The Antidote: Inside the World of New Pharma (25 page)

Thomson opted not to put down his torch. Managing Vertex’s mushrooming collaborations, he had witnessed over the years the necessity of strategic networks and was eager to replace the prevailing model by
developing effective new ways to treat neglected diseases—those that no drug company will spend its own money to investigate not because, as with CF, there are so few patients but because the ample patient populations live in countries too poor to buy drugs. Seeing an opportunity to leverage Vertex’s expertise in small-molecule discovery against major scourges such as tuberculosis by building alliances with academic researchers and local partners in the regions of the globe where hundreds of millions are infected, Thomson discovered another challenge worth his industry, one that he believed he and Vertex were well positioned to meet.

Murcko also found a large role to play in shaping Vertex’s strategic direction without having major managerial responsibilities, operating more within the interstices of Mueller’s new order. On the ever-shifting organizational chart, he remained chief technology officer, a description he chafed at because it invoked wizards whipping up new gadgets. But his larger purpose was to champion “disruptive innovation”: ideas that change things radically by unexpected means.

“My job,” Murcko says, “was to identify new technology—very broadly defined—but also to evaluate it and bring it into the organization in a way that would provide value. So it isn’t about playing with cool toys. It’s not a sandbox. A lot of people, when they hear the title of chief technology officer within pharma or biotech, they assume it’s the guys who go play with lasers. It’s the guys with beards and suspenders playing with cool toys in the basement. What Peter and I were trying to do is figure out what are critical problems within the whole organization where any kind of new approaches, new technologies can be brought to bear in ways that would shed new light on a problem, make it easier to make certain kinds of decisions, make something go faster—have some material impact. It’s not limited to research. It covers the whole organization.”

Equally vital was Murcko’s history as Boger’s sidekick and his ability to read Boger’s actions. In a place where everything was debated deeply and head-snapping decisions came down too often with insufficient explanation for why they were made, puzzled scientists across the sites looked to Murcko for understanding and perspective. After Vertex’s own stock swoosh had started in 2000—the nosedive after the biotech bubble
popped, the crash of the p38 kinase inhibitor, the layoffs, the limbo of pralnacasan—even longtime Vertexians frequently got anxious. They’d been millionaires during the run-up, and now the company seemed to be sucking wind, or throwing everything behind a molecule that Lilly rejected. Many had trouble filtering out the internal volatility and external noise. They would wander into Murcko’s office early in the morning or late at night for counseling. “We got a little ahead of ourselves,” he advised them.

“The underlying mission of the company hadn’t changed, the goals hadn’t changed, the leadership hadn’t changed,” he recalls. “What I would tell these people is, ‘So exactly what are you worrying about? Yeah, it’s unsettling, I get it. I don’t like it either. It sucks. But what are you going to do? Do you or don’t you believe that we’re still on track to something really, really useful? If you’ve come to the conclusion that we aren’t going to get there, then go away, leave. Some of us still think this is a game worth playing.’ ”

Boger’s losing Vertex’s chairmanship was of little consequence in the labs and conference rooms. The lions had been thrown some meat so that they wouldn’t breach the fence. The adult who mattered to the scientists was Mueller, not Sanders. Vertex was vaulting, the
Boston Globe
wrote in June, “out of its research driven niche into a prominent new role carrying the banner for the idea that new science can turn into real profits.” If anything, the three and a half down years from 9/11 to “twelve of twelve” had been astoundingly successful, producing VX-950 and VX-770, which the FDA now granted fast-track status. The company’s market value had soared as high as $5 billion in March before falling back by nearly a third. Murcko, like Boger, couldn’t fathom exactly what people were worried about.

It had been a decade since most Americans first heard the term “drug cocktail.” Combination therapy had turned AIDS into a survivable scourge; you only had to look at Earvin “Magic” Johnson, the former LA Lakers basketball star-turned-entrepreneur brimming with vitality, to see the change. Ever since the first patients starting choking down as many as forty pills per day, the challenge to drugmakers, clinicians, and the FDA
was to determine which drugs to combine in which specific subgroups of patients and for how long.

Though the microbes that cause AIDS and hepatitis C share many similarities—both are RNA viruses that hijack human cells to make more of themselves—they’re vastly different as disease agents and drug targets. HIV inserts itself into host genetic material in the nucleus; HCV doesn’t. Thus, except in a handful of reported cases, HIV can’t be eradicated without killing the host, but HCV can. And so while the goal of treating the AIDS virus is to lower the viral load to the point where it stops infecting new cells—requiring a lifetime of vigilance—the body can be rid of the virus that causes hepatitis C, the patient cured.

On the other hand, HCV produces trillions of new viruses daily, a thousand times more than HIV, mutating at a much higher rate. And because HIV lasts only a few minutes once it’s exposed to air, it doesn’t spread as easily as HCV, which can last up to sixteen hours—explaining, for instance, why tattooing carries a risk of transmission for HCV but not HIV. Most crucial for drugmakers, HIV resistance arises only under drug pressure, while every patient infected with HCV carries multiple subspecies—a “population of mutants,” Boger calls them—that are resistant before the drug is even there. “To control and wipe out HCV, you had to get every last bugger,” he notes, which is why a cocktail is absolutely needed. Both in the United States and worldwide, four times as many people are infected with HCV than with HIV.

