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Wednesday, November 27, 2013

You Can't Be 20 On Sugar Mountain

...though you're thinking that you're leaving there too soon.

I continue on this thread of employment, unemployment and the impact of the layoffs in the biopharma industry (Cargo Cults). There is a story here that is not being covered by any news agency. The government uses statistical analysis to tell the story they need to tell, that things aren't so bad. From my LinkedIn account however, the people I have worked with in the biotech Cargo Cults are not doing so well. Especially those over a certain age. I'm focusing on laboratory work in honor of Frederick Sanger. Some people still value laboratory experience and lament that it is now considered a "Sugar Mountain" of sorts where only the young and vulnerable need apply. Here is a comment from a post on Dr. Sangers passing on the blog In the Pipeline that sums up this sentiment :

In academia of yore, it was usual for even the most senior scientists to perform lab work. A recently-deseased colleague of mine had the privilege to work with both Sanger and Perutz. Apparently, the latter would not take on grad students who got 1st class honours degrees as undergrads becasue he belived they must have spent too much time in the library and not enough time in the lab to achieve such results. My colleague worked in the lab until he retired aged 82. Washing glassware gave him time to think he told me. 
Contrast that with the "show me a scientist who is still doing bench work at 35 and I'll show you a failure" mentality that pervades academia today. Much better to spend half your life writing grant proposals to fund others to do the work than to do it yourself I guess. Me, I'm way past 35, but still do some lab work almost every day. It's the only way for me to stay sane.
As Dr. Sanger said, "Of the three main activities involved in scientific research, thinking, talking and doing, I much prefer the last and am probably best at it. I am all right at the thinking, but not much good  at the talking." What we are talking about here today is the thinking, doing and talking and the careers associated with this work.  

The New York Times ran an article last Sunday entitled, "Caught in Unemployment's Revolving Door" by Annie Lowrey. It begins with the story of Jenner Barrington-Ward who, at 53, has been unemployed for five years. She is soon to become forgotten. We don't learn much about her or what other factors led to her long term unemployment. She had last worked in the administration office at MIT. The story is about long term unemployment, a situation that tends to plague higher educated people who in previous generations may have been looked upon more favorably. A gap in your resume speaks louder than the words you actually write down.

According to the NYT article, we have what are known as structural and cyclical forms of unemployment. Cyclical unemployment is a temporary situation caused by a slack economy. Structural unemployment stems from a mismatch between what businesses want and what workers offer. In my last post I argued against the idea that biopharma job losses are cyclical. The losses are steady and they are unusually high, even when compared to high cyclical job losses in other industries. Our work force has been brought in to staff the endless new R&D paradigms and business models dreamed up by the managerial class. When their ideas fail, the laboratory staff tend to be the first to go. The constant hiring and firing of the laboratory staff has taken its toll.

Some people lose their jobs via uncontrollable circumstances. In good times they'll soon get a new job. In bad it will take a little longer. But long term unemployment on a resume is not seen through the lens' of good and bad times. It is simply a canary in the coal mine that sends the message that an individual is a problem employee. The "Thinking Fast" idea that pops into the hiring teams head is that the worker was bad, not the project they were working on. The "Thinking Slow" idea is that the individual works in a highly volatile industry and has little control over what his resume says about him or her as a thinking doing and talking researcher.

