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How to Survive the Downturn: Five Questions With Boston Biotech Leaders, Part 1

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that understands the importance of bringing innovations to patients, and who also understands that innovations for patients be of high therapeutic impact for patients. I’d support an FDA commissioner who abhors incrementalism.

The final aspect of the job is that they be an amazing recruiter of people, and an amazing advocate for the needs of the FDA in front of Congress. The FDA in my mind is poorly funded, and poorly supported from a staffing standpoint. They are good people. But I’d like to have an FDA where a recent MD/PhD out of Harvard or Stanford says ‘I want to go work at FDA for five or seven years out of my career,’ instead of saying that’s the last thing ever do.

There are people within the FDA who could do it. Janet Woodcock is an outstanding leader, as is Bob Temple. The FDA without Janet would be crippled. Either one of them would be fine. I also could see someone from the outside being impactful. [[Former commissioner]]Mark McClellan comes to mind. He was a fantastic FDA commissioner. He seemed very thoughtful, and is respected by almost all people. And we need it soon, please. We can’t wait 18 to 24 months.

X: What’s the most surprising impact of the past year’s economic turmoil on your plans for this year?

JM: For Alnylam, we look at our balance sheet as an incredibly important strategic asset. We always did, but more so now. The availability of new financing from investors may be absent for a couple years. We have to be smart about how we look at our balance sheet and make sure we make all the right investments. Even with a half-billion in cash, we trimmed down our spending plan by 20 percent from what we had looked at doing in September. There are many companies that had to do it dramatically, but we did it because we want to be thoughtful about how we use our cash.

Josh Boger, CEO of Cambridge, MA-based Vertex Pharmaceuticals, Chairman of the Biotechnology Industry Organization

Xconomy: What was the single most valuable lesson you learned from the last big biotech bust (the genomics-driven crash of 2001 and 2002), and how will having those battle wounds help you carry on today?

Josh Boger: The lessons of 2001 were mainly about being more prudent about projection into the future. The lessons out of this one are more likely to be lessons about efficiency. People can be more efficient than they ever thought they could be, because we will have to be. So when the clouds part again—and they will, there’s no question they will—all of us who will have taken it as an opportunity to be more efficient will be in a better position to take advantage of opportunity than we were before. So it’s a different lesson.

X: Every year, bankers like to say acquisitions and partnerships between biotech and pharma companies are going to pick up because pharma needs innovative new drugs, and biotechs need cash to develop them. Do you see this trend truly accelerating this year, and if so, why?

JB: No, I don’t think it will accelerate this year. The partnering activity will be very similar to what it was last year and the year before. There may be a couple of more dramatic moves, but I don’t think there will be a wholesale change in how companies work.

The dynamic is really still the same. The economic downturn hasn’t yet created a crisis atmosphere at pharma. They have a crisis, but it’s been the same crisis they’ve had the last few years.

X: What kind of companies, technologies, and people will be resilient enough to survive this downturn?

JB: We have many more companies now that are actually not companies that have a reasonable expectation of sustaining themselves. We have a lot of sort-of research projects that are funded by venture capital that really aren’t real companies with a sustainable business plan. They always had a ‘We’ll get this to that stage and sell it’ mentality. That depends on there being a market at that point in time, rather than saying ‘We’ll build value, and at every point in value-building, we’ll see if we can carry on to the next step.’ That’s a business plan. The first one is not a business plan. There may be too many of those first kinds of operations. Some of those may go away. I’m not saying that’s a good thing, but it may not be a disaster.

Ironically, it’s been driven by pressures from the venture capital community that don’t want to invest in anything but the exit strategy. It’s leading to more assets than are desirable that actually aren’t companies. Then the VCs say ‘Woe is me’ but they should probably take some of the blame for that. They created that kind of terminal, limited, time-sensitive asset base that didn’t have the legs to get through a substantial financial downturn. That’s a mistake. Companies need to get through the unexpected.

X: Who would make a good FDA commissioner and why?

JB: I’m not going to give you any names. There are plenty of real names out there. The profile of a good FDA commissioner is someone with significant management experience. It’s a management job, not a policy job. Somebody who takes management of a large, very complex agency seriously, and understands what it means to manage a large, complex agency under political pressure. I’d marry that with someone who’s passionately enthusiastic about the innovations that FDA is a partner in bringing to the public, rather than someone who thinks it’s their job to counter the passion of other people. That doesn’t mean they shouldn’t be tough, or can’t be worried about safety, but they should think it’s exciting when a drug is approved, rather than worry ‘Oh, my God, did we just let one go?’

X: What’s the most surprising impact of the past year’s economic turmoil on your plans for this year?

JB: The impact to our business has been negligible to date, so I’ll try to extrapolate to other people. The most surprising thing to me, and it surprises me every time, is how quickly people can fundamentally turn to pessimism even if there’s no direct affect on them. There are people perfectly able to make their house payments, with very stable jobs, worried about their house price. Why should they be worried about their house price? Who cares if your house price isn’t as high as your mortgage if you can afford your mortgage? The purpose of a house is to live in a house, not as an investment vehicle. There are people truly suffering, and that’s a problem, but there are more people who have taken a negative attitude and have become overly conservative, and not spending on things they can afford, and therefore making the downturn worse. People succumb to this groupthink very easily. It happens on the other side, too.

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