GSAS Harvard Biotechnology Club

Vertex Pharmaceuticals, Inc.
130 Waverly Street
Cambridge, MA 02139
(617) 577-6000

Vertex Pharmaceuticals is involved in the discovery, development and commercialization of novel, small molecule pharmaceuticals to treat viral diseases, autoimmune and inflammatory diseases, neurological disorders and cancer. As a leader in structure-based drug design, Vertex has pioneered the use of structural biology approaches and information technologies to develop these pharmaceutical agents. Vertex has an impressive track record for drug development, with one drug on the market and eight pharmacological compounds currently in clinical trials. Agenerase, an orally delivered HIV protease inhibitor, is commercially available for the treatment of HIV infection and AIDS.

Vertex differentiates itself from other biotechnology companies in several respects. Vertex emphasizes structure-based drug design, making use of computer models for generation/selection of chemical enzyme inhibitors, including prediction of pharmacokinetic properties.

The company focuses exclusively on small-molecule drugs, in contrast to many biotechnology companies that pursue protein drugs (i.e. growth factors and monoclonal antibodies), or a mixture of protein and small molecule therapeutics. Vertex makes extensive use of X-ray crystallographic and NMR data of an enzyme's active site to design lead compounds. In turn, this will allow for the design of multiple chemical scaffolds capable of binding of proteins in a given family, and achieve rapid identification of chemical side chains linked to these scaffolds that provide specificity to a group of related proteins. The emphasis on protein families is significant, as knowledge gained in studying one protein family member provides a jump start on studies of other members (both on the structural and drug design initiatives), and is critical for drug specificity studies. Vertex has assembled large research programs to focus on the caspase and p38 kinase families to date.

Recognizing the importance of sequence information in identification of potential drug targets, Vertex has established an agreement with Incyte Pharmaceuticals to access to their Lifeseq Gold database. In addition, Vertex has an agreement with Harvard Medical School genomic and proteomic resources and technologies.

Of the total employee population, nearly 70% are part of research and development. Therefore it is not surprising that Vertex relies not only on the intelligence and inventiveness of their scientists, but also encourages their employees to be outspoken (see interviews below). Communication is considered vital between all scientific groups, and the company philosophy emphasizes a collaborative and cooperative environment. These features allow scientists to be more effective and to contribute to the process of improved efficiency in the drug development process.

Vertex has an ambitious R&D program, ranging from immunosuppressives to cancer chemotherapy and treatment of neurological disorders. Vertex strives to submit two to three new drug applications per year. Although focused on the development of smalll-molecule therapeutics, the Vertex platform technology can be applied to diverse areas of medical interest, creating many potential competitors.

For HIV protease inhibitors, Vertex competes directly with Merck & Co, Inc., Abbott Laboratories, Inc., Hoffmann-La Roche, and Warner Lambert. The anti-inflammatory market is likewise densely populated, where VX740 may eventually compete with the Immunex blockbuster treatment for rheumatoid arthritis, Enbrel. Chiron has alleged infringement by Vertex and Eli Lilly of three US patents issued to Chiron in the heptatis C protease field. Owing to extensive resources and experience, big pharmaceutical companies are the stiffest competitors for Vertex (i.e. Glaxo, Lilly, Merck, Pfizer, Johnson and Johnson, etc). However, through extensive partnerships, Vertex can maintain competitiveness with big pharma on multiple fronts.

Boger Topic Index		Sato Topic Index
Getting Started Vision of Vertex Working with Big Pharma Intellectual Property Working at Vertex Breaking into Business		From Academia to Industry Working at Vertex Project Development Working with Big Pharma Looking Ahead

Title: Chairman President and CEO, Vertex Pharmaceuticals
Age: 47
Background: Dr. Boger received his B.A. in Chemistry and Philosophy from Wesleyan University in Connecticut. He went on to complete his M.S. and Ph.D. degrees in Chemistry from Harvard University. His postodoctoral training was conducted with the Nobel Prize Laureate for chemistry Jean-Marie Lehn in Strasbourg France.

