The Antidote: Inside the World of New Pharma

by Barry Werth

  From McHutchison’s perspective, hepatitis C drug development was a “graveyard.” But the swoosh sped up the life cycle for testing new agents in patients. In December he and Alam quickly designed and pulled together a twenty-eight-day trial of VX-950 combined with peg-riba. “We did that four-week trial because we didn’t have the twelve weeks chronic tox data to dose for twelve weeks,” McHutchison recalls. “So it was either wait and dose for twelve weeks or get some info on a small group of people. We wanted to get this done and get it done fast.” Enrolling subjects for trials before Christmas is difficult, but McHutchison enlisted investigators at busy clinics in San Antonio, Texas, and Puerto Rico. Again the study was small, just two dozen patients.

  A month after the Morgan meeting, Vertex announced the results. When its drug was added to current common therapy, the virus became undetectable in the blood of all twelve patients after four weeks, compared with fewer than one in three of those taking only peg-riba. That morning, the Times published a story on Vertex and Boger that quoted McHutchison: “We’ve never seen data like this before, where everybody’s negative so early on in treatment.” Doctors are advised to wait twelve to twenty-four weeks after finishing treatment to declare a cure, because of viral breakthroughs—relapses. An absolute rule of clinical trials is that the results in large studies are always worse than in smaller ones. Still, “twelve of twelve” became a benchmark, a talisman, a signal that the standard of care could soon be shattered. It was a calling card for Vertex, which now looked to have the dominant HCV drug in the field.

  Pushing the data hard, Vertex began suggesting at investor meetings that VX-950 might clear HCV in twelve weeks by itself without significant side effects. Stories of miracle drugs are legion in the drug and biotech industries, but this one had started to have a ring of truth about it. Investor buzz, already feverish, spiked.

  Of course, there was also a competitive logic for urging shorter-duration trials. Schering-Plough, which also had a protease inhibitor, had started Phase II trials in the fall, a few months ahead of Vertex. Its drug didn’t produce as sharp a drop in viral activity after two weeks, and Schering was testing its molecule for six to twelve months, like the common therapies. Boger and Alam were gambling that they could leap ahead with twelve-week trials, but the FDA continued to resist. McHutchison, working to repair the relationship between the company and the agency, started to accompany Alam when he visited the FDA’s sprawling campus in the Maryland suburb of Silver Spring to plead his arguments.

  “The meetings were contentious,” McHutchison says, “because the FDA was saying let’s be safe and let’s go slowly, and Vertex and John were doing it in the classic Vertex way, which is to push in all directions. There were negotiations over sample size, and how many people you could put at risk, not knowing. Nobody knew what you were going to do. The fear was you would create a resistance in these patients, and they would be harmed for life, just like with HIV.”

  As head of the cystic fibrosis program, transplanted from San Diego to Cambridge, and with a charity to account to instead of a corporate partner, Eric Olson grappled with how to move VX-770 into clinical development across uncharted ground. The collaboration with the CFF had been severely tested by the decision to go first into clinic with a potentiator aimed at helping just 4 percent of patients. “That was a problem for them: ‘How can we do this? How can we sell this? Should we support this?’ ” Olson recalls. Vertex, with other funds from the foundation, continued to develop its hits for correctors; but because he was going ahead first with a potentiator, Olson needed to convince both parties to bear eventually hundreds of millions of dollars in clinical development and buildout costs that neither had anticipated or could easily afford. “I was getting continuing pressure from Vicki and finance: ‘Can you get some more money to fund this?’ ” he says.

  Before Sato retired, he’d persuaded her that he could ask the foundation to fund a development program only if Vertex also agreed to invest. “The model was to fund research, and it wasn’t really clear on what basis, other than our needing more money, they could do this,” Olson says. “We couldn’t really say to them, ‘And oh, by the way, we’re committed to this, but not committed enough to spend our own money.’ When I was putting the development plan together for 770, it was clear that we were gonna have a problem at some point. We were going to do our proof of concept in twenty to thirty patients, whatever it was, and if it worked, our next study was going to be our pivotal study. So we needed to be ready at the end of proof of concept to go to Phase III: tox studies, final formulation, final synthetic route. All these things needed to be done before we even knew whether the drug worked. In a normal program, you would wait for POC before you invested.”

