David Schenkein, Cancer Doc Turned CEO, Aims to Build New Genentech
David Schenkein is a kid from Queens. An underdog. The kid who barely eked his way into medical school. The one who had to work day and night as a young doctor to keep up with those who went to the glitzy Ivy League schools.
That same kid from Queens ended up running the cancer division at a world-class hospital in Boston, helped develop a lifesaving drug for multiple myeloma, and went on to run clinical development at the world’s most prolific cancer drug development shop. Now, at 55, he’s on another highly improbable journey. As CEO of Cambridge, MA-based Agios Pharmaceuticals (NASDAQ: AGIO), Schenkein wants to create the next truly great cancer drug development organization, the next Genentech.
To an outsider, it could easily be interpreted as a lot of hot air. Agios just went public this year with aspirations to lead the field of cancer metabolism. The idea is to fight cancer by essentially starving tumors to death. The field of research is exciting, but still in its infancy. Agios doesn’t have any FDA-approved products to validate its scientific ideas, and it only recently began testing its first drug candidate in the clinic.
Yet nobody’s laughing at Schenkein, or completely dismissing the idea. He’s running one of the most closely-watched biotech companies in the industry, an operation that is now worth over $800 million.
Schenkein says he never could have imagined himself being in this situation a few years ago. Even today, with all the responsibilities of a CEO, he still thinks of himself as a physician. He still carves out time to personally treat blood cancer patients at Tufts Medical Center every other Tuesday.
“That definitely wasn’t on the radar screen,” he says of being a CEO. “I wanted to be a great physician and take care of patients. It was very late in my career before I ever thought about doing what I’m doing today.”
Careers often unfold in unexpected ways. Schenkein’s ambition as a young physician was to be the chairman of medicine at a big academic center. After working his way up from an intern to the head of Tufts’ Cancer Center, he crossed over to industry and designed the clinical trials for bortezomib (Velcade) while at Cambridge-based Millennium Pharmaceuticals. He was recruited later to oversee the clinical development and regulatory work for several of South San Francisco, CA-based Genentech’s big cancer therapies like bevacizumab (Avastin), trastuzumab (Herceptin), and rituximab (Rituxan). Then, in May 2009, he got his shot to run Agios.
“What I love about David is his heart. There is absolutely zero pretense with that guy. There’s no smoke and mirrors. He won’t do anything he doesn’t believe in,” says Nick Leschly, the CEO of Bluebird Bio (NASDAQ: BLUE), who worked with Schenkein at Millennium, led the recruiting pitch to get him to Agios when he was a partner at Third Rock Ventures, and later put him on the board at Bluebird.
Despite his lofty ambitions, Schenkein doesn’t come across as conceited, or strung out by the pressure of making his vision a reality. Quite the contrary. He’ll often throw out lines like he wasn’t blessed with the same size “hard drive” as his scientific peers, or that he makes sure to surround himself with people who are smarter than he is. He latches on to role models to learn from.
“The thing that really sets David apart is his character,” says Hal Barron, Genentech’s chief medical officer and Schenkein’s former boss. “He treats everyone—from a low level position to a chairman of the board—with the same amount of respect and integrity, and does so with humility. It’s David as a person that rises above, and made him such an excellent person to work for and with.”
The character that Leschly and Barron see today was shaped in Forest Hills, NY, a middle-class neighborhood in central Queens. The place is home to many European Jews, and as the New York Times put it recently “is five subway stops and a world away from Manhattan.”
Schenkein’s parents were Holocaust survivors from Germany and Holland. His father was a wholesale diamond dealer in Manhattan, while his mother stayed home to take care of him and his brother. Neither of his parents went to college.
Schenkein described his parents as pretty “hands off.” He and his brother were free to do what they wanted, and shape their own life experiences. Even so, Schenkein describes himself as the peacemaker in blowups between his parents and his rebellious older brother, the more artistic “Woodstock” type.
“They couldn’t understand the culture difference,” he says of mediating disputes between his parents and brother.
