Latest / Making Medicine / Betting on Biotech: Dr. Jeremy Levin's Playbook | How America Makes Medicine Ep. 4

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Betting on Biotech: Dr. Jeremy Levin's Playbook | How America Makes Medicine Ep. 4 · Making Medicine

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Speaker 1: At Making Medicine. We're reporting on the headlines, not making
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Speaker 1: medical recommendations. For personal health questions, always ask your doctor.
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Speaker 1: Nothing in this episode constitutes investment, financial, or legal advice.
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Speaker 1: Consult your own advisors before making decisions.
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Speaker 2: Where is the next great cancer drug gain to be invented?
0:20
Speaker 2: Where is the next great Alzheimer's drug gain to be invented?
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Speaker 2: The answer is it should be here, But we can't
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Speaker 2: stop somebody else doing it. We just need to do
0:31
Speaker 2: it better. And one team is fully equipped, the other
0:35
Speaker 2: one doesn't have cleats, pads or comets. Who's going to win?
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Speaker 1: Welcome back to the Making Medicine podcast or Science Policy
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Speaker 1: and Innovation Meet. I'm your host John Stanford. On this
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Speaker 1: episode of our How America Makes Medicine series, we're talking
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Speaker 1: with Jeremy Levin, a universally known figure that has sat
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Speaker 1: on all sides of the pharmaceutical innovation we've been talking about.
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Speaker 1: Doctor Levin led global business development at Novartis before architecting
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Speaker 1: BMS's String of Pearl strategy, which was a major inflection
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Speaker 1: point in how large manufacturers do R and D. He
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Speaker 1: then served as president and CEO of Teva and is
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Speaker 1: now executive chairman of Avid Therapeutics and chairman emeritus of Bio,
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Speaker 1: the trade association that has done a lot engaging around
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Speaker 1: policy and advocacy. It's a remarkable, almost unmatched career, and
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Speaker 1: these days doctor Levin is also carving out a growing
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Speaker 1: thought leadership role on how America stays competitive. He did
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Speaker 1: that most recently as the author of his new book,
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Speaker 1: Biotech in the Balance, Saving a strategic industry in an
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Speaker 1: age of distrust. He's the perfect guest as our series
1:51
Speaker 1: transitions into how medicines get to patients, and he even
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Speaker 1: shares insights on the hottest topics of today. So let's
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Speaker 1: get into the show. Throughout our How America Makes Medicine series,
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Speaker 1: we're taking brief moments in every episode to do a
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Speaker 1: little history, but this one's particularly special. As we left
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Speaker 1: off last episode, the biotech revolution had begun. Ecosystem was
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Speaker 1: developing for early stage companies to develop the nih the
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Speaker 1: FDA was all moving in the right direction. But up
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Speaker 1: until the early two thousands, the big news in acquisitions
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Speaker 1: and mergers were large companies buy each other. Because back
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Speaker 1: in the mid two thousands, Big Forma had a problem.
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Speaker 1: Patents were expiring, pipelines were thinning out, and the old
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Speaker 1: playbook of by a competitor and cut costs and call
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Speaker 1: it growth wasn't actually producing new medicines. Bristol Meyers Squibb
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Speaker 1: decided to try something different, and that's where today's guest
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Speaker 1: doctor Jeremy Levin comes in and makes history himself. Instead
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Speaker 1: of one giant swing, doctor Levin his colleagues proposed they
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Speaker 1: go small and deliberate, sell off the businesses that didn't
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Speaker 1: fit nutritionals, medical devices, and use that capital to buy
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Speaker 1: up promising early stage science, one piece at a time.
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Speaker 1: Doctor Levin gave it a name string of pearls. Each
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Speaker 1: acquisition was a pearl string. Enough of them together and
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Speaker 1: you've got something valuable without betting the whole company on
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Speaker 1: a single roll of the dice. The strategy found its
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Speaker 1: defining moment in two thousand and nine when BMS acquired
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Speaker 1: a company called Metarex for roughly two point three billion dollars.
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Speaker 1: Doctor Level will talk about this in the episode. Metax
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Speaker 1: didn't look like much on paper, small biotech with early
3:38
Speaker 1: cancer research, but buried in that research where the foundations
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Speaker 1: of what we become your VOI and Updivo, two drugs
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Speaker 1: that didn't just make money, They created an entire new
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Speaker 1: category of cancer treatment in munooncology. Updivo alone still accounts
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Speaker 1: for over a fifth of BMS's revenue today. That's the
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Speaker 1: part that made String of Pearls famous, not just that
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Speaker 1: it worked, but that nobody saw it coming from the outside.
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Speaker 1: The industry took notice. In twenty twelve, pharmaceutical giant Teva
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Speaker 1: went out and hired doctor Levin away to run the
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Speaker 1: same playbook there, and that playbook hasn't just become one playbook.
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Speaker 1: It now defines how the large pharmaceutical ecosystem operates. With
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Speaker 1: patent cliffs looming across the industry, Companies across the board
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Speaker 1: run this strategy, building strings of smaller complementary deals instead
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Speaker 1: of one big acquisition, spreading their risk out across many
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Speaker 1: bets instead of one. So doctor Levin isn't just someone
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Speaker 1: here with an interesting resume. He's a part of the
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Speaker 1: very history that this series is uncovering of how we
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Speaker 1: got to where we are today. He truly defined the
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Speaker 1: moment where String of Pearls meant, instead of large mergers
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Speaker 1: and acquisitions, large pharma would operate more like venture capital, diversified,
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Speaker 1: small bets that come to define marquee moments like the
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Speaker 1: JP Morgan khon for Instant Jeffries and all of those,
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Speaker 1: they all come back to this inflection point. So we
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Speaker 1: couldn't be luckier to be talking with living history as
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Speaker 1: part of the How America Makes Medicine segment. So without
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Speaker 1: further ado, let's get into a great conversation with doctor Levin. Jeremy,
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Speaker 1: welcome to the show.
