Seattle Genetics, On the Verge of Going Commercial, Seeks to Keep Its Scientific Soul

7/5/11Follow @xconomy

Just glance at the name, Seattle Genetics, and you get the drift this is a science-based company. But Seattle Genetics is morphing into something bigger and more valuable, which creates a whole new challenge: How do you maintain an inspired scientific culture from the early days, while living up to the cold market reality to start producing real sales and profits?

Seattle Genetics (NASDAQ: SGEN) has been thinking hard about how to manage this transformation over the past year. Almost 14 years after its founding, the company is now just weeks away from what analysts expect will be a slam-dunk FDA approval of its first marketed product—a drug for rare lymphomas. Expectations are sky-high, as Seattle Genetics stock closed last week above $20 a share, making it worth more than $2.3 billion. To maximize this opportunity, Seattle Genetics has spent months vetting, hiring and training a new commercial team of 100 employees, bringing its total staff up to 450 people. Manufacturing, sales, marketing, supply chain logistics, and insurance reimbursement are just a few of the skills the company has had to add.

It’s hard to overstate how important managing this growth is to Seattle Genetics’ future as a company. If they do it right, this new commercialization crew will help the R&D groups realize their early vision of helping patients and blazing a new trail for “smart bomb” antibody drugs for cancer—a type of drug that has eluded scientists for three decades. But if the new commercial folks botch the product rollout, or engage in unseemly marketing practices to hit their numbers, then Seattle Genetics is asking for trouble. As Josh Boger, the founder and CEO of Vertex Pharmaceuticals said in a speech last week at the Biotechnology Industry Organization’s convention, “it will tear your company apart if commercial has its own set of values. Commercial plans have to be consistent with company values.”

The co-founder and CEO of Seattle Genetics, who is like Boger a scientist by training, has definitely been thinking hard about how to maintain the science-based culture as the company grows up.

Seattle Genetics CEO Clay Siegall

“We were very careful to select commercial folks who were very excited and passionate about a company that is led by the scientific discoveries and the clinical data we have,” says Seattle Genetics CEO Clay Siegall. “We wanted sales reps that didn’t just want talking points to sell the product. They want to know how the product works, and what kind of patient populations it works in. They wanted to understand CD30 [the drug's biological target] and its expression profile. When you have commercial folks asking about underlying science questions, and not just things like, ‘What are the sales targets?’ that’s the kind of person we wanted.”

A little science background is required to see why this matters. Other biotech companies have had a lot of success with targeted therapies over the past decade, making genetically engineered antibodies that specifically zero in on markers on tumor cells, while mostly sparing healthy cells—unlike typical chemotherapy.

Seattle Genetics has gone a step further, by turning genetically engineered antibodies into what amounts to a “smart bomb” against cancer. The company’s technology links the targeting antibody to a potent toxin, which gets unleashed on the tumor.

Most of these efforts to soup-up antibodies have failed over the years, but Seattle Genetics proved it had solved the puzzle last year in a pair of clinical trials. They showed that the new Seattle Genetics drug, brentuximab vedotin (Adcetris) could partially or completely shrink tumors in 75 percent of Hodgkin’s patients who had relapsed after getting prior therapies, and that it did the same for 86 percent of people with anaplastic large cell lymphoma. About 30 percent tumor response rates would have been considered good enough to seek FDA approval. The results sent Seattle Genetics stock soaring, and forced the company to quickly put together its commercial game plan.

All that commercial prep work is likely coming to a climax soon. Seattle Genetics will make its case before an FDA advisory panel on July 14, and the FDA’s deadline to complete its review of the drug is August 30.

Given the abysmal effectiveness rate of typical cancer drugs, Seattle Genetics has had no trouble attracting commercial talent that wants to be a part of a product launch like this one. The company sifted through 1,600 applications for the 100 slots on its commercial team, which includes sales, marketing, and reimbursement specialists, Siegall says. The company has recruited people from a number of big names in biotech and pharma—Genentech, Novartis, Celgene, Alexion Pharmaceuticals, to name a few—and has been careful not to get too many people from one place, to avoid too much cultural carryover from people’s previous employers. More than 90 percent of the commercial team has already been hired and started work at Seattle Genetics—a sign that the company wants to make sure it hits the ground running on approval day, and that it is confident it will get the FDA green light on time.

“I wanted to make sure that we had the right commercial team on the ground to do an effective, strong robust launch,” Siegall says. “There are a lot of patients in need, and we don’t want to be the holdup.”

Siegall wouldn’t be so crass as to say it in so many words, but Seattle Genetics seemingly wanted to avoid going the route of the stereotypical pharmaceutical commercial team full of pretty young women straight out of college who wink at doctors and hand out leaflets. It’s been putting together a small, experienced team of people with experience dealing with hematologist/oncologists who treat patients with blood malignancies. It has drafted medical experts who will answer the phone and provide a medical answer, fast, when doctors call. And Seattle Genetics has written up training manuals for its sales reps, and forced them to pass exams before they are cleared to go in the field. Training typically takes the sales reps a couple months, Siegall says.

“What happens in some organizations, is that when doctors ask sales reps a question, the sales rep will have to say, ‘I’ll have someone call you.’ You can say that now and then. It’s OK to say that sometimes. But the doctor, who is very busy seeing patients, when they have a question, they want an answer. We wanted to be the type of organization where our sales reps are very knowledge and understanding of the questions that get asked,” Siegall says.

That means R&D and sales need to know each other, and what each of them does to the make the company go. The scientific team can’t just take a backseat to the new rainmakers in commercial. As the company grows far beyond its Bothell, WA headquarters, Siegall says, it has put thought into making sure certain people in certain departments don’t end up getting marginalized. Every Friday, the company holds an hourlong companywide teleconference, in which groups take turns making short presentations about what they’re working on. That means a sales rep in Houston will see what colleagues are doing in chemistry, toxicology, finance, or business development. “You can see the passion, you can hear it, and you can understand what Seattle Genetics is trying to do,” Siegall says.

Siegall is certainly one who wears his enthusiasm on his sleeve, and he continues to even as the company has gotten big enough that he doesn’t personally know everyone in the company anymore. He says he remains “very hungry.”

He often gets asked whether Seattle Genetics will end up getting acquired, like so many biotech companies do. While he’s artful in ducking that question, he’s also not taking the kind of actions that executives often do—like cutting back R&D—when they are getting their company dressed up for a sale. The day we talked, he sounded like he’s having fun right where he is.

“I’ve always had a strong drive to make a difference in the lives of cancer patients, but something else I found I enjoy doing, which I didn’t appreciate before, is that I enjoy building a company, and building careers for people,” he says. He adds: “With our first drug, we think we can be a very good company. With our second and third drug, we can become a great company.”

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