The Antidote: Inside the World of New Pharma (9 page)

Indignation, Boger knew, is a friend, especially to an underdog. Vertex pressed ahead against HCV. Tung and the chemists began
developing new scaffolds and “warheads”—chemical groups that seek and bind to specific subareas of the active site—against the protease. Kwong and her colleagues jump-started projects in polymerase and helicase. A month later, Vertex signed a deal with German pharmaceutical maker Schering A.G. to develop drugs to help regenerate nerves damaged by neurological diseases: $28 million up front over five years, plus milestone payments of $60 million. In October, Vertex and HMR announced that they had begun signing up patients for the first clinical trial for an orally administered small-molecule inhibitor of ICE, VX-740. First in humans with a new pill designed with atomic precision against an untested but highly promising target, and with a strong global partner and US commercial rights, Boger was right where he wanted to be.

Boger intended Vertex to innovate at every level, in every function. As the company began to brand itself as the new name in AIDS medicines, its direct-to-consumer advertising grabbed attention. Almost a year before it expected to receive approval, it wheat-pasted posters in downtown neighborhoods nationwide alongside pitches for Lilith Fair and Levi’s that screamed “Selling Hope Is Easy in an Epidemic” and “Ambition Will Cure AIDS Before Compassion Does.” One ad appropriated the Silence = Death symbol of ACT UP, the militant patient-advocacy group that led the protests over AZT. Another featured the NAMES quilt, the survivor community’s tribute to its beloved dead. Bart Henderson, Vertex’s chief of marketing, explained that the ads were meant to get people talking about the need to “push beyond the status quo to develop better drugs.” Merck’s ads for Crixivan showed, by comparison, an African-American man climbing a mountain, reaching the summit, and gazing at the view below. Its headline: “In the Battle Against HIV, There’s a Change in Outlook.”

Boger wasn’t just promoting a drug; he was promoting ambition as a superior virtue. Radical improvement—and the drive and tenacity to make it happen—was Vertex’s paramount value. Boger wanted to infuse its public image with the idea that a revolution in medicine could be led by a coalition of advanced drugmakers and patients, together demanding more of the pharmaceutical industry. In using guerrilla marketing to
define Vertex’s corporate identity as its first product reached patients, he also was broadcasting his own personal ambition to “
make better drugs, faster . . . become Merck, but better.”

In April 1999, two weeks after the Dow index closed above 10,000 for the first time, Glaxo received FDA approval for VX-478, now called Agenerase (amprenavir). Taken by mouth, an adult dosage was eight 150-milligram soft gel capsules twice a day. Fifth and last to market among the original HIV protease inhibitors, the medicine was well tolerated. With the need for flexible dosing—patients on triple-drug regimens took up to thirty pills a day, at specific times, some with food, some without, often having to wake themselves at night—its long half-life gave Glaxo a commercial advantage, with doctors trying to streamline their patients’ regimens in hopes of improving their compliance. The problem was the gel capsules. When Aldrich first saw them tumbling out of a pickle-jar-sized bottle containing a four-week supply, he doubted he could swallow them. Glaxo had been unable to come up with a more efficient way of mixing the active drug with other chemicals into a medicinal product that was stable, so Vertex committed itself to producing a follow-up compound that was smaller and better featured for a drug.

“So we ended up with these horse pills, and we said, ‘Okay, we don’t have any expertise in formulation but we’ll make another molecule that even you can formulate,’ ” Boger recalls. “They just let themselves get beat in the marketplace even though we had the better compound. They disappointed us. It was more dispiriting than I thought. It wasn’t just the money; the fact that the royalties were half of what they should have been to us. But because Agenerase and its follow-up didn’t get to be the number one compound, we didn’t get the credit for having designed, in the face of the entire industry, the best molecule.”

Few at Vertex wallowed in disappointment. After ten years in business, the company was well on track, even if the anticipated shortfall from Agenerase meant it would have to burn more cash and limit the number of new projects and hires. There was too much else to savor. The company threw itself a fitting launch party.

On a warm Saturday in May, nearly three hundred employees and
their spouses and dates assembled in the company parking lot and boarded a line of buses that stretched around the block, their windows papered over so the partygoers couldn’t tell where they were going. The buses deposited them at the Boston Cyclorama, a hulking brick, steel, and glass rotunda built after the Civil War to house a panorama of the Battle of Gettysburg, where there were potted palm trees and pounding music. The bartenders were drag queens, food didn’t arrive until midnight, there were a couple of fistfights involving guests; a short film spoof starring Boger and Sato and directed by the up-and-coming documentarian Nathaniel Kahn,
The Lip Balm Incident
, was shown. Some pot smokers felt encouraged to light up. Many would remember the party as among the best they’d ever attended, though it prompted a small human resources fiasco. The company faced numerous employee complaints: parents of young children unable to phone babysitters to say where they were going because they didn’t know; people, mostly from other countries, put off by the vamping queens.