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Speaker 2: Thank you very much. I'm delighted to be here and
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Speaker 2: thank you for having me on.
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Speaker 1: Well, I want our listeners to know that doctor Levin
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Speaker 1: is a doctor, and I think anyone who knows you
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Speaker 1: knows the long list of achievements you've accomplished that we'll
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Speaker 1: get into. But for some deep personal reasons, we're gonna
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Speaker 1: call you Jeremy on today's episode and we can unpack
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Speaker 1: those on a couch someday. So glad that you are here.
5:44
Speaker 1: In this series. We are trying to unpack how America
5:48
Speaker 1: got to where it is today, and one of the
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Speaker 1: things listeners always want is to understand the career paths
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Speaker 1: of the people we have on the show. It would
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Speaker 1: be hard for me to find someone who has had
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Speaker 1: a career like yours, and so I thought that's the
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Speaker 1: best place to start. Walk us through your remarkable career.
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Speaker 1: You've seen all sides of it. You know what you're
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Speaker 1: doing now relative to string of pearls and no vardes.
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Speaker 1: Walk us through your career and how you've seen changes
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Speaker 1: in industry along the way.
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Speaker 2: With great pleasure. And everybody comes from somewhere, and I
6:30
Speaker 2: come from a tiny town in the middle of remote
6:33
Speaker 2: South Africa, a place called Pickerberg, a farming village. I'm
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Speaker 2: a farmer by origin. That is my basis. But fast
6:42
Speaker 2: forwarding my academic career, I was very fortunate to be
6:47
Speaker 2: admitted to Oxford despite terrible high school grades, and manage
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Speaker 2: to go through my zoology training there, intending to go
6:57
Speaker 2: back to be a game ranger actually in Africa, and
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Speaker 2: then did my PhD, which changed my life. That was
7:03
Speaker 2: the structure of DNA. During that period of time, I
7:07
Speaker 2: met a patient with a terrible disease called zeroederma pigmentosa
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Speaker 2: and that changed me yet again, saying now I had
7:15
Speaker 2: to go after this disease or similar diseases and use
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Speaker 2: my knowledge to treat them. So I became a doctor,
7:22
Speaker 2: went to Cambridge practice medicine. I love medicine. I've never
7:27
Speaker 2: stopped being a doctor, although I don't practice it. But
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Speaker 2: I have one principle on everything I do, and it's
7:33
Speaker 2: been the guiding light for my entire career. Is that
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Speaker 2: every time you give a medicine, you change somebody's life.
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Speaker 2: That's number one, and number two, you have a covenant
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Speaker 2: with each patient. Doesn't matter what you do, whether you
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Speaker 2: make medicines, whether you treat patients, that covenant is inviolable.
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Speaker 2: You must make the patient better. I was very fortunate
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Speaker 2: to come to America to see the birth of of biotech.
8:01
Speaker 2: I came here for a while. I was incredibly I
8:05
Speaker 2: was brought over by a small biotech company in Washington,
8:09
Speaker 2: d C. And actually in the Watergate Building, and I
8:16
Speaker 2: knew nothing about Washington, knew nothing about the Watergate Building.
8:19
Speaker 2: Knew nothing, but I did learn, and it was a treat.
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Speaker 2: America's ability to really see something novel create a whole
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Speaker 2: new industry, even though it wasn't in the minds of
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Speaker 2: the eye of the general public, was terribly exciting. So
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Speaker 2: I stayed, and I was fortunate the government gave me
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Speaker 2: the right visas I was able to work. I got
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Speaker 2: to understand the industry, and then, delightfully for me, I
8:49
Speaker 2: met my wife, who was an American. I married, became
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Speaker 2: a citizen many many years ago, and then devoted myself
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Speaker 2: to helping build that same concept getting new medicines to patients.
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Speaker 2: The first real big step in that was to work
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Speaker 2: in Genzyme, where I learned from a marvelous leader, Henry Tamir,
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Speaker 2: the essence of how you get a medicine to a
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Speaker 2: patient and what it could do for the patient. From that,
9:20
Speaker 2: I also met a wonderfully important person in that was
9:24
Speaker 2: Dave McLaughlin, the CFO, who taught me the elements of
9:28
Speaker 2: how you build a business, how you create a business,
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Speaker 2: how you think about it from a fiscal perspective, and
9:34
Speaker 2: then from there after a lot of debate and thinking
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Speaker 2: with Henry, I went on to become the head of
9:45
Speaker 2: I joined with a couple a step in between but
9:48
Speaker 2: not really relevant. I joined Novatas as one of the
9:52
Speaker 2: third party, the third person to join Nevatas at the
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Speaker 2: request of then CEO Daniel Vasella to help a wonderfully
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Speaker 2: interesting man called Mark Fishman build the first nev Artist
10:05
Speaker 2: Research Center in America in Boston as the biotech industry
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Speaker 2: was flourishing, and I think I was the third employee.
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Speaker 2: I can't remember exactly, but I was responsible for all
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Speaker 2: the business development. I saw hundreds of deals there was.
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Speaker 2: One of the most important in my life was actually
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Speaker 2: doing a deal with John Marriganori at al Nylan in there.
10:29
Speaker 2: I believe it was their first pharmaceutical deal ever, and
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Speaker 2: actually Nevadis terminated it straight after I left Nevatas, and
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Speaker 2: everything they gave back is today is what al Nylam is.
