Business of Science, the dynamics of the startup

So what is involved in launching a life sciences startup? Curious about the dyanamics within the startup and competition with other companies? Today I suggest reading a book called Billion Dollar Molecule by Barry Werth. The author provides insight into a behind the scenes look at the science and business aspects of a startup, including its challenges. One message driven home is the passion of those starting the company and their belief in their idea. While at the same time realizing the competition with other companies. Parts of the story read like a thriller novel about a race to get the drug approval, and which company gets to the prize first.

As mentioned in my previous post (here), one potential business paradigm, is one where startups commercialize innovative technology. In some cases the startup takes the technology to a certain stage and then sells to a larger pharmaceutical company. In other cases the startup decides to vertically integrate and take the product all the way to the market. In the case of Vertex it was the later, with strategic partners. As a reader whatever you make of the described drama at the founding of Vertex and understandably every startup is not a Vertex, that said there is still a lot of lessons to be learned from this story.

The story is illustrative of how academic research tugs at industry research and it is discussed throughout the book. As an example, releasing academic publications versus keeping it confidential and eventually patenting (or just to not let your competition know how far you have gotten). Furthermore, the story is informative on the steps involved in the rational or structured drug design approach, specifically Vertex used the minimalist approach to designing molecules thus trying to identify the smallest region of a molecule that produces activity, then redesigning a smaller more efficient molecule.

This story also conveys the investment and expenses involved in bringing a new molecule to the market. Innovation was a key part of the success for Vertex. Although Vertex did not use a formal lean startup methodology at that time, the natural pivots that they had to make to become successful can also be observed.

As always I enjoy those factoids. One being, Benno Schmidt, the first Chairman of the Board for Vertex, coined the term “venture capital” in the 1960’s and his group’s first investments were in Minute Maid frozen orange juice and Spencer Chemical Company, a maker of fertilizers.

This book has its fair share of historical facts, which provides a good backdrop for the Vertex story. As we know, history can help us understand why the industry is where it is and where it should go in the future. The author starts with the history of how the flu epidemic in 1918 propelled the successful implementation of discovering drugs through soil screening and medicinal chemistry. At that time pharmaceutical medicine was basically metals and abstracts, aspirin, considered a wonder drug at the time, being the only drug that was discovered through science. In the 1930’s George Merck, head of Merck and Company, began expanding his company lab capabilities for the purpose of discovering new drugs and also allowing scientists to publish research. Then in 1935, there is the discovery of Sulfanilamide by Gerhard Domagk as a cure for syphilis and other bacterial infections. This led to the rampant research on derivatives, and the rushed development process of one of these led to the Elixir Sulfanilamide tragedy. Subsequently was the birth of the Food and Drug Act to protect patients. The Government sponsored science agencies were established by Franklin Roosevelt ahead of World War II and selected Vannevar Bush to lead the effort (see my previous post here). The author continues to describe how the development and production of pencillin during World War II was the birth of the pharmaceutical industry in the United States. Do you know the details of how the United States pharmaceutical industry got started with penicillin? Welcome your answers in the comment area of this post. I encourage you to read the book to find out the answer.

The author provides a great snapshot of the major events in the pharmaceutical industry through the 1980’s, which may not be readily known or taught in classes. For that matter, I think that a history of the pharmaceutical industry could be a nice course for graduate students pursuing degrees in the pharmaceutical sciences. I would highly recommend reading this book; it reads like thriller and discusses some history as well.