For the 10 years preceding his founding of Vertex, Dr. Boger headed the Biophysical Chemistry and Medicinal Chemistry of Immunolgy and Inflammation departments at the research labs of Merck, Sharp & Dohme where he held the title of Senior Director of Basic Chemistry. While at Merck he pioneered structure-based drug design for drug discovery programs and established his abilities to apply computer modeling in chemical drug design.

I franchised a lemonade stand [when I was young]. Not only ran it, but franchised it. There are debates on [how I acquired my knowledge of business].

I was a lab rat. It was a matter of moving fairly quickly to a lab research management position. And the reason I was interested in that was that my mind raced ahead of my ability to do experiments. So, I liked the idea of leveraging that with people, always taking a very active role myself. Until I stopped working in the chemistry lab, I was always the one in my group who did the really dangerous, big experiments. I really liked doing those. The ones that can really blow me up completely, those are the ones I would do. It’s not a matter of trying to get away from that, but it was a matter of leveraging, having enough, learning the trade, and then …to starting a company, because I could do it faster.

Q: How would you describe how Vertex differs from other biotech companies in terms of philosophy and hierchy?

I think the most prevalent (pervasive) distinguishing feature is that we are a drug company not just by aspiration, but by genesis… The company was founded with a large number of people from the pharmaceutical industry who had in various capacities understood what a drug is. I remember saying … to venture capitalists when they asked 11 years ago "Well, what’s going to make you special?" And I gave the answer "I know what a drug is". And they would look at me in an incredibly thoughtful but somewhat hopeful manner that I would keep talking. And sometimes I wouldn’t. But it’s an incredibly important notion, and so we put together the company consistently with an eye on the product… And I would say that is a distinctive feature [that Vertex has over] many, not all, but many of the companies we are compared to.

That doesn’t automatically mean we are better, but it is a distinguishing feature… our business is based upon the realities of the industry. Nobody who knows anything about the pharmaceutical industry would take the ‘bet the company on your favorite project’ approach, because that’s doomed to failure. You see it over and over again. You see people kind of urging companies to do that, usually investors who want to balance their own portfolio, but don’t particularly want you to balance yours.

One of the things that was clear to me and is still clear is that, in a process that will take 5-15 years to come up with a product, hopefully more like 5, information flow is going to be key, and barriers to information flows are bad things. . Organic to the company is the notion that you are undoubtedely responsible for everything. There is a center of responsibility … but it doesn’t have an edge. That’s the way everyone should think about their job [at Vertex]. It has a center, but it shouldn’t have an edge… [At many companies], people actually don’t cooperate, because it taints the purity of their contribution. And as loony as that sounds, it actually is status quo in a lot of places. That’s a barrier. And so what they do sometimes, they even go to an extreme and start to make a virtue out of it. We do this alone, or we can put that in the center of the universe. And, you know what, those are almost always doomed to failure, because it’s never the best way to do things. So they set up the problem that way, and they prove themselves wrong… I think that everybody can think of a case where this has happened.

Q: Vertex is known for its structure-based approach to drug design. Can you talk about that and why do you think there has been so much resistance to its acceptance?

It comes back to an appreciation for what the process is. And to me, it’s always been about what types of information could be brought to bear on a problem, and if information can be brought to bear on a problem at the time you make an influential decision, then it should be… And we’re not out to prove that this technology is better than that technology. When I get asked, can you prove that your X-ray structure helped the process?", I’m really not interested in that question. But I am interested in bringing up a track record of success that says, whatever we’re doing, the organic process of what we’re doing is more successful. And then if it’s described as rational drug design, I guess it is--in a broader sense of rational--meaning it’s based upon information and a process.

One of the misconceptions is that we use our computational chemistry entirely or even mostly for binding. That’s not true. [Take] things as hard to get your hands around analytically as blood-brain barrier penetration. We have computational algorithms where, literally, if you draw a structure on the board, we can predict whether it will go through the blood brain barrier, without doing any other intermediate interactions. They’re quite accurate. We’re adding whole areas of decision algorithms continually to layer these more complex decisions onto earlier decisions of the process. You’re never going to get an experimental process to look at milllions of compounds in a blood brain barrier penetration assay, but you can get a computational to look at millions of compounds for that question.