10:43
Speaker 2: It's remarkable anyway, Lots of teachings there from Nevada's. I
10:48
Speaker 2: didn't want to move abroad. They offered me wonderful roles,
10:51
Speaker 2: but I didn't want to go and run a division
10:55
Speaker 2: or run a country. It wasn't of my interest. I
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Speaker 2: wanted innovation, and I, after thinking it through, I chose
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Speaker 2: to go to Bristol, a company in enormous distress. The
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Speaker 2: CEO had been dismissed. There was a judgment against it,
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Speaker 2: there was a judicial supervision ongoing. But it had a
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Speaker 2: wonderful name and deep understanding of cancer. Wonderfully interim CEO
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Speaker 2: Jim Cornelius, a man of great consequence from Lily, really
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Speaker 2: deep thinking and a very good team in intact trying
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Speaker 2: to save this company, this iconic American company, Bristol Meyers Group,
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Speaker 2: which was teetering. It really was teetering. Jim basically made
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Speaker 2: it very clear to me that if we didn't bring
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Speaker 2: in a new pipeline, if we didn't recreate a source
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Speaker 2: of innovation in the future, then this company was going
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Speaker 2: to be sold. And he instructed the CFO, Jean Marcuer,
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Speaker 2: to help me. I am together with him the head
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Speaker 2: of research. We began to think what we could do,
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Speaker 2: and I conceive of a concept called String of Pearls,
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Speaker 2: which is a series of directed, small, targeted acquisitions to
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Speaker 2: rebuild the innovative pipeline because you just couldn't do that
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Speaker 2: from the internal capabilities they had at that stage. This
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Speaker 2: was highly successful. We bought a company called Metax at
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Speaker 2: the end, after doing seventeen transactions, we boughtx. Metax was
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Speaker 2: really the keystone of the next ten years of Bristol
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Speaker 2: Myers's success because it opened up the doors to this
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Speaker 2: area of immuno oncology and it was the only company
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Speaker 2: daring to do this. Nobody wanted to get into this area.
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Speaker 2: It looked like a dead area, an area that failed.
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Speaker 2: How would you get a white cell to attack a cancer,
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Speaker 2: the hidden disease. Well, the science told me it was
12:57
Speaker 2: going to work. The and that was another immense lesson,
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Speaker 2: and against great opposition initially and great fear with many
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Speaker 2: people in Bristol, I managed to persuade them to say, listen,
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Speaker 2: we're going to do this. And there's a true story
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Speaker 2: that made me write out my resignation that if the
13:14
Speaker 2: transaction didn't.
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Speaker 1: Work, I was going to be That was it.
13:19
Speaker 2: That was it. That was it. You put your neck
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Speaker 2: on the line. That was great. I love that. It
13:24
Speaker 2: was wonderful. I think Bristol was on track and it
13:28
Speaker 2: opened up the whole area of cancer research and within
13:33
Speaker 2: ten years fifty percent well there was only one company
13:36
Speaker 2: to begin with in nineteen nine, twenty or nine. By
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Speaker 2: the time ten years later it had passed, half of
13:44
Speaker 2: all pharmaceutical research was in that area. Was remarkable, just
13:49
Speaker 2: a wonderful opportunity to help patients. But at the same
13:53
Speaker 2: time I was approached by a company called Tever to
13:57
Speaker 2: come and fix it. And I turned to my wife
14:02
Speaker 2: and I said, look, Israel's great country. Let's go. Let's
14:06
Speaker 2: go and help see if we can do this. We
14:09
Speaker 2: moved there. I had the great pleasure of learning about
14:14
Speaker 2: manufacturing generics, providing one in six pills for all of
14:19
Speaker 2: the American populace. Actually, that was what it was generating.
14:25
Speaker 2: And when we returned to America in twenty fourteen, I
14:28
Speaker 2: decided to devote myself. Now, going down from the giant
14:32
Speaker 2: company which had previously had twenty twenty five billion dollars
14:36
Speaker 2: of revenue a country member exactly, and something like forty
14:40
Speaker 2: thousand employees in nearly all the countries of the world,
14:45
Speaker 2: certainly seventy languages. I came down and decided to start
14:48
Speaker 2: a tiny company, me in a room with one guy,
14:51
Speaker 2: and that turned into OVID and my love. From then
14:55
Speaker 2: on out, I've devoted myself only to the small companies,
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Speaker 2: the innovative biot companies, which is where I started from
15:02
Speaker 2: and is my love and is my passion. And today
15:08
Speaker 2: you know of it is is really doing well. So
15:12
Speaker 2: that's a long trajectory. But in the meantime, grew up
15:15
Speaker 2: two wonderful daughters, still live on a farm.
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Speaker 1: Yeah, it's it all. It all comes back to the
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Speaker 1: farm someday. I mean, like I said, it is hard
15:29
Speaker 1: to imagine someone with a more storied career. And one
15:33
Speaker 1: of the things that strikes out to me, and maybe
15:35
Speaker 1: this is jaded Beltway reality, a lot of people want
15:40
Speaker 1: to put up these buckets of small biotech over here,
15:44
Speaker 1: the emerging entrepreneur, the spin out of a university, early
15:49
Speaker 1: stage science, and then they want to put large manufacturers
15:53
Speaker 1: and pharma over here. And I think you're the good.
15:58
Speaker 1: You're the good and not necessarily rare example of a
16:02
Speaker 1: life spent in both. And I wonder if you would
16:04
Speaker 1: just share your thoughts on both. What were the differences
16:10
Speaker 1: between something like running a company like Avid versus a
16:14
Speaker 1: company like Teva, And is that divide justified or is
16:20
Speaker 1: it really one ecosystem now that you've had this career
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Speaker 1: on both sides of it.
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Speaker 2: It's a very important question, and I have given it
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Speaker 2: an enormous amount of thought and lies at the core
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Speaker 2: of actually what I've been talking about and writing about.
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Speaker 2: You are right. I've lived in the world of generics,
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Speaker 2: biologics manufacturing, big novel pharmaceutical companies and tiny, struggling little companies,
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Speaker 2: and some which have been successful the whole. They are panoply.
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Speaker 2: They all have one mission, and that is to get
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Speaker 2: a drug to a patient. But I think you should
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Speaker 2: perhaps conceive of it much more like the automobile industry.
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Speaker 2: There are components of it which are completely unique. Today
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Speaker 2: you have on the if the analogy holds, you have
17:19
Speaker 2: those who generate the software the unique capabilities of the
17:23
Speaker 2: electric car inside the stuff you don't see. Then they're
17:27
Speaker 2: those who build the bodies. And then there's those who
17:29
Speaker 2: sell the car. And people really see the sold car,
17:32
Speaker 2: they don't really know who does the software in the
17:35
Speaker 2: middle of the electric engine. And in the same way,
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Speaker 2: biotech is actually the hidden chip within the computer, which
17:48
Speaker 2: is the pharmaceutical industry. That chip is about a thousand companies.