  Olson and Ken discussed Vertex’s options, and Ken suggested that the company propose two alternatives to Beall: a step-by-step lower-risk process, and a higher-risk accelerated plan where activities were run in parallel. As Van Goor had warned, the development costs for a drug for patients numbering in the low thousands were no less than for one that targeted tens of millions of people, especially during the early and middle stages—before it was proven to be effective. At the same time, speed to market can mean everything to those who may suffer and die without it. The faster you go, the more you need to spend up front, and the higher the risk. Olson estimated the cost to the foundation of about $20 million.

  During the fall, he and senior business development director Phil Tinmouth had traveled to the CFF headquarters in Bethesda, Maryland, to present the plan to Beall, chief medical officer Dr. Preston Campbell III, and several others. “They bring us into this conference room,” Olson recalls. “Bob is already furious. In his mind, the agreement had always been ‘We’ll fund it up to there, then you guys are gonna fund the rest.’ And here we are saying, ‘You know, we need some help.’ ”

  The conference table was bare except for a single item: a book, The Billion-Dollar Molecule, a dramatic nonfiction account of the early days of Vertex. After Beall had enlisted the Gates Foundation to support the search for drugs targeting CFTR, Bill Gates Sr. had urged him to read it, and ever since, Beall had referred to it and recommended it when the question of Vertex’s commitment came up—especially among the many skeptical CF researchers who still doubted the approach and resented the company as a favored novice.

  “That was his prop,” Olson says. “He was saying, basically, ‘I trusted you guys.’ He ranted for an hour. We listened and listened. I said, ‘Bob, it’s fine, we can wait till we get proof of concept. I’m not asking you for money. I’m just saying here’s an opportunity.’ I remember he used the phrase ‘I thought I bought the Cadillac. Now you’re telling me I bought the Chevy.’

  “Then I said, ‘Well, Vertex is willing to put up half. Are you?’ What could he say? He’d just had his board meeting, and his budget was set. At the end of it, he pulled me over and said, ‘Let’s start making the slides for the board. If what you’re telling me is right, we have no choice. We have to do this.’ ”

  In March Vertex announced that it had entered into a new collaboration with Cystic Fibrosis Foundation Therapeutics (CFFT), the nonprofit drug discovery and development affiliate of the CFF, to accelerate clinical development of VX-770. CFFT agreed to pay Vertex $13.3 million over two years so that the company could begin testing the drug in patients by the end of 2006 and move quickly from there to Phase II studies. Vertex retained worldwide commercial rights.

  Olson supported moving into patients as quickly as possible, but he also anticipated a problem. With so few patients having the G551-D gating mutation, Vertex had been unable to find a suitable lung from which to extract HBEs: that is, as convincing as Van Goor’s videos were about the overall approach, their beating cilia were from cells treated with a corrector, in a genotype for which VX-770 wasn’t designed to work. The team had no comparable evidence that the drug would work in the very genotype for which it was developed. Boger clearly understood the issue, but Olson wasn�
��t sure whether many others in Cambridge appreciated how big a risk the company was taking by committing to clinical trials by the end of the year.

  As Van Goor and the scientists stepped up the search to produce cell lines isolated from a scarce and precious resource—the lungs of one of the world’s three thousand or so G551-D patients, Olson reckoned with another new type of hurdle arising from personalized medicine: the ever more complex challenge of what it means to “prove” a biological concept before the FDA will allow you to test it in sick people.

  At the May meeting, the board relieved Boger of the job of chairman, which he’d held since Benno Schmidt retired nine years earlier. The directors named longtime member Dr. Charles Sanders, seventy-four, a former chairman of Glaxo and vice chairman of Squibb, to replace him. Since the wave of business and accounting scandals that rocked Wall Street during Bush’s first term, business ethicists and shareholder groups had crusaded to strengthen boards of directors, which in the go-go years had increasingly become rubber stamps. Many corporations were voluntarily moving away from the unitary executive model—just, it’s worth noting, as the White House embraced it. Boger didn’t care about the change but believes he should have.

