“The Billion Dollar Molecule” – it is really a fancy title for a book that discusses company that all biotech investors know – Vertex Pharmaceuticals. Despite the fancy title, the company that the book portrays is nothing but that.
While Vertex is widely known for its complete dominance in the treatment of Cystic Fibrosis (and I assumed that the company started with development for Kalydeko), the initial development targets for Vertex were nowhere close to Cystic Fibrosis and instead they had focused on immunosuppressants for organ transplants and anti-viral agents for HIV.
True legacy of Vertex is not the therapy (although there is no doubt that their therapies are the most innovative), but the drug development – before Vertex, most of the large cap pharmaceutical companies engaged in massive screening – putting through as much molecules through screener to find active agents. It is finding needline in the haystack. Vertex’s method of designing the molecule was revolutionary in that they made the process much more efficient – it was very difficult and could have come to failure, but the company could push through because they recruited top talent from Merck – one of the most celebrated pharmaceutical companies in the world then and now.
As a company, Vertex really competed against the apex of academia of then and now – Harvard University for publication. The book also captures the massive pressure on the R&D team to deliver on time – meeting investor expectations for timing when science takes time and can be extremely irrational generates a lot of pressure. The dissidents between management team and the scientist were not limited to the process, but also allocation of wealth or company stock – only to be found out with IPO filing. Overall, the book really shows how difficult it is to found and run an early stage biotechnology company.
It is also interesting to see what Vertex management thought of Regeneron in terms of quality of science – both of them are arguably have established as the legends of biotechnology industry now.
Agrouon pharmaceuticals also gets a shout in the book – it was similar to Vertex. Agrouon was acquired by Warner-Lambert (now part of Pfizer) for $2bn. This shows biotechnology industry is a succession of M&A. Now Vertex has growth to be a $40bn company – which also shows how much value Vertex has generated over the past 20 years.
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I couldn’t resist commenting. Well written!