Operating Partner
SV Health Investors
Perfect Preparation Prevents Poor Performance.” These five Ps—with maybe a sixth before the word “poor”—is a traditional saying about the need for careful planning if one wants to succeed. I have lived my professional life adhering to this phrase as much as possible. Of course, there are other P-words that are particularly pertinent to biotech, including perseverance, passion, and persistence. And one cannot ignore “pet peeves.”
When I was a child, we would go on holiday (vacation to you Yanks) to a West Country place called Shaldon, near Teignmouth in Devon, in the U.K. It was a fun place, largely because there was a smuggler’s tunnel leading to the beach–at least that was what it was called. I remember seeing a boat in the harbor with the name ‘Perseverance’. Being young, I did not know what the word meant. I thought the boat was called Per-SEV-er-ance, i.e., with the accent on the second syllable. I have come to realize both the correct pronunciation and the association of that word with the biotech industry. Perseverance is a word that encapsulates much of what biotech stands for.
If you look at the history of many important biotech companies, including Alnylam, Regeneron, Ionis, Neurocrine, and even Genentech, they all went through experiences that took considerable perseverance, passion, and persistence to become the successful companies they now are. One of the stories I tell about perseverance again involves going on vacation, this time as an adult with my family of then-small children. We went to a farm, to which would now be called an Airbnb. When we got there, the owner of the farm, who lived close by, told us on no account to leave the gate open because one of her dogs was in heat. I had noticed as we came into the farm that there was a small black dog lying outside the gate with his head on his paws. It rained solidly (the whole week), but that dog stayed there the whole time. I found out later that someone did leave the gate open, giving that dog the access he had waited for all that time. I have always thought of that dog as a great lesson for biotech leaders in perseverance. It takes single-minded persistence over time–through rain or shine–to build an enduring biotech company. Such perseverance is a rare commodity: you can count on the fingers of two hands the number of start-up companies that have gone on to become large independent biotech companies.
The real fun starts when a growing biotech has products for sale, the specter of direct-to-consumer (DTC) advertising arises. This practice is allowed only in the U.S. and New Zealand. But I have difficulty understanding why it is permitted at all. Back at Biogen, I remember their rather muted DTC campaign to raise awareness of their multiple sclerosis drug Tecfidera. That campaign did not last long and apparently did not boost prescriptions. The advertisement itself was not at all special or even very appropriate, including scenes of a woman swimming and doing other activities that were ‘enabled’ by her having fewer relapses from her disease.
It has now reached the point where one large company spends close to a billion dollars a year on DTC advertising for its immunology drugs. The overall budget for DTC advertising across the industry is thought to be close to $14billion.1 Just the advertising of obesity drugs clearly has a substantial budget. I am sure the companies would argue that it is worth it in terms of an increase in prescriptions and sales, but for those of you who have watched those advertisements, it should make you wonder. First, they advertise the drugs as though they are candy, and second, the voice-over rushes through the side effects very quickly in case anybody should actually be paying attention. If the scenes are supposed to encourage the physicians to prescribe the products, then I would argue that they should know the drugs and their patients and the space better than how the drug companies describe them in those ads. As far as the consumer is concerned, if I were them, I would let my expert physician tell me what drug to use rather than suggesting a name based on some banal advertisement where happy patients are dancing on a boat.
I also fail to see how this DTC advertising strengthens the case for the maintenance of current drug-pricing paradigms. There are so many breakthroughs that the companies could talk about, including new drugs for autoimmunity and cancer (e.g., CAR T cells), that it would be better to advertise products primarily based on the name recognition of the company making them. Absent that happening, in my world, DTC advertising should depart from our various screens and the money instead be earmarked to be spent on R&D. That’s my pet peeve (and probably enough of words beginning with P).
Reference
- Campaign for Sustainable Rx Pricing (CSRxP) found that the ten largest pharmaceutical companies alone spent nearly $14 billion on DTC advertising in 2023.
Tim Harris, PhD, is a British biotech veteran entrepreneur and author of “In Pursuit of Unicorns” (Cold Spring Harbor Lab Press, 2024). He is currently an operating partner with SV Health Investors.