I think you can measure it a number of ways. I think that our large aspiration is to be the most influential pharmaceutical company. One way to reach that goal is to be measured in market cap and number of drugs on the market, and all those other things. I think to reach that goal, we have to transform the definition of pharmaceutical company.

Our goal is not to be the #1 pharmaceutical company and to be exactly like Pfizer, because if Pfizer wants to be exactly like Pfizer, they won’t be #1. But [our goal is] to be the most influential pharmaceutical company.

Yeah, we have looked at it on occasion. Our surveillance is constantly up. So far, it hasn’t come to be.

Q: What would be your response to another company that wants to acquire Vertex?

I think the mission [of being the most influential company] is attainable. Therefore, it would take a lot for me to give up that mission. Not me personally, but speaking for the company’s possibilities… I think if we were approached by someone who wanted to acquire us, I would say "How’s that going to help us get to be the #1 pharmaceutical company?"

Q: How large does a product market have to be before you decide that it is worth developing a drug for it?

I think we prospectively look on it exactly the way the largest pharmaceutical companies do in the numbers you hear tossed around… if you really don’t think you can attain $500 million in sales, then you probably shouldn’t be going about the process. .. [we tend to pursue] reasonably prevalent disease conditions. They don’t have to be the most common, but they have to be areas where we can develop drugs with significant advantages over existing therapies.

Q: Vertex seems successful at striking deals with Big pharma. How do you divvy up the leads with other companies that you are in agreement with?

There are no two of our agreements that are exactly alike. I can speak to the Novartis agreement. There are a lot of unusual things about that agreement, favorably unusual for us. One of the more unusual things is that Novartis has virtually no control over the research and early development process… It’s our choice [as to] which kinases to work on, and which disease categories to concentrate on, which compounds to select, and what the criterion for selection is. And that agreement has us taking compounds all the way into man and into the earliest proof of concept studies in man. That agreement has them able to take up the development at the clinical proof of concept point, and they can elect to do that and continue the development with their dollars and expertise… They have a very big investment, not only of dollars, but they’ve ceded the kinase area for the next six years to us. That’s a big cede.

If they [are not interested in pursuing a lead], it reverts to us. A lot of these agreements are structured so that if the partner doesn’t take it, they still get to hold it, keep it captive. In this case,you really have to listen to them, otherwise you can’t extract any value from it.

I think our goal is to deliver more drugs than we are committed to delivering to them. We hope to overperform. Even so, I think we’ll both be listening to each other’s needs and opinions…it really is a partnership among equals, this is how it is constructed.

Q: How do you decide on striking a deal with pharma that will provide funds now in exchange for potential royalties later, instead of looking to private or public equity offerings?

It’s interesting. I don’t think it’s as black and white. I’ll give an example in an another agreement. Our agreement with Aventis is on our inflammation compound VX-740, which is in Phase II studies in rheumatoid arthritis (RA) this year and larger Phase II studies. The compound has the potential to be applied not just in RA where we’re studying it right now and where they’re studying it and where they’re paying for the trials. [But the compound also has potential in] osteoarthritis and a number of other diseases…

Quite literally, if we hadn’t done that deal, I do not know how we would have studied the compound in osteoarthritis, because the trials would be not just expensive, its not just [about] money … but the trials are logistically very difficult to run. And in the end, the drug would have to be sold through general practitioners, so if you thought about selling it yourself in the US, you would need 5000 sales people for a start, and you need them on the ground. I think the total dollar return is larger by having the Aventis deal, assuming it does get developed for osteoarthritis, then if we hadn’t done the deal. So if you say, "Did you give up something to Aventis?", well it was a net positive. Absolute positive. Now I don’t even to have to go to the risk/reward sharing. They also have all the risk. But that’s almost a bonus in that case. I’ve not only off-loaded all the financial risk, but I think I’ve also increased the potential market by two to threefold, and in that deal still retained 30-40% of the margin of everything that’s done. That's an easy equation. I’m ahead on an absolute basis.

