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Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: Twitter: Dereklowe

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January 16, 2012

Biogen: A "Decimated" Pipeline?

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Posted by Derek

You don't want coverage like this: "Biogen CEO Tries to Refill Early-Stage Pipeline He Decimated". That would be George Scanos:

. . .Scangos and his research chief eliminated about 17 early-stage drug projects in 2010 and last year to hone the company's focus, leaving it with only about four early-stage compounds. Biogen exited oncology and cardiovascular research and is now targeting drugs to treat neurological and autoimmune conditions. . .

"We didn't want to fund projects that were unlikely to generate value," Scangos said in an interview on the sidelines of the J.P. Morgan health-care conference in San Francisco this week. . .But even if Biogen's late-stage pipeline delivers successful new drugs soon, the company needs more compounds in early-stage testing to sustain long-term growth. So it is licensing drugs from other companies. . .

The article itself (from Peter Loftus, originally in the Wall Street Journal isn't quite as harsh as the headline. As as that excerpt shows, part of the problem is that Scanos thought that the company was in some therapeutic areas that they shouldn't have been in at all, so that pipeline he's refilling isn't exactly the same one he cleared out. (And a note to the WSJ headline writers: "decimated" isn't a synonym for "got rid of a lot", although that horse, I fear, left the barn a long time ago. The mental image of decimating a pipeline isn't the sharpest vision ever conjured up by a headline, either, but I understand that these things are done on deadline.)

No, if I had to pick the biggest expensive reversal done under Biogen's new management, I'd pick the construction site a few blocks from here where they're putting up the company's new Cambridge headquarters. Those are the offices that used to be in. . .well, Cambridge, until former CEO Jim Mullen moved them out to Weston just a couple of years ago. I don't know how long it's going to take them to finish those buildings (right now, they're just past the bare-ground stage), but maybe eventually they can all work there for a few months before someone else decides to move them to Northhampton, Nashua, or Novosibirsk.

Comments (20) + TrackBacks (0) | Category: Drug Development


1. johnnyboy on January 16, 2012 9:15 AM writes...

Fun Fact:
"The word decimate in the English language has come to mean to destroy or slaughter something but the word has an older historical meaning. The military context of the word can be traced back to the Romans, where the decimation of a military unit was a form of punishment and a way of enforcing military discipline. The word decimate comes from the Latin word decimare meaning to take or destroy one-tenth (from the Latin word decem meaning ten). For a Roman legion deemed to have failed in its duties this meant that one in ten legionnaires would be selected, stripped of their armour and beaten to death by their comrades."

So by extension, Biogen did a lot worse than decimate their pipeline - they more like ninetycimated it.

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2. Boghog on January 16, 2012 9:55 AM writes...

jb: "For a Roman legion deemed to have failed in its duties this meant that one in ten legionnaires would be selected, stripped of their armour and beaten to death by their comrades."

The modern equivalent is downsizing.

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3. Henrik Olsen on January 16, 2012 10:07 AM writes...

I see they removed the " He decimated" from the headline.

Perhaps they read this blog.

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4. Chemjobber on January 16, 2012 10:28 AM writes...


Soyuz nerushimyy respublik svobodnykh
Splotila naveki velikaya Rus'!

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5. Curious Wavefunction on January 16, 2012 10:34 AM writes...

Aren't most pipelines today "decimated"? On the other hand, it's giving too much credit to Scanos to suggest that he was responsible for the decimation.

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6. Biotechtranslated on January 16, 2012 10:51 AM writes...

My understanding is that before Scangos took the helm, Biogen's R&D was very unstructured. Scientists were free to pursue any possible lead and they ended up with some scientifically promising programs in areas that the company had no business being in.

Biogen is a big(ger) biotech company, but it's still not big pharma. They pitch their MS drugs with a pretty small sales force. The R&D group had programs that targeted diseases that would have required Biogen to increase their sales force by 500%+ and delve into areas they had little knowledge about (i.e. it would cost a ton of money)

So when Scangos arrived, he decided to to come up with a strategy for the company as a whole (which TAs were within their reach) and then killed the R&D programs that didn't fit.

Just like every other R&D strategy decision made, it will take years to find out if it was a right move. Based on his leadership at Exelixis, I'd give him better odds than most.


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7. Student on January 16, 2012 11:49 AM writes...

So why kill...and not sell/license

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8. Cellbio on January 16, 2012 12:04 PM writes...

Interesting perspective offered by Mike. I was at a biotech that was unstructured. Or, to put it another way, the research emerged from the scientists initiative, which could lead to product opportunities outside of the existing expertise in clinical development and marketing. This, of course, was deemed highly inefficient by the business types, and change was ushered in, which at the time seemed reasonable.

However, the change was largely to replace bottom-up innovation for top down planning, and that failed miserably. Most of us know the drill: pick therapeutic areas with unmet medical need, find targets with rationale in those therapeutic areas, hit the numbers for projects at screening, Hit-to-Lead, pre-IND and FIH stages. This will make project managers happy, and for about 5-7 years fill the "pipeline" with projects rather than products and select for dutiful workers rather than innovators.

