Dendreon’s New Operations Man, Hans Bishop, Aims to Keep Provenge Trains Running on Time

1/19/10Follow @xconomy

Dendreon has a new man on the spot, and his name is Hans Bishop. The Seattle biotech company (NASDAQ: DNDN) settled the raging debate last year about whether its immune booster can help men with prostate cancer live longer without serious side effects. Now the company has graduated to a less glamorous, but equally important phase in which it must show that it can effectively manufacture and market its first-of-a-kind drug, sipuleucel-T (Provenge).

That responsibility falls to Bishop, its new chief operating officer. Bishop, 45, is a native of the U.K. who most recently worked as president of the specialty medicine business at Bayer Healthcare. He officially started at Dendreon on Jan. 4. He and his wife—who oversees communications at the Bill & Melinda Gates Foundation—have already moved into a new place in downtown Seattle which is about a 15 to 20-minute walk from Dendreon’s Belltown office.

I met Bishop and Dendreon’s vice president of communications, Katherine Stueland, while they were attending the JP Morgan Healthcare Conference last week at San Francisco’s Union Square. Before diving too deep, it’s worth noting that Bishop’s first name is correctly pronounced as “Hahnce,” not the Germanic-sounding “Hahnz.” He’s heard it both ways, and told me he doesn’t care when people get it wrong, but there you have it.

Like most of our interviews, I sought to get to know the person as well as the situation he is stepping into at an important local biotech company. Here are the highlights of the conversation.

Xconomy: Where are you from, and how did you get started in the pharmaceutical business?

Hans Bishop: I’m from New York, in the sense that’s where I was living last. My last job was as president of specialty medicine at Bayer. That was a 3 billion Euro business comprised of oncology, hemostasis, urology, and ophthalmology. It’s all of the specialty medicine parts of the Bayer business.

Hans Bishop

Hans Bishop

But I was born and raised in the U.K., trained as an organic chemist. I’ve spent pretty much all of my career, not all, but pretty much all, in healthcare and pharmaceuticals.

X: How did you find out about the Dendreon position?

HB: I met [CEO] Mitch [Gold] and the team during a business development discussion. I’m embarrassed to tell you that I wasn’t that aware of Dendreon in my prior job. I met them through business development talks, and I was really amazed. I learned about the product for the first time when I met with them, and the clinical data they had generated. I was really impressed with the product, all the technology they had built around the product, and the management team. So I came away really impressed. I was really delighted two weeks later when the phone rang and I was asked if I was interested in meeting with them about this position.

X: So Mitch Gold recruited you, after he met you when you were on the other side of the bargaining table?

HB: You should get the quote from Mitch, but Mitch clearly came away impressed with me. While it was unclear if he wanted Bayer as a partner, it was clear that he wanted me to join. That’s how it happened.

X: Why did this job appeal to you?

HB: I think Dendreon is unique at this point in time. There are several parts of that. Provenge addresses the needs of a group of patients who have got some very poor choices. The product is really launching into a market with a substantial unmet medical need. That’s important.

The product, of course, is unique. It’s not only unique in terms of the obvious clinical benefits—no one has shown a more than 4 month survival benefit in these patients—but it’s unique in terms of how well-tolerated it is. You put that together, and it’s going to be an important option for men with late-stage disease. That’s always my first test—how clear is the unmet need and how well does the new therapy address it?

The second thing is that it’s a company and a group of people that have already shown their ability to truly innovate. I’m proud to join a team that has that track record of innovation, and resilience.

X: What do you bring to the table that the company needs at this point?

HB: Commercialization experience, first and foremost. I’ve spent most of my career launching and growing major pharmaceutical products. Provenge is going to be a major therapeutic vaccine.

I’ve also had a good deal of experience with complex manufacturing environments. We (at Bayer) had an important manufacturing challenge to manage. And thirdly, managing growth. I’ve learned how to build organizations that are fast-growing.

X: Which product had the complicated manufacturing issues?

HB: Factor VIII (Kogenate). One of the businesses I ran before had a major product called Kogenate. It’s a recombinant protein for hemophilia. Actually, it’s the largest molecule administered in man. It’s a giant naturally occurring protein. It’s designed to fall apart in the body, naturally, with a limited half-life. So manufacturing is quite difficult. It isn’t inherently stable. It’s different than what we (Dendreon) do, and in some sense, what we do is a good bit simpler.

X: How is Provenge simpler?

HB: The intrinsic manufacturing steps are relatively straightforward. They are well-characterized. The company has shown in more than 1,000 patients already that it can do this in an incredibly reproducible way. The logistics around it [in which blood is shipped from the clinic to Dendreon and back] are different to other therapeutic proteins, but the inherent manufacturing isn’t particularly complex.

X: What are the top three priorities on your to-do list?

