Biotech on the Move

Phillip A. Sharp has enjoyed a front-row seat for the revolution known as biotechnology. As a young professor of biology at MIT in 1977, he checked out-at the request of several venture capitalists-an obscure California company called Genentech, which had the preposterous notion of using recombinant DNA to create pharmaceuticals. Later that year, when Genentech announced it had made a human protein from a synthetic gene, the world learned publicly what Sharp had understood privately: Genetic engineering technology would transform medicine.

In the spring of 1978, Sharp had the chance to put theory into practice. Those same venture capitalists recruited him and other prominent biologists from the United States and Europe to form the core of a new startup. The result, Cambridge, Mass.-based Biogen, remains one of the pioneering biotechnology firms; today, Sharp serves on the company’s board of directors and chairs its scientific advisory board, assessing potential research initiatives and overseeing the journey of drugs from lab bench to market.

Sharp’s own journey in science has taken him far from the Kentucky tobacco farm where he was born on D-Day in 1944. In 1974, after postgraduate stints at Caltech and Cold Spring Harbor, he came to MIT. In 1993, Sharp shared the Nobel Prize with Richard Roberts for research showing that genes are not arrayed as continuous stretches of DNA, but rather are spliced together during cellular processing.

Stephen Hall first interviewed Sharp 15 years ago while researching his book on the birth of biotechnology, Invisible Frontiers. In June, journalist and scientist sat down in Sharp’s office at MIT’s Center for Cancer Research. Kentucky still audible in his soft-spoken words, Sharp offered a down-to-earth, insightful perspective on the shape of the biotech industry, the difficulty of making potentially remarkable new therapies work-and the place of hope in the world.

TR: You were there at the beginning of biotechnology. How has it changed?

SHARP: Biotech began in 1976 with Genentech, and the evolution of the community followed a standard progression where new biological discoveries created opportunities to look for novel drugs and treat diseases. Venture capital funded your early efforts, and as you developed your technology you were able to strike relationships with large companies. You leveraged that either into a free-standing, vertically-integrated company or into a substantive research organization that ultimately was acquired by a larger pharmaceutical company-this was a standard paradigm for the last 20 years.

What we’re seeing now is that biological innovation is continuing, as are the exciting opportunities. But the appetite for new biotech startups, on the part of both venture capitalists and financiers in large companies, is more muted than it has ever been. There are 1,300 companies out there, and that’s a lot of capacity in the field. The other factor here is, given the Internet venture capital explosion, I suspect we’re hearing a large sucking sound as the VC money goes to something that turns over quite a bit quicker than a biotech organization.

TR: What will having fewer opportunities to launch new biotech ventures mean to the field in, say, the next 10 years?

SHARP: The startups that are already in place there will continue to do what they have done in the past. A few will get a product and succeed to vertical integration, but more and more of them will ultimately become part of other organizations. This consolidation in the biotech community, as well as the growing acquisition of biotechnologies by large pharmaceutical and chemical companies that want more biological exposure, is a major shift that started in the last year or two.

Still, I don’t believe there will be a decrease in the amount of activity-the total number of employees will continue to go up because the opportunities are there. It’ll just be organized in different ways, with fewer small organizations and more larger ones.

TR: Is there any area that’s flourishing within these new models for biotech?

SHARP: There are a number of very prominent companies that have been built on providing access to genomics. Millennium here in Cambridge is one which has done terribly well at developing new working concepts around genomics and human genetics and bringing all that together in a technology house that a large number of companies have struck associations with. That’s become a paradigm for the rapid development of an organization around a new technology and a new insight.

And there’s a lot more to be done in genomics than has been done. The human genome won’t be completed for another two years, probably. The functional genomics field is just emerging, where people are taking the catalogue of known genes that comes from the sequencing and then using them to explore biology-in drug development, for example, you could look at how genes are expressed in different parts of the body and use the information to determine how your drug is working and how a drug should work if it was curing the disease.

We need to push functional genomics even further: In many cases we’re looking at millions of cells at a time. But get down to one cell and you have the ultimate resolution, you can take a single diseased cell and understand what’s going on within it. That should be doable with the tools we already have.

TR: Perhaps that “sucking sound” you mentioned represents the fact that investors have finally understood why biotech is not like electronics: You don’t have to do a clinical trial (which adds years to the development process) for a chip. Is the risk in biotech simply much higher than it is for, say, a hard drive?

SHARP: The risk is higher, but the payoff is higher. Still, if you look post-World War II, there have been very few large pharmaceutical companies established. Syntex, which developed the birth control pill, was one of the few to emerge in that period. The most prominent biotech company now is Amgen, which has a market value, I think, in the $30 billion range. Biogen is number two. Genentech is no longer free-standing by any definition, and Chiron is nearly owned by Novartis. You can look at how small that list is and say, “It’s really hard to get there!”

TR: There’s a sense that people are creating a startup these days based not on the hope that they’ll ultimately make products and become a fully integrated company, but that they’ll have a successful business plan and an I.P.O. and then essentially cash out.

