After raising a $285 million special op fund last month, and changing its name from Flagship Ventures to Flagship Pioneering, the VC has also now announced it has taken on Novartis vet David Epstein as its new executive partner as it also brings a new biotech out of its stealth mode.
Epstein, who for six years headed up Novartis Pharmaceuticals, had a shock departure from the company last May as it rejigged its business setup and sought a standalone unit for its oncology efforts and separate from its pharmaceuticals division, a decision that left Epstein out of a role.
Many wondered where a man who is known to have a high influence on biopharma would land, with some surmising a biotech CEO role—but he has decided to move into the world of venture capitalism.
Epstein’s new role at the VC also follows Flagship’s recent addition of Dr. Michael Rosenblatt (formerly of Merck) as CMO and Jim Gilbert (formerly of Boston Scientific and Bain) as senior partner.
Epstein tells me that this was in many ways a natural transition. “This is pretty exciting and that’s for a few reasons. One, there’s some really interesting tech out there, and I get to be involved in that. Second, these companies, and the VCs that are funding them, need the experience of those from the pharma industry of getting drugs onto market.
“And the third is that these companies are looking for funding from the pharma industry, and having someone like me from that industry should help create a better understanding of what it’s looking for.”
He said that, when you work at a company like Novartis, a big international beast and at a senior level, you’re working across multiple therapeutic areas on a global basis, and there is always something happening.
“So, when you move over as I have to a VC firm that has a broad series of companies and science, it recreates that in many ways.”
And why Flagship, and not another big VC firm? “The people are great here, and many VCs will just inject cash into companies, but here they like to nurture them” he says. “They’re very bright and have an excellent track record, and they’ve funded some spectacular companies like Moderna, and that’s what brought me there.”
Flagship Pioneering has over the years amassed $1.75 billion in total, and Epstein will help decide the future on its recent special ops fund, as well as its most recent Fund V, which totaled $585 million and closed last year.
As an executive partner, Epstein will focus initially on becoming chair of Rubius Therapeutics, a venture founded and launched by Flagship VentureLabs.
After this and a few months down the line, Epstein said he will help out more broadly with Flagship “wherever I can add value,” whether that be by helping start up new companies, coaching execs, and sitting on other boards.
The initial focus for him will however be on Rubius, a small, early-stage Cambridge, MA-based biotech, which has been in semi-stealth mode until now with a handful of employees.
This company works from a platform that provides next-gen off-the-shelf, enucleated cell-based therapies (which are close to Epstein’s scientific heart) that aim to treat a wide array of ailments including cancer and autoimmune, metabolic and hematologic diseases.
Epstein says he’ll make sure things are going in the right direction here, which includes meeting with (as yet undisclosed) pharma companies who have “expressed interest in the technology” from Rubius.
“One approach that I’m strongly considering is this idea of either licencing out indications or therapeutic areas to specific Big Pharmas, which would bring in the money [on top of the startup cash it has from Flagship] to develop therapies against specific diseases. That would also of course allow us to upscale our hiring.”
He said that if the biotech ends up doing a few big deals with pharmas and they fund each of their programs, “that would work out pretty well for us. This has been used to good effective at other companies, again such as Moderna, which has for lack of a better term seen pharmas ‘buy’ particular indications and funded their development.”
Most of his job in the coming months will be centered around trying to get those types of deals, he said.
The biotech’s president is industry vet Torben Straight Nissen, formerly of Pfizer’s biotech unit and who has also worked across startups, making Rubius start life with a top exec team.
I spoke to Epstein about his new role as news also came out that Alessandro Riva, a man he in fact hired more than a decade ago at Novartis, has left his cancer role at the Big Pharma like so many others over the past year, and also comes after Novartis looks to scale down its work in cell and gene therapies.
Epstein said there was little room for him to talk about his former employer, or the departures, but said specifically that Riva was a “great guy” and a “terrific executive.” He said: “He has probably filed and gained approval for more oncology drugs than anybody in the world.
“But you have to think, I hired him around 12 to 13 years ago, and at some point, people want to do something different. And Gilead put him on their exec team, so that’s a step up for him, so I’m not surprised to see him take it.”
Epstein has followed a pattern similar to many of his Big Pharma peers, including now Riva and Nissen, who have left the pharma industry, only to find themselves drawn to the less political and bureaucratic but “pure science” roles that biotechnology can bring.
In May Geno Germano, formerly Pfizer’s global innovative pharma business head, landed the newly created role of president at major dealmaker Intrexon, and is also on the path to become its next CEO.
He left Pfizer back in February as it prepared for the (failed) $160 billion megamerger with Allergan, and came as Pfizer too mulls over whether to split its business units.
Nor is he the only former Pfizer exec to take this route: A year ago, Jose-Carlos Gutierrez-Ramos stepped down as the senior VP and head of Pfizer’s Cambridge-based Biotherapeutics R&D to run the MA-based startup Synlogic.
The biggest name in recent years to jump into biotech has been Sanofi’s former CEO Chris Viehbacher, who allegedly did not see eye-to-eye with its board and disliked the pull of French politics on the company.
He had long championed biotech and set up its key partnership with Big Biotech Regeneron, as well as investing $700 million in Alnylam, the Boston-based RNAi biotech.
Not all have taken this route, however, with Pascal Soriot moving from one Big Pharma, Roche, to another, when he took on the role of CEO at AstraZeneca.
He did, however, work with Roche’s biotech unit Genentech and help it integrate into its Swiss parent after its $47 billion takeover, so perhaps had his fill of biotech beforehand.