by Geeta Anand
No sooner had the words come out than both men paused, each one finding the idea both intriguing and frightening.
“Are you old enough to be a CEO?” Canfield finally ventured.
“I’m thirty-two,” John replied.
Hearing no response on the other end of the line, he added, “Michael Dell is thirty-three.”
“Well, let me talk to the folks over here about the idea,” Canfield said.
“I don’t know if I can do it anyway, Bill,” John said. “I just threw out the idea, but I just got a promotion at Bristol-Myers. Our families are all here…”
That night, John couldn’t sleep. He couldn’t stop thinking about his conversation with Canfield. It seemed like such a crazy idea that he knew he should just drop it, but somehow he couldn’t get it out of his mind.
The next morning, he called Slonim to see what he thought. Taken aback, the doctor told John that it was one thing to start a foundation donating money to researchers, but an entirely different thing to put himself at the front line.10
“Research is so slow and so frustrating. It’s one step forward, two steps back. It’s emotionally taxing on the most objective researchers. It’ll be far too hard on a father whose children’s lives depend on the outcome.
“Don’t do it, John,” Slonim continued. “Your family needs you too much. This will take you away from them.”
Next, John called Andy Singer, his classmate from Section J at Harvard Business School, who worked as a biotechnology investment banker at Robertson Stephens. It was Andy who had introduced John a year earlier to officials at BioMarin, helping start the failed conversations about a joint venture with Martiniuk.
Today, Andy, too, urged caution—but for a different reason.11
“Nobody will invest in the company if you’re CEO,” Andy said. “They’ll see your conflict of interest. It will be a huge red flag for any potential investor.”
John knew Slonim and Andy were right, but he still couldn’t let go of the idea.
A few nights later, after the kids were in bed, he broached the topic with Aileen as they sat in the dining room eating dinner together.
“You know the Oklahoma company we just invested the foundation money in,” he said. “If I were to become CEO of the new company, what would you think?”
“What—why on earth would you do that?” Aileen asked, shocked. She was accustomed, by now, to being thrown curveballs by her husband, but this latest bombshell didn’t even make sense to her. “You know you’re happy at Bristol-Myers. They’ve treated us very well. You got two promotions; you’re going to be the youngest vice president in the whole freakin’ company. And they pay for all the kids’ health benefits. You can’t just walk away from that.”
She’d talked him through the crises of leaving the Naval Academy for Georgetown, exiting law practice for Harvard Business School, and resigning from Marakon for Bristol-Myers, but still, she hadn’t seen this one coming.
“Aileen, I feel like we’re running out of time,” John said, his face flushed and his pitch rising with passion. “Chen’s trial isn’t going well. I have no idea where the hell Martiniuk is with his research. Aren’t you tired of being told the clinical trials will include other people’s babies, not ours? Aren’t you tired of being told to stay home and wait for a phone call? I think there’s only one person who’s going to make this happen for our kids—and that’s me.” His voice grew hoarse with emotion. “Here’s a chance for me to get involved instead of waving from the sidelines,” he finished, tears flooding his eyes.
“Will we have to move to Oklahoma?” Aileen asked, softening with her husband’s fervor, but still wisely honing in on where the job might lead.
“I don’t think so, but it will mean I’ll be away from home a lot,” he said, wiping his eyes. “I won’t be able to be around as much for you and the kids.”
Aileen set her napkin aside and came around the table to stand by him. “Sharon and I can handle the kids and the house,” she said, wrapping her arms around him tightly. “John, I know you’re the only one who can get this done. And you know that, too. If you think it’s right, then just do it.”
The next week, John put together a booklet at Kinkos with his résumé and several years of stellar Bristol-Myers job reviews, and boarded a plane for Oklahoma City, determined to persuade Canfield to hire him.
Canfield had spent the two weeks since John first suggested becoming chief executive fretting over his conflict of interest. He talked for hours to his lawyer, Doug Branch, pondering whether the father of children with the disease the company was striving to treat could possibly be expected to act in the best business interests of the firm.12
Doug, a low-key, amiable deal maker, had accompanied Canfield east the previous year when he visited John. He’d been impressed even then with John’s exuberance, his Bristol-Myers experience, and his educational background. He pushed Canfield to consider John’s enormous personal and professional attributes. “We can manage the conflict,” Doug told Canfield, arguing John had the kind of “never say die” attitude that no amount of money could buy.
Unbeknownst to John, by the time he appeared in his pin-striped blue suit in Canfield’s corner office on the fourth floor of the Presbyterian Health Foundation Research Park, the scientist had already decided to offer him the job. Now sold on John, Canfield was worried that he might not take the position, so he set about wooing John in the only way he knew how—with a highly technical scientific presentation on his progress so far in developing the enzyme treatment.
For four hours, Canfield stood at the white board in his corner office, drawing diagrams and writing out equations in black marker. He detailed the multiple-step process that he had developed over the past decade for extracting two processing enzymes, and using them to produce a version of the Pompe enzyme with the right sugar attachments to be transported to the lysosomes of muscle cells, where it was needed.13
John nodded brightly, if a bit dazedly, hoping Canfield didn’t realize he understood very little of the seemingly never-ending lecture. When Canfield finally concluded, John asked only one question.
