The Soul of Biotech

Yes. I have several draft blog posts percolating. The approximate themes are:

• Grad School vs The Working World
• My experience with the brand planning process
• Review of Sicko and my perspective on MCOs

Any preferences?

If you’ve been following our news, you may have heard about the FDA’s warnings on erythropoetic-stimulating agents, or ESAs. ESAs are a class of agents manufactured by Amgen that treat anemia. The first ESA was epoetin alfa, which was marketed in dialysis as Epogen by Amgen, and marketed in non-dialysis indications as Procrit by Johnson and Johnson (J&J). In 2001, Amgen launched Aranesp (darbepoetin alfa), a longer-lasting agent that can be dosed less frequently. Amgen retained the rights to all indications for Aranesp, and competes with Procrit in the non-dialysis markets such as chronic kidney disease (CKD) and chemotherapy-induced anemia (CIA).

In December 2006, a Danish head and neck study concluded that when Aranesp is used in anemia of cancer (AoC), it triggered adverse events. It is important to note that Aranesp had never been approved by the FDA for use in AoC, and as such, Amgen has never promoted the use of Aranesp in AoC. When Amgen learned of the preliminary data, it informed the FDA within 24 hours, per FDA rules. However, because the data was preliminary, it did not tell investors until late January. (This is what the informal SEC inquiry is about.)

In February, the FDA confronted both Amgen and J&J in February and asked both companies to add a black box warning to their products that advised physicians to use the lowest possible dose of ESAs in treating anemia. Initially, this warning covered all use of ESAs (even use in chronic kidney disease), but after an outcry from the nephrologist community, the FDA amended the warning to include only AoC.

In May, the FDA’s Oncology Drugs Advisory Committee (ODAC) voted overwhelmingly to ban the use of ESAs on patients with certain types of cancer. The committee also recommended placing greater restrictions on ESA usage, including stopping the use of ESAs once chemotherapy treatments are over. Furthermore, the committee unanimously decided that more studies were necessary. As this is an advisory committee, its recommendations to the FDA are nonbinding, although the FDA usually follows its advisory committees’ recommendations.

The following week, based on the ODAC recommendation, the Centers for Medicare and Medicaid Studies (CMS) announced that it would curtail reimbursement for ESAs when used in AoC. Additionally, although CMS would still reimburse for CIA, they added a grace period to the last chemotherapy dose, after which they would not reimburse for ESAs.

ESAs make up a large portion of the CMS budget. Given that budgetary significance, it looks a lot to me like the FDA and CMS are working together to create policies that would reduce the cost of ESAs to the federal government.

But what’s the impact to Amgen? Well, although Aranesp and Epogen aren’t indicated in patients with AoC, we do make some money from off-label use, and that revenue source could taper off. Furthermore, the general cloud of suspicion over ESAs could cause physicians to use lower doses of ESAs or administer them less frequently, even for CKD and CIA. As a result, Amgen’s overall anemia revenues could grow more slowly than anticipated.

Our stock price took a major hit over this month, of course — major enough to make it to a lot of national news outlets. We took a bigger percentage hit than J&J did over Procrit, probably because more of our revenues are concentrated in ESAs than J&J’s revenues are. On the other hand, we have a more flexible cost base, so although it has been a little uncomfortable to make adjustments to cope with the new reality, we’re not going to become much less profitable.

Overall, I have been impressed by how well upper management handled this crisis, especially internally. Communication from the senior team has been forthcoming, and every manager between myself and my VP has sent out communication encouraging us to come talk about any concerns we have. I see a lot of confidence in the hallways, and no one is whispering about jumping ship. I bought our stock at $55 right after ODAC, and it’s already up to $57. We feel good. I feel good.

My only complaint is that I wish we had taken a more aggressive stance in messaging that our drugs are safe and effective when used properly, because I believe they are. Epogen and Procrit have been safely used for EIGHTEEN YEARS. Aranesp has been on the market for six. This stuff ain’t rat poison. Amgen is still learning how to win battles of public opinion, but if that’s our biggest problem, then we’re going to be just fine.

