Stirring the Pot Once in a While Doesn’t Hurt, and It Could Help Biotech Break its Malaise
Listen to enough biotech industry leaders talk in public, and you’ll hear a lot of carefully scripted comments. Everyone can list off their corporate milestones on a PowerPoint slide, and utter some politically correct platitudes about novel technology, helping patients, having a “good working relationship” with the FDA, constructive partnership talks.
Blah, blah, blah.
Rarely do you see an executive really willing to stir the pot. This can be risky (look at Yahoo CEO Carol Bartz), but if more people were willing to break out of their “let’s not offend anybody today” communications rut, the biotech industry would be better off and would enjoy a broader following in the business world.
This has been on my mind for some time, but especially in the past few weeks since I wrote a BioBeat column which took Seattle-based Dendreon (NASDAQ: DNDN) to the woodshed. That column generated way more readership than I thought it would, but curiously, far fewer published reader comments—only eight. Yet privately, at networking event after networking event, and in my e-mail inbox, I’ve gotten at least five times as many “attaboys” from readers. These people—including many industry leaders—all want to express privately that Dendreon screwed-up big time, and it was about time someone stood up and forcefully said so. Yet they are afraid to say so in public.
This past week, the sheer timidity of public discourse in biotech popped up again. It came when Vertex Pharmaceuticals CEO Matt Emmens dared to challenge an analyst with Morgan Stanley at his own firm’s investment conference, probably right in front of his bosses, in New York.
Here’s what Emmens had to say, as first reported by Peter Loftus of Dow Jones, and later picked up by FierceBiotech.
“Do you understand this company? I don’t think so,” Emmens said on stage to Morgan’s David Friedman. “By what I read, I don’t think you understand our company. I’m going to do the best I can to prove you wrong again and again, and it’s been fun, but when does it stop?”
It should be noted that the tone of this exchange, when I listened to the audio, sounded like one of gentle (but firm) ribbing from Emmens. It sounded like he was trying to push Friedman back on his heels, rather than tear the guy’s head off. He’s not calling Friedman a moron, he’s criticizing Friedman’s actions. This is completely fair game, just like it’s Friedman’s absolute right to criticize Vertex and question its growth trajectory.
Even though this is mild stuff, public confrontation doesn’t happen every day in biotech, so it makes news, and was circulated widely on Twitter. As someone who edits tech news in Seattle, I can say nobody would bat an eyelash at this in tech, unless it came from a celebrity like Bill Gates or Steve Jobs. Among mere mortals, there are dozens of tech entrepreneurs in my city who are perfectly willing and able to call Microsoft out in public for its various stumbles. I consider it a great thing, nothing more than healthy dialogue that strengthens the community and the industry.
I get why so many biotech executives and investors can be so circumspect in public. They fear retribution from the FDA, from partners, from board members, from the media. Saying something controversial carries risks. Emmens might feel confident enough to take on Morgan Stanley now while his company is riding high. But this is a volatile business, and I’m sure he considered beforehand the possibility that some tough talk could come back to bite him at a later date, when he could be in a weaker position.
Yet every now and then, it pays to take the gloves off. Alnylam CEO John Maraganore did it last fall in an interview with me, when he had some choice words for Roche after the pharma giant pulled out of a collaboration. Investors were bailing fast on Alnylam, and he needed to do something to restore confidence, even if it may not have been well received in the C-suite in Basel. “Roche made a decision to be focused on near-termism. They are walking away from an incredibly important field that we think in the future they will regret,” Maraganore said in December.
I understand that when people get called out in public for making bonehead moves, the targets sometimes have long memories. It can limit some already pretty limited career options. And when the whole biotech industry is shrinking, jobs and financing can be excruciatingly hard to come by.
But if the industry is afraid to have real arguments about real problems in the public domain, you have to wonder how serious it is about solving its problems. I’ve seen some good ideas emerge from debate on our site and others. I’m not suggesting biotech go down the low road of politics, and stoop to the level of personal attacks and name-calling for publicity value alone. That won’t help solve anything. But it’s fair game to challenge powerful people in public, whether they be from Morgan Stanley, the FDA, a pharma company, or a big-name VC firm in Silicon Valley. They are sometimes wrong, sometimes disastrously wrong, and sometimes they need people to stand up and get in their face to tell them when they are wrong.
If people are too shy to stir the pot, it can make for a pretty bland stew.