Schenkein didn’t have any many clashes with his parents. He channeled his energy into sports and science. He started competing in several tennis tournaments in junior high school and even became a nationally ranked squash player after college. Schenkein’s father wanted him to carry on in the diamond business, but the son felt pulled more toward science.
“He thought it was clean, you don’t have to touch other people, and you could make a good living and support your family,” Schenkein says.
As a child, Schenkein was in awe of his pediatrician, a doctor who used to make house-calls to the family apartment. He loved solving problems, and science and math came naturally. Schenkein, along with many of his childhood friends, applied to two of the city’s top specialized science and math schools, Bronx High School of Science and Stuyvesant High School.
Schenkein got into Stuyvesant, which he calls a “science hotbed,” and with good reason. That was where he met Eric Lander, the famed mathematician-turned-biologist and founding director of the Broad Institute of MIT and Harvard. Schenkein, in fact, competed against Lander in 1974 in what used to be called the Westinghouse Science Talent Search (now known as the Intel Science Talent Search), a science competition for the top high school seniors in the U.S. Lander, a year older than Schenkein, was the clear whiz kid who dazzled and won. Schenkein was a semi-finalist, and incidentally did his Westinghouse project on metabolic enzymes, the type of biology that Agios is built on today.
Lander “wrote a one-page application and I guess he solved some theorem that mathematicians for a century had been trying to solve—he was a high school student,” Schenkein says of Lander, chuckling. “There was Eric Lander, and then the rest of us humans.”
The Stuyvesant experience helped get Schenkein hooked on science. He began spending his summers working in labs, including one at a Connecticut prep school that served as a feeder for his eventual college of choice, Wesleyan University. It was here as a chemistry undergraduate that Schenkein began to see the possibilities of what he could achieve. He designed small molecules that would inhibit a certain enzyme, and published a few papers. When he wasn’t in the lab, he blew off steam by playing squash.
“You realized that if you worked incredibly hard, that you could make things happen,” he says. “It got me really excited about setting the bar high and pushing myself.”
Schenkein wrestled with the idea of continuing on as a scientist in graduate school, but chose medical school instead because he wanted to work with people. He didn’t think he had the chops to make it in science.
Medical schools appeared to have their own doubts about Schenkein. While many friends got into Harvard, Yale, and other top programs, Schenkein got one rejection letter after another. He applied to 31 medical schools, and was rejected by 29. One school, SUNY Upstate Medical School in Syracuse, put him on a waitlist. One place accepted him. That was SUNY Buffalo.
“It was pretty humbling,” he says. “It made me wonder if I had the right stuff to be a physician.”
Schenkein drove out to Buffalo, preparing to enroll, depressed. Three days before classes began, he got an acceptance call from SUNY Upstate. He immediately got in his car and drove straight to Syracuse, leaving the cheap furniture he’d just bought for his Buffalo apartment behind. SUNY Upstate had a solid reputation, and he wasn’t going to waste the opportunity.
SUNY Upstate was where Schenkein decided to be a doctor, and as he says, “dug in extra hard” to prove himself. An attending physician, Paul Cohen, became Schenkein’s mentor, and encouraged him to apply for a residency at Tufts Medical Center, one of the centers of top-notch patient care in Boston.
Schenkein, however, couldn’t even get an interview. Driven to go there regardless, Schenkein came to Boston to interview for a different residency, and walked over to Tufts right after, dressed in a suit. He walked in, with no appointment, asked for an interview.
“The woman who was running the group looked at me like I had 12 heads,” he says.
It was a brazen act, but the director of Tufts’ internship program agreed to meet anyway. Schenkein waited for an hour to meet Marshall Kaplan, and handed him his resume.
“He looked down at the bottom of the resume and said, ‘Wow, you’re ranked No. 2 in the United States in [Men’s B] squash,” Schenkein recalls, pointing to a certificate that hangs in his Agios office today. “He said, ‘I was nationally ranked and I play squash all the time.’ And for 40 minutes, we talked about squash. And I got in.”
