The Antidote: Inside the World of New Pharma (36 page)

Emmens knew what kind of person he needed to lead the commercial organization, and it wasn’t someone with a blinding or abrasive intelligence.
In the mid-1990s, when he headed sales and marketing for Astra Merck, he led a commercial team that drove the most successful market expansion of any drug in history: Prilosec. For heartburn sufferers, the drug was truly a miracle. But the real amazement was what happened after the company started telling millions of TV viewers in newly legal ads to ask their doctors about “the purple pill”—also known affectionately, by those relieved of the hellish heat in their lower chests and upper abdomens, as “purple Jesus” and “purple crack.” With a great drug and effective commercial operations, Astra Merck turned its franchise into the biggest-selling medicine of the decade.

Emmens was promoted to CEO in 1997, and he replaced himself in sales with Nancy Wysenski, a lieutenant of his who’d also started out at Merck. Wysenski began her career as a VA nurse, and she had a nurse’s healthy directness. Outfitted in trim pantsuits, short hair streaked, with a blaze in her eye, she energized the sales reps with her excitement and passion and impressed her bosses with her thoroughness. When Emmens later went on to found North Carolina–based EMD for Merck KGaA, he invited Wysenski to join as vice president of marketing and sales.

Women CEOs in biopharma are rare except among the smallest businesses. When Emmens left EMD to take over Shire, Wysenski replaced him, presiding over the slow-motion collapse of a privately held company of 1,300 that couldn’t be averted; this had little to do with her leadership and entirely to do with the fact that all but one of its eight drugs failed in trials. “The importance of having good R&D,” she says now. Wysenski landed on her feet. Having twice built operations from scratch, she joined Endo Pharmaceuticals, outside Philadelphia, as chief operations officer, participating for the first time in investor calls and learning how to navigate Reg FD as a company officer.

In August Endo announced that Wysenski was resigning to attend to “family matters.” (From an anonymous post on Cafepharma, the industry’s online chatter site: “ ‘Family matters’??? What woman in a top corporate position is able to care for a family? If female reps can’t, then one in upper management certainly cannot either.”) Wysenski negotiated a separation agreement that included, in addition to accelerated vesting
of her stock options, a $75,000 reverse-relocation allowance and $200,000 for the loss of equity on her Pennsylvania home.

Her return to Durham was brief. In December Vertex announced her appointment as executive vice president and chief commercial officer. Arriving in Cambridge before Christmas, Wysenski encountered elements of the Vertex culture that concerned her and that might have troubled her more deeply if not for her comfort and history with Emmens. She recalls:

When I got my first exposure to the board and the ET, what I found was an incredibly bright, high-intellect company that seemed to enjoy intellectual sparring. That was difficult for me, because that’s just not my thing. So I would sit in meetings and say, “My goodness, are we trying to get this done, or are we just trying to explore conceptually how many ways we can twist it and look at it?” It didn’t make sense to me. At times I’m sure that people felt that I was a little overwhelming—I’ve heard the word “hard-ass” used. But we had to get it done. The future of the company depended on it.

I was very fortunate reporting to Matt. I know him, trust him, totally. No BS. We can just talk very directly. The first thing he did before I ever arrived is put a place mark in the financial planning process that was more than enough money than I needed. When I looked at that, in my gut I knew I didn’t have to worry. The other thing is, since Matt had come from the board, it paved the way for acceptance there. The thing that made it easier than if I had been at another company is I didn’t have to prove myself to him. I
wanted
to prove myself to the board, and I wanted to win them over. But I also knew he would fly cover for me.

Six months after replacing Boger, Emmens had his “giant brain.” The central lobes were Mueller, to drive telaprevir across the goal line; Smith, to finance the company; and Wysenski, to push the drug out the door and into the sales channels, to get it to patients. There were other important voices on the ET, notably Ken, repository of
Vertex’s received wisdom, business history, and, as the sole remaining Boger, collective consciousness. “Yoda,” Garrison calls him. But in the small circle that Emmens drew around himself, fewer was more.