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Speaker 2: They are very different from the computer industry. This chip,
18:00
Speaker 2: which is hundreds of thousands of researchers go in every day.
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Speaker 2: They mostly fail. They take a huge risk when they
18:11
Speaker 2: go in. There are no revenues to support them. They're
18:15
Speaker 2: selling stock, They're selling the aspiration that something will happen
18:20
Speaker 2: to that tiny company. Most of these companies are between
18:24
Speaker 2: ten to fifty people, most not all about as I
18:29
Speaker 2: said one thousand and two thousand and they started in
18:32
Speaker 2: nineteen seventy three when Genentek was conceived, in San Francisco
18:39
Speaker 2: with a crazy scientist saying I have an idea, and
18:44
Speaker 2: an even more crazy venture capitalist saying, hey, I'm willing
18:47
Speaker 2: to put my money on that crazy idea. It's a
18:50
Speaker 2: little bit like the the go West in my wagon.
18:55
Speaker 2: I don't know what I'm going to find, but I'm
18:56
Speaker 2: going west. That's truly an American approach. Truly. It's not
19:01
Speaker 2: a I'm going to go and find. I'm going to
19:04
Speaker 2: go and build. And you know, most many people died
19:08
Speaker 2: on the way in those wagon trains, but biotechs like that.
19:13
Speaker 2: Many companies live, many die. All of these little companies
19:17
Speaker 2: put their neck on the line. It's either make innovation
19:21
Speaker 2: or die. Then they're bought. Most of them are bought
19:26
Speaker 2: when they get a product, not all, but most. Some
19:28
Speaker 2: go on to commercialize their product, but very rare because
19:32
Speaker 2: the cost of commercializing is incredibly expensive. So the giants
19:36
Speaker 2: who are out there, these giant pharmaceutical companies, are very different.
19:41
Speaker 2: Their great skill and their great capability is a constanty
19:48
Speaker 2: of presence. They never sell stock. They earn huge amounts
19:56
Speaker 2: of cash. That cash flow they use within their companies,
20:01
Speaker 2: sometimes to buy As I support strongly young biotech companies
20:07
Speaker 2: with novel products sometimes and something I don't support buying
20:11
Speaker 2: back their stock and sometimes and hopefully investing in infrastructure
20:19
Speaker 2: that helps them be successful in manufacturing and distribution. These
20:28
Speaker 2: companies have a different These types of companies have a very,
20:33
Speaker 2: very different psychology. The young innovators incredibly desirous of risk,
20:40
Speaker 2: very close to the patient. The big giants focused on constancy,
20:47
Speaker 2: cash flow status, and really like giant ships, not moving.
20:56
Speaker 2: The irony is, that's seventy percent of all innovation from
21:00
Speaker 2: the little guys. All of those new medicines, seventy percent
21:05
Speaker 2: of them come from those and go into the big
21:07
Speaker 2: companies who distribute them and largely get them to patients.
21:11
Speaker 2: So culturally, these are completely different organizations. In industries, the
21:17
Speaker 2: biotecker's never really been recognized as a separate one. Unfortunately,
21:22
Speaker 2: the legislators think about the industry this is not This
21:28
Speaker 2: is as if you're saying, I am a chip company
21:31
Speaker 2: versus I am a computer company, completely different. One sells
21:36
Speaker 2: through Walmart or through a Apple. It doesn't matter the
21:44
Speaker 2: other one sells. You know, just this tiny little chip
21:47
Speaker 2: never gets out, just goes straight to the other factory.
21:51
Speaker 2: So a component, it's very critical to understand that difference,
21:57
Speaker 2: and then, unfortunately is the truth. When the public sees
22:03
Speaker 2: and takes own issue with the pharmaceutical companies because of pricing,
22:10
Speaker 2: access or lack of insurance, et cetera, et cetera, and
22:15
Speaker 2: legislators then move to attackle the pharmaceutical companies and impose
22:23
Speaker 2: restrictions on them. That is an enormous and disproportionate effect
22:27
Speaker 2: on the innovators. Enormous there are Simply, they are the
22:34
Speaker 2: casualties of an attack on a giant industry. And venture
22:40
Speaker 2: capitalists get worried. They move their money out of it,
22:44
Speaker 2: They move their money out of their risk, money out
22:46
Speaker 2: of biotech, while the pharmaceutical companies continue, they continue no
22:51
Speaker 2: matter what.
22:53
Speaker 1: Two questions on that one sharper end of the stick,
22:57
Speaker 1: and that is you know something I've I've tried to
23:01
Speaker 1: make clear to the most ardent Inflation Reduction Act supporters
23:07
Speaker 1: of the new sort of price mechanism a law price
23:11
Speaker 1: control or MFN on President Trump's side, at some point,
23:18
Speaker 1: you know, they talk about AARP. Just put something out
23:21
Speaker 1: that said the government could save not patients, but the
23:24
Speaker 1: government could save two hundred billion dollars if we put
23:27
Speaker 1: price controls on XYZ drugs at some point two hundred
23:33
Speaker 1: billion out of the industry, three hundred billion out of
23:35
Speaker 1: the industry. It does flow down, right, It is the
23:39
Speaker 1: pockets of these large companies. Is not where the impact stops.
23:46
Speaker 1: Would you agree with that that that impact if we did,
23:48
Speaker 1: if we do suck these revenues entirely out of the system,
23:51
Speaker 1: what are the consequences for that chip maker and your
23:54
Speaker 1: analogy for that that biotech.
