Seattle’s Pharma Godfather, Ben Shapiro, Sees Potential Here To Transform Medicine Despite Setbacks

11/17/08Follow @xconomy

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When he got to Merck, though, he saw inspiring work going on to develop the first generation of protease inhibitor drugs to fight AIDS. “I saw how an excellent business organization can transform a plague into a manageable disease,” he says. “These big companies have transformed healthcare and saved millions of lives. I went through a psychological evolution.”

Merck in those years enjoyed the reputation as the most innovative of the pharmaceutical companies, but also a reputation for being somewhat insular and isolated from the rest of the world. “Merck did about 1 percent of the biomedical research in the world,” he says, so under Shapiro, it sought to form partnerships with academics and biotech companies to enhance what it already was working on.

He left Merck a year before controversy erupted over Vioxx’s link to increased risk of heart attack and stroke. The company’s woes have been well-documented since, including its recent decision to slash 7,200 jobs, and close several research centers, including one with 300 workers in Seattle.

These days, Shapiro sees action in biotech where a lot of VCs are afraid to tread. He has hit it off with Nelsen, the Arch managing director, who has bucked the trend of more conservative VCs who gravitate toward drug candidates only if they are in the late-stage of development, because of the high risk of failure. “Arch is one of the few remaining VCs that do early stage stuff,” Shapiro says. “Bob has good taste. He’s an interesting guy.” He says the same of PureTech Ventures, which doesn’t think about investment “exits” so much as trying to assemble some of the best minds in science to build companies around big problems like pain, obesity, and Alzheimer’s.

“I’m totally interested in innovation, in how you start from zero with an idea, and see how that can be manifested,” he says.

Given how much he values innovation, I thought he might be disappointed in the job losses and clinical trial failures that have plagued Seattle biotech in the last few years. Wrong.

“Amgen’s buying of Immunex is huge, they’ve invested a lot here,” Shapiro says. “Icos was a great success. There are a lot of smart, creative people here that are quite independent, and don’t follow the herd. We have a very interesting mix of people here.” He singled out Mark Roth of the Fred Hutchinson Cancer Research Center, who pioneered the hibernation-on-demand technology that Ikaria is developing a few blocks away in Seattle’s South Lake Union neighborhood.

When measuring a nexus of innovation, Shapiro says he doesn’t put too much stock in conventional measurements like product revenue, patents, jobs, or market capitalization. “What drugs or treatments have really transformed therapy? It’s not just things that are commercially viable,” he says. “If you look at bone marrow transplant that came from the Fred Hutch, that transformed therapy. Enbrel, for blocking TNF, absolutely transformed therapy for rheumatoid arthritis. There is a lot going on in Seattle that can change people’s lives.”

Seattle doesn’t have nearly as much venture capital as Boston, and biotechnology there benefits from “extremely sophisticated” technology transfer at MIT, Shapiro says. The San Francisco Bay Area and San Diego are other hotspots on his radar, along with New York and North Carolina’s Research Triangle Park. Ultimately, Seattle should do fine because it attracts talented people with big ideas, just like the other places. “Good ideas can come up anywhere,” he says.

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