  “That was a mistake,” he says. “When Charlie took over as chair, that was presented to me as where good corporate governance was going—that there would never again be in the history of the world, except by historical accident of companies that hadn’t yet got to this advanced level, another CEO-chairman, so it’s about time for us to lead the way and split these roles.” The succession to Sanders cut him off from direct responsibility for communicating with other directors, isolating him from their discussions. He stopped knowing what they were thinking.

  As Vertex advanced and grew, it was all but inevitable that the company would need to acquire what Murcko called “adult leadership.” Sanders was a paragon, a gregarious native Texan with a large presence like Schmidt, who’d led the war on cancer and later helped found and capitalize dozens of biotech companies. Also like Schmidt, Sanders had strong institutional and political ties and a jumbo Rolodex. A distinguished cardiologist, he was a former general director of Massachusetts General Hospital, a past chairman of the New York Academy of Sciences, and chairman of the Foundation for the National Institutes of Health. He also served on the boards of Genentech and Merrill Lynch. After retiring from Glaxo, he registered as a Democrat and ran for the party’s nomination to unseat North Carolina senator Jesse Helms, spending his own money to buy name recognition but losing ultimately to the former mayor of Charlotte.

  It was equally certain that with “adults” in charge, the company’s remaining original torchbearers would leave or recede from running things—“put down their torches,” as Boger says. Vertex had kept its soul, its corporate DNA, during the long, hard years leading up to the swoosh in large part on the strength of Boger’s hub-and-spoke, open-door management style, and he still made it a point to have lunch with all new Cambridge employees within their first three months—a practice that kept him in touch with what was happening down the ranks. Fewer had left than he had feared. But Mueller gradually had tightened his control in drug discovery, displacing and unsettling the old guard.

  Mueller wanted one person in charge in San Diego, and he chose Negulescu. Tung agreed to remain as head of discovery at Aurora, but his wife, who wanted to return east, considered it a slight and a demotion, and in the fall, he left Vertex. (Shortly after he quit, he reconnected with Aldrich, who’d become a leading Boston biotech investor and venture capitalist, and together they started a new drug company, Concert Pharmaceuticals, with Tung as CEO and Aldrich as chairman.) Mueller wanted new blood in Cambridge and replaced Thomson with the former head of the Novartis collaboration, biologist Mark Namchuk, a laid-back Canadian who set out to undo some of the reporting strictures that had thickened through the years of having to account to corporate partners for every one-quarter full-time employee.

  Thomson opted not to put down his torch. Managing Vertex’s mushrooming collaborations, he had witnessed over the years the necessity of strategic networks and was eager to replace the prevailing model by developing effective new ways to treat neglected diseases—those that no drug company will spend its own money to investigate not because, as with CF, there are so few patients but because the ample patient populations live in countries too poor to buy drugs. Seeing an opportunity to leverage Vertex’s expertise in small-molecule discovery against major scourges such as tuberculosis by building alliances with academic researchers and local partners in the regions of the globe where hundreds of millions are infected, Thomson discovered another challenge worth his industry, one that he believed he and Vertex were well positioned to meet.

  Murcko also found a large role to play in shaping Vertex’s strategic direction without having major managerial responsibilities, operating more within the interstices of Mueller’s new order. On the ever-shifting organizational chart, he remained chief technology officer, a description he chafed at because it invoked wizards whipping up new gadgets. But his larger purpose was to champion “disruptive innovation”: ideas that change things radically by unexpected means.

