Under my byline

Biotech blessings

Posted in Books by Rrishi on 1 January 2009

Good chemistry makes good business

Binder and Bashe, Science LessonsScience Lessons: What the Business of Biotech Taught Me about Management
Gordon Binder, Philip Bashe
Harvard Business Press
viii + 293

Like an American high-school sports movie, this book is chock-full of high-five moments, lumps in the throat and moist eyes caused by honest, morally fibrous and sporting actions by the underdog, team practices that stress equality and shared responsibility, running drama when bullies try and grab the hard-won ball (via, in this case, lawsuits), occasional high drama when a disloyal member of the team is found out and expelled… all crowned with ultimate vindication and glory. The whole package is delivered in a folksy and direct style, the arguments connected and enlivened by practical metaphor and real-life example. It’s like a very good CEO memoir — and that’s what this is.

It’s a memoir not of Gordon Binder’s life but of his years at Amgen, one of the pioneering companies of the 1980s and 1990s’ biotech revolution. Binder joined Amgen (formerly Applied Molecular Genetics, based in California) as CFO in 1982, when the company had just a handful of people, cripplingly expensive research goals and no money. Its prime asset was George Rathmann, the CEO and now an industry legend — he was just the kind of believer and deliverer (read: sports coach) the company needed to get itself off the ground.

As CFO, Binder helped Rathmann raise venture capital and later shepherded Amgen through a successful IPO, in dangerous times for biotech IPOs. In 1989 he was elected CEO, when Amgen was just about to launch its long-awaited drugs Epogen and Neupogen. After a decade of struggle — legal, financial and scientific — those two products became the cash cows that fuelled Amgen’s growth. A sizeable proportion of the billions of windfall dollars was reinvested in R&D, the raison d’être of a biotech firm and the particular interest of both Rathmann and his successor.

So much for background. What Binder does, with the help of co-author Philip Bashe, is to skilfully describe, between two covers, the history of a successful company, the management practices that nurtured its success, the personal traits and experience that made its core team effective at making good and timely choices, and also the legislative, commercial, regulatory and intellectual-property environment that shaped the industry and evolved alongside it. In Binder and Bashe’s hands, the story is enthralling.

The first of the eight “Amgen Values” Binder lists is “Be Science Based”, which means that the scientific habit should apply to all aspects of the company’s work. To test new management or sales ideas, for instance, he says, experiment. Innovation needn’t happen only in the lab.

Nor is science neglected in favour of money and management. On-the-task training in what Binder calls “dog and pony shows” — that is, the blitz of pre-IPO meetings with skeptical investors — in an era when even the best-staffed investment firms had no idea what biotechnology was, has clearly prepared him to present the hard science behind Amgen’s products in language that is unusually limpid. There are only two scientific diagrams in the book (they show the structure of DNA), but even without visual aids Binder is able to lay out what his research teams were doing, what worked or didn’t, and why; and, above all, why it takes so long and costs so much to bring a new drug onto the market.

This is good because, without a window onto the science, the picture is incomplete. In biotechnology, drugs are not pills (that is traditional “big pharma”, says Binder). Instead they are complex proteins created in labs and normally injected into the blood. Because the proteins work by interacting with our genes, biotech researchers need to know what gene plays what role in the body, so that they can turn it on or off as required.

As CEO, Binder presided over the “building” phase. In 2000 he handed over to Kevin Sharer, whose challenge it was to transform a once-tiny company to handle the consequences and reap the benefits of size. Binder moved on to other businesses, including venture capital and a jet-rental company where he’s applying the lessons he learnt at Amgen. He’s a trustee of the American Enterprise Institute, a conservative think-tank — no surprise, given his obvious faith in the efficacy of the market. He also fits into a democratic American tradition: that legitimacy comes from public utility and/or approbation, that it’s not enough to be excellent for the sake of excellence. Success must be shared, taught, transmitted — and all that is asked in return is the cover price of this book.

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