By Kevin Davies
April 26, 2010 |
BOSTON – In what turned out to be his final official engagement as CEO of Sirtris Pharmaceuticals, Christoph Westphal offered some key lessons in how to build a successful biotech company during a thoroughly engaging keynote at Bio-IT World Conference & Expo last week. He announced his resignation as Sirtris CEO the very next day.
Westphal, a spectacularly successful venture capitalist, essentially wrote the book on how to launch and build a successful biotech business, with several start-ups under his belt before co-founding Sirtris, a developer of small-molecule drugs for diseases of aging such as type 2 diabetes and other chronic conditions. These compounds are potentially thousands of times more potent than resveratrol, the active ingredient in red wine.
Westphal raised $100 million in 2006, and made it look easy. “If you don’t want to invest in us, we’ll see who is going to live longer!” he would tell potential backers, typically overweight men in their fifties. The biggest single investor was John Henry, the co-owner of the Boston Red Sox, who emailed Westphal asking if he could help. After Westphal suggested a number, Henry replied: “I can’t do $50 million, but I can do $20 million.” Westphal replied: “Deal.”
The Big Idea
One year after taking Sirtris public, Westphal sold it in June 2008 to GlaxoSmithKline (GSK) for $700 million upfront, one of four final suitors. To its credit, GSK left Sirtris totally independent. “We still run clinical trials. We still have our own email,” said Westphal. Sirtris drugs are currently in Phase II.
The Sirtris story had four secrets to success: strong founders, good financing, a sound strategy, and possession of intellectual property, all complementing another crucial component – a big idea. For Sirtris, the big idea was to address diseases of aging by focusing on the genes that can naturally be turned on by calorie restriction. Could small molecules that increase the lifespan in animal models target those same genes?
Westphal advised would-be entrepreneurs to “take the money,” because one never knows when adverse events might happen, such as a global economic meltdown. Another key principle was to find someone better than yourself to run the company. And he said it was much more important to publish research findings in top journals than worry about keeping information proprietary.
The Flip Side
Westphal admitted his team was now living the flip side of being media darlings. “It’s pretty amazing… in the last 20 years, we’ve gone from zero understanding of the genes that play a role in aging to a pretty clear understanding that IGF1 plays a role, MTOR, the Sirtuins play a role, there’s 10-15 genes play a role. Many of those are going to be druggable targets. Will Sirtris be successful? I don’t know. It’s still going to be very risky. But I’ll be shocked if there are not drugs in the next 10-15 years that target gene that control aging.”
Westphal did not shirk from addressing the ongoing controversy surrounding the physiological activity of some Sirtris compounds.
“There’s a debate in the academic world,” Westphal acknowledged. “We don’t know the specific molecular mechanism of why you need a specific substrate on the in vitro screen to find Sirt1 activators. Pfizer, Amgen, GSK, Sirtris, everyone in academia agrees on that. Then the question is: Is the mechanism direct on SIRT1 or indirect on SIRT1? Everyone in the field agrees our molecules have beneficial effects in animals, and I hope they will in man soon. The specifics of the mechanism are under debate. This kind of thing will be debated for ten years.”
Westphal added: “We have a paper in review right now that I think will get the same press that says we don’t need the fluorescent substrate… in fact, our published Nature molecules don’t need the fluorescent substrate.”
For someone who has spent much of his career fostering innovation outside of the walls of big pharma, Westphal said he has “learned a ton” at GSK. “It’s a thoughtful, large company,” he said. “They take a long time to make a decision. They’re not dumb, just a very large organization that needs to take the time.” Large companies are much better than biotech at making a drug, running clinical trials on an enormous scale, timelines and investment – these were all things very hard for a small biotech to do. On the other hand, he still believed that innovation happens better in smaller organizations beyond big pharma.
To deal with “Pharmageddon” – a descriptive term for the impending demise of many blockbuster drug patents -- Westphal said the key was “to bring in as many shots on goal from the external environment in a flexible spending way as you can.”
Westphal said “It’s a numbers game and it’s gotten harder with the FDA… People are spending less on pharma R&D and more on consumer health care and trying to diversify into developing countries and away from Europe and the United States…. Fewer drugs are getting approved, revenues are going down, margins are going to go down.” But Westphal predicted the pendulum would swing back as an aging population deals with diseases such as cancer and Alzheimer’s disease, and learns to appreciate the role of pharma companies once more.
With George Vlasuk taking the reins at Sirtris, Westphal will be heading up GSK’s SR One venture fund. He has also established the Longwood Founders Fund, along with Richard Aldrich and Michelle Dipp. He will continue as chair of the Sirtris advisory board.
During questions following his talk, a member of the Calorie Restriction Society stepped up to the microphone. Westphal complemented the questioner on his lean physique, but the questioner responded: “I’d rather be chowing down every meal, so hurry up!”