How many people in the biotech industry today really feel like they are part of something special, something bigger than themselves? How many people feel such camaraderie with their co-workers that they’d show up to meet them at a reunion five years from now? How many people in biotech feel the task in front of them is challenging, but that nothing is impossible?
I’ve been ruminating over these questions the past week, since I hosted a reunion for the alumni of Bothell, WA-based Icos. This biotech company is largely forgotten now, but it made waves when it was founded in 1990. Icos brought together three superstar founders—George Rathmann of Amgen, Bob Nowinski of Genetic Systems, and Chris Henney of Immunex—and they raised a then-unprecedented $33 million Series A financing from a cast of rich people that included the young Bill Gates. The idea: develop drugs to fight cardiovascular diseases and inflammation.
After the auspicious beginning, Icos sustained all the usual ups and downs. It burned through huge sums of investor cash—more than $850 million over the next 16 years. It suffered regulatory setbacks. But it ended up developing a multibillion-dollar molecule in tadalafil (Cialis), and spun out a cancer drug that was the founding jewel of Seattle-based Calistoga Pharmaceuticals. Icos made money for investors when it was acquired by Eli Lilly for $2.3 billion in 2007.
Those are just the basic facts we in the business press and financial community use to keep score, but there was something bigger going on here. At its peak, Icos employed 500 people in Washington state and a total of 700 nationally. Many in the early days were young turks fresh out of academic research labs. As anybody could see at the reunion this week, many of them felt they were embarking on the most exciting and challenging journey of their careers.
These Icos vets told stories about how Rathmann memorized the names of every employee, and even their spouses, to show how much he cared about them personally. One scientist recalled how great she felt that Icos invested in a company-supported day care center to make it easier on parents pulling long hours in the labs. People were expected to work hard, but they wanted to, because they felt they were recognized and contributing to something larger than themselves. There was a spirit of egalitarianism that didn’t exist in hierarchical academic labs. There was a respect for everyone’s ideas. It was possible for anyone with smarts and ambition to advance from secretary to high-powered positions in human resources or investor relations.
The story, as many people know, didn’t end well for these people who invested so much of their brainpower and energy at Icos. The vast majority were given pink slips by Lilly. But people weren’t there to dwell on the ending. They remembered the company culture they were a part of—its values, its habits, its ways of working.
And actually, this team spirit was pretty common among the first generation of biotech companies. I personally witnessed this extraordinary spirit twice last year, when I organized similar events for the alumni of Genetics Institute in Boston and Immunex in Seattle.
After thinking about what I saw at those events, I can’t help but wonder where the spirit has gone. Christopher Henney, who attended both the Immunex and Icos reunions in the past year, has as good a perspective as anybody on what stirred that spirit back in the 1980s and ‘90s.
“The people who came to Icos, they mostly came out of academia, and certainly that was true of Immunex,” Henney says. “For them, it was part of that era where people said, ‘Wow, this is a whole world that I hadn’t known existed where I could practice my trade or my art or science, and work toward a common good.’ When you are doing things in an academic setting, the end product is always the glory of the guy who runs the lab. But when you’re in a company and you’re a shareholder, and you own part of the business, you could receive material benefits too. In many ways, their lives were changed. Most of them were more or less carrying out the same job they had in academic positions, but their sense of self-importance and self-worth was much more recognized. It was a great way to do science.”
Henney, like all first-generation biotech entrepreneurs, helped create that culture and seized upon the positive team energy to build valuable companies. And he’s also been around long enough to see the biotech model, and culture, go through some wrenching transformation.
Today’s companies, to the extent any are being started at all, are forced to run on extremely lean and mean budgets and to meet strict deadlines by investors who care much more about short-term returns than long-term impact. They are lucky to employ 30 people at their peak, not 700.
These new models have forced a whole set of new cultural ideas onto biotech. No longer do people go in to a company like Icos, somewhat naively, thinking they’ll work there 20 years, be part of something really big and bold, and have financial security for their families. For those lucky enough to get full-time jobs with benefits, they’re aware that what’s here today could easily be gone tomorrow. They know that today’s co-workers could be gone in a heartbeat. So why bother getting to know them very well? Who has time for a company softball game or happy hour anyway?
Henney noted that he re-connected with a former Icos employee this week who told him she now works at Oncothyreon (NASDAQ: ONTY). This person pointed out that the company (where Henney is chairman of the board) was appealing in part because it had a decent amount of cash, which meant it could operate for at least a couple years.
It’s understandable that people would want to grasp for a branch of stability in an unstable world, but that answer from a biotech employee is a revealing one. It says that people have been burned before, and everybody in biotech now does the cold-eyed financial analysis before pouring their heart and soul into anything.
“That’s the kind of level of perception that wouldn’t have occurred to first-generation people,” Henney says.
Some of this is clearly for the better. Surely, it would be foolish to get overly nostalgic about the past. There was a huge amount of waste in first-generation biotech companies from the ‘80s. Like many others, I’ve opined here about how biotech needs to do a better job at reducing the time/expense/risk equation that’s the great bugaboo of drug development. Some of these new business models are imposing a focus and discipline that in many ways is healthy, and should better serve patients and society. Maybe it’s just part of the natural way of the world, as people become wiser and more cautious with age and experience.
But I still can’t let go of the amazing can-do spirit that I saw in that room of Icos alumni this week. It’s a powerful thing. While few people are in a position to feel so good about their current jobs, there’s still tremendous human spirit in the people who work in biotech. It was obvious in the exciting early days of the industry. And it’s still there, if you just scratch a little below the surface. The best entrepreneurs and investors today understand that. As we head into the holiday season, it’s my hope that industry leaders find a way to keep that spirit alive and well.
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