Some executives are leaving much bigger pharmaceutical companies for the biotechnology industry's promise of greater things to come.

Heeding the call of biotech

April 21, 2005|By Tricia Bishop | Tricia Bishop,SUN STAFF

Dean J. Mitchell's phone rings every day, with people calling from his old pharmaceutical stomping grounds to talk about one of two things: what it's like in the "wilds" of biotech and whether he's hiring.

His first answer: "It's like doing the high-wire act without a safety net."

His second: "Yes."

Over the past decade, many - like Mitchell - have left the pharmaceutical industry for the less-established field of biotechnology, which some scientists believe will make the world's next big medical breakthroughs.

The shift is hard to measure - no one seems to track movement between the two industries - but executives and headhunters say they have noticed the trend. They say it has been on the rise since late 2003 as the $500 billion pharmaceutical industry has been roiled by expiring patents on certain blockbuster drugs, criticism of marketing practices, a shrinking pipeline of new treatments and increased mergers and acquisitions.

FOR THE RECORD - MedImmune Inc. employee Dirk Reitsma's last name was misspelled in an article in yesterday's Business section. Also, a word was omitted in Linda J. Peters' title. She is MedImmune's senior vice president, regulatory affairs.
The Sun regrets the errors.

Tightened government regulations were the last straw for Mitchell, who thought it took too long to get anything done in the big companies.

He left his position as a division president at Bristol-Myers Squibb Co., among the top 10 pharmaceutical companies, to become chief executive of Guilford Pharmaceuticals Inc. in December. He took a pay cut to do it, even though the Baltimore company is less than 1 percent the size of Bristol, has never shown a profit in its 12 years of existence and has watched its stock drop by two-thirds during the past year.

Mitchell said he was drawn to biotech by the entrepreneurial spirit within the sector and, ultimately, "the chance to shape a company and leave your mark on something, which is very difficult to do in big pharma."

In the past year, several top executive positions in Maryland biotechs have been filled by former pharmaceutical executives.

William F. Spengler, Guilford's chief financial officer, came on board in July after 14 years at Bristol-Myers Squibb, along with stints at other large companies, including Black & Decker Corp. and Sweetheart Cup Co. Inc.

In February, Gaithersburg's MedImmune Inc., Maryland's biggest biotech company with a market value of $6.3 billion and about 2,000 employees, snagged Linda J. Peters as its vice president for regulatory affairs from a division of Baxter International Inc. The Deerfield, Ill., company has a market value of $21.5 billion and about 48,000 workers.

In November, Rockville's Human Genome Sciences Inc., which has 840 employees and no products on the market, replaced its retiring founder and CEO with H. Thomas Watkins, who gave up a senior management position at Illinois-based Abbott Laboratories Inc., with more than 60,000 workers and a market value of $77.5 billion.

"I always wanted to be CEO of a company," said Watkins, explaining his decision to jump into the smaller pond of Human Genome Sciences, which is working on treatments for lupus, cancer, hepatitis C and rheumatoid arthritis. "I plan to be here a good long while."

Compared with the pharmaceutical industry, biotech drug businesses are fairly young. The sector took root in California about 30 years ago and grew eastward around cities such as Washington, Boston and Raleigh, N.C. Maryland, which ranks among the country's top four biotech hot spots, has more than 300 such companies.

Years ago, pharmaceutical companies typically developed plant- or chemical-based remedies, while biotech drug companies focused on genetic remedies and cell manipulation. The two segments have grown more alike as the science has advanced, easing the transition of professionals between industries.

They are borrowing from one another, with pharmaceutical companies partnering with biotech businesses to increase their library of potential products and biotech looking to the pharmaceutical world for ideas about generating revenue.

It often takes a dozen or more years to develop a drug or treatment and up to $1 billion in funding, for which established pharmaceutical makers have deeper pockets. Many area biotechs that survived their growing pains are just now reaching the stage where they're ready to commercialize. That partly explains why they're sending recruiters to look for people with pharmaceutical experience.

"They can tell you how to get a drug to market," said Kim Coghill, spokeswoman for the Biotechnology Industry Organization, which is based in Washington.

The pharmaceutical industry has learned how to navigate the regulatory system and make cash cows out of drugs such as the antidepressant Zoloft, Pfizer Inc.'s third-largest product with $3.36 billion in sales last year. But patents on those same drugs are nearing expiration (2006 for Zoloft), which means cheaper generics could soon be available. And many companies are struggling with finding new drugs to replace their best sellers.

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