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to California, no more moves until after they graduated. Scangos agreed.
A couple years later, the Human Genome Project was starting to rev up, huge amounts of information was transforming biology, and Scangos says he didn’t think pharma companies were in position to take advantage of it. Once again, the action was in academia and biotech. In 1996, he was wooed to lead a Cambridge, MA-based startup called Exelixis that was seeking to industrialize genetic research, by knocking out genes in fruit flies to see what effect that had on disease processes. The thought then was that this would provide valuable information for drug development.
Scangos loved the concept, but didn’t like the fact that Exelixis was in Cambridge: he had promised his daughters he wouldn’t leave California so soon. He declined the move, but the board wanted him so badly that Exelixis moved to California—almost all of its 24 employees, anyway—to set up shop with Scangos at the helm there.
It was at Exelixis that Scangos cut his teeth as a biotech CEO, raising money, recruiting talent, and switching strategy when it became clear that selling information wasn’t as good a business as developing drugs. Over the next 14 years, Scangos oversaw the building of a broad and deep pipeline of new cancer drugs, and struck a number of Big Pharma partnerships. But by 2010, which turned out to be Scangos’ last year at the helm, Exelixis hadn’t yet won FDA approval for any new drug, and when investors demanded more tangible progress in clinical trials, the company had to do some painful downsizing and re-focusing. (Exelixis has since bounced back under his successor, Mike Morrissey).
Scangos initially says he wasn’t interested when a recruiter called him to gauge his interest in being CEO of a large independent biotech company in Boston. But the recruiter persisted, saying the board really wanted to meet Scangos.
Scangos ultimately warmed up to the board’s pitch. After all, few biotech companies ever get to Biogen’s position, with thousands of employees, a multi-billion-dollar valuation, several drugs on the market, lots of infrastructure for science and manufacturing, loads of cash in the bank, and a long history of profits. And the kids were out of the house, so that was no longer an issue. “It’s such a unique company, and a unique opportunity, I figured I’d be crazy not to take it,” Scangos says.
The story of Biogen’s renaissance since Scangos took over in mid-2010 has been well-told. He made a big round of cuts in his first few months, recruited a couple of well-respected former CEOs to his senior management team, and decided to move Biogen’s headquarters from the suburbs back to Cambridge next to the company’s scientific core and where it had been until just before he took over.
Those moves reflect a philosophy that Scangos has been forming on his journey. He’s been around long enough to know that drug development is a major gamble, despite all the advances in our understanding of biology. One minute you might be the hero, while the next minute people will be calling for your head. To hear him talk about how he approaches decisions, he sounds pretty humble.
He quoted another former mentor of his from Bayer. “Horst Mayer once told me ‘as you rise up in management, you know less and less about more and more. Then you become the CEO, and you know nothing about everything,'” Scangos says. “What he meant by that is you have to recognize the limits of your own knowledge.” That means a scientist like him needs to recognize that other people know more about things like reimbursement, sales, marketing, and manufacturing. A CEO at a big company like Biogen needs to oversee all of it, defer to the subject experts, but also have a good “BS filter.” As he put it: “You have to have big picture, you have to know the issues, and you have to ask tough probing questions.”
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