What are your thoughts?

Last night, my friend Lexi and her boyfriend Matt were packing for a camping trip in Texas. They invited my buddy Khiem and I over for drinks and dessert at her house in the San Fernando Valley. Later in the evening, Lexi’s father Ken, stopped by as well. Ken, like his daughter, works in psychiatry and has some fairly strong opinions on the pharmaceutical industry. Lexi had mentioned each of us to the other previously, but the two of us had never met face-to-face.

Ken’s main complaints were:

1. Clinical trials sponsored by drug companies are not valid. Ken recited a statistic that 90% of corporate-sponsored clinical trials “succeed,” and implied that the number was lower for public-run trials.
2. Drug companies and the medical community are too reluctant to espouse alternative treatments such as vitamin supplements
3. Psychotropic drugs, such as antipsychotics, are unethical because they (clumsily) treat symptoms rather than cures. (Antipsychotics in this conversation included both atypicals, such as Seroquel, Zyprexa, and Risperdal, as well as typicals, such as Haldol and Thorazine.)

The theses of my responses were:

1. Waiting for the scientific community to do our trials for us, if it happened at all, would slow down the approval process dramatically. Keeping valuable therapies off the market longer than necessary does a disservice both to patients and to shareholders. If corporate-sponsored trials tend to succeed more often than others, it could be because our trials are designed more effectively, with input from the therapy’s original researchers. I admit that “bad science” can happen, and if it puts patients at risk, then it’s dangerous. But blanket claims of industry-wide corruption are unfair and disrespectful to many accomplished and thoughtful industry scientists.
2. If trials data exists to support such hypotheses, then in an ideal world, treatment patterns would follow best known practices. But marketing and medical affairs departments exist for very good reasons — to promote what their respective companies believe are the best practices. I don’t think that a marketing department should apologize for doing a great job of convincing the medical community of its product’s ability to help patients. (I can only imagine the reaction to a brand director proposing to highlight competing therapies in promotional materials.)
3. Ken’s specialty area of interest is in psychiatric treatments, a base of experience I do not share. I have never worked much on any drugs that affect the central nervous system. Amgen does not currently manufacture any CNS drugs, nor does it have any in its pipeline. Although I consulted with AstraZeneca, I did not work closely with Seroquel. As a result, I did not have a lot of perspective on the topic.

As Ken and I mostly talked past each other on the little common ground we shared, I was concerned about how much intent Ken ascribed to each organization. It is probably easy for outsiders to imagine those who market pharmaceuticals and biologics as mustache-twirling ne’er-do-wells, cackling with glee as stacks of cash pile up at the expense of patient health and pocketbooks. There might be temporary places in the industry for people who don’t care about patients, but those individuals aren’t likely to last long.

The drug industry doesn’t have a perfect record, to be sure, but I do believe that for most of us, our intentions are in the right place. Unfortunately, employees in every organization, as brilliant as they are, occasionally succumb to being people, too. That means they sometimes become stressed, selfish, or lazy, leading to imperfect decisionmaking. That’s an unfortunate defect in any large organization.

Do you think biotechnology (or the pharma industry) is evil? Do they have different ethical biases? And what does evil mean anyway?

Of all the questions I’ve ever gotten, I think this one comes up among the most frequently. Just after, “How do you smell so good?” and just before, “When are you moving back to Boston already?” (My mom asks that one often enough to bump it near the top of the list.)

Anyway.

Strategy consulting is a particularly great way to transition from “generally brilliant but untrained and inexperienced” to “overworked but well-trained and fairly clueful.” Most firms don’t need you to know a ton of finance or business (although it helps a little). They realize that if you are thoughtful, ambitious and intelligent, then the rest is just training and experience. That’s why most consulting firms hire straight out of undergrad or business school. If you are trying to apply from industry, know that your industry experience might not be rewarded. Firms generally don’t bother to hire a 24-year-old who has two years of industry experience when they can get away with hiring a 22-year-old fresh out of school and pay him or her a bit less. (Unless that industry experience is closely related, such as investment banking.)

