David Schenkein, Cancer Doc Turned CEO, Aims to Build New Genentech
(Page 4 of 4)
eventually run his own company, with Ebersman serving as an “official” mentor and grooming him for such a role. He was also talking with Levin about heading up one of the companies his VC firm, Third Rock, was investing in.
Even so, Schenkein wasn’t planning to leave Genentech just yet—even when Roche swooped in and made a hostile takeover bid in 2008. Levinson and others, he says, told the staff “don’t worry…we’re going to fight them tooth and nail, we’re going to win this battle and we’re going to stay independent.”
“So none of us looked for jobs, and all of us just focused on getting our drugs approved and let Art fight the battle,” he says.
As everyone now knows, however, Genentech didn’t stay independent. Roche persisted, raised its offer, and Genentech finally agreed to be acquired in March 2009. Schenkein says it was “like a funeral” internally when the news broke. Employees put together a spontaneous rally for Levinson on the main part of the campus. Thousands of Genentech employees walked out, holding paper hearts they’d cut out, and gathered around for the rally, which was called “Hearts for Art.” Levinson came out, stood on a truck, and spoke to everyone (you can see it on youtube here). Schenkein, in the crowd, was moved that day to run his own company.
“It was, for me, an inspirational moment, with Art as a role model of the power of what a leader can actually do,” he says.
So Schenkein began making moves. He told Levin he had a specific set of criteria if he were to leave Roche for a startup: it had to be a company with a vision, and investor support, to be a long-term, independent company. It had to be a cancer company, but with a novel approach, rather than just some incremental advance. And it had to have at least one investor that Schenkein trusted.
Levin was eager to get Schenkein in one of his Third Rock portfolio companies. “David had come to a point in his career, after time at Millennium and Genentech, where he had all the necessary experiences to successfully lead a company,” Levin says. “And although experience is necessary it is far from sufficient. What is most important for a great leader in biotech, are those inherent [emotional intelligence] capabilities and confidences that allow you to hire the best people, including people smarter than yourself, and create a team committed to changing the world—that is who David is!”
Levin asked him to look at two companies in the Third Rock portfolio: Constellation Pharmaceuticals, an epigenetics startup, and Agios, which was looking at a raw field of oncology research, cancer metabolism. Schenkein was familiar with Agios’ founders: he already knew of Lewis Cantley through Cantley’s wife, Vicki Sato, and trained in a lab near Cantley earlier in his career. And he’d heard Craig Thompson, another Agios founder, give a seminar on cancer metabolism a year earlier. Schenkein was intrigued. Genentech was thinking about cancer metabolism as well, but Schenkein says it was very, very early. Agios was early in the process as well, but Schenkein saw big potential, and told Levin that was his choice.
“What I saw was the potential to move into a novel area of targets that could [hit] cancer from an orthogonal approach that we had just not been doing,” he says. “It had the feel of ‘go big or go home.’”
Schenkein liked the science, and the idea that Agios had a lot of money in the bank, with a big $33 million Series A commitment. He met with Agios’ three investors—Third Rock, Arch Venture Partners, and Flagship Ventures—and came away convinced they weren’t going to flip the company.
“They said, if you want to build the next Genentech, go for it,” Schenkein says.
So Schenkein resigned from Roche. Roche CEO Severin Schwan was stunned that Schenkein gave away the chance to run the world’s biggest oncology franchise. Both Schwan and Levinson pleaded with Schenkein to stay.
“[Schwan] was beginning to lay out what I was going to be doing and I said ‘Hold it, I’m not so sure I want to do this…Big Pharma, 80,000 employees, being on an airplane to Basel every two weeks, I’m not sure this is what I want to do,” he recalls. “I want to run a company.”
Schenkein took the job in May 2009, and has staunchly pursued his vision of one day having Genentech and Agios mentioned in the same breath. This is the kind of sentiment that is sure to raise eyebrows among battle-hardened industry veterans. Agios, of course, isn’t on the same planet as Genentech. Cancer metabolism, while exciting as an approach, still has everything to prove in the clinic.
But Agios at least has a chance. Schenkein and Agios’ investors decided in 2009 they’d take the company public, because that’s what long-term independent companies do.
Schenkein laid the groundwork a few years ago. In 2010, he helped steer Agios into a massive partnership with Summit, NJ-based Celgene (NASDAQ: CELG). Then, in 2011, Agios began driving towards an IPO by meeting with “hundreds” of funds so they knew who management was and they knew the science. Many public investors already knew Schenkein from his Genentech days. Those connections all paid off with an upsized IPO that raised $106 million in July. Now comes the hard part—turning all that cash into a sustainable company.
“I know it’s a long road, there’s going to be a lot of twists and turns and ups and downs—and we’ve been very lucky, extraordinarily lucky. I’ve used this as the time to fill up the bank account for when we hit the tough times,” he says. “So my focus is hiring amazing people, trying to inspire them, with the people around me, to do things they didn’t think they could do, make sure we have adequate cash to do that, do incredibly high quality science—and then don’t make any decision unless it’s guided by whether or not it would be good for a patient.”