Where is the next great cancer drug going to be invented? Where is the next great Alzheimer's drug going to be invented? The answer is it should be here, but we can't stop somebody else doing it. We just need to do it better, and one team is fully equipped, the other one doesn't have cleats, pads, or helmets. Who's going to win?
Welcome back to the Making Medicine podcast, where science, policy, and innovation meet. I'm your host, John Stanford.
On this episode of our How America Makes Medicine series, we're talking with Jeremy Levin, a universally known figure that has sat on all sides of the pharmaceutical innovation we've been talking about.
Dr. Levin led global business development at Novartis before architecting BMS's string of pearls strategy, which was a major inflection point in how large manufacturers do R&D. He then served as president and CEO of Teva, and is now executive chairman of Ovid Therapeutics, and chairman emeritus of BIO, the trade association that has done a lot engaging around policy and advocacy.
It's a remarkable, almost unmatched career, and these days Dr. Levin is also carving out a growing thought leadership role on how America stays competitive. He did that most recently as the author of his new book, Biotech in the Balance: Saving a Strategic Industry in an Age of Distrust.
He's the perfect guest as our series transitions into how medicines get to patients, and he even shares insights on the hottest topics of today. So, let's get into the show.
Throughout our How America Makes Medicine series, we're taking brief moments in every episode to do a little history, but this one's particularly special. As we left off last episode, the biotech revolution had begun, the ecosystem was developing for early stage companies to develop. The NIH, the FDA, was all moving in the right direction.
But up until the early 2000s, the big news in acquisitions and mergers were large companies buying each other. Because back in the mid-2000s, Big Pharma had a problem.
Patents were expiring, pipelines were thinning out, and the old playbook of buy a competitor and cut costs and call it growth wasn't actually producing new medicines.
Bristol-Myers Squibb decided to try something different, and that's where today's guest, Dr. Jeremy Levin, comes in and makes history himself.
Instead of one giant swing, Dr. Levin and his colleagues proposed they go small and deliberate. Sell off the businesses that didn't fit, nutritionals, medical devices, and use that capital to buy up promising early stage science, one piece at a time.
Dr. Levin gave it a name, a string of pearls. Each acquisition was a pearl. String enough of them together, and you've got something valuable without betting the whole company on a single roll of the dice.
The strategy found its defining moment in 2009, when BMS acquired a company called Medarex for roughly $2.3 billion. Dr. Levin will talk about this in the episode.
Medarex didn't look like much on paper, small biotech with early cancer research, but buried in that research were the foundations of what would become Yervoy and Opdivo. Two drugs that didn't just make money, they created an entire new category of cancer treatment, immuno-oncology.
Opdivo alone still accounts for over a fifth of BMS's revenue today.
That's the part that made string of pearls famous. Not just that it worked, but that nobody saw it coming from the outside. The industry took notice. In 2012, pharmaceutical giant Teva went out and hired Dr. Levin away to run the same playbook there. And that playbook hasn't just become one playbook.
It now defines how the large pharmaceutical ecosystem operates. With patent cliffs looming across the industry, companies across the board run this strategy, building strings of smaller complementary deals instead of one big acquisition, spreading their risk out across many bets instead of one. So, Dr. Levin isn't just someone here with an interesting resume.
He's a part of the very history that this series is uncovering of how we got to where we are today.
He truly defined the moment where string of pearls meant instead of large mergers and acquisitions, large pharma would operate more like venture capital, diversified small bets that come to define marquee moments like the JP Morgan conference and Jefferies and all of those. They all come back to this inflection point. So, we couldn't be luckier to be talking with Levin as part of the How America Makes Medicine segment.
So, without further ado, let's get into a great conversation with Dr. Levin. Jeremy, welcome to the show.
Thank you very much. I'm delighted to be here and thank you for having me on.
Well, I want our listeners to know that Dr. Levin is a doctor and I think anyone who knows you knows the long list of achievements you've accomplished that we'll get into, but for some deep personal reasons, we're going to call you Jeremy on today's episode. And we can unpack those on a couch someday. So glad that you are here.