HB: To make sure we build a world-class team. The organization is going to grow substantially as we prepare for launch. Bringing in the best of the best is important to us. It’s going well so far, by the way. We just hired a number of district managers that I really believe fit that criteria.

We also need to make sure all the things you need in place for a good commercial launch are in place. We need to educate urologists and oncologists about the clinical data set we have, and the benefits of Provenge.

There are a couple things we clearly need to manage between now and the launch. In the first quarter of this year, we’ll have an inspection from the FDA of our manufacturing plant [in Morris Plains, NJ]. Those are the three major things on the list.

X: What do you want to accomplish in this first year on the job?

HB: The priority, without a doubt, is a successful launch of Provenge. All the other things we just talked about will support a successful launch of Provenge. That’s where I’ll spend all my time.

X: Will you be closely involved in figuring out what the price will be?

HB: Sure. What we’ve said is we’ll price Provenge similarly to other novel biologic drugs that extend lifespan.

X: I’ve heard that before. Can you be a little more specific? Will this be in the Erbitux range or the Avastin range? [Editor's note: Eli Lilly's cetuximab (Erbitux) antibody drug for lung cancer costs about $80,000 per patient, while Roche's bevacizumab (Avastin) antibody for lung cancer costs $8,800 per month, which can cost as much as $100,000.]

HB: I don’t think we’ll say more than that. It wouldn’t be appropriate. We haven’t made a final decision. But that’s the range in which we’re doing our analysis.

X: How has health care reform affected your ability to set the price?

HB: There’s been nothing directly in this round of healthcare reform that will change the process for us. There is no change. But we take the general debate very seriously. One of the things you find when you walk into the company is that this is a “patients-first” company. People come to work at Dendreon because they want to do something for patients with cancer, with our first product being for prostate cancer.

X: What worries you about this job, and keeps you up at night?

HB: It’s helpful to have a degree of paranoia when an organization is growing very fast. You need to pay attention to the details. You need to be involved in the key hiring decisions. You need to make sure that your first line of managers are really very able.

Katherine Stueland: We had 190 employees in March, and we started the year with 450. By the time we plan to launch Provenge, we should be at about 600 people.

HB: You’ve got to be intimately involved in many aspects of the business. You’ve really got to pay attention to where the team is just doing great and you can leave them alone, or where they need a little more support and coaching, or where they might need additional resources.

X: What other key slots need to be filled on the management team? Are there certain lieutenants you need to bring in to help you?

HB: There are two sets of positions that I am most focused on right now. We’re looking for a senior vice president of sales and marketing. In fact, the breakfast I just had was with [a job candidate]. And we’re also soon to hire two more vice presidents, who will be manufacturing heads in our second and third manufacturing plants. Those are very important hires. Those are big jobs inside Dendreon, and we are looking to bring in some new talent.

X: What kind of applicants are you getting? Because in talking to people around this meeting, I’m struck by how many Dendreon haters are still out there.

HB: They’re fading fast.

X: People are asking me if they think the drug is going to be approved. I don’t know if it’s jealousy, mistrust, something historical, or what it is, but this still seems like a company that some people love to hate.

HB: I’m new. I’ve been here one and a half weeks. I’ve had, I don’t know, 50-odd meetings this week. Overwhelmingly, the impression I get is that even former skeptics now get it. They now understand this is going to be an important therapeutic. There will always be skeptics out there. Apparently, you’ve met a few. But the impression I get is that the vast majority of people now get the importance of what we’re doing.

X: Are you becoming a talent magnet? Can you draw the kind of people you need to make this drug into a success?

HB: Yes, absolutely. Before I even joined the company, my hiring had been announced [December 10]. And you know how the e-mail addresses at Dendreon are pretty simple. And I picked up my new BlackBerry, about three weeks before my first day. I switched on my BlackBerry, and on my first day, I had e-mails from premier oncology company reps who were saying, “I’ve been following you closely. I want a job. Who do I speak to?” It’s been striking. There’s a huge amount of interest.

KS: The caliber of the people we are seeing are the best of the best from pharma. They are interested in coming on board with a company like Dendreon that has a rare opportunity to make the transition from an R&D company over the past decade to a company that’s on the cusp of commercializing a very high-profile product like Provenge.

X: A question on manufacturing. I know you just raised a lot of money [$630 million last year]. Do you have enough capacity as things stand now to meet demand during the early phases of the launch?

HB: We’ll be capacity constrained for about 12 months. At launch, there will be less capacity than there is demand. But with this raise, and the fact that we are bringing forward the construction of the Atlanta facility, and California, that period of time is only 12 months. We’ll have both of those plants online by the middle of 2011.

X: How much demand do you anticipate during those first 12 months? I’ve heard CEO Mitch Gold say that Provenge has 93 percent brand recognition already from the target population of urologists and oncologists who would prescribe Provenge, already, before you’ve ever run an ad.

