Four months have passed since Cambridge, MA-based Millennium Pharmaceuticals was taken over by Japan-based Takeda Pharmaceutical for $8.8 billion. Now that some of the dust has settled, we checked with CEO Deborah Dunsire to see just how much has changed at one of Cambridge’s leading biotech companies.
Quite a bit, although it’s not the usual chainsaw stuff you see with U.S. takeovers. It turns out Takeda didn’t buy Millennium solely for its fast-growing cancer drug, Velcade. The parent company has shown it also wanted Millennium’s workforce of 1,000 employees, and their capability in developing cancer drugs, says Dunsire. Besides the 10 drugs Millennium had in its pipeline when the acquisition closed in May, the Cambridge group has been given responsibility to develop and oversee clinical trials for 10 more cancer medicines from Takeda’s worldwide discovery teams. So instead of firing people to fatten the bottom line, Millennium will have to hire another 150 to 200 people in Cambridge to handle all the work over the next 18 months, she says.
“I was just talking to another biotech CEO the other day who was so excited that Takeda chose to focus on our capabilities, and wanted to acquire the capabilities,” Dunsire says. “That’s a kudo to the team at Millennium, who are really seen as shining stars.”
Those stars will not only have plenty to do, but lots of authority to make decisions on how to proceed in clinical trials, Dunsire says. Takeda wants them to keep operating with autonomy, so Millennium’s talented workers will want to stick around. If they stay, then comes an even harder task: maintaining the egalitarian culture, teamwork, and quick decisiveness that helped Millennium excel with Velcade. Then there’s dealing with a 13-hour time zone difference, a large company budget process, language barriers, national cultural barriers, and company cultural differences. Culture change is always hard to measure inside a company, but the early signs are that Millennium employees are giving the new employer a chance. Turnover rates have been cut in half since the takeover, to less than 10 percent, Dunsire says.
“I view this as one of the most significant leadership challenges in business,” Dunsire says. “It’s not for sissies.”
Nobody would accuse Dunsire of shrinking from the task. She certainly wouldn’t have trouble finding another job if she wanted. Before she joined Millennium in 2005, Dunsire had a track record of helping develop a dozen new drugs while at Basel, Switzerland-based Novartis, and overseeing a unit that grew from $50 million to $2.1 billion there in the span of a decade.
Dunsire says she’s staying around for the challenge of repeating what she and the team have done with Velcade. The drug is gaining strength in the market for patients with multiple myeloma, a deadly bone marrow cancer, against Summit NJ-based Celgene’s Revlimid. Velcade was approved by the FDA in June for use in newly -diagnosed patients, and based on its ability to eliminate tumors in a clinical trial, doctors are eager to use it. I know, because I witnessed a standing ovation from doctors at the American Society of Hematology meeting in December, when pivotal clinical data was presented on the drug, showing it could wipe out myeloma completely for 30 percent of patients, compared with 4 percent for those on standard immune suppressors.
That applause is being translated now into the marketplace, contributing to Takeda’s bottom line. In a survey of 100 hematologist/oncologists this summer, about 70 percent said they expect to increase use of Velcade this year, by an average amount of 28 percent, according to Christopher Raymond, an analyst with Robert W. Baird in Chicago. That means Velcade should generate sales of $1.3 billion for 2008, Raymond said in a note to clients last month.
Dunsire says she’s sticking around because she wants to do something like that again.
“I really believe in what we’re doing here,” Dunsire says. “I loved Millennium as it was. We were in an exciting position with Velcade coming along and the pipeline advancing. There’s a lot of blood, sweat, and tears behind that. For me, working in oncology, where there’s a high unmet need, is something I love to do—and now we have 10 other compounds we’re studying behind it.”
Dunsire has been given a lot of decision-making authority, but it’s not absolute. She reports to Takeda’s president, Yasuchika Hasegawa, who answers to Chairman Kunio Takeda and the board of directors. “They want to know what’s happening. It’s not autonomy without oversight. You have to be answerable to the board,” Dunsire says.
One of her primary tasks is to keep her Millennium team in place, She wants to “preserve the core” of Millennium, while finding ways to adapt to life within a much larger company with more projects, people, and resources. She defines the core traits as egalitarianism, empowerment, autonomy, quick-decision making, and inclusiveness. One of the dangers, she says, in becoming part of a larger organization is losing some of that verve—and becoming tentative, always feeling the need to run things up the flagpole.
Dunsire, who’s originally from South Africa, says she hasn’t been swamped with travel to Japan, although she has enjoyed her time there. On a recent trip, she got to try the traditional meal called kaiseki, an elaborate multi-course dinner made with fresh fish, vegetables, and soup, served on low tables placed on tatami mats. She still hasn’t learned much Japanese language beyond “Hello” and “How are you?”
Luckily, many of the executives at Takeda speak English, she says. They tend to work long days, so when she needs to communicate, it’s not uncommon to start a videoconference at 7 am Eastern time in the U.S., when it is 8 pm in Japan. Or the Millennium crew will meet at 9 pm Eastern, when it’s 10 am in Japan, Dunsire says.
“It’s hard because we try to preserve the concept of balance,” Dunsire says. “We try to preserve the dinner hour. Although we certainly do work hard and travel, we want to keep that.” It’s just one of many challenges to overcome so Millennium can make the kind of impact for Takeda that it did when it was a standalone, entrepreneurial biotech company.