Viehbacher is clear, though, that Gurnet will be founding companies as well as looking outside the red-hot fields like oncology. To find value these days, you have to look outside of the trendiest fields, he says. And you’re also not going to find much in the way of innovation at huge companies like Sanofi.
“My conclusion is that you can’t have truly disruptive thinking inside big organizations,” says Viehbacher. “Everything about the way a big organization is designed is about eliminating disruption.”
In Viehbacher’s view, Big Pharma is still trying to act in the way the old movie studios once operated in Hollywood, with everyone from the stars to writers and stunt men all roped into one big group. Today, he says, movie studios move from project to project, and virtually everyone is a freelancer. In biopharma, he adds, value is found in specializing, and “fixed costs are your enemy.”
He’s right about that disruption problem at big companies, although he raised eyebrows when he said something similar while still employed at a big company. (Sanofi tried to put those comments in the ever-present “broader context” here). A large organization has its own momentum, but even if its magnitude is decent, its vector is pointed in the direction of keeping things the way that they are now. To be sure, that requires finding new drugs – it’s a bit of a Red Queen’s race in this business – but a lot of people would be fine if things just sort of rolled along without too many surprises or changes.
If that was ever a good fit for this industry, it isn’t now. That makes it nerve-wracking to work in it, for sure, because if you feel that your job is really, truly safe then you’re wrong. There are too many unpredictable events for that. I was involved in an interesting conversation the other day about investors in biopharma (and how passionately irrational some of the smaller ones can be), and we agreed that one reason for this is the large number of binary events: the clinical trial worked, or it didn’t. The FDA approved your drug, or it didn’t. You made your expected sales figures, or you didn’t. And those are the expected ones, with dates on the calendar. There are plenty of what’s-that-breaking-out-of-the-cloud-cover events, too. Trial stopped for efficacy! Trial stopped for tox! Early approval! Drug pulled from the market! It’s like playing a board game with piles of real money (and with your career).
So Viehbacher’s right on that point. But I part company with him on his earlier comments (basically, that if he was going to get anything innovative done at Sanofi, that he was going to have to go outside, because no one who wanted to innovate was working at a company like that in the first place). Even large companies have good people working at them – believe it or not! And some of them even have good ideas, too. But it can be harder for them to make headway in a large organization, he is right about that.