KS: We expect demand is going to be high, but we’re also aggressively communicating that we’ll be launching it as we ramp up our manufacturing facility. Our goal is to make sure that physicians and patients understand that over time, more capacity will be built.

X: Is that a concern that patients who want the drug, and can’t get it, might be pretty unhappy about that? This is, as you say, a life-extending therapy.

HB: We would clearly like to be in a position where we could supply all the patients from Day 1. But as you think about the investment that Dendreon has made in manufacturing, prior to product approval, it’s truly extraordinary. I don’t know if we’ve disclosed the precise capital figure, but we are at risk in building three manufacturing plants before the FDA has approved the product. I don’t know of any other example of a company now that’s putting more capital at risk to get ready.

Every company needs to decide how much it’s going to invest before approval. What I’m saying to you is that we’re investing a very significant amount in capacity. But there will be a period, about 12 months, before we are up to full capacity and we can be assured we can meet full demand.

X: What is one thing you’d like to change now that you’re on board at Dendreon?

HB: I’d like to have a senior vice president of sales and marketing in the office on Monday [laughs].

X: You’re kidding, right?

HB: Well, we’ve had a good week this week. But yeah, it probably won’t happen on Monday.

But yes, I’m looking forward. I’m a great admirer of any organization that shows resilience, and the team at Dendreon has clearly shown resilience [with the FDA delay of Provenge in May 2007]. It’s a great test of any organization’s core strength.

I’m also hugely complimentary of the work that’s been done to manage the supply chain. You’ll hear people say—and you referred to skeptics earlier—who say, “Oh, Provenge, it’s complicated.” If you’re a physician, this is how complicated it is. You put in a call to our call center to schedule a patient. Two days later, the activated cells arrive at your office. That’s it. Everything else in the supply chain process, we take care of all those different steps. I’m very happy about it.

X: What’s the biggest misconception out there about the company? Is it the manufacturing logistics question?

HB: I think that’s one. People think the doctors need to get involved in scheduling the apheresis [a procedure in which blood is drawn and filtered]. They don’t. The product is going to be very simple to use.

KS: You asked before about things that Hans might want to change, but there are also things we want to maintain. And as we grow from 190 to 450 people to 600 people, one of the things we want to maintain is the culture.

HB: I’m sure about that. What are we at now, 450 people? Of that, I’m certain that 90 percent come to work because of patients. When you have a foundation where the culture is that strong, we need to continue to focus on that. We need to make sure that will grow with us.

X: Will you get involved with managing the pipeline as well, or are you exclusively going to be focused on Provenge?

HB: That’s not my day job, but clearly that’s something that Mitch has the management team discuss vigorously. Yes, for sure, I’ll work on the pipeline.

X: Will the manufacturing facilities that you are building now be ready and equipped to make other products for clinical trials?

HB: Yes. Our next most advanced clinical program is Neuvenge. It uses exactly the same technology platform as Provenge, but applies it to metastatic breast cancer. It uses clearly a different antigen, but a similar delivery cassette. And similar manufacturing processes. And if we’re successful with Neuvenge, it will absolutely utilize the structures we are putting in place now.

X: Is that moving ahead in clinical trials?

HB: We hope to start a Phase 2 program later this year, or early next year.

X: Five years out, what are your goals personally, and for Dendreon as a company?

HB: The first priority is to meet the needs of patients. That will continue to be our first aspiration. From a business perspective, the twinkle in our eye is to build a company that’s a bit like [Summit, NJ-based] Celgene (NASDAQ: CELG). That’s a company that many of us on the management team greatly admire.

X: What did they do right that you admire?

HB: They did many things right. They successfully commercialized their first product. They made smart choices developing their pipeline. They have a great team. And they managed their growth outside of North America very successfully. It’s important to remember for Provenge that the opportunity outside of North America is probably three times bigger than the opportunity in North America. The rest of the world opportunity is very important. It’s several years away. We are focused on the U.S. launch and getting that right. We have no manufacturing capacity outside of North America, so it is several years away. But don’t lose sight of the fact that it’s an important opportunity.

X: How can it be three times bigger?

HB: The numbers work roughly like this. If you look at the epidemiology of the disease in the big five countries of Europe, it’s about the same size as North America. The normal rule of thumb—and this can be a bit off—when you scale up for the whole of Europe with Scandinavia, Central Europe, it’s normally about 2x what you see in the big five countries, or 1.5x to 2x. Total Europe has about 150,000 to 200,000 [patients with prostate cancer that has spread, and no longer responds to hormone-deprivation therapy]. Then you add Asia, Japan, which has about 100,000. And North America has about 100,000. So that’s how we get that number.

X: One last thing. How old are you?

HB: I’m 45. But I look younger, don’t I?

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