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of the drug, and never approved it. NPS stock plummeted from more than $15 to about $4, and Coles had to make the hard decision to make deep cuts in the company’s 400-person workforce. The first round wasn’t deep enough, so a few months later, he had to make a second round of layoffs—never a good thing for morale. “I can remember standing in front of employees and shedding a tear. It was that difficult,” Coles says.
Painful as it may have been, it was some necessary medicine for NPS, Coles says. The company has since recovered, with a pipeline of multiple drugs, a partnership with Amgen, and a market valuation of more than $650 million. “What we did saved that company,” Coles says.
While NPS was putting the pieces back together, a recruiter for Onyx came calling. Coles, having lived his whole life on the East Coast, didn’t really know the Onyx CEO, Renton, and didn’t see himself moving west. But he agreed to meet Renton over dinner.
Coles liked what he heard about Onyx. It had a product for cancer that was established in the market. Importantly, it also had $470 million in cash on the balance sheet at the end of 2007, which could serve as a war chest to survive tough times. Those were both key strategic assets Coles didn’t have at NPS. “A strong balance sheet empowers the CEO. You can begin to think about things with a commercial product and money,” Coles says. “I wanted to run an enduring company. I wanted to run a company that wanted to grow itself.”
Investors didn’t quite know what to make of the new CEO at Onyx, as the stock took a dive in the spring of 2008. Coles spent much of his first year learning the company, and nudging it to broaden its focus on marketing its cancer drug not just to oncologists, but also to other medical specialists who see kidney and liver patients.
Coles’ biggest strategic move came about 18 months after he joined Onyx, when the company agreed to acquire South San Francisco-based Proteolix for $276 million upfront, and milestone payments that brought the potential tab to $535 million. This was mainly to get the rights to one core asset, carfilzomib for multiple myeloma. The drug had shown promise in early trials, but hadn’t yet nailed Phase 2 clinical trials, which are an essential proving ground for the effectiveness of new drugs. The move wasn’t broadly popular with investors, who wanted Onyx to do more to maximize profits from its single drug.
“We knew we couldn’t be a one product company,” Coles says. “It took courage, because buying an untested asset is a scary thing. It’s daunting. The question I posed to our team on the eve of the acquisition was not one of business judgment. It was one of courage.”
It was a gamble that appears to have paid off, as Onyx has hit its goals in subsequent clinical trials, and has filed an application for FDA approval. If all goes according to plan, Onyx could be marketing the new product in the first half of 2012.
As a manager, Coles has a reputation for getting out of his office and walking around, trying to keep his finger on the pulse of the 300-employee company. He says he likes to make himself available for candid one-on-one interactions that don’t happen in team meetings. When I asked him what might surprise people about his management style, Coles says “I think people would be surprised by my sense of humor and how silly I can be. People read me as a serious, intense, cerebral guy. I think people would be surprised by how I love having a good time in any setting.”
Business, Coles says, is really about people and how you relate to them. And biotech drug development is really about the people who are patients, and family members of patients.
He can relate on a very personal level. Coles’ oldest son, Andrew, was diagnosed a decade ago with non-Hodgkin’s lymphoma when he was just 12 years old. After some tense months, a scary relapse, and an uncertain hunt for a matching bone marrow donor, his son was cured. So if Onyx can do something like that for patients with multiple myeloma, he’ll have a much deeper than average understanding of what that means for them and their families.
“If there’s one thing people should know about me it is that I’m in this world to create a big impact,” Coles says. “Onyx is an opportunity to create a huge impact for patients and their families. That’s what I’m about. I’m grateful to have the opportunity to serve.”
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