“How long before it’s ready for a clinical trial?”
“One year,” came the response.
John had heard that one before, but this time he believed it—because he was no longer relying on someone else. He was going to make it happen.
The job offer came a half hour later when they were lunching at Coach’s Restaurant, a sports bar and restaurant within the AAA baseball park in downtown Oklahoma City. And it didn’t come from Canfield, but from Doug, who joined them for lunch.
“We really want to offer you the position of CEO,” Doug said in his Oklahoma drawl, and proceeded to briefly describe the offer. “We understand this might take some time to arrange, but this would all work best if you were to move to Oklahoma.”
John didn’t negotiate the salary, which was less than his almost $200,000 take-home pay at Bristol-Myers, or even inquire about the health benefits, so vital to his children’s nursing care. He didn’t argue about relocating his family to Oklahoma City, fearing that the hint of a reluctance to move might upset the job offer he now desperately wanted. He would figure out those things later.
“I really want to do this,” he said, beaming. Pushing all his doubts away, he faced the two men squarely, put on his game face, and echoed his wife’s advice from earlier in the week: “Let’s just do it.”
13
A Rocky Start
Spring–Summer 2000
Oklahoma City, Oklahoma; Horscham, Pennsylvania;
Pennington, New Jersey; Newton, Massachusetts;
New York, New York
On the morning of April 3, 2000, John appeared in Canfield’s office, looking alert and eager in a sharp gray suit and red tie. In his weathered brown briefcase he carried a legal pad he’d filled at night with questions to ask and plans to put in place. On page 4, under “Mission,” he’d written: “Get Canfield’s scie
nce into human clinical trials within a year.” The last part—“within a year”—was circled and underlined twice.
To do that, John knew, he would need to raise millions, maybe even tens of millions of dollars. That’s how the chief executive of a fledgling firm spends most of his time, he had been told. In conversations over the phone, Canfield had told him he had almost nailed down the first, or “angel” round of financing—the $1.2 million needed to get the company off the ground. There were many local people ready to invest, including a small local venture capital firm, Chisholm Private Capital, and several wealthy oil executives. John’s job would be to finish off the angel round and quickly begin what was called a Series A round—the first major effort drawing in several venture capital firms.
Canfield ushered John into a small office beside his. The office had a single window overlooking the parking lot of the sprawling, modern technology office park that looked strangely out of place against the backdrop of the aging city’s skyline.
“You’ll have to make do with this small desk and chair for now,” he told John apologetically. “I’ve ordered more furniture, but it’s not in yet.” Neither were John’s computer or phone lines. Canfield also introduced him to Tony McKinney, an intense but affable man with a pronounced Southern accent whom Canfield had recruited from a small Texas biotechnology firm to be the head of drug development. McKinney, a native of Oklahoma, was still amazed he’d been able to find a biotechnology company to come home to.1
As Canfield sat with John in his office later in the day, he gave him his first assignment: “Drive down to Chisholm Private Capital, meet the venture investors, and get them to sign on to the deal.” Chisholm was one of the only venture capital firms in Oklahoma investing in early-stage research companies, Canfield told John, and the partners were ready to commit to a half-million dollars at least. They were waiting to meet the new chief executive before making a formal commitment to invest.
John was able to get a meeting with the venture capital investors the next day. He showed up at their offices a mile away in a modern high-rise office building downtown. The two partners were waiting for him in a second floor office and greeted him. Their smiles faltered a bit as they absorbed how young John was, but nonetheless the introductions were cordial as they sat down at a small table. John Frick, a fifty-year-old Stanford University Business School graduate, took the lead and began prodding John about his business background. He wasted no time getting to the heart of the matter.2
“Ever run a company, son?” Frick asked.
John did his best to talk around the question, describing his experience as a trial lawyer before business school, his foray into the business world as a financial analyst for Marakon, and his quick rise at Bristol-Myers to executive director of the committee that ran the company’s pharmaceutical business.
“That’s all very good, but really—ever run a company before?” Frick asked again, this time with a touch of impatience and condescension.
“No, I haven’t, but at Bristol-Myers I was being groomed for a leadership position at the company. I was about to become the youngest vice president there,” John said, hoping a big smile and the luster of a successful pharmaceutical company would get him past this shaky ground.
“There’s a big difference here,” Frick declared, grumpily. “In Bristol-Myers, raising money is mainly a political process. If you’re CEO of a small startup, you need to convince investors that you not only have good science, but that you’re also an expert at fund-raising continuously. And besides that, your drug development plans I’ve seen are completely unrealistic. You guys seem to think you’re going to go into clinical trial next year. Based on all the data I’ve seen, it’s going to take much longer…”
“That data doesn’t apply to us,” John interjected vehemently. “We’re going to do it better and faster and cheaper.”
Frick leaned back in his seat, sighing, and rolled his eyes at his partner. “You obviously know that no venture capitalist is going to invest in a company run by an inexperienced chief executive and a scientist who has never worked outside of an academic lab.”
