Xconomist of the Week: Roger Perlmutter’s Parting Thoughts on Amgen

3/1/12Follow @xconomy

[Updated: 1:50 pm PTRoger Perlmutter had a long run by biotech standards, a full 11 years, to put his stamp on R&D at Amgen. Some of the work he oversaw was unequivocally good (denosumab for osteoporosis and cancer), some bad (the EPO debacle), and some of the record is still a work in progress (44 drug development programs in clinical trials on the company’s website).

Perlmutter, an immunologist, stepped down last month from his job as executive vice president of R&D at the world’s biggest biotech company (NASDAQ: AMGN) to make way for his hand-picked successor, Sean Harper. [Updated link to consulting agreement.] While sticking around for a while as a high-paid consultant, the past few weeks have given him an opportunity to reflect, and consider what comes next. Perlmutter has also agreed to be the newest informal editorial advisor to Xconomy, a group of technology leaders around the country who we call Xconomists.

There’s no doubt that Amgen today is a much bigger, more potent R&D organization than when Perlmutter left Merck to join Amgen on Jan. 8, 2001. Amgen’s sales grew five-fold, from about $3 billion to more than $15 billion. The R&D budget grew almost four-fold, to $3.17 billion in 2011, and the company expanded from its base in Thousand Oaks, CA into other top U.S. biotech hubs like San Francisco, Boston, and Seattle. Amgen went from relying on two cash cows (Epogen and Neupogen) to become a more diversified operation that has seven novel molecules approved by the FDA for treating cancer, autoimmune disease, osteoporosis, and chronic kidney disease. Like most every R&D organization in this risky business, Amgen under Perlmutter had its share of stumbles—a Parkinson’s drug candidate that flopped, and cancer drug candidates that underwhelmed. Most notably, its attempts to exploit anemia drugs by testing higher doses backfired big-time as safety concerns emerged.

I spoke briefly with Perlmutter, 59, by phone earlier this week to do an exit interview about his time at Amgen, his thoughts on the industry, and what’s next. Here are the highlights, edited for length and clarity.

On what he sought to accomplish in the early days:

I set out four guiding principles from the start, and for 11 years we recounted it as a daily catechism. The first was that we were going to focus on grievous illness. We want to treat people who are very sick and make them somewhat better. We’d love to cure people, but that is rarely done in this business. What it means is you don’t focus attention on things that are not grievous. You eschew distraction, which is very important. In the traditional pharmaceutical industry, you can spend a lot of time trying to improve your product’s image. You can change things from being given twice a day, and into a once-a-day drug.

Second, I thought we needed to be modality independent. I was uncomfortable with what was happening at a majority of the major companies at the time. Often, medicinal chemistry was something seen in isolation, and a lot of attention was focused on the tool and not the task. I wanted a R&D organization that was focused on the task.

If I’m proud of anything in my 11 years, it’s that—creating an organization that’s comfortable with fitting the tool to the task. You start by asking, what are we trying to achieve with this drug? It could be a protein, a peptide, an antibody, a small molecule. I don’t care what the tool is you use, I want to focus attention on the task. That was a very useful way of describing our activities, and it attracted an impressive group of research scientists. Amgen isn’t really unique in that respect, but for a time we were.

The third principle was to do the experiment in patients, recognizing that preclinical models have poor predictive value for disease. You can invest a lot of time in them, but we are trying to treat human beings in this business, and we owe it to people to test them in the human setting. You have to build the tools necessary to test in humans, and ask things like whether your drug hits the target you intend, and then measure the outcome. That is still something that is not satisfactorily explored by biopharmaceutical companies.

The last one is what we call seamless integration. I wanted us to have the insights that came from the marketplace brought to our research, and vice versa. George Morrow (Amgen’s former executive vice president of sales and marketing) came in the same day I arrived, Jan. 8, 2001, not that I remember that date specifically or anything (laughs). George and I had the view there’d be no white space between us and we’d do everything but keep house together. I wanted marketing people in our meetings. Not to tell us what to do, but so … Next Page »

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