Editor's Note: This is the first in a new series of "In conversation with" long-form articles we’ll be producing on a regular basis, talking to biotech CEOs and executives about deals, cutting-edge science and biotech culture, as well as their latest updates, to build up a microcosm of the life science industry as seen from those running it. Want to learn more? Contact me—Ben Adams
It’s become a familiar move in recent years: big company executives, wanting to get back to their science roots and away from big company executive culture, have packed their bags and moved into biotech.
We’ve seen it with a host of pharma veterans jumping ship into small, independent and early-stage life science companies and venture firms—from ex-Biogen chief George Scangos, former Novartis leader David Epstein, former Astellas oncology VP Stephen Eck, Clovis Andrew cofounder Andrew Allen, ex-GlaxoSmithKline executive Jason Gardner, Genentech vet Raphaël Rousseau, and former Pfizer leader Torben Straight Nissen, to Novartis vets Usman “Oz” Azam, Alessandro Riva and Hugh O'Dowd.
One of the most unexpected has been Jeremy Levin, the former CEO of Israeli generics company Teva, and before that, a Bristol-Myers Squibb executive who spearheaded its “string of pearls” strategy of partnering.
It looked as if he was set at Teva, but squabbles at the top of the company and opposing forces from Levin and the board saw his departure in 2013. (Given that this week, has Fitch downgraded Teva to junk, citing "operational stress," he may be very happy he went.) Two years later, and he was back—not at a large pharma, but at a small, relatively unknown New York biotech with an ancient name, but with an eye to the future.
FierceBiotech caught up with Levin before this week’s Financial Times Pharma and Biotech event in London to talk pharma vs. biotech, executive pay and compensation, bugbears and the future for his rare disease company after getting off a $75 million IPO in the spring (today, it has a market cap of $271 million).
Biomedical innovation is clearly a love affair for Levin—he had offers from other companies, including for a “very big company,” he told me, but neither they nor Teva could deliver on the kind of R&D future he wanted. And, as so many have done since, he turned to biotech. He also stumped up millions of dollars of his own plus his family and friends’ cash into this company, with no guarantees he would ever see it again.
“I didn’t think too much about it at the time, but a friend of mine told me: You made it OK to fail,” he said, adding that making that jump had been seen as a scary move just a few years ago.
When leaving Teva, and in turn the world of Big Pharma, and moving into the very different world of biotech, how much of a culture shock has that been? I asked him. How had he handled the process?
"Nobody on the media side has ever asked me that. Now, I have definitely enjoyed it; going from a large company to a small company allowed me to try and articulate certain values and beliefs that I had tried to infuse in a big company," said Levin, "but as I realized, you can’t change culture in a big company; but conversely, you have to create a culture in a small company.
"I’ll be honest, it also highlighted the strengths and weaknesses of my own capabilities. On the one hand, it highlighted how much the patient mattered to me and being in touch with them. At the same time, it also showed to me in small companies how you can affect culture, and how I can decide how we invest capital, and how we spend our time, and I’ve enjoyed that, because in this setting, you feel closer to the patient. I started off working in [the U.K.’s state-funded] National Health Service where you don’t get paid any money, and you work hours and hours and hours and just get yelled at by your consultant for being an idiot all of the time," he continued.
“So, if you had to distill it down, I would say to you this has been about getting down to patients’ needs: That has been the most gratifying part.”
But what’s the least gratifying part? “Having to confront myself in the mirror and saying sometimes ‘you can’t do this’. You need to have a fabulous team around you, which is why I built [Ovid] the way I have. You know, you have to be humble.”
Why this biotech? I asked him. Why not another, perhaps more well-known company or VC, or another pharma?
"So, I didn’t buy into a pipeline, or a company, I bought into a concept," said Levin.
He said this is a similar "aha" moment that hit him a decade ago when immuno-oncology was just starting to peak its head above the parapet, before today exploding into the thousands of trials and combo studies run by nearly every major pharma/biotech company in the world.
“I saw this [at his time at Bristol-Myers] and said ‘this is exactly the time to get into it, because it will fundamentally change the way we treat cancer. In the same way, since being at Teva and Bristol, I have seen the way science has involved in neurology. I’m seeing better animal models; more robust genetics; new ways of scanning the brain. All of this tells me that there is major development in this area that is on its way.”
Levin said he focused on the orphan disorders of the brain, because “it’s my firm belief that as you learn more about these disorders in smaller populations, so you’ll learn also about how you impact larger disorders.”
He doesn’t rule out that perhaps one day, developments in these orphan areas could lead to breakthroughs in much bigger, unmet medical needs such as Alzheimer’s. However, he added, don’t underestimate what neurology needs now outside of this Holy Grail, as there are millions of patients, with hundreds of disorders within neurology, but with incredibly few medicines. “But the science is saying: We’re coming, and you need to be on it.”
