CAMBRIDGE — Start with a concept, sign on the stars, link up with an established distributor, and hunt for some deep-pocketed investors to bankroll your blockbuster.
But don’t expect anyone to shout “lights, camera, action,” because this isn’t movie-making. It’s the biotech industry taking inspiration from Hollywood in its pursuit of new drugs.
For decades, most new pharmaceuticals were shepherded from early-stage research to consumer sales by one company. But as big drugmakers increasingly cede research to startups, venture capitalists have been stepping in to pull together teams of scientists, senior executives, and supporting managers and staff to work on a single development project.
If successful, the team might sell the medication or its marketing rights to a pharmaceutical company, disband, and move on to new drug discovery projects.
In recent years, some industry leaders have discussed the Hollywood analogy informally in private meetings such as the invitation-only summer gatherings in Greece hosted by retired Wall Street banker Stelios Papadopoulos and Clarus Ventures cofounder Nick Galakatos.
Now there are new calls to make the model explicit, setting ground rules on how to more efficiently divvy up the roles and compensation levels for each player in a drug research program. In a forthcoming business journal article, a pair of Cambridge management professors will propose that the biopharmaceutical industry formalize the concept of “project-focused organizations” for research programs involving a single molecule or drug target.
Unlike companies pursuing research into cell therapy or gene editing, which require an infrastructure to produce multiple products, startups seeking to commercialize one drug candidate are better off organizing as temporary projects than enterprises, argue Harvard Business School professor Gary Pisano and Andrew Lo from the Sloan School of Management at the Massachusetts Institute of Technology.
They contend a project-focused approach would recognize the reality that most leading entrepreneurs and scientists already hop from one company to another every five to eight years, after their startups move from research to commercial stage or their drug compounds fail in early clinical trials or their company is acquired by a pharmaceutical giant.
“Right now, biotech firms are set up to be ongoing enterprises but their leaders and their research stars come and go and restart somewhere else,” Pisano said. “If that’s going to happen, you might as well just set it up as a project, just like a movie. Movie stars are attracted to movies. After one movie, they want to make another one. Let’s make it explicit.”
Noubar Afeyan, senior managing partner and chief executive of Flagship Ventures, a Cambridge investment firm that seeds small biotechs, outsources many of their functions, and strikes alliances with big drug makers, said the new model is a work in progress. The industry’s structure and incentives still stem from the old “studio system” of Big Pharma.
For example, researchers who have successfully brought experimental compounds from their laboratories into clinical trials often remain at startups for years — while they could be more fruitfully redeployed in new research — because they are waiting to cash in on stock options that will become valuable only after the drug is approved and commercialized.
“The thing that’s been toughest for the industry to crack is how to split up the pieces in the economic value chain so that everyone knows what they’re going to get,” Afeyan said.
Another high-profile player in the industry’s shift to a project-oriented model is Boston’s Third Rock Ventures, where cofounder Kevin Starr applies what he learned during a stint as an independent filmmaker in California to launching early-stage biotechs. For Starr, hiring is paramount, and the networking site LinkedIn is an indispensable tool.
“We network like crazy, looking for that ‘nothing is impossible’ mentality,” Starr said. “We have this family of companies, and we’re always asking, ‘Who do you know? Who do you know?’ ”
Connectors like Starr and Afeyan are at the center of the project-by-project approach, scouring biomedical labs from Kendall Square to Boston’s Longwood Medical Area for “druggable” molecules. They also play matchmaker, introducing entrepreneurs to researchers, business talent, and financial backers. And they hire the chief executives, who then seek to enlist a mix of people who have shined elsewhere in the quest to create a new kind of magic.
“We’re trying to build a nimble company,” said Jeff Albers, chief executive of Blueprint Medicines, a Cambridge cancer drug startup that has recruited top scientists and executives from Novartis AG, Millennium Pharmaceuticals Inc., Genentech Corp., and other companies. “We are a company of biotech and pharmaceutical immigrants, and every person has a functional expertise.”
As the project-based companies move forward, one of their goals is often to land a pharmaceutical company to share the costs and risks of drug programs, and aid in everything from clinical trials to regulatory filings. While they have scaled back on their in-house research programs, the big drug companies remain the parties with the resources to carry projects over the finish line.
But the startups often can forge environments that allow early-stage research to flourish and promising drug candidates to move from the lab into clinical development.
Nancy Simonian, chief executive at Syros Pharmaceuticals Inc. in Watertown, a two-year-old company backed by Flagship and Arch Venture Partners, is a veteran of larger biotechs Biogen Inc. and Millennium Pharmaceuticals. As employee number one at Syros, she is trying to use her experience and her contacts forge a new company culture from scratch.
“I really wanted to go after a different way of thinking,” Simonian said. “We’ve brought in people from Millennium, from Vertex, from Infinity, from Genzyme. It’s a real melting pot, people who had the kind of attributes for the culture I was trying to build.
“I wanted a new type of company that would get out of the ‘group think’ and doing things the same way.”