Smith started to be recognized outside Vertex as the architect of its financial story, and he enjoyed his rising status. At the Liver Meeting, where the company reported a spate of impressive data, he strolled the poster session trailed by a gaggle of analysts and reporters eager to hear his opinions of other companies’ molecules. Vertex held its lead by showing that telaprevir could cure even the toughest-to-treat patients with hepatitis C and that it might work just as well in twice-daily doses as when administered three times a day. Results from a midstage study showed an SVR rate exceeding 80 percent. But forty or more other drugs were in clinical trials—trying, as one fund manager would say crudely but effectively, “to crawl up the company’s ass.” As Vertex’s new data mounted throughout the fall, shares of VRTX surged, driven by an analysis by Cowen and Company estimating that telaprevir would generate $2.3 billion in US sales by 2013.

Smith was soaring, each of his financing schemes more ambitious than the last. In July he’d announced that Vertex, which held up to $250 million in milestone payments associated with the filing, approval, and launch of telaprevir in Europe, would sell the milestone payments for cash up front: the deal netted $155 million. After the Liver Meeting, the company announced yet another follow-on stock sale. Boosted by investor confidence that telaprevir was a better drug than boceprevir and that it would become a blockbuster soon after launch, the company banked another $450 million by selling another 11.5 million shares, bringing its cash reserves to about $1.3 billion, polishing Smith’s reputation for having a golden touch, and strengthening Emmens’s confidence that the company would have enough fuel to get to launch.

Wysenski returned to Durham for the holidays, to spend time with her family before moving to a waterside condo in Boston. She was convinced that telaprevir was a transformative drug but not at all certain that the economic assumptions underlying both the company’s valuation on Wall Street and its sense of its own worth were supported by any real understanding of the commercial issues it was about to confront. Selling
new prescription drugs isn’t like selling anything else. The people who use your products aren’t your customers. Your customers are exclusively doctors and hospitals. But your payers are third parties: governments, giant managed care companies, and insurers. If you haven’t lined up managed care reimbursements, it doesn’t matter how many prescriptions get written. The key is to identify patients
and
their payers and somehow reduce all the psychological, medical, and financial barriers that keep doctors from “writing” your product and patients from receiving it.

Vertex had exorbitant expectations about the number of patients telaprevir would reach. Its market research revealed that the highest-writing doctors were withholding thousands of patients from treatment until better alternatives came along—“warehousing” them. Sachdev had helped line up voices in Congress to support an expanded health advisory from the Centers for Disease Control and Prevention recommending age, rather than a history of high-risk behavior, as the reason baby boomers should be tested for HCV, which would dramatically enhance diagnosis rates. The company envisioned a flood tide of new patients. As Wysenski reviewed the company’s projections, she became more and more alarmed.

I’m going through documents that I hadn’t had time to read, and it took my breath away . . . There was a market expansion rate in that forecast, in terms of diagnosing HCV patients, that had never been achieved by anyone, ever, with maybe the exception of the French government after they had dealt with an infected blood supply that had gone out. The other market expansion plans that we could benchmark came nowhere close. We also went back and looked at what Schering-Plough and Roche had done during the Pegintron and Pegasys launches, and
they
fell flat.

I said, “We’ve got great science here, and we’re gonna leverage that, and we’re gonna do everything we can to build a customer-intimate organization so that we can marry up the knowledge of the customer with that great science. But I think we
really
need to pull back on this thought that we can change the world. Because a certain amount of that is out of your control. Right? We’ve got a great effort.
We’ve got Amit in DC, and they’re working on changing the guidelines with the CDC. We’re doing everything right. But you still have to look at how the market has responded historically and then make sure that you’re being prudent about what it is you think you can achieve.” So we brought that rate down dramatically, to about half the growth rate that we originally had.