“I’m sorry, I, uh, don’t understand,” John said, horrified at the direction the meeting was taking. “Dr. Canfield has done groundbreaking science that is very impressive, and every CEO starts somewhere. I have all the right academic credentials and excellent legal and business training.”
“Young man, no venture capitalist is going to invest in this company, and that’s just a fact,” Frick said, abruptly standing up. His partner stood up, too, and the two men began walking to the door, leaving John no choice but to rise and follow.
“This will be good learning experience for you,” Frick said, patting John’s back as he closed the door.
John drove back to the office in shock. Canfield had no explanation for the change that had come over the venture investors whom he had been certain were ready to commit to his new company, but the effect was worryingly predictable. In the world of venture capital, there was almost always a domino effect. Sure enough, that same week, the Oklahoma City oil executives stopped returning Canfield’s phone calls. Several of them had been talking to Canfield about making substantial investments of $50,000 to $100,000 or more.
Canfield tried to reassure John. Luckily, he said, he had another source of investment that was almost guaranteed. A small, publicly traded drug company, Neose Technologies, was eager to form a partnership. “Once we get Neose on board,” Canfield said confidently, “we’ll have the credibility to get Chisholm and other venture investors to sign on.”
Canfield scheduled a meeting for the end of the week at Neose’s offices in Horscham, Pennsylvania. Before they left, he opened his locked desk drawer and gave his new chief executive the company checkbook. John scanned it quickly and his eyes widened. There was only $37,000 in the bank—barely enough to make payroll for the month. Things with Neose had better work out, or this company was in deep trouble.
Neose was a pioneer company in Dr. Canfield’s area of expertise, glycobiology, the study of carbohydrates, which had lagged behind the sexy scientific breakthroughs in decoding genetic material, or proteins. Companies had been making proteins and using them as drugs for the past decade, for the most part ignoring the attached complex carbohydrates or sugars. But glycobiologists like Neose’s founder, Dr. Stephen Roth, were now studying carbohydrates, and showing that they played an important role in directing the proteins to which they were attached to the right region of the body. Roth, the former head of the department of biology at the University of Pennsylvania, had founded Neose not to develop its own drugs, but as a service company, to improve other companies’ protein medicines by attaching the right carbohydrates.3
To keep tabs on the latest innovation in university labs, Neose had started a competitive program to award two $75,000 research grants each year to scientists, no strings attached. The applications from labs around the country gave Neose a window into the work of the top university scientists. In 1998, the company’s scientists had chosen Canfield from the 200 applicants, recognizing both the brilliance of his work and its commercial potential.4
Neose scientists had known it was theoretically possible to try to treat patients with Pompe and other lysosomal storage diseases by making the protein that is defective in patients—in each case a particular enzyme—with the correct carbohydrate attachments. But the Neose team didn’t even consider undertaking such a project with Pompe because they knew how long and complicated the enzymes involved were. It would take years to figure out the structure, let alone make them in a lab, if that was even possible.
When the Neose team reviewed Canfield’s application, they realized that someone had actually already spent years figuring out the unimaginably complex process. “If he can do what he says he can do, this is a potential gold mine,” Roth said to his team. But Roth had been in the business long enough to know the road from the lab to the market is littered with the failures of some of the most exc
iting and promising science. Now Canfield was pressing for a partnership with Neose, and though Roth and his scientists were impressed, they were still full of questions about whether Canfield’s science was ready for prime time.
* * *
Accompanied by Canfield and Doug, John flew back east for the meeting at Neose’s offices, hoping to seal a deal. Neose’s offices were in a converted warehouse in Horscham, an old industrial town about an hour from Philadelphia. Roth and a half-dozen company scientists and regulatory and business officials were waiting in a spare, windowless conference room. As with the interview with Chisholm, they had a list of tough questions to help them decide whether to invest in Canfield’s company.
Roth, dapper in a pin-striped suit and a red and blue University of Pennsylvania tie, led the questioning. At age fifty-five, he was about ten years Canfield’s senior, far more experienced in the business world, and accustomed to grilling junior scientists.
“How are you getting the PTase?” he began, using the abbreviation for phosphotransferase, the name for the first of the two processing enzymes Canfield planned to use to make his Pompe enzyme.5
“We’re purifying it out of lactating bovine udders,” Canfield responded.
“Cows? Where are you getting the udders from?” Roth asked.
“The stockyards,” Canfield said.
“Roger Decker from our company picks them up once a week; they weigh eighty pounds each,” John interjected eagerly, trying to be helpful. Canfield scowled at him, making clear he was not to try to add anything to the scientific discussion.
“Never in a million years can you inject cow protein into people,” Roth responded, his tone angry. “The FDA would never allow it.”
“He’s right, you can’t do that,” said Marjorie Hurley, Neose’s head of regulatory affairs. She was a petite woman who was in charge of getting drugs approved by the FDA, and the very notion of trying to get the FDA to sign off on such a scheme had put an expression of pain on her face. “The FDA will never approve a product using a protein derived from cows.”