concerned that their work lacked a market focus. The company's new president, Roger Salquist, changed that in 1984, when he created a vision for the company that involved abandoning a number of scientific projects that didn't fit into specific commercial goals. "The scientific staff was all very pleased," says Goodman. "This is what enabled us to take the company public and raise some $30 million. It all centered on making a good set of judgments about commercial opportunities, technical feasibility, and the size of potential markets. And it allowed us to sell promise without being guilty of hype." Shutting down a project, as Goodman did with Calgene's ill-advised pursuit of genetically engineered corn, is never easy. "There are no assurances or guarantees that your judgment is the correct choice," laments Biogen's Sato. "But I like to think that it doesn't strike as a lightning bolt from the sky. There is a rational decision process, and I think the scientists realize that." "Scientists are accepting of priority decisions," agrees Valenzuela, adding that the fact that scientists hold other top positions at Chiron helps calm the waters. "[My staff] sees that the decision was not made by a businessman, but by a management team that includes very well-known scientists." Nevertheless, for some the challenges and rewards of management can't match the lure of the lab. "It [academia] is a strenuous, satisfying lifestyle," says Goodman, who earlier this summer left his position at Calgene and plans to return to academia within the next year. Goodman, who hadn't planned to move to industry when the company approached him eight years ago, says that he wouldn't trade his experience there for anything. But as he talks about the energy and personal sacrifices demanded by the job, there is strain and fatigue in his voice. "Calgene needs stronger product development and it needs its chief scientific officer to be more involved in regulatory affairs," he says. "I have no expertise and little interest in these areas. I want to return to the lab and have greater autonomy in what I work on. I'm leaving before that becomes a real problem for anyone." If Goodman's colleagues at other young biotechnology firms are not yet burned out with the magnitude of their responsibilities, they are at least painfully aware that their actions can determine the future of each of their companies. "I really feel that the pressure to make it all work is in our court," says Centocor's Berger. "And if we don't, it's our - R&D's - fault." Susan L-J Dickinson is a freelance science writer based in Philadelphia.

Biotech Firms' Research Chiefs Balance Demands Of Science And Competition

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