23:57
Speaker 2: It's a disproportionate trickle down. Imagine that you've got rain
24:04
Speaker 2: falling on the top of the mountain. Basically the top
24:08
Speaker 2: of the mountain remains relatively the same, but as those
24:14
Speaker 2: drops fall down, they turn into rivulets, and the riverts
24:18
Speaker 2: turn into river and the rivers they erode massively at
24:21
Speaker 2: the base of that mountain. That's what happens. We're the
24:24
Speaker 2: base of the mountain, we get eroded, we get destroyed
24:29
Speaker 2: by the trickle down effect of these ill conceived and
24:38
Speaker 2: they are ill conceived legislative steps which are designed to
24:45
Speaker 2: do a good thing. By the way, their concept is right,
24:50
Speaker 2: America should get the best medicines, be access to as
24:54
Speaker 2: many as they can, and they should be affordable for
24:57
Speaker 2: people but the answer is wrong. The answer is not
25:01
Speaker 2: to slap a price control on we have a mechanism
25:04
Speaker 2: for that. Well, here's another solution, which most favored nation
25:10
Speaker 2: and IRA really should be thinking about. Why is it
25:14
Speaker 2: the patient should reach into their pocket to pay They've
25:20
Speaker 2: been punished by having a disease. They're productive members of society,
25:24
Speaker 2: they want to be economically viable, they want to be
25:27
Speaker 2: with their families. We have the means to give them that,
25:31
Speaker 2: but the insurance companies say, we're not paying for that.
25:36
Speaker 2: And oh, by the way, we're going to put lots
25:38
Speaker 2: of intermediaries between you and us so that we ensure
25:43
Speaker 2: we don't pay it. And these are things like there
25:47
Speaker 2: were there many intermediaries, they all take a cut of this.
25:50
Speaker 2: So your question is very fundamental basically all of these
25:59
Speaker 2: most favored concepts. Yes, you can get a cheaper drug
26:04
Speaker 2: in Germany, but let me ask you a question. How
26:09
Speaker 2: many intermediaries are there between the patient and the manufacture
26:14
Speaker 2: And the answer is one, it's the government that pays
26:17
Speaker 2: for it. Period. We're here, fifty percent of the cost
26:24
Speaker 2: of a drug, and sometimes a lot more goes into
26:27
Speaker 2: the pocket of an intermediary like a pharmacy benefit manager
26:32
Speaker 2: that nobody knows about. Why is it that the insurance
26:35
Speaker 2: companies should charge premiums as they do and they're not
26:39
Speaker 2: pay for medicines so that when you're sick, you go
26:43
Speaker 2: to the pharmacy, you put your hand in your pocket.
26:47
Speaker 2: Now you're sick and you're being punished again. You're handing
26:50
Speaker 2: cash over. This is crazy and the key I've heard
26:54
Speaker 2: legislators talk about skin in the game, Wait till they
26:58
Speaker 2: get cancer and then come and talk about skin in
27:02
Speaker 2: the game. They've got skin in the game. My job
27:04
Speaker 2: is to fix them. And our job is legislators could,
27:09
Speaker 2: instead of tackling most favorite or trying to impose most
27:12
Speaker 2: favored nations, get rid of all the middlemen, get rid
27:16
Speaker 2: of them, make sure that insurance companies pay for the
27:24
Speaker 2: drugs that people have, and make sure that the pharmaceutical
27:27
Speaker 2: companies abide by the rules that already exist in the
27:31
Speaker 2: generic entities. So there are lots of different ways, but
27:37
Speaker 2: the result, going back to your point, trickle down is
27:43
Speaker 2: immediate consequential. Because remember what I said about these small companies,
27:49
Speaker 2: they live by their stock price. When a imposition is
27:54
Speaker 2: made on the pharmaceutical companies, there is an immediate market reaction.
28:00
Speaker 2: A stock price of these companies plummet, and they sell
28:05
Speaker 2: their stock to fund the innovation they can. Now the
28:10
Speaker 2: cost of their money goes huge. It becomes enormous. They
28:15
Speaker 2: can't afford to develop new drugs. So they've got to
28:18
Speaker 2: make very hard choices, stop developing, reduce the amount investment
28:24
Speaker 2: in research, all because somebody wanted to conceive of taking
28:30
Speaker 2: some very old drugs and reducing their price by legislation.
28:37
Speaker 2: Most favored nation, which is much more politically demonstrative than
28:45
Speaker 2: it is effective.
28:49
Speaker 1: So much well said there that we at Incubate are
28:54
Speaker 1: trying to convey. And I think you did incredibly well there,
28:58
Speaker 1: And I think point you use the word constancy a
29:02
Speaker 1: few times. How important is it? And one of the
29:10
Speaker 1: one of the pieces of feedback we get when a
29:12
Speaker 1: when a new policy is put out there, I really
29:15
Speaker 1: have members of Congress say, well, the manufacturer stocks didn't
29:19
Speaker 1: move that much, it can't be that bad what we're proposing.
29:26
Speaker 1: But you know, as as you kind of laid out,
29:29
Speaker 1: they're built for this constancy. They are an oil tanker
29:33
Speaker 1: that disrupting them is very hard to do. Is it
29:38
Speaker 1: important that that constancy be there and is this this
29:43
Speaker 1: new way of thinking. I want to come back to
29:45
Speaker 1: string of pearls. Biotech innovate, large constancy pharma get out
29:52
Speaker 1: to patients. Is that the best way?
29:57
Speaker 2: Well, I think there is a lot to unpack in
30:01
Speaker 2: what you've said. There is no best way. There's the
30:04
Speaker 2: way that works best well said in our environment. It
30:13
Speaker 2: one thing that has been demonstrated categorically, categorically is that
30:19
Speaker 2: innovation is driven not by size. It's driven by the
30:26
Speaker 2: intellectual risk taking, the capital risk taking in tiny, small companies.
