Interview: Vertex CEO concerned about investors' 'hyper-focus' on hep C
On the heels of Vertex Pharmaceuticals' ($VRTX) big news last week about changing CEOs next year, FierceBiotech chatted with both current chief executive Matt Emmens (pictured, top) and his successor Dr. Jeffrey Leiden (pictured, bottom). Both Emmens and Leiden are heavyweights in the biopharma industry, with hugely successful drug launches under their belts.
Still, Vertex needs another hit to follow the successful approval and launch of its hepatitis C drug Incivek this year, and it could have one in the experimental cystic fibrosis drug Kalydeco now under FDA review. Much of the company's stock growth of recent years has wilted over the past 6 months on fears that Incivek faces lots of competition in the years ahead from Merck's ($MRK) rival drug and interferon-free treatments against hep C in development, which analysts believe could rapidly eat into Vertex's Incivek business if approved.
Emmens, a 60-year-old biopharma veteran who headed Shire ($SHPGY) prior taking over as CEO of Vertex in 2009, is handing over his chief executive duties to Dr. Leiden on Feb. 1 and will serve as executive chairman until May. Leiden, 56, has served on the board of Vertex since 2009, and he made a name for himself in past leadership roles at Abbott Labs ($ABT), where he oversaw the launch of the blockbuster rheumatoid arthritis drug Humira.
Here's an edited version of FierceBiotech's conversation with Emmens and Leiden on Tuesday:
FierceBiotech: What has been your biggest mistake as CEO of Vertex?
Emmens: You ask tough questions, you know that [laughing]. I don't see any mistakes. I don't know if I'd do anything different. People are going to second-guess a lot of things. But when you look retrospectively at things, without all the information, that's easy to do. When you're there, the decisions that you have to make at the time have quite a different face on them. I don't think I would have done anything differently knowing what I knew then. Knowing what I know now, yeah, in the drug industry I think I would have gone back and bought Genentech when it was three people.
FierceBiotech: What's your biggest concern about Vertex's business heading into 2012?
Emmens: My biggest concern is the way it's perceived by some in the investment community. I think you have a company here that has the best pipeline that I've ever seen in any company in terms of numbers of projects that are successfully proven in man and in a time frame that's not 15 years out. You see, basically, 8 projects here that could all be on the market by , and you see three or four that could be on the market by . That's very nice, I think. The hyper-focus on hepatitis C has taken people's focus away from that. And I think on top of that, in hepatitis C, we've got a number of projects that could put us in an all-oral regimen in the time frame of . That's being overlooked.
FierceBiotech: Do you see yourself being a biopharma CEO again after you leave your executive role at Vertex in May?
Emmens: No. I've been working since I was 11 years old. I retired once from Shire, as you probably know. I was on the board here at Vertex and I saw a unique opportunity to use my skill set at a time that the company needed it. I would not be willing to do that for the long term again. I'll be happy to be on boards and advise and help people who are earlier in their career be successful.
FierceBiotech: According to an online poll, lots of people believe that you are the best CEO in biotech this year. Do you agree with them?
Emmens: They were obviously deluded [laughing]. I thank those who voted and it's a nice honor but I have no idea whether I agree with them or not. I did the best I could, and I try to do the best job I can everywhere I've been. And I came here to help the company along into the commercial realm and be successful, and that's happened.
[FierceBiotech's Q&As with Leiden]
FierceBiotech: What's one meaningful change that you plan to bring to Vertex as CEO?
Leiden: I've been very involved in the strategy that Matt and the team have crafted on the management side and the board side. I'm very supportive of that strategy, and I don't anticipate any major changes to it.
FierceBiotech: Did you have any doubts about whether you should take the CEO job?
Leiden: There's no question that Matt is leaving some big shoes to fill, and, frankly, so did Josh Boger. There have been two fantastic CEOs of this company. So that's always a challenge. On the other hand, I see the opportunities at Vertex looking forward are just fantastic. I've had the good fortune to look at a number of biotech and pharma CEO jobs over the last 5 or 6 years, and this was absolutely a unique opportunity because of the pipeline, the team and the proven record of execution here. The job now is to come here and execute over and over, just like they executed on [Incivek and Kalydeco].
FierceBiotech: As a physician and scientist by training, do you see yourself getting more involved in R&D than Matt has been as CEO?
Leiden: I really see my job as integrating the R&D-scientific-medical function with the commercial function. It's what I did at Abbott and I think it made a difference at Abbott. One of the problems that biopharmas have had is a disconnect between the discovery organization, which first makes the molecules, the development organization, which takes it through human trials to approval, and the commercial organization, which obviously brings [a treatment] to patients and the market. The discovery organization makes drugs that are difficult to develop. The development organization develops them in a way that makes it difficult to sell them. So the real key to the success of a modern-day biotech company is a highly integrated organization.
FierceBiotech: Does Vertex spend enough money on R&D, or too little, to keep growing?
Leiden: I've never seen an R&D organization spend as relatively little money and produce so much. The key metric at Vertex is to look at the productivity per dollars spent, and I would hold that up against any company out there--Pfizer, Merck or Genentech. We're spending an 8th to a 10th of what most of the Big Pharmas are spending and producing more.