While true that some efforts scientists bring forward lack convincing merit from a market perspective, the examples of these are actually small in number, in my experience, but large in influence as they are used as the example to justify change. The cost of these is small compared to the cost of extinguishing scientific initiative in favor of highly managed top-down research which has an apparent rationale which is easily communicated with simple slide deck but has failed pharma and big biotech for more than a decade now.

Additionally, if research emerges that does not fit the downstream operation, it still has value if there is a partner out there with clinical and marketing teams in need of new product opportunities. Seems like the better change would be more deal making rather than finding fault with innovation that fails to land in the lap of your colleagues prior experience or the scale of your marketing team.

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9. Howie on January 16, 2012 12:38 PM writes...

@Cellbio I agree with your analysis and comment. To my mind, the challenge facing industry today is the skillful balance of top-down and bottom-up project initiation. How to direct (or redirect) promising initiatives to align with areas where a company could successfully develop (and markety them)? How to keep key therapeutic pipelines full by directing creative researchers toward clear goals? What is the reality among this esteemed group of commenters: has bottom-up or top-down been more effective in new product introduction in your experience? What about out-licensing promising, but "non-aligned" programs?

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10. Biotechtranslated on January 16, 2012 1:28 PM writes...


I'm not privy to the details of the strategy that Scangos employed, but from what I've heard, it's not the typical big pharma strategy like the one you described.

It was a little more flexible and took into account some of the other options (out-licensing) that you mentioned.

I agree 100% that it's foolish to drop a promising program simply because it doesn't fit a rigid commercial model, but it is helpful to make the overarching decisions of whether or not the company should be spending large sum of money going into new TAs or whether they should refocus their efforts on expanding in the areas they are already in.


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11. RET on January 16, 2012 1:53 PM writes...

At least pharma is creating jobs and demolition.

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12. Cellbio on January 16, 2012 3:06 PM writes...

Reasonable thoughts Mike. I do agree it makes sense to have a strategy and goals that include anticipating indications and the preceding clinical trials that get you a meaningful label. In balance though, this top line goal is over-emphasized too often and drives the formation of metrics that do become too rigid. I hope Biogen gets it right and lets the scientists operate with knowledge of the goals, but not overly bound by them. I'd be surprised if it happens that way, but why not hope.

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13. JasonP on January 16, 2012 3:34 PM writes...

"So by extension, Biogen did a lot worse than decimate their pipeline - they more like ninetycimated it."

Nonadecimated, I believe it would be. :)

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14. anonymous on January 16, 2012 7:16 PM writes...

Where's the problem? Northhampton is a VERY nice town !

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15. Anonymous BMS Researcher on January 16, 2012 8:39 PM writes...

Everytime I see the word "decimate" misused, I think of a classic line from The Princess Bride: "You keep using that word -- I do not think it means what you think it means."

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16. NH_chem on January 16, 2012 8:47 PM writes...

For me, Biogen is always been a biotech first thus small molecules sit in the back row. I know some folks who work there and the chemists are always looked down at.

Add to that the Ichan issues and the layoffs/hiring over the past several years, the moral at Biogen is not where it once was. Then again, the stock price is doing well so someone is happy......

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17. Big Freddy on January 16, 2012 9:35 PM writes...

Leadership at Exelixis? Did I miss something?...Not to be a jerk a lot of money got spent to get one (maybe two) compounds to a point where they might, possibly, maybe become "me too" drugs. Is that the standard of excellence right now in Biotech? Yikes. But the great thing about EXEL...all the folks leaving the ship landed on their feet. I guess except the stockholders who are being left to hold the bag least there were awesome salaries, repriced options and golden parachutes :-)

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18. NH_chem on January 17, 2012 8:36 AM writes...

@17- you are right on. Lots of people lost their jobs and I was at an investor conference the day it happened. The Exelixis rep had the audacity to say that "we will let the R&D people go although we know they were great and delivered a great pipeline. Of course, we will hire them back when we decide that makes sense".

I sincerely worry for those at Biogen.

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19. Icahn_Reaper on January 17, 2012 8:42 AM writes...

Scangos' experience at EXEL had nothing to do with how he decimated Biogen research. He was Carl Icahn's personal pick as new CEO and as the designated letter carrier, he carried out Carl's vision to the letter. It's no small wonder that the early R&D pipeline is now bare when he cut the R&D staff by almost 40%. And that he chose to focus an overwhelmingly biologics-based approach on disease areas where small-molecule expertise is crucial. The hilarious part is that Carl cashed out after making a heck of a lot of money and now George is left holding the bag or at least desperately trying to patch the leaks.

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20. WB on January 17, 2012 9:38 PM writes...

"Biogen exited oncology and cardiovascular research and is now targeting drugs to treat neurological and autoimmune conditions. . ."

Wow, talk about out of the frying pan and into the fire!

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