In biopharma, much of what begins as a promising new technology soon hits a snag. With poor tools such as RNAi and animal studies, a laboratory worker will produce less than impressive results. As new information comes in new people are hired to move the work forward. Thus what is cyclical is the nature of research. We have a history of short lived projects. Rather than working together and focusing on planning experiments using the scientific method, making all possible assumptions and anticipating negative outcomes, the leadership positions itself in the safest place possible. Careers are at stake. As one commenter said with regards to why animal studies are poor predictors for drug efficacy in humans:
Reproducibility is an issue. We can always trace this back to the low pay, no career development, no benefits, borderline abused individuals that give results they are expected to give to their PI. But that is never addressed and hand-waved away.
It certainly isn't hand waved away here at the CCS. The lack of career development and abused individuals giving only expected results is Cargo Cult 101. The argument here is that what we are facing is a structural unemployment crisis that generates a weak ineffective laboratory work force. The NYT article states that economists believe the strain of unemployment, plus the erosion of skills and loss of contacts that naturally occur, explains structural unemployment. There is also a bias against the unemployed that keeps long term unemployed from re-entering the work force. In biopharma, the laboratory work force faces all of the above, all of the time. The solution to both biopharma and their work force is to beef up the credibility of the laboratory.

Ah but I'm only dreaming again. When I was young I dreamed of living on Sugar Mountain with the barkers and the colored balloons. You can't be 20 on Sugar Mountain, though you're thinking that you're leaving there too soon. When you look at Sugar Mountain everyone is young. When you look at biopharma everyone is well educated. If you look closely you will see that the people only stay for a short time however. Where do the people go? It is hard to reinvent a person who has invested their education dollars in learning about DNA and proteins. They were trained to work in the lab. We've trained them to conduct research. They need a permanent place to be, think, talk and do.

Monday, November 25, 2013

The Hardest Times at Cargo Cults

Imagine working in a Cargo Cult. You're coming of age and the tribal leaders assign you a position in the watch tower. You are issued your coconut-stick head set and given detailed instructions on what to do. Each ceremony you do exactly as told and you look to the skies. The planes never come. As a young person you have only heard of the planes and the cargo, never seen them. After a while you start to wonder wherein lies the problem. Is it you? Is it the old lady with the barbed wire wrapped around her body (the radio lady)? It couldn't be the leaders. They know too many details about the ceremony. What if they have it wrong though? You wonder if the chief really is communicating with the people in the airplanes when he channels them through the radio lady.  Could you take the chiefs place and talk to them?

One day you awake for the biggest ceremony of the year. The annual Cargo Cult Superbowl! Everyone attends. All hands are on deck and everyone is believing to the best of their faiths ability. You take to the tower, don your headset and perform the ritual you were taught. You look to the skies. You look to the Chief and the radio lady. You wait and wait and once again, no airplanes come. As dawn comes you come down from the tower to return to your hut to sleep. No cargo will be waiting for you when you wake. Just rice and berries as usual for you daily meals.

What year is a good year in the Cargo Cults? Did you almost see an airplane back in 94? When you've got a group of people who have never seen the airplanes land, you have a problem. Somehow you have got to get people who have failed and succeeded on your team. The best example I have from my career was when the large successful contract manufacturing organization banned our director and his immediate reports from participating in the process development of product. Our people had neither failed nor succeeded. They had showed up to work for years (still do) with the "fake it til you make it" philosophy. The CMO had had enough and they called us out. They exercised the option in the contract to exclude members of our team from the alliance between our two companies.

I saw myself as the young boy in the watch tower watching the empty skies. One day I came across this CMO and a few others who I believed had seen the planes and the cargo. The CMO had been in business for many decades and had made drugs for many companies. The other people I met taught classes in process development and they made sense when they spoke, unlike members of my tribe. I wanted out from under the leadership of those who have neither failed nor succeeded to learn from those who had. My tribe let me out but in a manner that would exclude me from participating with other tribes. I had had enough of everything I had done before, but I still had an interest in the biotechnology of drug manufacturing. After so many years of working in biotechnology, I finally had enough information to decide where I wanted to work.

The layoffs are the direct result of the Cargo Cult mentality. The layoffs are business as usual. The layoffs are a business decision that replaces actual changes to the role that kid up in the watch tower needs to have value. For those who think they are seeing a surge, check out this article. According to the author there had been a perceived lull in job cuts that had been moving at a "breakneck pace starting in 2011". In reality, 8,793 jobs were lost from January to August of 2013. In 2012 9,626 jobs were lost, only 9% more. When Mercks job cuts are accounted for, 2013 is going to be a worse year than 2012.

