Todd Patrick is one of those rare people in the pharmaceutical business who can say he built a successful career as a vaccines entrepreneur. He was the president of ID Biomedical, a Vancouver, BC-based vaccine company with operations in Bothell, WA, for 12 years before it was sold to the world’s second-largest drugmaker, GlaxoSmithKline, for $1.5 billion in December 2005.
Patrick, 46, hasn’t had the desire to go back to the full-time pressure-packed life of a biotech executive, but he’s kept his hands busy in four different healthcare startups. He’s now serving on four small company boards, often investing his own money, along with his longtime business partner, former ID Biomedical CEO Tony Holler. I met with Patrick yesterday over lunch at BluWater Bistro in South Lake Union, partly to talk about Xconomy’s upcoming vaccine forum that he’s agreed to moderate, and partly to find out what he’s been up to since leaving his high-profile gig at ID Biomedical.
It turns out that Patrick still has the itch for developing next-generation vaccines that made ID Biomedical so successful. This time, the operation is called Vaxent, a startup in Memphis, TN that he travels to from his home at Yarrow Point once a month. Ironically, he has scooped up the same vaccine for Group A streptococcus bacteria (strep throat) that his team had been developing at ID Biomedical. Glaxo didn’t want it, and handed it over to the startup in Memphis, where much of the original science was done. The strep vaccine will probably need to be tested in huge, costly clinical trials, but it has already been tested in 100 patients, and has provoked antibodies against the strep infection, Patrick says. It’s possible he’ll clinch a partnership with one of the four major vaccine companies (other than Glaxo), which could re-ignite development of this product by the end of the year.
“It’s like starting all over,” Patrick says. “It’s exciting.”
The vaccine business is a vastly different place than when Patrick started with ID Biomedical in 1994. In those days, he told investors it was worth betting on a new generation of proprietary vaccines—like a nasal spray for flu and the strep throat candidate—because health insurers had finally come around to the idea that vaccines provided great value to the health system, and insurers needed to pay for them to encourage development. Vaccines have played a historic role wiping out scourges like polio and smallpox. But in the post World War II era, vaccines were relegated to a low-margin, high-liability pharmaceutical industry backwater. Vaccines for measles, mumps, rubella, tetanus, flu—all were cheap commodities. “I can remember going on the road to meet with investors, and nobody wanted to talk to us,” Patrick says.
Then came the hepatitis B vaccine, made through modern genetic engineering, which Merck and Glaxo offered at $150. Then came the haemophilus influenzae type B at $100 a dose. A new chickenpox vaccine at $150. Then the motherlode: Wyeth’s pneumococcal vaccine for infants (Prevnar) was approved by the FDA in 2000. At $230 for a four-dose course of therapy, it created a market that generated $2.4 billion in sales last year.
“It’s been about pricing,” Patrick says. “If you can get good margins, capital will be attracted.”
Of course, the vaccines business can’t defy the current gravitational pull of the capital markets. It’s made him glad he’s not in the hot seat running any of the companies he’s gotten involved with. … Next Page »
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