At Ovid, the focus currently is on Angelman syndrome (a genetic disorder that can cause delayed development, seizures, sleep problems and others medical issues) and Fragile X syndrome (a genetic condition that causes a range of developmental problems and usually hits boys the hardest). There is underway the so-called phase 2 STARS trial of OV101 in adults with Angelman syndrome, as well as a phase 1 for OV101 in adolescents with Angelman syndrome or fragile X syndrome.
This medication comes from Lundbeck and Merck—one that was put on the scrap heap eight years ago, after the pair failed to get it through the clinic for insomnia. Levin said it is the only small molecule highly selective extrasynaptic GABA(A) receptor agonist tested in clinical trials, and believes that new scientific insights from others, as well as Ovid, will reveal the hidden value of this once failed drug.
Seeking out new pacts
Levin explained that he wanted to get this kind of research done at Teva, but “the board dismissed that. So, when I left, I sought out anybody I could talk to about it; I travelled the world, was given the opportunity to work with that very big company; I spent a lot of time talking to them whether they would invest substantially in this area.”
Their answer, he said, was that neurology had failed in the past and will in the future. “I decided then to devote myself to this; so, I found Mathew During [former Ovid CEO and current CSO]; he was one man, in a shop, filing his own IP, and personally financing this.” Levin said he got on board, and with his family and friends, invested $5 million, something that was “very high risk”, as they had no product, just an idea and IP.
“We scanned the whole globe for medicines that might work; but I said from the start we wouldn’t develop anything that wasn’t a novel medicine, or mechanism, and we would never do a retread. So, we put together a list of those drugs that met those criteria on the cutting floor of pharma companies, which led us in 2015 to acquire the first one from Lundbeck [OV101], and then two years later, a 50% share from Takeda in OV935.”
This pact with perennial dealmaker Takeda sees Ovid help out on the Osaka-based company’s work on a selective CH24H inhibitor in rare pediatric epilepsies.
Takeda has already put the med through a phase 1 test, and has moved into phase 1b/2a trials in rare epileptic encephalopathies. This includes Dravet syndrome, Lennox-Gastaut syndrome and tuberous sclerosis complex.
Under the deal, Takeda gets equity in Ovid and could also gain milestone payments based on the progress made on TAK-935. If all goes well, other orphan CNS indications “may also be pursued,” the pair said at the time.
Levin said the Lundbeck deal was a “bread and butter agreement,” but the Takeda deal is a “super story” as it became clear to him that a small company needs strategic partners. “I looked around for companies that didn’t just want to dump a program, but rather would be willing to exchange from a scientific discussion, moving it from one disease area, into a more orphan focused company.”
He said they went to Takeda, among others, and they were “respectful and receptive.” For a year, they spoke about different programs, and “almost as if by an off-chance,” the head of neuro science at Takeda told Levin that he had a treasured program that he wanted the biotech’s opinion on.
“He showed us ‘935, and it became apparent that this drug and its preclinical data spoke more to orphan epilepsy than to broader areas like depression and Alzheimer’s—the sort of thing big companies will go after. So, after that talk, they told us OK, if you really believe this, we’re willing to let you buy into the program but we’ll continue to be involved, share half the costs, and share half the profits [should it gain approval]. And, because you understand rare diseases, you will lead development and commercialization, which we in turn will learn a lot out of.”
There may be more partners and in-licensing pacts in the future, but don’t expect a Levin-led Ovid to be subsumed into a big pharma buyout. “That’s a depressing thought,” Levin said about the potential of being bought out. “As a public company, the statement is made clear; I have no intention of selling. When you look at small companies like ours, we’re all setting out on a mission to break open the world of neurology. It’s clear to me, though, that Big Pharma will watch this ... some companies as a result will be scooped up, others not. In my mind, what I’m doing is to have a world-class team that can take this on for a generation, or two.”
I spoke to Levin about how plaudits for biotech are often lost given that so many programs do end up within a larger pharma company. “I was watching an awards ceremony recently (for biomedical innovation), and it was basically large pharma who were getting all these awards," he said. "And then I realized that most of these products that were being lauded all came originally from little companies!”
But Levin lamented some of the pharma exec culture and its inherent reward system that focuses almost entirely on stock and financial performance, rather than on, say, R&D spend, or risk in research.
“The reason I think we have this dearth of innovation in Big Pharma is because of the way executives are compensated. They are compensated for topline, for earnings per share and for short-term total shareholder return. They are not compensated for building a sustainable pipeline, launching novel medicines and for investing in R&D.
“So, it’s easy for a pharma exec, missing numbers at the top to say ‘wow, why don’t I just quickly raise prices,’ or the same thing when a drug isn’t approved: Jack up the prices. Or, when earnings are low, I’ll take cash and buy shares back, so my earnings look better.
“It’s depressing. And I was in that system, and I found it grueling that my compensation committee were resistant to try and alter the way we were compensated. They were only interested in the short-term metrics, which in our industry is a disaster.”
Levin hopes by building out a new culture in an R&D-led biotech, things will be different, and that this company can become a disproportionate force in neurological research in the future, without becoming a Big Pharma unit.