Just to randomly check a few other data points, here is an article from 2002. How about 2009? 2007? If you look hard enough you will find that only a handful of companies have succeeded at bringing a drug to the market. Those fortunate enough to have that experience have much to teach. However, they too live the perilous life where important decisions made by others can bring their employment to an end. When a good job turns south and is eventually terminated, the value of that employee is only in that employees understanding of what happened. In order for that person to go on and contribute to the improvement of the biotech industry, they must understand what went wrong and find a new position that specifically intends to mitigate the risks that ended the last position. If a person has real value, the position must extract that value.

In the history of the industry we have always had hard times. Layoffs became the norm long ago. Just as the leadership class has yet to solve the mystery of generating value from the lab, so has the laboratory class.

Recently Frederick Sanger died at the age of 95. He left behind much to study. He won two Nobel Prizes in Chemistry, one for his work on the structure of proteins and a second for contributions concerning the determination of base sequences in nucleic acids. A man such as this was certainly a member of the leadership class but he included a followership role with science as his boss. He worked in the lab! While we've created a thousand hierarchy structures, business models, six sigma black belt methodologies and restructured our laboratory working class into a dizzy group of unemployed Home Depot employees, one guy had an interesting life. From Wikipedia:

He declined the offer of a knighthood, as he did not wish to be addressed as "Sir". He is quoted as saying, "A knighthood makes you different, doesn’t it, and I don’t want to be different." In 1986, he accepted the award of an Order of Merit, which can have only 24 living members.
In 2007 the British Biochemical Society was given a grant by the Wellcome Trust to catalogue and preserve the 35 laboratory notebooks in which Sanger recorded his remarkable research from 1944 to 1983. In reporting this matter, Science noted that Sanger, "the most self-effacing person you could hope to meet", was now spending his time gardening at his Cambridgeshire home.
Sanger died in his sleep at Addenbrooke's Hospital in Cambridge on 19 November 2013. As noted in his obituary, he had described himself as "just a chap who messed about in a lab" and "academically not brilliant".

If you care about science you should aspire to be this humble. The Cargo Cult boys and girls who work up in the  tower are working in boring mundane jobs. However, our responsibility is to demonstrate value. We are hired to develop drugs. The question is how much our work contributes to the big picture. We try and try but every year we face hard times. The hardest times for the laboratory workers are not a particular year or a tough economic downturn. It's a season that comes over and over in the life of the lab. The hardest times come when everyone is sent home and the labs sit empty. At any given moment in our industry, hard times are happening.  

For those roughly 9,000 who lost their job in October of this year need to know they are joining another class of roughly 9,000 men and women who lost their biopharma jobs in October of 2012. This is bigger than them. They work in a Cargo Cult. Frederick Sanger did not. Somewhere we too should be able to find a lifetime of productive scientific work. A little humility and unpleasant lab work will lead to the kind of work that serves as the proverbial shoulders of giants for future geniuses to stand upon. We should aspire to simply be chaps who mess about in the lab. Those who tell the best stories are those whom we should watch closest. 
Sanger, F. (Annu. Rev. Biochem., 1988, 57, 1): "Of the three main activities involved in scientific research, thinking, talking and doing, I much prefer the last and am probably best at it. I am all right at the thinking, but not much good at the talking."

That is the difference between successful scientists and successful Cargo Cult Scientists. The CCS thinks up narratives and talks about them. The weakened laboratory class is sent to the lab to "do". These are the people who are most vulnerable during the hard times. It is fortunate for the scientific community that Frederick Sanger did not have to work for biopharma. 

