Sleepless in Seattle

Yes it’s a cliché’ title, but this first post is actually about Seattle. Well, at least the evolution of the biotech and drug development ecosystem here in Seattle and the Northwest. That’s not a very catchy title and maybe I’m not losing sleep over it, but it’s something I’ve been thinking about quite a bit.

Let’s back up…

The reason I’ve been thinking about biotech and drug development in Seattle is because I’ve lived it for the last 20 years. Until last summer, I worked in the Inflammation Research Department at Amgen’s Seattle waterfront campus. Not only was it a nice location to work but I was also fortunate to work alongside talented colleagues that I respected and admired. 

The legacy of Amgen’s presence in Seattle actually traces back to Immunex, one of Seattle’s original biotech successes and home to my first industry experience. Immunex was very much a discovery-based biotech and would be an anomaly today with its heavy emphasis on Research (the R in R&D) compared to Development. Immunex had world class immunologists and some of the best gene cloners in the industry. Countless co-stimulatory molecules, cytokines and immune receptors were cloned in the downtown Seattle labs on University Street.

One discovery in particular-  the receptor for the inflammatory cytokine TNF, eventually became the drug known as Enbrel®, a first in class inhibitor of TNF used to treat rheumatoid arthritis and psoriasis. Enbrel® now brings Amgen $ billions in revenue and was one of the main reasons for acquiring Immunex in 2002

After the merger, Amgen’s Seattle campus thrived for over 10 years and housed research departments focused on immunology, inflammation and oncology as well as strong translational science groups. The site is also where much of Amgen’s innovation in process development and bio-manufacturing took place. As discovery scientists responsible for building the early pipeline, we were fortunate to be surrounded by this diversity of expertise. I’m convinced this kind of hands-on experience working side by side with fully integrated project teams is the best way to learn drug development.

In late 2014, Amgen decided to ’shrink its geographic footprint’ and subsequently closed all operations in Seattle and Bothell. The Washington sites basically fell victim to an ongoing trend in the biopharma industry of consolidation-primarily to San Francisco and Cambridge/Boston. It was a blow to the many displaced scientists and to Seattle’s life science ecosystem. On the other hand, it also added to the pool of experienced researchers to help populate newer biotech operations in the area. It also led to a new home for Expedia. Time will tell if the quality and cost of living in the hubs of San Francisco and Boston will support sustained consolidation or whether companies will begin to reconsider the value of geographic diversity.

So, where does that leave biotech in Seattle?

Obviously the region's identity is determined by much more than Amgen or any one company, but large anchor campuses do play an important role in maintaining a stable and trained workforce. I  believe Seattle biotech is now in a reset period. For example, Juno is rapidly growing and Celgene has established local operations. Novo Nordisk still has a research presence in Seattle, but jobs have been lost and the focus has shifted. We also have lots of very small startups, some with only a few employees, including some of my former colleagues. It will be important for their science to succeed but they’ll also need support from both investors and the community in order to reach the end of their runways.

Larger trends...

Besides geographic moves, other macro trends are exerting selective pressure on the evolution of global drug development and commercialization. One of them is the mounting pressures from pharma investors to spend less money on research. This is another reason Amgen made cuts and why Immunex would never be tolerated by today’s financial models. Other trends shaping our industry, such as challenges of research reproducibility and the hot political issue of drug pricing have received considerable attention elsewhere and I'll not try to discus them further in this post. One important larger trend that I will discuss is that the industry as a whole is becoming more reliant on external discovery to feed drug pipelines. Some of this comes from that investor pressure to focus less on internal research. Some of it comes from the fact that the low hanging fruit, if there is such a thing, has been picked.  It’s just gotten tougher and more expensive to advance new drugs that are novel, effective, and competitive with what’s already available (and likely cheaper if they happen to be available as generics). An unfortunate consequence of this trend is that there are fewer opportunities for scientists to learn drug development by actually doing it within a fully integrated organization. As I said before, this is the best way to learn these skills and it’s unclear if the small and lean startups will be able to substitute.  

Opportunity…

There’s a positive consequence to this trend, though, and that is the opportunity being created for the discovery providers. Besides small startups, these are the research universities, institutes and their associated licensing and commercialization offices and they're beginning to play a larger role in filling the early pipelines of large biopharma. After all, those new targets have to come from somewhere. We’re already seeing competition for high quality academic discoveries and the bidding wars are significantly driving up the value of early discovery and associated intellectual property. Fred Hutchinson Cancer Research Center in Seattle and Memorial Sloan Kettering in New York both played instrumental roles in creating the CAR-T immuno oncology company Juno Therapeutics, which quickly raised over $300 million and a recent $20 million deal gives Merck access to early stage anti-cancer compounds developed at Harvard (and advanced from hit to lead with help from an internal incubator). I believe we'll continue to see more of these lucrative deals as this trend continues, especially as the discovery providers get better at maturing their assets a little further themselves.

The good news is that the Northwest is still very much part of this ecosystem.

Seattle is home to world class research centers such as UW, FHCRC, Benaroya Research Institute and many others. Not just in Seattle either. For example, WSU has approval to build a second medical school in Eastern Washington. Its future home, the new Riverpoint campus in Spokane, already houses WSU’s Pharmaceutical and Biomedical Sciences programs and there's considerable community support for developing life science innovation in Spokane. Across the northern border are other excellent research institutes. Besides UBC, Vancouver is home to the CDRD, a fully integrated translational science center working to advance Canada’s academic discoveries towards commercialization. The CDRD has already spun out 5 companies, including Sitka Biopharma and Kairos Therapeutics. Collectively then, biomedical research, including here in the Pacific Northwest, is healthy and well-positioned to contribute to future drug development innovation. 

So maybe that’s why I’m not losing sleep over all these changes affecting my industry. This is a new start for me too and I’m excited by the opportunities I spoke of. I believe that with my scientific background and the translational skills I learned doing drug development I can help discovery providers bridge the gap and move early discoveries closer to becoming new therapeutics. And along the way, help them become more valuable. It’s not a one-way bridge either. I look forward to helping my former colleagues at biopharma companies learn about and connect with the breakthrough discoveries that I know are out there.

 

What do you think of these trends? I'd love to hear from you.