Q: And do you typically approach several companies before signing this type of a deal?

Every deal we’ve done has been different… In some cases, we’ve talked to lots of people in simultaneous business discussions. Making a business deal is all about understanding the other person's needs. If you quickly find out about the person on the other side of the table, and can put yourself in their chair and find out what’s valuable to them…and you find that what you can bring to a collaboration or a deal is very high from their perspective, then you have a higher likelihood of making it… I often hear that, "If you come into a business arrangement, we’ll bring this of value". Well this same "thing" you bring of value has very different value to different people. It’s more important to assess the value to the other person rather than it is to think of it as a block of gold. That’s the way we look at the business development.

I think the biotech/pharma distinction is pretty artificial to begin with. My stand up comedy definition of a biotech company is a company whose market cap is not supported by sales. In that definition, every biotech company wants to be a pharma company. And indeed, some of the large pharmaceutical companies describe themselves as biopharmaceutical companies, because they want to invest themselves with the positive trendy scientific on-the-edge image of biotech… Right now, it looks like there’s quite a mass in the ‘biotech companies’ by my definition. Amgen’s not a biotech company by my definition, but there are only a couple of others that are not. And so the total of the biotech companies whose market caps are not supported by sales is pretty massive.

But maybe a different way of thinking about it is, will there be a continual role for smaller entrepreneurial parts of the pharmaceutical industry, or is this some sort of just historical transition? I think there will always be a role for [biotech]... I can see that I’ll be glad that there are new biotech companies starting up…I don’t necessarily want to go from the nascent technology to in-house, with no intermediate. There’s a role for incubating new ways of doing things, not just a narrow technology, but even ways of looking at a problem, ways of approaching a therapeutic area, ways of approaching a diagnostic modality… it won’t be done well if they go from a single person's mind to a larger company. There will always be a role for [biotech companies].

Patents are constructed in layers. If you’re clever about constructing any patent claim, you always construct it in layers of defense. So you always have claim one, which is the biggest nest, and you nest them exactly with the intent of, what if I lost this one, what do I have left.

I don’t depend upon a new type or category of intellectual property. I just note that I seem to be able to get some new categories because of the way we’re actually generating information.

Q: Has Vertex been able to find a balance between proprietary knowledge and allowing its scientists to publish?

I think we have a pretty good balance. If you run literature searches, you’ll find that we publish reasonably avidly, especially in comparison to our size. We publish in specialty journals, as well as some of the more general scientific journals such as Cell, Nature, and Science. I tend to look at those different publication areas a bit differently. If you’re talking about a specialty journal, the value to Vertex is mostly to the scientists involved, to keep them sharp and to keep them connected to their communities. I tend to look at the higher profile publications a little bit differently…We tend to be very aggressive in those cases, and tend to want to use those occasions to let people know that we’re going to dominate in that field. It’s a more studiously offensive weapon. We encourage both kinds of publication.

It’s not so unusual in the big pharma companies [to find CEOs with a Ph.D. or M.D.]. During most of my career at Merck, the head of Merck was Roy Vagelos, who called the shots in research. And he didn’t call the shots in business, but acted as a bridge between two aspects of the organization. And I thought "that’s pretty attractive". [Therefore] I sort of create the role of what I do according to what I am interested in. It’s my own perk.

It’s a very supportive environment for people who are confident. If you’re very confident about what you are good at, and honest about what you don’t know, you don’t have to pretend around here. If you’re not sure about what you are good at, to be forceful about it, this is not a good place.

Being interviewed at Vertex is a daunting process… you’re very likely [to be asked] during your first interview day to talk intelligently to one or more people way outside your area of expertise. That’s not an accident, because even if you’re spot-on with people that are right in your area of expertise, and you’re just uncomfortable outside of that, you just aren’t going to fit in here well.

We hire people with experience. We have some new people out of school, but for the first couple years of the company’s history with the very rarest of exceptions, we didn’t hire anybody who didn’t have 3-10 years of experience in the industry. As we got little bit bigger, and we started to be able to afford to relax that a bit, and start enlarging that scope.