Aldrich felt fortunate to have ushered the company this far, adding more and more revenue streams—real and imputed—to the balance sheet. One welcome consequence of becoming more secure financially while having several programs in development was that the business was in a position to cut its losses sooner than later: it could afford to be truer both to the science and to investors. To Aldrich, this meant not having to prop up less than desirable drug candidates. More and more biotech companies, confronted with onerous burn rates, disappointing clinical results, and slender portfolios were now pursuing questionable therapies longer and longer in the face of ambiguous or even negative clinical data. Such desperation, he thought, inflated expectations ruinously, making the inevitable failures that much harder in the end.

Aldrich’s business development strategy centered on building out the company’s clinical and commercial arms, a task that became thornier as its original partners were devoured by global players. Renegotiations were expected, and, indeed, made sense for both sides. He was surprised that he still hadn’t heard from HMR, Roussel’s global parent, about the ICE program, expecting someone there to wake up and realize that Vertex had US rights. He says:

They hadn’t connected the dots, and finally they did. I got this nice fax from the senior VP for business development saying that as a multinational company HMR intended to commercialize its products itself. So I drafted a note that basically said, “We’re really pleased with the collaboration, and we’re happy to go forward. As it stands, there are no problems with it from our perspective.” I remember we put it over the fax machine and said, “This is gonna be interesting.” Within an hour we got back this stream of consciousness: “We
must
have this, we
must
have that!” Guy totally lost his cool.

We had a lot of leverage and we used it. We actually took them up to the brink of a deal where we would have shared control of North America. They could hardly stomach it but they went along with that for a long time. Then we finally said at the end, “There’s an alternative,
but
it’s expensive: twenty million dollars immediately, give us all these milestones, pay for our sales force, but you can be in charge of the launch in North America.” They jumped at that, since they’d been looking into the maw of shared control, which they hated.

Disputes, lawyers say, settle for the other guy’s price. Vertex’s business, like its science, revolved around opportunity. With a best-case horizon of three to five years before VX-740 might make it to market, Aldrich settled for immediate cash and ongoing support over any potential windfall if and when the drug would be launched. Such was the innovator’s dilemma in biotech: you needed dozens of projects to make it to profitability, but in order to generate more projects you were forced again and again to surrender most of their value before you knew if your drug worked. Without proof of concept, it was anyone’s guess what a molecule was worth, so deals were sized to fit the competing needs of the partners. In the end, Aldrich extracted up to $206 million in potential licensing fees and milestone payments—provided HMR commercialized VX-740 for rheumatoid arthritis and two additional indications—but these were so-called BioBucks, contingent upon a staggering array of optimal results, and thus as sketchy and evanescent as they sound.

Vertex had a second approach to rheumatoid arthritis that targeted a different enzyme: p38 mitogen-activated protein (MAP) kinase. Kinases had been discovered in recent years to regulate the molecular traffic inside cells that signals them to function, grow, change, and reproduce. Infinitesimal stoplights, so to speak, they switch on and off billions of times per second, letting some messages through, stopping others. Being so deeply implicated in such a vast expanse of basic human biology, and thus disease areas, made kinases both immensely attractive and daunting as drug targets. As the race to solve the genome accelerated to its conclusion, spurred on by the entry of bio-entrepreneur Craig Venter and his gene sequencing company Celera Genomics, it was now recognized that there were about five hundred kinases, give or take a handful. Labs competed fiercely to determine what they did—which ones made promising targets for which diseases—and how to disrupt them. Their premier screening tool was crude but often effective, a bioengineered mouse with the individual gene deleted so that researchers could observe how not having the gene affected rodents: mouse knockouts.

P38 kinase triggers a molecular cascade that causes acute and chronic inflammation, and inhibiting it had been shown to block disease progression in animal models of both rheumatoid arthritis and stroke. In mid-1999 Vertex began clinical trials of VX-745, the first p38 inhibitor tested in humans. Expectations leapt within the company, not just because the discovery process had been remarkably quick and efficient, but because of Vertex’s exceptional commercial position. Its development partner in the Far East was Kissei, its collaborator in HIV. Vertex, advancing for the first time with a potential billion-dollar drug on its hands, owned the rest of the world.

Seeking to leverage what the company had learned from the project, much as it did with HIV and HCV, biologist Michael Su began exploring other protein kinase targets. The traditional pharmaceutical view of kinases held that, like proteases, they were too hard to inhibit without inadvertently hitting closely related members of the same family, causing sufficient unwanted side effects to inevitably—invariably, it seemed—doom them as drugs. But Su argued that p38 showed that Vertex was
uniquely situated to strike a blow against that orthodoxy, exploiting kinases as a class by compiling data on all the known subtypes and delineating them on an atom-by-atom basis. Individual kinases now were generating hundreds of research papers each. Publication of the entire genome could only ratchet up the science, competition, knowledge base, and business interest in them all.

“We began to think we could tackle the whole gene family,” Murcko recalls. It was a logical next step but also a sharp leap in scale and scope, steep even by company standards. “In typical Vertex fashion, we thought, ‘Why mess around with a few targets when you can just do all five hundred?’ ” They all saw the potential. The real question was how to take what they’d learned from one target and extend that to the next. At the same time, with almost no understanding of the roles particular kinases played in which diseases—much less the cellular havoc that inhibiting them might induce—the idea held substantial downside risk. Not everyone was sold, but the logic for taking a shot was compelling and swiftly gathered momentum. Murcko: