Baseball and Biopharma: More Alike Than You Might Realize

7/3/13

This may seem like a surprising observation, but it’s true. Biopharma companies and baseball teams employ similar strategies that they hope will result in either a blockbuster drug or winning the World Series. The challenges each faces are significant. Did you realize that the percentage of drugs that are put into clinical trials and successfully make it onto the market is virtually identical to the percentage of minor leaguers that make it to the Majors? In both cases only 5 to 10 percent of those starting on the first rung of the ladder will make it all the way to the top. The rest will fall by the wayside, eventually to be replaced by new candidates for the open positions they left behind. So what, exactly, do these two businesses have in common?

Experienced Managers Get Fired and Rehired

Many biopharma executives bear a striking resemblance to baseball managers. No, I’ve never seen one kick dirt on an umpire’s shoes, but they face similar challenges. Do you ever wonder why biopharma and baseball executives that get canned (usually because of poor execution under their leadership) are often quickly rehired by other companies/teams? It happens because they share one all-important quality: big league experience. Investors want seasoned executives to fill the corner offices in biopharma and they are willing to overlook past problems to get them. The poster boy for this “experience outweighs other considerations” mindset is Sam Waksal, who achieved infamy as ImClone’s CEO for both screwing up the development of the cancer drug cetuximab (Erbitux) as well as being convicted of securities fraud, bank fraud, obstruction of justice, and perjury. Despite serving over seven years in federal prison on these charges, he managed to find himself a new position heading up another biopharmaceutical company. His bio on their website, not surprisingly, omits his time in the pokey.

Baseball managers know that having a great year or two behind you (like making the playoffs or winning the World Series) will not keep you from getting fired if things go south on your watch. Examples in baseball are too numerous to mention, but it happens in biotech too. Take Mitchell Gold, for example, the former CEO of Dendreon. He won several industry awards for successfully shepherding the company’s first drug, sipuleucel-T (Provenge), through the FDA approval minefield. Everything was great until the next year, when Provenge sales were well below expectations and Gold was forced out. As an experienced CEO, however, he landed on his feet and is now heading up a new immunotherapy start-up. His fruitful efforts at Dendreon led other companies to ramp up the development of their own immunotherapy drugs. This “follow the leader” approach reminds me of Billy Beane’s statistics-based methodology for evaluating baseball players, which was adapted widely by other teams after the Oakland A’s successfully employed it.

I’m not aware of any biopharma executives who’ve held the top job in as many organizations as baseball’s Dick Williams (who managed six clubs) or Billy Martin, who held nine managerial positions in his career (including five separate stints with the Yankees). Deposed CEOs do return to their old companies from time to time, including Steve Jobs at Apple, Larry Page at Google, and Howard Schultz at Starbucks. Any chance that ImClone wants to take Sam Waksal back? I don’t think so.

Prospects in the Pipeline May Not Pan Out

Baseball managers, like biopharma R&D chiefs, have to play the hands they’ve been dealt. If their everyday lineup features a lackluster group of ballplayers, then that’s who they’ll be stuck playing. It can take years to upgrade a team by bringing up talented young players from the minor leagues, and you can never be sure that they will make it in the majors. Many early round draft choices are … Next Page »

Stewart Lyman is Owner and Manager of Lyman BioPharma Consulting LLC in Seattle. He provides strategic advice to clients on their research programs, collaboration management issues, as well as preclinical data reviews. Follow @

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  • Kyle Serikawa

    Nice post Stewart! I think your comments about managers and why they keep coming back (a la Eric Wedge for example) is very appropriate. One of the things you hear from the Sabermetrics community is that while they believe managers make a difference, it’s incredibly hard to figure out how to actually measure that since so much of the job involves things that aren’t happening in the game (ie, training, managing egos, leading) and thus are essentially unmeasurable by outsiders. Speaks to your point about trying to build a great team. I also think you’re right that past experience really is so often the deciding factor for hiring in both biopharma and baseball. It’s the safe choice. If someone experienced blows up, the hiring party can always hold up their hands and say, well, they had experience. If someone new blows up, the hiring person gets the blame because they took the risk.

  • J. Thomas Ranken

    Is there a biopharma exec that we could suggest to run the Mariners?

  • David Webb

    Very amusing and provocative, Stu; it has always interested me how in many sports, a new manager or coach can come in and take all of the same team players and turn them from losers to winners. Likewise your article reminds of an old ’90′s joke about Biotech.
    There are ~1800 Biotechs and only 6 good CEO’s! Do the math!