Most consulting firms are set up as pyramids, using the “up or out” model. That means you either make sure to get promoted to the next level in the time allotted to you, or you leave the firm. The layers, from bottom to top, are as follows. Although the exact titles vary from firm to firm, the role is about the same in each.

• Analyst / Business Analyst: Hired straight out of undergrad or master’s program usually. You aren’t expected to know much other than how to be very smart, and how to execute everything asked of you. You’ll get a small piece of the overall problem to consider. If you succeed with that, you get more work and more independence.
• Consultant / Associate: Once you’ve proven that you can handle a sizeable chunk of work successfully with virtually no supervision, you’ll be promoted to consultant. You’ll be expected to mentor the other Analysts to an extent, as a way of grooming you for management opportunities. MBAs are usually hired into an “Experienced Consultant” level.
• Manager / Engagement Manager: As a manager, you’ll be responsible for supervising projects of 2-4 people. Consensus is that this is absolutely the worst level. You have to balance your small amount of managerial control with developing the young men and women below you. You’re the first and last person the client sees, so you generally work the longest hours. If the people below you screw up and underdeliver, it’s on you to fix, and if the people above you overpromise, it’s up to you to make it happen anyway. While you’re at it, you need to develop a specialty to get promoted to Senior Manager. Sound like fun yet?
• Senior Manager: As a Senior Manager, you have specialized expertise and you’re probably involved in managing one large project or two small projects at a time, but you usually have Managers handling the day-to-day. You provide expertise and get to talk to more senior clients more often.
• Partner / Principal: Jackpot. The salary is great, of course (anywhere from 250k to well over 500k). But you had better like selling projects. You are now no longer a manager of people but a full-time salesman. On the plus side, you make a ton of money and spend very very little time on day-to-day. On the minus side, you do nothing but find projects to sell so that you can make your annual sales quota, which goes up every year.

Most people come to consulting for 2-3 years, do their turn, learn a variety of things from a variety of firms, and leave for greener pastures. Among my two best work friends and I, none of us made it to our second anniversary, and none of us regretted it. So don’t think that you have to build a career here if you don’t want to.

Many people are attracted to consulting because of the travel element. I certainly was. If you are single and aren’t leaving anyone behind, it can be a lot of fun. When the workload isn’t too heavy, you can explore new cities if you’re near anywhere worth visiting. And you can take weekends to places other than home and have other companies pay for it. At Accenture, this practice was referred to as the “flexible flyback” policy. In two years, I took weekends to Boston, Orlando, Seattle, Las Vegas, Puerto Vallarta, and other cities, just for fun.

If travel doesn’t interest you, know that not everyone has to travel every week. My coworker Jim worked almost exclusively with local clients for his entire time with the firm. The level of required travel depends on many things, including the geographical distribution of your company’s clients and of project opportunities within them. Your preferences will be considered to an extent, but business need almost always trumps that.

If you’re sure that you want to get in, start by reading on Vault.com about the companies you like, both in the snapshots and in the forums. Plus, begin studying case interviews, which are the most common format used in consulting interviews. In a case interview, you are given a broad business problem, and will show that you are capable of structured thinking, rigorous analysis, and proactive recommendations. Make sure to ask plenty of questions so that you have the data you need to solve the problem. You can buy practice books, much as you would for the SAT or GMAT.

Any questions or advice that I missed?

Before I came to Los Angeles, I carried many preconceived notions about the nature of its inhabitants — mostly that they were cheap, plastic, celebrity-obsessed, and, well, shallow. I can thank Entourage and Beverly Hills Cop for that. So I told myself when I arrived nine months ago that I would steer clear of any “Hollywood” types and look for the few other fashionably nerdy in the midst of Southern California. Fast forwarding to the present, one of my very best friends here is Robert, a brilliant, talented and deeply spiritual… movie actor.