30:35
Speaker 2: Those are the most fertile soil of innovation. There's perhaps
30:41
Speaker 2: only one company or maybe two in the entire biotech
30:46
Speaker 2: and pharmaceutical industry that gainsays what I've just said, and
30:50
Speaker 2: that's regeneron ann Al Nylon. They are remarkably innovative, and
30:56
Speaker 2: somehow they've created a culture that has a low innovation
31:00
Speaker 2: to proceed. When their current leaders pass, the question is
31:05
Speaker 2: can they continue that That's a side issue. This constancy
31:12
Speaker 2: in the large pharmaceutical is essential because they survive over
31:18
Speaker 2: decades and they live within political systems that change every
31:23
Speaker 2: several years. So their need and thank heavens, they've got
31:29
Speaker 2: this is the ability to navigate through enormous changes happening
31:35
Speaker 2: around them in the political, social, economic world. Their job
31:40
Speaker 2: is not to innovate. Their job is to be constant
31:44
Speaker 2: and to deliver the medicines. If they weren't here, that
31:48
Speaker 2: would be a problem. You'd have huge inequity across the
31:52
Speaker 2: world and the ability to get any kind of medicine.
31:55
Speaker 2: So I don't gainsay them that. I think it's very important.
31:59
Speaker 2: The question is how they do that, and how they
32:02
Speaker 2: launch new medicines, and can they do better than that? Yes,
32:05
Speaker 2: they can. The small company is completely different. The small
32:10
Speaker 2: companies live and die on a daily basis. Literally, if
32:17
Speaker 2: there is no predictability on what's going to happen with
32:21
Speaker 2: regard to a policy, with regard to the FDA, with
32:25
Speaker 2: regard to immigration of new individuals coming to help staff,
32:31
Speaker 2: their innovation, with regard to the real source of innovation,
32:38
Speaker 2: which is the academic centers. If there's no constancy in
32:42
Speaker 2: those systems, then resting at top, these innovative small companies
32:47
Speaker 2: get an immediate hit because their funders, the venture capitalists,
32:53
Speaker 2: and the risk takers in the marketplace simply abandon them
32:57
Speaker 2: for short for much more certain long term entities and
33:04
Speaker 2: that's a problem because biotech is not a trade. It
33:11
Speaker 2: is a ten year cycle from concept to a drug,
33:15
Speaker 2: during which time they're owning nothing, during which time their
33:18
Speaker 2: stock is wagging all over the place. And those one
33:25
Speaker 2: thousand companies will see any one of them will see
33:30
Speaker 2: massive inflection in their stock. Let me give you an example.
33:36
Speaker 2: Genentech was sold finally at seventy dollars a share to Roche,
33:43
Speaker 2: but in its inception it was thirty cents. Okay, al Nylan,
33:50
Speaker 2: a company which everybody today lords is a wonderful company,
33:55
Speaker 2: was has seen, in fact, even in the last few days,
33:58
Speaker 2: has seen a thirty percent drop in its top price
34:02
Speaker 2: for missing its earnings on about one hundred million dollars,
34:05
Speaker 2: which was nothing. That doesn't happen in the pharmaceutical industry. Ever,
34:09
Speaker 2: that volatility doesn't occur. Oh. A slight variance on that
34:15
Speaker 2: I will confess is when the press suddenly sees one
34:20
Speaker 2: giant trying to buy another giant or alleging it is so.
34:24
Speaker 2: As we saw last weekend where it was mooted that
34:28
Speaker 2: AstraZeneca was going to buy Bristol. That stock dropped nine percent.
34:34
Speaker 2: People kind of shrugged, But that was a catastrophically bad
34:38
Speaker 2: move if it was going to happen, And nine percent
34:42
Speaker 2: on a multi hundred billion dollar company is worth more
34:47
Speaker 2: than the entire biotech industry. So you go back to
34:51
Speaker 2: the biotech companies, Regeneralon, the hero of today, hero, wonderful company,
34:57
Speaker 2: really interesting, great leaders, iconic. Actually, well, there was a
35:02
Speaker 2: if you go back, you know there's many, many, hundreds
35:07
Speaker 2: of millions. It's one hundred million dollar plus company. It
35:11
Speaker 2: was considered a dog. The stock was doing this all
35:14
Speaker 2: the time. It was considered terrible, don't do it, don't
35:19
Speaker 2: touch it, and so much so that offers. There are
35:23
Speaker 2: occasions when really great medicines just don't get developed because
35:29
Speaker 2: of that. So the consequence, I don't know why the
35:34
Speaker 2: legislators put on shades and look at the pharmaceutical companies
35:39
Speaker 2: and say, well, their stock doesn't move that much, so
35:42
Speaker 2: it can't be a big deal. Sure, look what they've
35:47
Speaker 2: done to the innovation engine. And if they can't look
35:51
Speaker 2: at that, then they shouldn't really be legislators because what
35:55
Speaker 2: they've done is they failed to understand the oil in
35:58
Speaker 2: the ground of the gas industry is actually what drives
36:04
Speaker 2: a gas industry in the same way that the innovation
36:08
Speaker 2: in the biotech industry is what drives the whole pharmaceutical industry,
36:15
Speaker 2: and the consequences of their legislation is catastrophic on the
36:20
Speaker 2: biotech industry. Sometimes it's cyclical, people say, but I would
36:26
Speaker 2: argue to you now, what they've done over the last
36:29
Speaker 2: several over the last two years is completely structural, and
36:36
Speaker 2: I would say to you that the consequences of today's
36:39
Speaker 2: legislation are not just a matter that will pass away.
36:46
Speaker 2: It's really the undermining of all the struts, all of
36:54
Speaker 2: the infrastructure that holds up the United States biotech industry
37:00
Speaker 2: and is on the verge if it's not fixed, and
37:02
Speaker 2: it can be fixed of irreparably harming the state of
37:07
Speaker 2: the United States biotic industry for the foreseeable future. This
37:14
Speaker 2: is not a panic moment, because innovation won't stop. It'll
37:19
Speaker 2: just migrate to China. And it is migrating to China,
37:24
Speaker 2: and the big farmers will shrug and say, you know what,
37:27
Speaker 2: that's okay, We'll go and get innovation in China. And
37:30
Speaker 2: in America, the question will be, why did we destroy
37:34
Speaker 2: that industry? Mm hmm. That is that is what's that
37:39
Speaker 2: is the direct corollary of what I'm.