Thursday, November 14, 2013

Sarepta Therapeutics

I've talked about Sarepta here and here. I've talked about RNA drugs often. Here and here for example. In 2006 Jim Cramer of Mad Money was touting a biotech company that later tanked because one of the many pluses was their RNAi program. RNA drugs replaced the DNA drug projects that had failed miserably the decade before. RNA soon began suffering from the same issues as the DNA drugs, efficacy in the human body. Along the way however there was a Nobel Prize for its discoverers and wild investments that followed. The mania to turn this science into a pharmaceutical product, asap, stems from a fundamental misunderstanding of how a specific cell produces just the right amount of a specific protein to participate in the function of the entire living organism. Those who attempt to throw a little more nucleic acid into the body and hope that it cure diseases are grossly underestimating the complexity of our DNA.

I look at it like a view from an airplane flying out of LAX. You look down and find Venice Beach. You know where the sand hits the water but you can't make it out from that distance. It's the mile high view obscuring details. In the case of looking down at a cell from a microscope, we can't see DNA. We can see the nucleus but we can't make out the details of the DNA inside. We have learned a great amount and harnessed that knowledge to now be able clone genes, sequence DNA and so on. But we can't actually watch the things that take place with our DNA that regulate protein expression. Just as I can't make out where the sand reaches the water from my seat in the airplane, I can't see the protein expression machinery in action. I take a pipette and add some RNA to a cell culture and often times measure something other than the expression of the protein I'm trying to knock out. Now just imagine adding some RNA to a human body and measuring something like a miniscule effect in very sick people like those suffering from Duchenne muscular dystrophy.

Eteplirsen works by skipping exon 51 to overcome a genetic mutation to allow for the creation of dystrophin. This single solution is alledged to correct the body's inability to build muscle. The end point that Sarepta reported to the FDA was not however a detailed view of that mechanism of action. Rather they chose to remain in their mile high view and ask the FDA to look out the window while they spun their narrative. After a few more data points were added to the big picture, such as the failure of exon 51 skipping Prosensa in a larger study, the FDA decided they needed to see more rigor in Sareptas scientific method. Sarepta now has to add new endpoints, a longer study duration and a larger study population. Based on this new demand by the FDA to get more information, Sarepta lost $750M in market value this Tuesday.

The question I have for those who try and bring up the human side of the story and how this effects the patients is why are they bailing out? If the caring investment community and the leaders of Sarepta thought the 12 person trial was sufficient for a fast track approval by the FDA, why don't they think that the data offers some predictive powers over what would come from a more detailed study? The pot of gold still remains at the end of this journey. It's just gotten a little tougher. The Sarepta crew are one mile up in their airplane looking down at Venice Beach. The people in the watch tower have instructed them to take another pass and get a closer look at the beach before they move on. Are they afraid that they don't have a clue where the water really is?

The reason Sarepta is in business and has burned through well over $320M without putting a single drug on the market is due to the fact they are targeting RNA. The smoke and mirrors approach has them in trouble once again. They didn't spend that $320M studying Duchenne muscular dystrophy. They spent all of that money and still can't think of more convincing evidence for their product. What we on the outside know is that they are in business to make money. If they believe in their medicine they should forge ahead. The 12 patient sample size was enough for Sarepta to tell the FDA and the investment community that they are on to something that will help these boys suffering from DMD. The same fame and fortune awaits, it's just gonna be a little bit harder now. Now is the time when Sarepta has to stick to their guns and finish what they started. We've heard the narrative and we've heard about the results that has given people hope. We need to know more about this new exon skipping method, not just for DMD but for other single genetic mutation disorders. Either outcome, positive or negative, the patients and the scientific community have an interest in the scientific work of Sarepta.

Friday, November 08, 2013

BMS in Seattle

Bristol Meyers Squibb spent $885M on Zymogenetics. The guys and gals who spend their work life serving a company like Zymogenetics inevitably get notified that their efforts will be rewarded with a termination. These individuals now have to go forth and convince another company that it was BMS and/or Zymo who made the mistakes. To add to the pain, the researcher must make this case without bad mouthing their previous company!

