Beaten to the Punch

Last week, Luke Timmerman’s interview with Noubar Afeyan was published, and I had some immediate comments, but was tied up at BIO (as was Luke). How discourteous of Luke to write a story when everyone was at the meeting! I thought to myself: I’ll write a blog about that when I get home. Well, Katrine Bosley beat me to the punch, with many of the same thoughts I had. If you didn’t read the original article, I’ll recap.

Noubar made the argument that biotech could be much more orderly if people would just go to pharma, see what they needed, and develop those products. He made the analogy to the auto industry, which has an orderly supply chain. Using the example of brake pads, he points out that no supplier would spend years developing a novel brake pad, and proposing to sell it to auto manufacturers at thousands of dollars per year to balance the losses incurred in the development of the new pad. That’s essentially what biotech (and pharma, for that matter) do. The production cost for a $10K/yr therapeutic is orders of magnitude less than that, but the end user price includes the cost of development, since most of the products in the pipelines of biotechs and pharmacos fail.

In her article, Katrine argues that i) there is a wide spectrum of what constitutes a biotech company, so Noubar’s argument may not apply, and ii) it encourages “teaching to the test.” That is, developing products that are of interest to pharma solely because they fit a box that the pharma is trying to fill.

Katrine disclaims that she’s known Noubar for a long time, and that he was an investor in her prior companies. I’m in the same boat, having had Noubar as a client in his PerSeptive days, and I concur with her that he sees a longer horizon than most. In this case however, I couldn’t agree with Katrine more. I’ll cite two examples to support her argument.

In grad school, we were quaintly known as “the rat lab,” being the only animal facility in the department. When the lab manager left, a new person was hired who promised to bring some order into the lab. With a military background, he set schedules, developed reagent supply/replenishment programs, etc. The lab was certainly much more organized, but in addition to the operational structure he provided, he tried to set timelines for completion of experiments without providing for the inevitable detours or unexpected results. He lasted a few months. What he failed to realize was that you can’t mandate innovation by putting it on a Gantt chart.

Years later at Athena Diagnostics, I established monthly update meetings for all the senior managers. I had gotten wind that people thought I wasn’t doing anything in Business Development. Importantly, I reviewed all the projects – most importantly, the ones that I had passed on. They failed to realize that running BD means saying “no” a lot. There were tons of things I’d look at that just didn’t make sense. They would say “Why don’t you bring us a decent diagnostic test for Alzheimer’s?” My response? Well, since we don’t have our own discovery effort at the company, and since nobody has developed a decent test (there still isn’t one 15 years later), what would you like me to do? Sometimes, you can’t mandate BD either.

If a car manufacturer goes to a supplier and says “we need a brake pad that will fit into this caliper, and that can sustain temperatures of 800°,” the suppliers toddle off and try to develop one. Yes, sometimes that requires innovation, but there’s almost always an engineering solution or workaround to mechanical problems. Mother Nature isn’t nearly as accommodating.

Supremely Irritating

This blog has been pretty dull lately, but as I’ve said before, I try to keep my mouth shut if I have nothing to say. This one has me pretty riled up.

The Supreme Court heard arguments yesterday on the patentability of genes.  There is a sense of jubilation coming from the academic camp, as evidenced by Eric Lander’s and Bob Cook-Deegan’s high five following the hearing. I’m not convinced that their jubilation is justified. If you’re having trouble sleeping, you can read the whole transcript, but from my reading, the Court didn’t sound like it’s ready to clamp down on gene patents.

What got me really riled up was, in the aftermath of the events at the Boston Marathon, on the advice of a tweet, I turned to PBS to watch what was promised to be unvarnished coverage. I happened on a piece about the SCOTUS hearings on gene patents. On the “academic” side of the argument was Ellen Matloff, a genetic counselor at Yale. She, characteristically of many academics, completely confused the issue, bringing arguments about the reduced cost of whole genome sequencing, insurance companies denying reimbursement, etc. None of which have anything to do with what’s at issue.

She claims that “Myriad invented nothing.” Really? Through linkage analysis, the BRCA1 gene was localized to one arm of one chromosome by the team led by Mary-Claire King, announced at an ASHG meeting in 1990. Four years later, the gene’s sequence was identified by, in part, Myriad scientists. Turning it into a commercially reliable clinical diagnostic test was done by one company: Myriad.

She also claims that Yale had been conducting diagnostic testing, which was subsequently shut down by Myriad. Correct. That’s how patents work. But it’s independent of whether or not the gene itself can be patented. What she’s really complaining about is that she can’t perform the testing in her lab (read: can’t make money from offering the test). That’s what gets under the skin of most academics. I’m not aware that Myriad, or any other patent holder, prevents others from doing true, basic, academic research. It’s not in their interest to do so. Think of it this way: a company discovers a bunch of mutations responsible for a disease. An unrelated researcher identifies a new mutation. Would they propose not licensing that mutation to the dominant provider and offering testing for that single mutation? How does that benefit anyone – the company, the researcher, or most importantly, patients?

I’m not a lawyer, and certainly not qualified to argue before the Supreme Court, but it all seems pretty simple to me. If you identify a method to diagnose a patient with a disease, assuming that it’s scientifically and clinically justified, it is novel, non-obvious, and reduced to practice, and therefore, should be patentable. Why does it matter if the method uses DNA as the substrate as opposed to, say, serum?

Nobody is patenting a person’s DNA. Never have; never will. Nobody with any knowledge of the matter believes that such a thing would be patentable. However, utilizing the chemical nature of something found in nature to identify a person with a disease meets the criteria of patent eligibility. What’s so difficult about that?