At Tufts, Schenkein began working in hematology under doctors and mentors Jane Desforges (the former president of the American Society of Hematology) and Robert Schwartz. He did a three-and-a-half year fellowship at Tufts working in a molecular virology lab. Schenkein was comfortable at Tufts, eventually took over Desforges’ practice, and spent more than a decade building a reputation as one of the preeminent lymphoma specialists in the country. He ran clinical trials of exciting new treatments, got put on national committees, and eventually became the director of Tufts’ cancer center.
Schenkein saw himself as a physician/scientist, and enjoyed his work. Working on clinical trials, he met people in industry. He turned down a lot of offers to work in industry, but the long hours began to wear him down.
In 2000, he got a call from a “friend of a friend” who said Millennium was looking for someone to run a cancer clinical development group. Schenkein had never heard of it. Millennium had no drugs on the market, but it had just acquired a company called Leukosite.
Schenkein was lukewarm about it until he met two people: Julian Adams (now president of R&D at Infinity Pharmaceuticals) and Mark Levin (a partner with Third Rock Ventures). Adams had created Leukosite’s PS-341—also known as bortezomib—and while his pitch to Schenkein to develop that drug began to sway him, it was a meeting with Levin, then Millennium’s CEO, that changed Schenkein’s career path.
“Mark spent an hour and a half in his office late at night, covered all of his white walls telling me about personalized medicine and the genomics revolution—this is 2000,” he says. “Herceptin had been approved, and now we were sequencing the genome, and [Levin said] how all this information was going to revolutionize the way we practiced medicine.”
Schenkein added: “I walked out of that office, and I picked up the phone and I called my wife and said, ‘if they offer me this job, I’m taking it.’”
Six weeks later, Schenkein was out of academia, and at Millennium’s office on Sydney Street in Cambridge, heading up the development of what would become Velcade as the company’s vice president of clinical oncology. Schenkein built a team and designed the clinical trials for the drug, and came up roses. Bortezomib was approved in May 2003, went on to extend lives of thousands of multiple myeloma patients, and became a multi-billion dollar product.
The following year, however, Schenkein says Millennium started changing. It downsized research. Levin left, along with several others, and Schenkein got antsy. The bortezomib experience, though, had put him on the industry map in a big way. Genentech, at the time, was looking for someone to run the clinical development for all of its experimental cancer drugs. And despite the fact that Schenkein had one approval to his name, Genentech reached out to gauge his interest.
“[David] would admit himself [that job] was sort of a little above his pay grade,” Leschly says.
Schenkein jumped at the opportunity, even though it meant moving to the West Coast.
“Mark Levin always held Genentech as his gold star, even at Millennium—we want to be the next Genentech, he’d say it at every company meeting,” he says.
There was a lot to learn for Schenkein at Genentech. The company had four FDA-approved cancer drugs at the time, and 17 molecules in Phase 1, 2, and 3 that he was in charge of. Schenkein was responsible for those, and several hundred oncologists and doctors, as well as key go/no-go decisions on which molecules to invest in. Schenkein also says there were many Genentechers who were passed over for the job, so he had “a lot of people nipping at [his] heels.”
Barron could see that even though Schenkein wasn’t the most obvious candidate for the job, he had room to grow. “When I met David one could argue he wasn’t the most experienced candidate on the list. But when you meet a brilliant, hard working, extremely charismatic leader who cares deeply about making a difference for patients, you think, how can I convince this person to come work for Genentech? And when they agree, you say thank you!”
So Schenkein took a deep breath, and settled in. Genentech was trying to shake things up, so Schenkein tried to be as transparent as he could, and spent his first three months talking to every person in his group. The idea was to listen, find out what peoples’ concerns were, and then put the right people in the right places.
“At the time David was here, Genentech was going through a period of incredible growth and development of an extensive oncology pipeline, and we needed David to help bring promising medicines to patients,” Barron says.
Schenkein spent the next three-and-a-half years helping Genentech navigate through multiple approvals of new drugs, and new uses of existing drugs. Just as importantly, he got to spend significant time up close with top Genentech executives Art Levinson, Sue Desmond-Hellmann, and David Ebersman. He began amassing the key experience needed to 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.”
Sounds like something a doctor might say. Or an executive at Genentech.