37:41
Speaker 1: Saying, Well, I wanted to get you are you are
37:47
Speaker 1: full of insights after that incredible career, and you put
37:51
Speaker 1: those insights to paper, and you titled your book Biotech
37:55
Speaker 1: in the Balance. And I think that's what you're getting
37:58
Speaker 1: to here, that we are at this massive inflection point.
38:04
Speaker 1: What made you write the book and what do you
38:06
Speaker 1: want people to take away from it when they've read it?
38:10
Speaker 2: Two reasons. I believe that while we have created in
38:17
Speaker 2: this country the unbelievable capability of innovation in new medicines
38:26
Speaker 2: and the ability to crack open diseases like Alzheimer's, like cancer,
38:31
Speaker 2: like diabetes, heart disease, any number of them, these took time.
38:39
Speaker 2: We started in nineteen forty seven and with the establishment
38:46
Speaker 2: of the NIH, and have continued consistently, and we went
38:51
Speaker 2: from a one or two biot companies in the early
38:54
Speaker 2: seventies to over one thousand today. All of this time
39:01
Speaker 2: infrastructure building into FDA, building an NIH, building the academic
39:09
Speaker 2: centers that you need to do this, bringing in the
39:11
Speaker 2: right kind of people to staff create innovation. All of
39:18
Speaker 2: this a lot of time. Unfortunately, starting in COVID twenty
39:26
Speaker 2: twenty and the enormous attacks on basic science, the concepts
39:36
Speaker 2: of science, the opprobrium that has then led to legislation
39:42
Speaker 2: by the both Democrats and Republicans, putting in place harmful
39:51
Speaker 2: legislation to the industry without understanding its consequences on the
39:58
Speaker 2: biotech industry per se. Specifically, this was catastrophic because it
40:06
Speaker 2: laid the groundwork for then what happened. We could have
40:10
Speaker 2: passed through those simple moments of distrust and change in legislation.
40:16
Speaker 2: What we couldn't pass through easily was the wholesale destruction
40:23
Speaker 2: of the morale of the FDA last year when twenty
40:28
Speaker 2: percent were just fired, the enormous reduction in basic research
40:35
Speaker 2: that took place at the NIH, the firing of the
40:39
Speaker 2: National Science Foundation, and the total gutting of the CDC.
40:46
Speaker 2: These steps are structural. They are not legislatives that changed.
40:52
Speaker 2: These are structural, and so I felt it was essential
40:59
Speaker 2: to bring this to the attention of policymakers, of the public,
41:07
Speaker 2: of our industry who were feeling it, but they hadn't
41:10
Speaker 2: conceptualized what it really meant to them, and that's why
41:13
Speaker 2: I wrote it. It is a moment of balance that
41:17
Speaker 2: is of the supreme importance because at the same time
41:22
Speaker 2: the other people around the world have acknowledged and recognized
41:26
Speaker 2: biotech as a strategic asset. I don't mind competition on
41:31
Speaker 2: a fair playing field, but what they did was they
41:34
Speaker 2: started to learn from us. Some cases they actually took
41:37
Speaker 2: from us implemented in their own countries. And China's the
41:43
Speaker 2: most important of all of these. But they have a
41:45
Speaker 2: twenty five year plan to be the leader in biotech.
41:49
Speaker 2: We've just implemented a two year plan to be a
41:52
Speaker 2: second rate player where we were, and we can still
41:57
Speaker 2: remain the leader if we pay attention to what it
42:01
Speaker 2: means to be the leading biotech nation in the world,
42:09
Speaker 2: not necessarily the only one, but the one with the
42:12
Speaker 2: leading capabilities as a strategic acid. So I felt it
42:15
Speaker 2: was imperative to right now and to put down not
42:23
Speaker 2: necessarily a root map for how to be successful, but
42:27
Speaker 2: at least identify for those who are policy makers, those
42:32
Speaker 2: who think about the industry, and leaders in the industry.
42:35
Speaker 2: Policy makers should take away from this that biotech is
42:42
Speaker 2: a strategic acid, that there is a route to retain
42:47
Speaker 2: the supremacy, if not the tremendous capability that America has,
42:53
Speaker 2: but only if they step forward now, and if they
42:57
Speaker 2: understand what I've written. Within this, Pharmaceutical executives need to
43:03
Speaker 2: understand that they need to recruit not just patients for
43:08
Speaker 2: their clinical trials, but the support of all patients and
43:13
Speaker 2: also the support of the populace as a large. We
43:20
Speaker 2: cannot continue to be seen as harming people or exploiting patients.
43:28
Speaker 2: This is not possible. We need to turn our attention
43:33
Speaker 2: to recruiting and establishing that our purpose as an industry
43:40
Speaker 2: is the patient and thereafterwards, yes we'll make a profit,
43:47
Speaker 2: but that depends on us recruiting the patients that are
43:51
Speaker 2: there and ensuring that they understand that we are who
43:56
Speaker 2: we are and we are supremely focused on them. And
44:00
Speaker 2: then lastly, it's really looking inwards to the industry itself
44:07
Speaker 2: and looking in to create the conditions that employees understand
44:16
Speaker 2: what the logic is for what they're doing, how they're
44:19
Speaker 2: doing it, and give them a purpose again the patient again,
44:26
Speaker 2: knowledge that if their innovation is successful, that they will
44:32
Speaker 2: help these patients in a way that is remarkable. And
44:36
Speaker 2: so for each one there's a different message. There's also
44:40
Speaker 2: one final one, and that is to the public and
44:45
Speaker 2: to those of us who all of us will be
44:48
Speaker 2: patients where you know, this is an industry which is
44:55
Speaker 2: devoted to them. They don't see this industry. They see
45:00
Speaker 2: the big pharmaceutical companies, and I hope that they appreciate that.
