How Biogen Idec Overhauled R&D Under Doug Williams

3/7/12Follow @xconomy

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early-and-middle part of the pipeline, from preclinical through early clinical development, which were focused on interesting biological targets, but which “really hadn’t progressed as quickly as they should have,” Williams says. There were programs that had patents running low on life, and others that would have been winners if they had hit the market five years ago, before competitors emerged, he says. A lot of tough choices still had to be made about scrapping certain programs, and then re-allocating people and resources to other projects that appeared to be more competitive, Williams says.

While Biogen still had some rare opportunity with seven drug development programs in late-stage development, the R&D reviews led the company to scrap 17 programs from the early-and-middle parts of the pipeline, Williams says. While Scangos did the “rough cut” by getting Biogen out of cancer and cardiovascular disease, Williams says he did “fine surgery” by digging into individual programs in other diseases and deciding which ones had to go.

The cuts weren’t about saving money, but rather more about setting priorities, Williams says. The company’s R&D budget has remained fairly steady at about $1.2 billion a year over the past three years. By spending the same amount on a smaller number of programs, Biogen hopes to move its chosen programs faster through development.

“It was clear we were trying to do too much,” Williams says. “By cutting programs, it enabled us to reallocate resourcing, and make sure we were adequately staffed on programs we thought did still have a competitive advantage in the marketplace.”

Like most any new executive on the job, Williams says he started off by trying to get his bearings internally, getting to know people in the company as well as specific profiles of projects in the pipeline. He had heard all the critiques of Biogen R&D from the past, from shareholder Carl Icahn and others. He says he thought the criticism went too far. “Essentially there was a blanket statement that they didn’t know how to do R&D,” Williams says. “I found that to be inaccurate. I think there were pockets of excellence, programs that were really good. And there were projects that candidly deserved to be cut.”

But once Williams and his team decided to make the series of cuts to internal R&D, it put the onus on them to fill the voids that were created. That meant a new urgency to speed up development of internal programs, and created an imperative to do more in-license of promising programs from the outside. Steve Holtzman, Biogen’s executive vice president of business development, spoke about his focus in doing more of these deals in an exclusive interview with Xconomy in January. Biogen has put the new strategy on display with its deals in the past year with South San Francisco-based Portola Pharmaceuticals, Carlsbad, CA-based Isis Pharmaceuticals, and through the acquisition of Cambridge, MA-based Stromedix.

Back when Scangos and Williams were getting started, one of the things they talked about was the need to make “crisper decisions” at a company that had a reputation for letting decisions bog down in committees. To do that, Williams says certain committees that didn’t add much value, have been disbanded, and small teams have been empowered to make certain decisions. Part of what he’s aiming to do is instill a cultural attitude that says decisions need to be made about programs even when not all the data you’d like to see is available. “You have to recognize that you have to keep programs moving, and sometimes you have to make decisions in the absence of the data you wish you had. You really have to deal with a bit of ambiguity,” Williams says.

Williams, a scientist who was formerly the CEO of Seattle-based ZymoGenetics, said a year ago that he wanted to roll up his sleeves and focus on R&D all day long, rather than spend a lot of time on the fundraising circuit, as CEOs must. Now he says he’s gotten his wish, as he spends most of his time at Biogen’s main labs in Cambridge, talking to scientists and developers, and learning about a wide variety of programs. The company, which has grown back to 5,000 people since the cuts of November 2010, has a lot more on its plate now with an ambitious series of Phase III development programs, and the final regulatory push with BG-12. He says he’s still getting used to the sheer size and complexity of an organization this big.

“I’m fortunate to work around really smart people, and to be doing great work with people who can teach me,” Williams says. “That’s the thrill of a job like this, spending days tackling difficult problems, and doing good things for patients.”

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