Why Would a Biotech Company Go the Trouble of Changing Its Name?
[Updated 1:26 pm PT with survey results] If you’re trying to figure out what the heck a certain biotech company does, the last place to look is usually the company name. Names often don’t mean much, or at least it isn’t obvious. But sometimes you actually can learn a lot about what makes a company tick when it goes to the effort of changing its name.
Did the company run into legal snag, possibly by infringing on someone’s trademark? Did it change strategy by merging with some other company? Is it trying to say it’s not a science project anymore, that it’s matured into a real company that sells products and makes money? Is it trying to distance itself from a past failure, in some (lame) attempt to wipe the slate clean? Did new management come in determined to make a symbolic break with the founder, who coined the original name? Or was the old name just too clunky, too hard to spell or pronounce?
There are lots of reasons why companies change their identity, and some are more noble than others. In an industry that’s 30 years old and has spawned several thousand companies, a lot of the obvious names based on “biology” or “genetics” are already taken. I don’t envy folks whose job it is to come up with original, distinctive, catchy company names.
Some name changes are truly great. Seattle-based Dendreon (NASDAQ: DNDN) is about stimulating dendritic cells of the immune system to fight cancer. The name is distinctive, and way cooler-sounding than its astoundingly boring original name, Activated Cell Therapy. Cambridge, MA-based Ironwood Pharmaceuticals (NASDAQ: IRWD) sought inspiration from the ironwood tree that can live more than 1,000 years in harsh desert conditions—which sure beats the geeky-sounding original name of Microbia.
But on the whole, I tend to take a pretty dim view of company name changes, because it often feels like companies have lame reasons for the change, or that they are trying to hide something. Many times, the new name sounds goofy, or forced. Think of AbbVie, the new name for the pharmaceutical company spinoff from Abbott Laboratories. It’s supposed to be short for “Abbott” and the Latin root “vi,” meaning “life.”
Yuck. I hope they didn’t pay the consultants much for that tripe.
One name that made me do a double-take recently was that of Cambridge, MA-based Aveo Oncology (NASDAQ: AVEO), formerly known as Aveo Pharmaceuticals. That seemed like an unusual, subtle shift. It wasn’t completely obvious to me at first glance why the move was necessary.
The story, CEO Tuan Ha-Ngoc says, actually goes back almost a decade. The company was founded in 2002 as GenPath Pharmaceuticals, a name the founders came up with based on their exploration of gene-signaling pathways. Ha-Ngoc wanted to change when he started building the company in its early days, as part of his 10-year plan to grow from a scientific platform into a pharmaceutical company.
Instead of hiring a consultant, he chipped in $1,000 to employees to compete in a naming contest. Aveo, which means “be well” in Latin, won partly because Ha-Ngoc thought it was a good theme for a pharmaceutical company. Ha-Ngoc says he personally designed the Aveo logo, with a little swoosh through the letter “A” to symbolize breakthroughs, on his own desktop computer at work.
“I always thought I’d prefer to have a name starting with the letter A, and I wanted a name with good meaning,” Ha-Ngoc says. “It was easy to pronounce, and tested in different languages. And when it would be time for the company to go public, people knew what our symbol was going to be.”
But now that Aveo is 10 years old as a company, it has finally gathered evidence from a pivotal clinical trial that it needs to put its first product on the market. This drug, tivozanib, is for patients with kidney cancer. While getting ready to go through the FDA approval process, Aveo decided to survey key people—patients, doctors—about what they think of the company. The survey from last fall told Ha-Ngoc that it might be time to reconsider his original naming idea.
“Most people didn’t know what Aveo Pharmaceuticals does,” Ha-Ngoc says. “Patients did not know who we are. I thought, if I don’t try to define ourselves a little bit better, the brand of the company will be defined by others. I’d rather be the one defining us, rather than be defined by others.”
So Aveo went to work on coming up with a new name. The switch … Next Page »