Q: What are the opportunities for someone without industry experience at Vertex?

It could be anything. We’re big enough now that people without experience would not have one entry place. It could be on the business or any of our science sides.

[For those interested in business opportunities but lacking experience:] First of all, I ask them if they’re sure they really want to do that, because I hear it a lot… It’s useful to make sure that you’re talking to people who [are in those jobs], to know what it really is. Having said that, that’s an area where you do need the bootstrap somehow. One of the things we’ve done and I know that a lot of other companies do is that we take on summer interns in the science areas and the business side. Those are really good opportunities.

Consulting is a possibility [for those interested in business positions in biotech], and it’s a pretty reasonable one. My advice to someone going through the consulting side would be don’t spend too much time doing that. I think you can probably get 95% of the benefit in 18 months to 2 years, and then maybe the curve then starts to go in the other direction.

Q: What advice would you give scientists seeking to transition into business?

I know there is a lot of excitement, and I think it is all justified, from folks who are finishing or are even in the middle of their education through totally the scientific path, to say "I really want to apply this to business, because I am really excited by that aspect". Great. Most of those people should consider actually applying the science first, in a business. Then, they’ll first of all find out more about the business that they’re interested in, and they may be more valuable as business people from actually having a little bit of the practical science experience in the business... I think it might be very valuable to be a little more operational on the science side, even still holding the goal [of transitioning to] the business side… Then, within that business or another one, find a transition to the business side.

Name: Vicki Sato, Ph.D.
Title: Chief Scientific Officer, Vertex Pharmaceuticals
Age: 50
Background: Dr. Sato received an A.B. in biology from Radcliffe College, and completed her A.M. and Ph.D.degrees in biology from Harvard University. Her post-doctoral research covered chemistry and biology at UC Berkeley and Stanford Medical School. As associate professor in Biology at Harvard University she conducted research on the development and regulation of the immune system. Dr. Sato joined Biogen, Inc. in 1984 and was appointed to a senior research post in 1988.

In 1992, Dr. Sato joined Vertex as Vice President, CSO, and Chairman of the Scientific Advisory Board and currently is senior vice president of research and development in addition to her roles as CSO and advisory board chair.

I went to graduate school, fully expecting that I would be an academic. Because that’s what you did – besides teaching biology there wasn’t anything else. Certainly the idea of working for a drug company never crossed my mind because it just wasn’t something you did. It’s different for chemists -- hot shot chemists were going into drug companies for a long time. And Harvard was a breeding ground for those kinds of chemists. But it certainly wasn’t where biology was. I did the standard academic thing… did the postdocs, got a faculty position and had a great time. I had great students and postdocs and I liked teaching -- I shouldn’t admit that but I did … and it was fun. And somewhere around tenure time, I started to think about things. Okay, what am I going to do next? I’d grown up in the Harvard system so the prospect of getting tenure at Harvard was just not there. So I just decided that I was going to have a great time while I was there. And I did.

At the time I was teaching immunology with Wally Gilbert who was in the middle of starting Biogen… First year, it was a great time. We would give lectures and grade papers together. Second year, I would get these calls "I’m in Geneva [and] I’m trying to do these 10 million dollar deals. I’m in Paris [and] I’m trying to convince venture capitalists to put a several million dollars into the company. Can you give the lecture on Monday?" And then he would come back and we would talk about what was going on and it seemed very interesting. Mark Ptashne was starting GI (Genetics Institute) and getting all kinds of flack. And colleagues at MIT were doing likewise. So, I had a sabbatical coming up and I got involved in what I considered an educational experience of starting [as a] very junior partner in a startup of a monoclonal Ab company with Malcom Gefter, who was at the time at MIT. And much to my complete surprise and amazement, I really got a buzz from the whole match of science and business. I like talking to investors, I like the idea of making the science more immediately applicable.