On the day that Emmens flew with Smith to San Francisco for his first Morgan conference as Vertex’s CEO and chairman, the momentum lurched unexpectedly in Massachusetts in the race for the vacant US Senate seat held for forty-six years by Ted Kennedy, who’d died in August. In its latest survey of likely voters, Public Policy Polling showed a little-known but well-funded Republican state senator, Scott Brown, leading Democratic attorney general Martha Coakley by 1 percentage point. A
Globe
poll still had Coakley ahead by 15 points, but the contest had drawn much closer than anyone had imagined, with cosmic implications for both sides. Brown emphasized that he would be the deciding vote against Obama’s health care legislation, proposed by the president in the wake of Kennedy’s death and championed by the White House as a fitting legacy for Kennedy’s career-long crusade for health care reform. Coakley inexplicably had taken a week off for a Caribbean vacation in the midst of the two-month campaign, giving an impression that she was taking her ascent too much for granted. In US politics, it was a resoundingly bad time to appear smug.

Emmens recognized the risks and benefits of being compared with Boger, but he concentrated on the larger challenge: convincing Wall Street that Vertex was closing in on Boger’s formula for a new model of success in pharmaceuticals: New Pharma. “Two thousand ten will be a defining year for Vertex as we seek to evolve into a fully capable biopharmaceutical company,” Emmens told a packed audience. Dressed in a light grey suit and matching tie, his sharp gaze framed by rimless glasses, he appeared crisp—monochromatic, polished, and on point.

“Phase III data for telaprevir, our lead drug candidate for hepatitis C virus infection, will begin to emerge in the spring of 2010 to support the planned submission of a new drug application in the second half of this
year,” Emmens continued. “We also recognize the need for continued innovation in the treatment of this disease, and we are preparing to initiate the first clinical trial combining telaprevir with the investigational HCV polymerase inhibitor VX-222 this quarter.

“Beyond HCV, Vertex is conducting midstage and late-stage development of two novel compounds aimed at addressing, for the first time, the underlying mechanism of the orphan disease of cystic fibrosis. The VX-770 Phase III registration program is advancing rapidly, and we expect to obtain Phase III data for VX-770 in early 2011. Additionally, we also expect to obtain clinical data from a Phase II trial of VX-809 in the coming weeks that could potentially support the evaluation of VX-770 and VX-809 as part of a combination regimen in patients with the most common mutation of this disease.

“Supporting our vision to become a fully capable biopharmaceutical company, Vertex is also planning multiple proof-of-concept clinical trials in other diseases, such as rheumatoid arthritis and epilepsy.”

Moving ahead with the JAK-3 inhibitor in RA was no surprise. Pfizer had shown proof of concept; it was up to Vertex to show that it had a better molecule. But Vertex’s epilepsy drug was a case of a benched asset unexpectedly reactivated in light of a new biological insight—a medicine, so to speak, before its time. Such stories are all too common and herald the value of never giving up on a promising target.

It had been almost seven years since Vertex and Aventis had stopped testing the company’s ICE inhibitor pralnacasan because of ambiguous liver signals in animals suggesting that it was too toxic to be a drug. The company’s fast follow-on, VX-765, proved to be clean in similar studies, but without a corporate partner to pick up the cost of development, it languished in the company’s compound library: a massive robotic repository of four hundred thousand molecules in the basement of the San Diego site. Then, in 2009 Italian researchers at the University of Verona reported a new observation about epilepsy, a brain disorder where clusters of nerve cells signal abnormally, causing seizures. They found that a faulty immune reaction exacerbated the progression of the disease by making the blood-brain barrier more leaky, allowing harmful molecules into the brain that affect neural activity and make additional seizures
more likely. All existing epilepsy drugs were anticonvulsives, which suppressed nerve cells from firing uncontrollably, but here was a rationale for blocking seizures with an anti-inflammatory. Preclinical results for VX-765 were striking, and Vertex, in collaboration with the Italians, was pressing ahead to be first to test the hypothesis in patients.