Dendreon May Not Survive Its Success: Q&A with Founder Chris Henney, Part 2
Yesterday, we brought Xconomy readers the first installment of a conversation with Christopher Henney, the co-founder of Seattle’s three most successful biotech companies of the past 30 years—Immunex, Icos, and Dendreon. The first two companies ended up getting acquired—Immunex for $10 billion in 2002, and Icos for $2.3 billion in 2007. Now that Dendreon has had a big success with its prostate cancer treatment, sipuleucel-T (Provenge), and has built a market capitalization of $2.45 billion, it seems likely to get acquired as well.
Here are edited highlights of the second half of the conversation, in which Henney elaborates on why manufacturing is so important to Dendreon, Medicare reimbursement for the expensive new drug will be critical, and what it all means for the future of Seattle biotechnology:
Xconomy: What about the state of Seattle biotech? What kind of shape do you think it’s in compared to, say, five or 10 years ago?
Chris Henney: It’s a good question. We do need an anchor tenant. I’m doing my part to try to persuade a few companies to move here. I was involved with Ken Ferguson of Icos in bringing a company from Australia here. I have a friend who is moving a company here. This remains a very vibrant place. One of the things I’m doing in retirement is trying to encourage small companies to move here. The company came from Australia because it’s easier to raise funds here. It’s easier to recruit people here. It’s still one of the centers of biotechnology. It doesn’t compare with San Diego, and it doesn’t compare with Boston. And we do lack an anchor tenant. That would be nice. Dendreon is clearly that tenant at this point in time. But we’ll see if it survives its own success, if you like.
X: Which companies are you involved with these days, whether on the board or as an adviser?
CH: One is Oncothyreon, where I’m chairman. I’m involved with a company in Australia in the vaccine space. I’m involved with Cyclacel, a company in New Jersey that Xcyte bought, and we took the name. I’m involved with what I think will be a very important company in the Bay Area called Anthera. It’s a spectacular company, and a private one. A very good story. And AVI Biopharma.
X: How old are you now?
CH: Too old to be doing this. 68. But it’s what I do, right? It really does become part of your identity. You can see why people carry on working in retirement. It is what you are. Your identity is inextricably linked with biotech. But I do enjoy nothing more than startups, early-stage companies. I’m not so good with companies that I liken to being like a box with a ribbon around it. Where you make sure the ribbon doesn’t come off the box. That’s never too interesting.
X: Is that like saying you’re an entrepreneur, not a manager?
CH: I like to think I can motivate people as a manager, but I’m more of an entrepreneur than a classical operating guy.
X: But when I think of your big three companies, it’s really Immunex, Icos, and Dendreon…
CH: They are the three biggest ones ever to come from Seattle, right?
CH: I only worked in three companies, and they became the three biggest companies in Seattle. They were all multi-billion dollar companies. So that worked out OK.
X: How do you think Provenge stacks up with what you’ve done in the past? Enbrel obviously is a $7 billion a year worldwide drug, the third-biggest seller in the world right now. Icos created a billion dollar drug. What kind of impact can Provenge make?
CH: I see numbers that other people are putting up, projecting, and they are pretty important numbers. Obviously, it needs to be reimburseable. If it’s not reimburseable, that will be a severe limitation. It’s going to be expensive. The good news is that you only need the treatment once.
X: Yeah, but with three infusions in a month.
CH: Yes, but it’s one course of therapy. It’s totally benign. Not many guys, when facing the alternatives, wouldn’t want that. I suspect that a large amount of use will be in very early stages of disease. Theoretically, that’s where it should work best. Just post-surgery.
The problem is with the way we develop drugs. It takes too long, and costs too much, to do a trial in that population. You have to test it in patients who are far more advanced. Because their life expectancy is shorter, the trials can be done quicker. The dice are stacked against you when you treat patients in that category.
I don’t think they’ll ever do those trials, but I suspect that people will get treated in this setting.
X: So you think doctors will intuitively understand this, and that they’ll prescribe it off-label?
CH: I think so. Clearly, the scientific literature says that stimulating the immune system at an earlier stage of disease is going to be of significance. Obviously, that’s a huge number of patients. You have a lot of data these days about whether the surgery early on is the way to go. It’s hard to tell people, what’s the phrase, watchful waiting. Psychologically, that doesn’t work for a lot of people. If Medicare will reimburse this at some level, I can see a lot of people will want the therapy.
Chemotherapy doesn’t work very well for prostate cancer. Local radiation therapy is not as appealing to a lot of people.
X: Back to your earlier point. You think Mitch Gold might sell the company?
CH: It won’t be up to Mitch. It’s up to the shareholders.
X: By that, do you mean the board, or the shareholders in a larger sense?
CH: The board represents the shareholders. And I think Mitchell, for the right price, would sell the company. I think he would. Maybe people want to see some numbers from sales first. But the time to buy it is before it goes on the market. Then again, Dendreon will be cutting teeth for the industry on the manufacturing side. Nobody has done this kind of thing at large scale. By that, I mean taking out cells [from patients], incubating them, and re-infusing them.
X: Do you still own any Dendreon shares, or did you take the opportunity to sell them in the recent run-up?
CH: It’s fair to say that I still own a good number of Dendreon shares [smiles]. My wife and kids are Dendreon shareholders, and my grandkids are still Dendreon shareholders.
X: How do you feel about what’s happened at Dendreon when you look back at the scope of your career in biotech?
CH: It’s probably the one I’m most proud of. That was a lot of commitment for me, for a long period of time. I was involved in the technology, the development, and the financing of it when the financing was hard. It’s not to say that I didn’t make a large contribution to the others, but this is one where I had a lot more thumbprints on it.