At some point for all academic scientists especially if you are in biomedical research, your going to say "look, is getting the cover of Science really the impact I’m going to have?" And as funding also gets more and more constrained - you know you’re writing grants and you get comments back saying "well you’ve never actually done any of that so why don’t you stick with what you’ve been doing" - you …[want] to have this big impact on stuff but you are getting more and more constrained. And this [was] a way to make the science more immediately tangible... . And I thought "Ya know, this could be fun".

And in a certain sense it was historic. The biotech industry is starting and it was not going to get started again. It was based on a premise, that Peter Weinstein used to call "the commercialization of biology". And it will only happen once. So I thought, "What have I got to lose? I’ll just do this for a while." And in those days people could not go so freely back and forth [between academia and industry]. So you went into industry, then your cross was erected. [I thought] "I’ll do this for two years. I probably have two years where I could still go back to academics if really hate it." But I didn’t hate it. I like it, so I never looked back.

I was on leave this year, and actually I was a tutor in the biochemistry department. I found that after a long time I miss having students. I like that, because Harvard students are really smart, some are a pain in the butt, but they ask you good questions and they challenge your fundamentals. They ask " Why are you doing that"? So I find that student contact is always a way of keeping you fresh, and it does make you a little uncomfortable about the assumptions you are making. I do try to make it to one or two scientific meetings a year. And I usually try to pick those in an area where I want to get educated.

I think different companies use the title differently. My responsibilities [at Vertex] cover the drug discovery, drug development, regulatory affairs, [and] all pre-clinical work that is in between those phases, and … project management company-wide and also intellectual property. When the company expanded, development came under my wing as well. That's a sort of different definition for a CSO than at some companies… it is a reflection of a fundamental belief that… at Vertex, drug discoveries are a continuum… they go all the way to the clinic.

But one of the more profound changes that’s happened with, really with the advent of recombinant DNA technology and certainly with genomics is that there is the opportunity to work a lot more with a lot of the targets being the first in the class. Vertex prides itself on positioning itself that way as well.

[The] drug industry suffers a lot from inefficiencies in information. [Considerable] information gets gathered during the course of a project and very little unfortunately gets used. By defining drug discovery and competitive selection and clinical evaluation all as part of the same process we really are trying to build a company where scientists are versatile and multilingual, and the process has a continuum. When [our scientists] are developing assays for screening compounds, [they] should also be thinking, "Can this assay or modified versions of it actually be useful for later stages [of development]?" If the [scientist] is thinking like that, they'll build an assay that's more versatile. So we put the company together in a way that is a reflection of that philosophical belief.

Q: Does this mean a person may expect to have more roles at Vertex as opposed to other companies?

Often …it's the same role but for a … longer part of the process than they would [have] at other companies. [For example] a lot of big drug companies have a group that does pharmacokinetics. They usually get a compound after … [it has been worked on by] the chemists… [as the case for] a drug like erythromycin trans-illuminase that they shove into a dog and say "yeah it works"or "no it doesn’t work". And that particular group will stay with the drug until it gets to the clinics. Or sometimes they’ll do all the work in lots dogs and then pass it to another pK [pharmacokinetics and drug metabolism] group that will pass it into man. Everytime you hand-off [the compound], you loose time. Somebody might say "I know you told me this but, I better [check for] myself". [At Vertex] people get assigned new projects when it’s an idea. Those people are involved in evaluating the compounds, helping selecting the compounds that are also going to development. So they’re are not getting it tossed to them. They’re actually part of the team that generates the data, looks at them and says "I like this one" earlier in the process.

We tend to select for people who are busy bodies, who like the totality of the process and who are committed to contributing … [who] invest in the whole process and think about how their science can contribute at more than one point. We tend to have people who are very good at what they do, very invested in that same goal which is getting our product to market or getting as many products as you can to market. [We want] them to articulate their positions, question other people’s positions, all in the mutual interest of picking the best molecule, picking the best project, picking the best development track. You have to be good enough for your opinion to have weight, you have to be articulate enough to be understood, and you have to bold enough to risk having people tell you that maybe you’re full of ___. It is part of doing good science, frankly. The most stimulating environments to be in are the ones where you have a huge respect for the other people sitting around the table, and nobody is pulling punches.