  “My job,” Murcko says, “was to identify new technology—very broadly defined—but also to evaluate it and bring it into the organization in a way that would provide value. So it isn’t about playing with cool toys. It’s not a sandbox. A lot of people, when they hear the title of chief technology officer within pharma or biotech, they assume it’s the guys who go play with lasers. It’s the guys with beards and suspenders playing with cool toys in the basement. What Peter and I were trying to do is figure out what are critical problems within the whole organization where any kind of new approaches, new technologies can be brought to bear in ways that would shed new light on a problem, make it easier to make certain kinds of decisions, make something go faster—have some material impact. It’s not limited to research. It covers the whole organization.”

  Equally vital was Murcko’s history as Boger’s sidekick and his ability to read Boger’s actions. In a place where everything was debated deeply and head-snapping decisions came down too often with insufficient explanation for why they were made, puzzled scientists across the sites looked to Murcko for understanding and perspective. After Vertex’s own stock swoosh had started in 2000—the nosedive after the biotech bubble popped, the crash of the p38 kinase inhibitor, the layoffs, the limbo of pralnacasan—even longtime Vertexians frequently got anxious. They’d been millionaires during the run-up, and now the company seemed to be sucking wind, or throwing everything behind a molecule that Lilly rejected. Many had trouble filtering out the internal volatility and external noise. They would wander into Murcko’s office early in the morning or late at night for counseling. “We got a little ahead of ourselves,” he advised them.

  “The underlying mission of the company hadn’t changed, the goals hadn’t changed, the leadership hadn’t changed,” he recalls. “What I would tell these people is, ‘So exactly what are you worrying about? Yeah, it’s unsettling, I get it. I don’t like it either. It sucks. But what are you going to do? Do you or don’t you believe that we’re still on track to something really, really useful? If you’ve come to the conclusion that we aren’t going to get there, then go away, leave. Some of us still think this is a game worth playing.’ ”

  Boger’s losing Vertex’s chairmanship was of little consequence in the labs and conference rooms. The lions had been thrown some meat so that they wouldn’t breach the fence. The adult who mattered to the scientists was Mueller, not Sanders. Vertex was vaulting, the Boston Globe wrote in June, “out of its research driven niche into a prominent new role carrying the banner for the idea that new science can turn into real profits.” If anything, the three and a half down years from 9/11 to “twelve of twelve” had been astoundingly successful, producing VX-950 and VX-770, which the FDA now granted fast-track status. The company’s market value had soared as high as $5 billion in March before
falling back by nearly a third. Murcko, like Boger, couldn’t fathom exactly what people were worried about.

  It had been a decade since most Americans first heard the term “drug cocktail.” Combination therapy had turned AIDS into a survivable scourge; you only had to look at Earvin “Magic” Johnson, the former LA Lakers basketball star-turned-entrepreneur brimming with vitality, to see the change. Ever since the first patients starting choking down as many as forty pills per day, the challenge to drugmakers, clinicians, and the FDA was to determine which drugs to combine in which specific subgroups of patients and for how long.

  Though the microbes that cause AIDS and hepatitis C share many similarities—both are RNA viruses that hijack human cells to make more of themselves—they’re vastly different as disease agents and drug targets. HIV inserts itself into host genetic material in the nucleus; HCV doesn’t. Thus, except in a handful of reported cases, HIV can’t be eradicated without killing the host, but HCV can. And so while the goal of treating the AIDS virus is to lower the viral load to the point where it stops infecting new cells—requiring a lifetime of vigilance—the body can be rid of the virus that causes hepatitis C, the patient cured.

  On the other hand, HCV produces trillions of new viruses daily, a thousand times more than HIV, mutating at a much higher rate. And because HIV lasts only a few minutes once it’s exposed to air, it doesn’t spread as easily as HCV, which can last up to sixteen hours—explaining, for instance, why tattooing carries a risk of transmission for HCV but not HIV. Most crucial for drugmakers, HIV resistance arises only under drug pressure, while every patient infected with HCV carries multiple subspecies—a “population of mutants,” Boger calls them—that are resistant before the drug is even there. “To control and wipe out HCV, you had to get every last bugger,” he notes, which is why a cocktail is absolutely needed. Both in the United States and worldwide, four times as many people are infected with HCV than with HIV.