In this series, we are trying to unpack how America got to where it is today, and one of the things listeners always want is to understand the career paths of the people we have on the show.
It would be hard for me to find someone who has had a career like yours. And so I thought that's the best place to start. Walk us through your remarkable career. You've seen all sides of it. You know, what you're doing now relative to String of Pearls and Novartis. Walk us through your career and how you've seen changes in industry along the way.
With great pleasure. And everybody comes from somewhere and I come from a tiny town in the middle of remote South Africa, a place called Piketberg, a farming village. I'm a farmer by origin. That is my basis.
But fast forwarding my academic career, I was very fortunate to be admitted to Oxford despite terrible high school grades.
And managed to go through my zoology training there intending to go back to be a game ranger actually in Africa. And then did my PhD which changed my life. That was the structure of DNA. During that period of time, I met a patient with a terrible disease called xeroderma pigmentosum and that changed me yet again saying now I had to go after this disease or similar diseases and use my knowledge to treat them.
So I became a doctor, went to Cambridge, practiced medicine. I love medicine. I've never stopped being a doctor although I don't practice it. But I have one principle on everything I do and it's been the guiding light for my entire career is that every time you give a medicine, you change somebody's life. That's number one.
And number two, you have a covenant with each patient. Doesn't matter what you do, whether you make medicines, whether you treat patients, that covenant is inviolable. You must make the patient better.
I was very fortunate to come to America to see the birth of biotech. I came here for a while. I was brought over by a small biotech company in Washington, D.C., actually in the Watergate building. And I knew nothing about Washington, knew nothing about the Watergate building, knew nothing, but I did learn.
It was a treat, America's ability to really see something novel, create a whole new industry, even though it wasn't in the eye of the general public, was terribly exciting. So, I stayed. And I was fortunate. The government gave me the right visas. I was able to work. I got to understand the industry.
And then delightfully for me, I met my wife who's American. I married, became a citizen many, many years ago. And then devoted myself to helping build that same concept, getting new medicines to patients.
The first real big step in that was to work in Genzyme where I learned from a marvelous leader, Henri Termeer, the essence of how you get a medicine to a patient and what it could do for the patient.
From that, I also met a wonderfully important person, and that was Dave McClaughlin, the CFO, who taught me the elements of how you build a business, how you create a business, how you think about it from a fiscal perspective.
And then from there, after a lot of debate and thinking with Henri, I went on to become the head of... I joined, with a couple of steps in between, but not really relevant. I joined Novartis as one of the third party, the third person to join Novartis at the request of then CEO Daniel Vasella to help a wonderfully interesting man called Mark Fishman build the first Novartis research center in America.
In Boston, as the biotech industry was flourishing. And I think I was the third employee, I can't remember exactly, but I was responsible for all the business development.
I saw hundreds of deals. There was one of the most important in my life was actually doing a deal with John Maraganore at Alnylam, I believe it was their first pharmaceutical deal ever.
And actually Novartis terminated it straight after I left Novartis. And everything they gave back is today what Alnylam is. It's remarkable. Anyway, lots of teachings there.
From Novartis, I didn't want to move abroad. They offered me wonderful roles, but I didn't want to go and run a division or run a country. It wasn't of my interest. I wanted innovation. And after thinking it through, I chose to go to Bristol, a company in enormous distress.
The CEO had been dismissed. There was a judgment against it. There was a judicial supervision ongoing. But it had a wonderful name, and deep understanding of cancer, a wonderfully interim CEO, Jim, a man of great consequence from Lilly, really deep thinking.
And a very good team intact trying to save this company, this iconic American company Bristol-Myers Squibb, which was teetering. It really was teetering. Jim basically made it very clear to me that if we didn't bring in a new pipeline, if we didn't recreate a source of innovation in the future, then this company was going to be sold.
And he instructed the CFO, Jean-Marc Huet, to help me. And together with him, the head of research, we began to think what we could do.
And I conceived of a concept called String of Pearls, which is a series of directed, small, targeted acquisitions to rebuild the innovative pipeline, because you just couldn't do that from the internal capabilities they had at that stage.