Really intelligent, curious, effective at translating a curiosity to output. Really articulate. For a company to be successful, you have to have scientists [who can] make whatever it is you do understandable, acceptable and useful to somebody who doesn’t do it but who needs to use that information. Without understanding that information the activity is a waste.

Q: What is the skill set that you look for in a potential employee and can you learn on the job?

One of the things I started to have some inkling of when I was in graduate school, but never really appreciated, is that nobody is teaching you how to be an academic researcher. I don’t know if people are better at it now… I think there are some skills to be taught but there’s a certain sense that the most important skill to learn as a graduate student and a postdoc is developing the skill of independent scientific thinking… How to frame the scientific problem in a way that is tractable directly. How to develop and execute a set of experiments that give you an efficient set of answers. So learning the efficiency of scientific thinking, the ability to be smart in the work you do and using your head well, is an important skill to learn. And if you learn that well then you can decorate that with whatever environment you want to use that skill in.

Q: When you have a lead compound, how do you organize a team to study it and what strategy do you employ?

When we’ve got a new idea, a new project to start, we form a project team around it. There is a project head assigned, who can come from any discipline…we just look for who happens to be the best person to lead that project. That project team pulls people from every relevant part of the company. So, at the very beginning, … there are chemists assigned to it, cloners, expressors, protein biochemists, assay people, pharmacokinetics people, every discipline that we’re going to need to both make and test the compound gets put on the team at the get go. Over time the emphasis shifts…you might have a lot of phenotype A at the beginning, and fewer as you go along and you ramp up phenotype C. But the core is the same. Every relevant discipline is represented.

The average drug discovery team at Vertex is 20-30 people. Sometimes they’re bigger, sometimes they’re smaller. But, if we’re really being serious, and we’re always serious, we feel that that’s what it takes to be competitive. We’ve not chosen arcane opportunities…we’ve gone in there and picked projects where our competitors are not biotech companies. Our competitors are Merck, Pfizer, and Abbott. This is serious competition. You can only argue that your people are smarter to a point, and then you have to deal with the realities of mass action. You can’t understaff a project, it handicaps the team.

Project teams run like this: The chemists meet as a department. "Chem heads" for these projects meet regularly as a "chem head" group, where they have a chance to share the tricks of the trade… Same with every other department… So projects run [vertically], while functional organization runs [horizontally] and you try to have as many points of contact as you can without taking everybody’s time up in meeting. We also use an intranet and web-based data sharing.

Q: How does Vertex respond to changes in scientific knowledge that arise during the time period it takes to develop a product?

Vertex was very early in getting involved in making inhibitors of IL-1-converting enzyme. The project group was sitting around saying, "It looks like there is a converting enzyme activity, but we’re not involved in gene hunting. So let’s wait until somebody actually finds this gene." …When the Immunex group published the sequence, everybody was ready to jump on it. And, those papers all started out with [the notion that] IL-1-converting enzyme appears to be a member of a unique gene family. We got involved, solved the structure, started making drugs, and have a compound, the only ICE inhibitor actually in clinical development. In the middle of that, we got a preprint of Bob Horvitz’s paper on CED-3. Cell death! Not an activity associated with ICE, but there is a gene family in there somewhere. In fact, that is how it was pretty clear that the idea of a unique member of anything is probably not in the cards. So we’ve actually started before that paper came out saying look, we should be looking for homologues, because if there are homologues, they're going to present an issue for drug design specificity. And so if there are any out there, maybe we should be hunting for them…

So we were already aware of the fact that there were certainly things that worked like our structure, but we didn’t know what their functionality was going to be. When Bob’s paper came out, we thought INTERESTING. So now of course we found ourselves in the middle of a multi-gene family… the members of which have quite different functions biologically, but whose active sites are remarkably related. So, we’ve been able to use a lot of the structural and chemical knowledge we’ve built around making an ICE inhibitor into making inhibitors of other members of the family. It’s an interesting example of contributing to new science that was unfolding, but of also being responsive to new science that was unfolding around the area, and being able to exploit some of the assets that we’ve built around the first target onto other targets. So we’ve got a caspase program now that’s focused on making substances for stroke, for sparing cardiac damage after myocardial infarction. And we were able to do that more quickly because we were there early with a particular target. So [here is an example] of not only being responsive and aware of change, but also helping to drive that change.