SHARP: Well, that’s been the basic business concept for the last 10 years. It may not be explicitly stated that way, but companies develop a technology and then license it to multiple large corporate partners, relinquishing a lot of control and a lot of the rights in the process. They all, by and large, have plans that say, “We will retain a part of this technology and develop our own products.” But if you look at how these companies allocate their resources, the major manpower thrust goes toward those corporate relationships, and maintaining those relationships.

TR: If you look back now to the mid-1970s, what challenge did you most underestimate in starting a biotech company?

SHARP: Business acumen-knowing exactly where this technology fit into developing pharmaceuticals and how one needed to invest to make that happen.

What did we underestimate in terms of technology? Well, the first set of products we put on the list were interferons. And we underestimated how difficult it was going to be to find and prove the efficacy of these proteins. The interferons were wonder drugs, but were available in such minute amounts you couldn’t test them! So a lot of the data was really untrustworthy. It took a long time in the clinic to find out how to use them, and they’re still being developed. We originally thought interferon would be a drug for cancer, and it turned out to be a drug for multiple sclerosis. It’s amazing! It’s amazing how difficult it is to find drug opportunities.

TR: On the plane up, the person sitting next to me was reading Golf Digest, and there was an ad in it for SmithKline Beecham’s new Lyme disease vaccine. I feel reasonably confident saying this is probably the first time a vaccine ad has appeared in a golf magazine. But it raises a larger question about whether companies choose to develop a product to address a market or what you might call a social need-do you work on a vaccine for malaria, which causes a million fatalities a year in mostly indigent populations, or do you work on a vaccine for Lyme disease, which accounts for about 16,000 well-to-do new cases a year?

SHARP: I’m enough of a realist to know that in the private sector, if you can’t develop the revenues to support the technology, the technology is not going to grow. Second, you really don’t bring technology to fruition, in this country and almost anywhere in the world, unless the private sector does it-because it is so difficult in large, federally sponsored programs to have the focus, the sustained attack that you need to develop a new pharmaceutical.

Those are constraints of the real world. There is, on the other hand, a significant amount of research being done on worldwide infectious disease problems. I suspect that commitment will grow as we increasingly learn that these diseases are very transportable. As people travel in various parts of the world and come home with the “local disease,” the U.S. medical community is going to need to be able to treat them, both here and at the source, in order to control those diseases, and that in time will bring benefits.

Let me add a third point. In a recent issue of Nature, the British scientist Max Perutz wrote an article in which he showed that the fraction of gross domestic product being spent on biomedical research grew 10 times in the United States over the last 15 years, while growing only twofold in England and the other European countries. We have the biggest gross domestic product, and we are really dominating the biomedical research community. And as the world leaders, I think we would benefit-and benefit the world-by extending our interests a little more globally. In addition to helping people in developing places for humanitarian reasons, there are good pragmatic reasons that the government should encourage international collaborations, investments in problems and people elsewhere in the world to augment this leadership position we have. But if anything, as we’ve gotten more successful as a scientific community and as a pharmaceutical community, we’ve become more inward-looking.

TR: Given the biotech industry’s historic tendency to oversell a new technology, could you provide some perspective on two of the most highly publicized recent developments, gene therapy and anti-angiogenesis as a treatment for cancer?

SHARP: I’m still very optimistic that gene therapy will emerge as a therapeutic. But it’s going to take a while to learn how to use it in a clinically important way. Throwing a few genes into a patient and saying that’s going to help a cancer has just not been very useful.

But there is serious work going on. I expect the first applications to emerge as vaccines, where delivering a vaccine by DNA is liable to be more efficacious than by conventional ways, and safer. That could play a role in the HIV story. And I also think that as we become capable of regulating gene activity as well as inserting genes, we’re going to see gene therapy used with therapeutic genes. In other words, you’ll be able to insert the gene for erythropoietin, which tells the body to make red blood cells, into the appropriate cells of a patient. And once these cells take up the gene and aren’t rejected, you can essentially turn the gene on and off over long periods of time, producing a source of therapeutic protein that controls a disease state.

As for angiogenesis, my guess is that we’re going to find that it’s going to take four, five, maybe 10 years in the clinic to learn how to use this. And even with well-controlled experiments, you’re going to step back and scratch your head and say, “Why didn’t that work?!?” Or, “Why didn’t it work better?” You know, like everybody else, I’d love to have it available today. But these are complicated biological processes.

TR: Do you see any danger of a public backlash against biology because of the promise of success-the familiar drumbeat of hype which creates the expectation that some newly discovered drug or process is going to cure disease?

SHARP: I don’t underestimate the intelligence of the public. I come from Kentucky, and not from an academic family. My father was a manual laborer. I keep in pretty close contact with that community, and they understand now, given 20 years of intense press coverage of science, that there is always a time between discovery and delivery.

But they also, and this is very important to point out, hope that the world in the future will be better than the world in the past. And if they can’t benefit from a drug, they certainly would like to see somebody else ultimately benefit from the drug. The promise that progress is being made-and historically, progress has been made-is something that they enjoy, appreciate and are interested in learning about. So they can dream of the day when they don’t have loved ones who died of cancer. It’s not going to hurt them.

It’s not clear we will get there. We can’t say from our technology that we’re going to get there. All we can say is that we’re making incremental improvements, and we would hope-and underline “hope”-that we’ll get better at that.