A startup spun out of Pfizer just got $103 million to develop experimental drugs Big Pharma won't (PFE)
REUTERS/Lucas Jackson
There's a popular theory about the limitations of global pharma companies: For all their skyscrapers and strategy reviews and private jets, they're simply too knotted up in bureaucracy to realize how many great drugs are gathering dust in their vaults.
Now, the biggest of Big Pharma is out do do something about that. Pfizer, home to nearly 100,000 employees, on Monday announced the launch of a six-person startup to develop new drugs.
This may seem odd in that Pfizer spends literally billions of dollars a year advancing treatments of its own. But the company's executives say they simply don't have the resources to advance all the promising compounds that catch their eye — and they believe an independent company with the scrappy ethos of a startup will be in a better position to take on that task.
"The problem is very simple: There's too much good science and not enough resources to advance it," said Dr. Lara Sullivan, a former Pfizer vice president who is now leading the startup.
"If you want to see grown men cry, stop a program for budget reasons, not based on science," Sullivan said.
The new spinoff, SpringWorks Therapeutics, is getting started with $103 million from investors including Pfizer and Bain. It will focus at first on four Pfizer-invented therapies, for conditions including post-traumatic stress disorder and rare forms of cancer. All are already in clinical trials. The two most advanced therapies, targeting tumors found on connective tissue and nerves, will advance to the final stage of development in the coming year.
SpringWorks, which will be based in New York, also plans to scour the pipelines of other pharma companies for compounds that have been set aside for lack of resources, hoping to license some of them for further testing.
It's a business idea that has been gaining steam of late.
Roivant Sciences, founded by an ex-hedge fund manager in 2014, has built a cottage industry on the same principle, licensing unwanted therapies from the likes of GlaxoSmithKline and Takeda and then launching small startups to test them.
BridgeBio Pharma, established in 2015, takes a similar approach, searching academia and pharma alike for early-stage projects in the field of inherited disease. "We have what we call a better-owner model," CEO Neil Kumar said. "We try to advance things as far as possible until we're clearly not the best owner for the asset."
The concept of scavenging for waylaid gems is considered so promising that Roivant has raised more than $1 billion to widen its search. Its 32-year-old founder, Vivek Ramaswamy, landed on the cover of Forbes, and two Roivant spinoffs pulled off a pair of biotech's largest-ever Wall Street debuts.
Neither Roivant nor BridgeBio, however, has yet brought a drug to market.
And they're dogged by the same questions that will follow SpringWorks: If these discarded compounds are so promising, why were they discarded in the first place? And how can a startup push them along better than a multinational heavyweight?
"What I'd say is that from the ground up we're different," said Saqib Islam, SpringWorks' chief financial officer and chief business officer.
The company doesn't intend to push for quick-turnaround returns on investment, he said. And it plans to work alongside the companies that originally invented or discovered each compound — such as Pfizer — to take advantage of in-house expertise.
"We think that's the distinction that will draw some attention from those looking to partner their assets going forward," Islam said.
Pfizer's decision to wade into the space follows years of navel-gazing at major pharma companies, which have long envied the agility and nothing-to-lose gusto of biotech startups.
Conscious of how the comforts of corporate largess can be counterproductive, companies including GlaxoSmithKline and AstraZeneca in the past sought to create mini startups within their own walls. But though they tried to replicate the feverish immediacy of startup culture, that proved almost impossible when the employees knew they were operating above the multibillion-dollar safety net of a huge pharma company.
Pfizer's move to create an independent company — deliberately safety net-free — suggests the biggest wheels of the drug industry have learned an important lesson, said Bernard Munos, a former R&D executive at Eli Lilly who now consults for pharma companies.
"I think the industry has realized that they have not really been true to their words in terms of embracing innovation," Munos said. "So this is very encouraging, frankly, especially coming from Pfizer."
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