I last wrote about Vivek Ramaswamy in the context of his first company (Axovant). That one went public on the hopes for a retread Alzheimer’s drug to work out in Phase III, and if that sounds a little iffy to you, then join a fairly large club. Alzheimer’s is truly the approach-avoidance conflict writ large: from one perspective you have a massive, ever-expanding patient population in wealthy industrialized countries, almost totally unserved by existing therapies and willing to pay handsomely for something that really works. From the other perspective you have a slow-moving disease that’s very difficult to diagnose well, in a heterogeneous patient population that tends to show several comorbidities, giving you a corresponding need for large trial enrollments, but with no good animal models to guide you to the clinic and a clinical success rate that’s basically 0.0%. It’s a high-voltage standoff.
You would never know, to read a lot of Ramaswamy’s press coverage (here’s a recent profile from TechCrunch) that the Axovant drug works through a mechanism that has failed twice in Alzheimer’s clinical trials so far. It has an extremely low chance of working this time, too – if there’s some convincing reason why this latest attempt should succeed where the others have failed, I haven’t heard it. So the risk/reward behind Axovant’s IPO makes no sense to me at all. But that hasn’t slowed the man down: his company Myovant had a big ol’ IPO back in the fall, built on a former Takeda candidate for uterine fibroids. Here’s the latest addition. According to that profile piece, Ramaswamy is building a whole portfolio of companies based on compounds like this:
The idea, explains Ramaswamy, is to create individual companies around each drug or small groupings of candidates that Roivant acquires, then install the scientists who developed the drugs and provide them with big rewards if the drugs prove useful. If the drugs don’t pan out, Roivant will find another place for the scientists — potentially at another company under its umbrella.
Fine; I like not firing people. You wouldn’t know from such articles, though, that there have been (and are) other companies which have been formed around the idea of taking pharma cast-offs and getting them through the clinic (larger companies already try to monetize what they can in their portfolio by partnering or outlicensing, of course). The Medicines Company is one such dealmaker, acquiring and partnering late-stage compounds and trying to get them approved. Outside of the for-profit business model, there are a number of initiatives trying to repurpose or revive older compounds for new diseases.No one so far has been able to take over the world doing this. There are not, unfortunately, many big piles of such candidates sitting around. Most of the shelved compounds were shelved because (a) they did not work, and/or (b) they showed toxicity. You’re going to have to figure a way around those problems before you go back into humans, and that’s not easy. There are a few drugs that have been dropped for business reasons, or were lost or mishandled during a merger or the like, but I don’t think that there are enough of those to make a Ramaswamy drug empire.
From that same profile, I found this to be a bit odd-sounding:
Whether the scheme will work longer term isn’t clear, but it’s easy to appreciate why people like Seely and Shih were drawn to Ramaswamy’s vision. At traditional, top-down pharmaceutical companies, scientists aren’t typically rewarded when a drug they’ve developed becomes a blockbuster, and failed drugs often translate into job cuts.
“It sounds vanilla, but I can’t overstate the importance of re-aligning R&D personnel,” says Ramaswamy of his decentralized approach. “A lot of what you see in conventional pharma R&D is, because [scientists’] jobs are on the line if their projects fail, in many instances, clinical studies aren’t designed to get the answer but instead not get the answer. There’s a kick-the-can mentality.” By addressing that incentive misalignment, he insists, “we’ve stacked the odds in our favor.”
OK, let’s take these one by one. I have seen nothing about just how these new companies are going to reward people if the drug makes it to market. I will also note that people do actually have incentives at other drug companies to get things to market – it sounds stupid to have to say this, but that second paragraph seems to make it necessary. I have no idea what Ramaswamy is talking about when he says that clinical trials are designed to “not get the answer”, and I would welcome some clarification. The only kick-the-can stuff I see is done by small companies that are trolling for some kind of deal or partnership, and they’re taking a very large risk when they do things that way. Otherwise, there’s simply no point for a company to run a clinical trial that is not directly aimed at their business interests. To paraphrase Samuel Johnson, no one but a blockhead ever went into the clinic except for money. It’s damned expensive, and you want to get the best answer you can get in the shortest time it takes to get it.
So I don’t see the misaligned incentives that Ramaswamy does, and how this stacks the odds in his favor is another question. The proteins, cells, and organs that are being targeted in the patients are impervious to bold statements and applause in the press. They don’t care what your business model is, or how your IPO went. They will do what they do, and what they do most of the time, unfortunately, is not what we want them to. In Alzheimer’s, they let us down pretty near every time. I don’t see anything that Vivek Ramaswamy is doing that will change that.