Last weekend, I was fortunate enough to be brought by Robert to a dinner party at the home of a fairly well-known movie actress. As I hate to bore others with work, I stuck to more relatable topics, such as how much I enjoyed Porgy & Bess this week, and why I think Pinkberry sucks. A couple of hours in, Actress asked me if, like Robert, I was an actor.

Now, when I go out with my friends to parties in order to meet new people, as I love to do, the dreaded “What do you do?” question comes up pretty often. I have friends who prefer to give smart-ass answers, but unfortunately I love talking about myself too much to do that to a stranger. Depending on how I feel, I’ll usually answer one of the following:

• “I work at Amgen.” — Sadly, despite being one of the 100 largest companies in the world by market cap, few in the general public have heard of us, even in Los Angeles.
• “I work in biotechnology.” — Even sadder, sometimes people have no idea what biotechnology is. “Kinda like pharma. You know, drugs. But harder to make and much more expensive.”
• “I work in marketing.” — Always a winner, and gets us in the right ballpark.

I chuckled at Actress’ question and said no, I work for a biotechnology company called Amgen out in Thousand Oaks. Actress then asked me some fairly pointed questions about our recent ESA safety problems. I stammered out a response, a little surprised to hear her ask me about it so eloquently. Actress smiled and said, “Admit it, you thought I was stupid, didn’t you?”

If my friend Eric had been in the room, I think he would have leaned over to me, held out his thumb and forefinger together, and said: “She got your number right there, boss.”

Turns out Actress is dating a very famous Nobel laureate scientist. Oops. Maybe Hollywood and science can coexist after all.

What do you think? Is biotech a socially relatable industry?

Hello world, and welcome to my new blog, which will focus on the biotechnology industry. Most blogs in biotech tend to cover emerging trends and technologies. I’d rather focus on what it’s like to actually BE in biotech. In addition to answering the common questions I get from others looking to find their way into or within biotech, I’ll chronicle my evolving path towards becoming a biotechnology executive. And of course, let’s have good healthy discussion and some fun along the way.

The overall theme of my career has been that of a nerd who always wanted to help patients. I went to MIT for undergraduate degrees in mathematics as well as in computer science and engineering, plus minoring in biology. I looked into being a doctor originally, but after I shadowed Dr. Elaine Woo from Massachusetts General Hospital for a day, I confirmed my tragic discomfort with blood and guts. That’s when I looked into computational biology as a career path. After several classes in the area, I pursued an internship with the Molecular Informatics group at Pfizer Discovery Technology Center, and one as a Program Manager with Microsoft. After finishing up my bachelor’s degrees, I stayed at MIT for my M.Eng degree. I conducted my thesis research with Mark Daly’s group at the Whitehead Institute Center for Genome Research (now known as The Broad Institute), and won the David Adler Thesis Prize for best Master’s thesis of 2004.

Despite my success, my career took a sharp turn. While pursuing my Master’s, I decided to add a class on the side. I took Prof. Fiona Murray’s class, “Building a Biotech Enterprise,” at the MIT Sloan School of Management. The class explored many of the business questions that I had never even considered before: planning manufacturing capacity for the next five to ten years based on a company’s current portfolio… outlicensing a drug… even structuring VC deals! I had to stay after class for extra lessons from my TA on the basics of finance, just to keep up — but I was hooked. I wanted to get into the business of life sciences immediately. I finished up my Master’s that same year and joined Accenture as a Business Analyst in the Health and Life Sciences Strategy practice, based in San Francisco.

After two years at Accenture, I found myself growing weary of the constant travel, and joined Amgen in Thousand Oaks, which is about 30 or so miles west of Los Angeles. Specifically, I joined Amgen’s Business Analysis and Information group in August 2006, where I assumed the role of Senior Marketing Analyst for the Aranesp Non-Oncology brand. In April 2007, I became the Secondary Market Research Manager for both Aranesp Non-Oncology and Sensipar. I am fortunate to work with tremendously brilliant and innovative people who share my passion for improving patient lives. So far, no matter the setbacks I’ve faced, I still bounce out of bed and can’t wait to get back to work.

What about you? Who are you, and where are you going?