In July the FDA approved the first complete treatment for AIDS taken once a day as a single pill. It combined three drugs already on the market made by two companies, Bristol-Myers Squibb and Gilead Sciences. A fixed-dose cocktail called Atripla—a pink, film-coated tablet with “123” stamped on one side—it was to first-generation protease inhibitors like Agenerase what the iPod was to the Sony Discman. Not only was it an elegant, future-inspiring marvel of miniaturization and packaging but also a triumph of intuitiveness. Not a single drug but an all-in-one therapy, Atripla had all the hallmarks of a game-changing product.

Gilead sold only two of the molecules itself; the other it licensed in. When it first tried to combine the three compounds, “we had glue on our hands,” an engineer recalled. It took about a year to find a formulation
that would produce the same exposures as when the drugs were taken separately, and Gilead had tested five different formulations in volunteers. A midsized Northern California company, it had bootstrapped itself to become the sales leader in AIDS. With a higher valuation now than Sears and rich in cash, it was on a buying spree, aiming to branch out from its historic antiviral franchise into circulatory and respiratory diseases. Of special note to Kwong and her group were Atripla’s targets: none of the compounds inhibited HIV protease. Like AZT, all three blocked reverse transcriptase, the enzyme that enabled the virus to make DNA copies from RNA, and one was a nucleoside analog—a nuc.

Kwong hoped to determine how the hepatitis C virus progressed in the bloodstream of patients on VX-950, and she had hired a young researcher named Tara Kieffer to build a clinical virology group. Like Kwong, Kieffer was a true believer, her heart deep in her work. In first grade, she fell in love with the structure of the double helix during a visit to her father’s biology lab at Montgomery College in Maryland, made a drawing of it, and had kept it on her wall ever since. While working on her doctorate at Johns Hopkins University, she devised and performed complex experiments to track the development of resistance to HIV drugs; her publications, along with others, helped scientists to conclude that the virus couldn’t be eradicated with one drug by itself.

Looking at the viral load curves from the second fourteen-day study with VX-950 alone and with peg-riba, Kieffer and her group assessed the overall problem with treating HCV: how to devise a better drug cocktail. They sequenced both the typical form of the virus most common in nature and also numerous mutations—both before and after treatment—and then examined the patient profiles. Kieffer tracked their progress in the presence of the drug. She found that it was powerfully inhibiting the most common form of the virus but that there were variants with specific mutations in the protease that by degrees were less sensitive to the drug. Only with peg-riba were these least sensitive variants suppressed. “We learned that the primary role of VX-950 is to get rid of the wild-type virus, which is the completely sensitive virus, and some low-level resistance,” she recalls. “Then we were really relying on the interferon-ribavirin component to get rid of the higher-level resistance.
We were able to look at these profiles and determine how long our drug is needed to do that job.”

Beyond boosting Alam’s case for shorter-duration treatment, Kieffer’s work gave scientists their first understanding of how HCV responds to direct-acting antiviral medicines. Clinical and commercial interest in her research was keen, and she was asked to give a plenary talk at the Liver Meeting in November at the Hynes. Meanwhile, Vertex signed a broad international collaboration with two Johnson & Johnson subsidiaries to develop and sell VX-950 outside North America and Japan, securing ample financing for its late-stage development and commercialization. Terms of the deal called for J&J to pay the company $165 million up front in cash, with an additional $380 million in potential milestone payments and tiered sales royalties averaging about 25 percent. Wall Street analysts, estimating that the European Union had twice as many patients as the United States and Canada, cheered the collaboration. More than one projected peak US annual sales of up to $3 billion by 2013 and overseas figures cresting at $2.4 billion two years later.

Smith pounced. After three years of pressing Boger to get the company in shape while insisting to Wall Street that Vertex had not just a breakthrough medicine on its hands but also a true blockbuster, the headwinds had stalled. Like Aldrich, he knew the time to sell new shares to investors was not when you had to but when you could. Smith had converted the remaining debt, and the balance sheet now showed about $500 million in cash. Vertex would lose more than $200 million this year and projected losses of more than $300 million in 2007. With Ken and his legal team filing quickly with the SEC, the company issued nine million new shares, the offering netting about $300 million. Boiling down the math, what Smith realized he could do—now that J&J was footing the bill for Vertex to get through approval to market with its newly renamed HCV protease inhibitor telaprevir (VX-950)—was to fund all the rest of the company’s own R&D for another year simply by minting more stock, which eager fund managers and institutional investors gobbled up in nine days. Perhaps no other biotech had ever been in such a position.

“When we went out and spoke to investors, we were very bullish,” Smith recalls. “It wasn’t inappropriate—we were basing it on the
data—but we were very optimistic. We were very aggressive with what we might achieve with clinical results: the potential and the opportunity. I make no apologies for that. We needed to create a big story with critical mass that caused a Wall Street following. This was a big story. Hep C is a big disease. Nobody had ever seen a result like ours. You’re kind of like the Pied Piper. They start to follow along. There’s also this viral marketing aspect among the investors themselves. There’s a lot of momentum; let’s call it greed as well: ‘I want to be a part of this.’ And then they start to live vicariously through you.”

From the beginning, science, people, and money had been the vital reagents in Boger’s experiment in building a better company. Throughout the fall, for the first time, a critical mass seemed to be reached. Kieffer stole the show at the Liver Meeting, where a crowd of several thousand packed the main conference hall to hear her explain how telaprevir worked, how it encountered resistance, and how it could be used effectively in a cocktail with existing drugs to cure even genotype 1 patients. Boger, anticipating Vertex’s transformation from a scientific and clinical leader to a commercial one, again turned his attention to a non-obvious foundational issue that felt to him far more urgent even than the singular mission of getting telaprevir to patients.