The reason for the acquisition of Zymo was primarily for Zymos interferon alpha product to fight Hep C. The job cuts in Seattle are being made as BMS' moves out of the Hep C, neuroscience, and diabetes areas. One has to wonder what value is left in Zymogenetics? The individuals who are being cut apparently only had value in the Hep C space. They are not researchers. They are Hep C Zymogenetic workers.

I have long railed against the notion that a research professional is only valuable in the field in which they have been working. In a non-cargo-cult world a researcher is a cog in the machine that conducts research. Put ideas into the machine and out will come the results that are nothing-but-the-facts-ma'am. In this fantasy world, the researchers at Zymo would be given new research projects, not pink slips. Having the ability to move from Hep C to cancer to diabetes would create a research department that relies on the scientific method more than the cargo cult mentality. The researchers would be partners in ending things that need to end. When their careers end with their projects, they will act in their best interest, not the companies.

Right around the time BMS was sniffing around Zymo they had a team conducting due diligence on an anti-IL6 antibody from a small Bothell WA biotech called AlderBiopharmaceuticals. They paid Alder $85M with milestone payments up to $764M. In June of 2011 BMS paid Alder a $15M milestone payment for the launch of a phase II Rheumatoid Arthritis trial that they reported on last week (positively) with no mention of milestone payments. This could mean trouble for Alder. The workers at Alder are in a typical biotech quandary. Their jobs might be in jeopardy and there is nothing they can do. The lead candidate is the money maker. The rest of the pipeline is window dressing.

What would an Alder worker have to tell BMS if their job wasn't on the line? The diseases the IL-6 crowd fights are Rheumatoid Arthritis and cancer. Genentech already sells Actemra, which is an antibody against the IL-6 receptor. The BMS/Alder drug is different in two ways. It binds to IL-6, not the receptor of IL-6, and it is expressed in Pichia pastoris yeast. The norm in biopharma is expression in Chinese Hamster Ovarian (CHO) cells such as the CHO platform employed by Genentech for drugs like Actemra. If BMS and their anti-IL6 drug is going to compete, they will have to also compete with pricing. That means they will have to somehow compete with the CHO platform. Do the workers at a small biotech even understand what they are up against?

The claims at Alder:
  • The cost of producing mammalian cell cultures is US$300 to $1,000 per gram. Alder’s microbial cultures cost a fraction of this amount.
  • Over 75% of antibody manufacturing capacity is held by a limited number of companies. Alder provides an alternative manufacturing process that avoids this bottleneck.
This is quite a claim. Having witnessed the pricing fiasco of Seattle based Dendreon, one has to wonder if Seattle has the right kind of talent to properly factor in the cost of providing a drug product. They have not produced many research professionals who are highly skilled in dealing with manufacturing. Cargo Cults specialize in the narrative. Manufacturing and engineering issues cut through the BS of cargo cults. Did BMS truly find the Pichia pastoris story convincing? The biopharma world, one would think, would be banging down Alders door to get at their manufacturing technology. It is not. Alder claims that their system "scales rapidly to 50,000 liter tanks" Compare this to Genentechs 15,000 liter tanks in Oceanside CA where Actemra is made. One can assume the CHO platform at Genentech expresses somewhere between 3 to 5 grams per liter. What is the Pichia pastoris expression level?  

The workers know but their jobs are on the line. Keep positive or parish. In spite of the unbridled optimism of Seattle biotechies, the layoffs and the confusion around Alder underlies the Cargo Cult nature of this business. The people being laid off at Zymo had no control over the competition against interferon alpha. The workers at Alder have no clue about big pharma manufacturing issues. The things that take away from the value of these researchers are things they have no control over. Like the Cargo Cult watchtower worker, the fact that the planes do not land has little to do with what is going on in the watchtower. It's something else. You can go back to watchtower school or you can work a little harder to find out why these things keep happening. 75 people at BMS, 160 at Ariad, 500 R&D jobs cut at Novartis... Just another week in the Cargo Cults.