45:07
Speaker 1: I think that last piece is particularly profound, and the
45:11
Speaker 1: importance that we're all going to be patients someday and
45:16
Speaker 1: that effectively this entire industry. Yes there are the occasional
45:21
Speaker 1: bad or neutral actors, but almost everyone in this industry
45:25
Speaker 1: lines up behind your mission, and that is the covenant
45:28
Speaker 1: with the patient to make them better. And I think
45:31
Speaker 1: that's really profound. The book is terrific. Well, we have
45:34
Speaker 1: a link to it in the episode information and in
45:37
Speaker 1: the comments encouraging everyone to read it, but also to
45:41
Speaker 1: read your other insights. You know, there's a great piece
45:44
Speaker 1: in the New York Times. And then I also saw
45:47
Speaker 1: a post that you had specific to some of the
45:50
Speaker 1: conversation in the midst of this debate of protectionism, and
45:57
Speaker 1: you wrote protectionism is not an innovation strategy, and I
46:02
Speaker 1: thought that was brilliant, because trying to stop others in
46:08
Speaker 1: a race in no way will make you run faster.
46:12
Speaker 1: So I wondered if you just had had more thoughts
46:14
Speaker 1: on that you touched on China and our global competitors
46:16
Speaker 1: a little bit, but I just thought that was another
46:18
Speaker 1: profound statement that you had put out there.
46:22
Speaker 2: Well, you know, I've had the great advantage of studying
46:25
Speaker 2: how China has built, what they've done, while I've also
46:28
Speaker 2: studied what we've done in America and then in other nations.
46:34
Speaker 2: And what's become incredibly clear is that protectionism is only
46:43
Speaker 2: good where you actually can one hundred percent stop something
46:49
Speaker 2: being exported, stop something being imported. You can't do that
46:56
Speaker 2: with knowledge. Knowledge flows and you can do it with
47:03
Speaker 2: the truck. You can maybe even do it with a
47:06
Speaker 2: gun sometimes, but you can't even do it with that
47:10
Speaker 2: flows across borders all the time. But intellectual knowledge, human knowledge,
47:18
Speaker 2: there's no barrier to it. So if we ask the question,
47:26
Speaker 2: where is the next great cancer drug going to be invented,
47:31
Speaker 2: Where is the next great Alzheimer's drug going to be invented?
47:36
Speaker 2: Where is the cure for and look at me baldness
47:41
Speaker 2: going to be invented? The answer is it should be here.
47:48
Speaker 2: But we can't stop somebody else doing it. We just
47:51
Speaker 2: need to do it better. And we can look at
47:55
Speaker 2: the extraordinary things that we've invented in this country, ordinary
48:00
Speaker 2: things where the electric light come from, for heaven's sakes.
48:06
Speaker 2: So for me, it's pretty straightforward. Protectionism is one thing
48:12
Speaker 2: that we know definitively cannot work for an intellectual entity,
48:18
Speaker 2: for intellectual industry, can't. But what we do know is
48:22
Speaker 2: that we have the capabilities to compete ferociously on technical expertise.
48:30
Speaker 2: And I think the real appeal here is only give
48:33
Speaker 2: us a chance, give us the opportunity. Stop bad actors
48:39
Speaker 2: using technologies for weapons, for biological war, for other things.
48:44
Speaker 2: Stop that. I'm not adverse to that, stop them using
48:50
Speaker 2: and I know a tremendous amount about how people did
48:53
Speaker 2: try and do this for years, and we need to
48:57
Speaker 2: stop that. There's no question about this. Stop people stealing secrets.
49:00
Speaker 2: This is absolutely right on target, no problem. In fact,
49:06
Speaker 2: we should help and encourage those efforts, but allow innovation
49:12
Speaker 2: to flow, allow investment in areas provided, and however, that
49:18
Speaker 2: we create the infrastructure in this country to compete on
49:23
Speaker 2: a level playing field with everybody else. If we don't
49:27
Speaker 2: do that, if we keep on tying our hands behind
49:30
Speaker 2: our intellectual our intellectual hands behind our back, we'll never
49:33
Speaker 2: develop anything. It's sort of like going onto a football
49:36
Speaker 2: field and one team is fully equipped, the other one
49:40
Speaker 2: doesn't have cleats, pads or helmets. Who's going to win?
49:45
Speaker 1: It's It's an incredible place to leave the conversation because
49:49
Speaker 1: that is my fear. My fear is we get wrapped
49:53
Speaker 1: up with the energy because making a policy chain change
49:58
Speaker 1: requires a certain mis amount of energy, and we're thinking
50:03
Speaker 1: about using that energy of how can we hold back
50:06
Speaker 1: people over there or do this, or do this or
50:09
Speaker 1: do this. But what you just said is critically right.
50:11
Speaker 1: The energy needs to be spent on fixing what's here
50:15
Speaker 1: and the neglect of our system over the last two decades. Jeremy,
50:20
Speaker 1: it has been an incredible conversation. We've covered a lot
50:24
Speaker 1: of ground, but also it feels like we have to
50:26
Speaker 1: have you back on to talk about ten different aspects
50:29
Speaker 1: of your career. But without a doubt, you are an icon.
50:32
Speaker 1: We're glad that you could join the series. Your book,
50:35
Speaker 1: Biotech in the Balance is out. Everyone should read it.
50:38
Speaker 1: Thank you again for joining the Making Medicine Podcast.
50:41
Speaker 2: I'm delighted, Thank you, thank you so much for having
50:44
Speaker 2: me out.
50:45
Speaker 1: That wraps up this episode of the Making Medicine Podcast.
50:48
Speaker 1: A really big thank you to doctor Jeremy Levin as
50:51
Speaker 1: we talk about moments in history for this ecosystem. It's
50:55
Speaker 1: nice to be with someone who made that history possible.
50:58
Speaker 1: For more from doctor Levin, you can find the link
51:01
Speaker 1: to his book in the episode description. Be sure to
51:03
Speaker 1: subscribe on YouTube and follow us on other channels for
51:06
Speaker 1: the rest of the How America Makes Medicine series. Thanks
51:10
Speaker 1: for listening, and as always, keep innovating.