Q: Vertex has been quite successful at striking partnerships to get many drugs into preclinical and clinical trials simultaneously. Do you envision that Vertex will continue to make similar arrangements in the future?

In the early days, we felt that it is prudent to share some of the risk with pharmaceutical companies. Because otherwise, a small company usually only has the finances to get behind one, or at most two bets, and if that doesn’t come up, you have a big problem. And our technology base is broad enough that we didn’t have to be limited. It wasn’t like we were a one idea company. Some companies are like that because they had one idea to start with and they live or die by that idea. We weren’t trapped there. The possibilities were, pardon the expression, endless. The challenge for us was making sure we picked our spots well. But in terms of affordability, it was a prudent choice to get some partners who could help support other projects, so that we didn’t have to pin everything on a single project. They also brought with them human resources and know-how for some of the downstream activities. We have learned a lot from working with those people, and it’s allowed us to build a better pipeline than we would have if we had been on our own.

Going forward, we will continue to partner, but I think for a different set of reasons. We will for sure see purple pills with Vertex on them, but the reasons for partnering now, is that we are very committed to improving efficiency of the overall drug discovery and development process. If you could effect a two-fold difference in that, you would the most successul pharmaceutical company in history, and if you could effect a ten-fold change in that, it would change the nature of the business. So, we think we can do that, we think we are doing that. We think our track record so far, in terms of compounds we’ve been able to make and get into the clinic, is significantly better than the industry. And with some of the new things we are doing now, exploiting gene families, we think we can do even better.

So we’ve set ourselves the task of improving on our own track record, which is already significantly better than the industry, by another factor of five or ten in the next few years. If we do that, and I think we will, Vertex is not going to have the development capability, no drug company that exists today has the development capability to take all those things through clinical testing and into the marketplace. The industry isn’t set up to do that, it’s set up on a 1 out of 300 model. So if you now move those odds to 1 in 30, no one company to do it…

Partners become not imperative, but a strategic essential, in that if you want to capture the value of having actually done something up front to the efficiency of the system, you’ve got to capture that value by holding hands with other people. You have to put the right price on your success, so that you can reap the commercial benefit. Vertex will continue to partner, for a different set of reasons than we partnered in the first phase, and we will also commit to taking some products to the market, because we want to do that. It’s an important part of it.

If you’ve heard Josh [Boger], you know that we’re not small on ambition. Our goal is to be one of the more influential and successful [companies]. We think we can do that by having an impact on the overall efficiency of the process. We have core strengths and we will continue to further those strengths. Making drugs, discovering and designing drugs, this is a hard problem. So to say that you are only going to do it one way is kind of foolish. I can’t tell you what we’re going to look like 10-20 years from now scientifically, but I can tell you that we will use all the information as efficiently as possible. We’re probably have core tools for doing that but we will probably also be considerably inventive and have a variety of technologies that scientists will think are relevant.

Q: Do you anticipate other biotechnology companies will successfully integrate structure-based drug design?

Structural information is what you make of it. A lot of other companies have misunderstood and misused structural information… It’s interesting to me that a lot of companies are focusing on high throughput strategies. More on "Let’s just turn the crank faster". Let’s screen a billion compounds. You have to shape other parts of your enterprise to respond to that data… [In isolation, structural information] is cute, but not powerful. Integrate it into other technologies, I think it’s incredibly powerful. So, I don’t know what other companies will be doing, but 10 years from now, we’re still going to be using it in lots of different ways. Insight can come from this structural detail of the chemical world.

About the Authors
Ben Gewurz is in his sixth year of the MD-PhD program at Harvard Medical School (yes, the program is a bit long), currently completing his doctoral work in the Program in Immunology. Evelyn Wang is a post-doctoral fellow in the Department of Pathology at Harvard Medical School. Both authors are members of the laboratory of Dr. Hidde Ploegh.