This was highly successful. We bought a company called Medarex. At the end, after doing 17 transactions, we bought Medarex. Medarex was really the keystone of the next 10 years of Bristol-Myers success, because it opened up the doors to this area of immuno-oncology.
And it was the only company daring to do this. Nobody wanted to get into this area. It looked like a dead area, an area that failed. How would you get a white cell to attack a cancer, the hidden disease? Well, the science told me it was going to work.
And that was another immense lesson. And against great opposition initially, and great fear with many people in Bristol, I managed to persuade them to say, 'Listen, we're going to do this.' And there's a true story, they made me write out my resignation that if the transaction didn't work, I was going to be... That was it.
That was it. That was it. You put your neck on the line.
That was great. I loved that. It was wonderful. I think Bristol was on track, and it opened up the whole area of cancer research. And within 10 years, 50%... Well, there was only one company to begin with in 2009. By the time 10 years later had passed, half of all pharmaceutical research was in that area. It was remarkable.
Just a wonderful opportunity to help patients. And but at the same time I was approached by a company called Teva to come and fix it. And I turned to my wife and I said, 'Look, Israel's a great country. Let's go. Let's go and help see if we can do this.'
We moved there. I had the great pleasure of learning about manufacturing, generics, providing one in six pills for all of the American populace. Actually that was what it was generating.
And when we returned to America in 2014, I decided to devote myself now going down from the giant company which had previously had 20, 25 billion dollars of revenue, I can't remember exactly, and something like 40,000 employees and nearly all the countries of the world and certainly 70 languages.
I came down and decided to start a tiny company, me in a room with one guy, and that turned into Ovid. And my love from then on out, I've devoted myself only to the small companies, the innovative biotech companies, which is where I'd started from.
And is my love and is my passion. And today, you know, Ovid is really doing well. So that's a long trajectory. In the meantime, grew up two wonderful daughters. Still live on a farm.
It all comes back to the farm someday. I mean, like I said, it is hard to imagine someone with a more storied career.
And one of the things that strikes out to me, and maybe this is jaded Beltway reality, a lot of people want to put up these buckets of small biotech over here, the emerging entrepreneur, the spinout of a university, early-stage science. And then they want to put large manufacturers and pharma over here.
And I think you're the good and not necessarily rare example of a life spent in both. And I wonder if you would just share your thoughts on both.
What were the differences between something like running a company like Ovid versus a company like Teva? And is that divide justified, or is it really one ecosystem now that you've had this career on both sides of it?
It's a very important question, and I've given it an enormous amount of thought, and lies at the core of actually what I've been talking about and writing about.
You are right. I've lived in the world of generics, biologics, manufacturing, big novel pharmaceutical companies, and tiny struggling little companies, and some which have been successful.
They are a panoply. They all have one mission, and that is to get a drug to a patient. But I think you should perhaps conceive of it much more like the automobile industry.
There are components of it which are completely unique. Today, if the analogy holds, you have those who generate the software, the unique capabilities of the electric car inside, the stuff you don't see.
Then there are those who build the bodies, and then there are those who sell the car. And people really see the sold car. They don't really know who does the software in the middle of the electric engine. And in the same way, biotech is actually the hidden chip within the computer which is the pharmaceutical industry.
That chip is about a thousand companies. They are very different from the computer industry. This chip, which is hundreds of thousands of researchers going every day, they mostly fail. They take a huge risk when they go in. There are no revenues to support them.
They're selling stock. They're selling the aspiration that something will happen to that tiny company. Most of these companies are between 10 to 50 people. Most, not all. They're about, as I say, a thousand, two thousand.
And they started in 1973 when Genentech was conceived in San Francisco with a crazy scientist saying, 'I have an idea.' And an even more crazy venture capitalist saying, 'Hey, I'm willing to put my money on that crazy idea.' It's a little bit like the go west in my wagon. I don't know what I'm going to find, but I'm going west.
That's truly an American approach, truly. It's not a 'I'm going to go and find,' it's 'I'm going to go and build.' And you know, many people died on the way in those wagon trains. But biotech's like that. Many companies live, many die.
All of these little companies put their neck on the line. It's either make innovation or die. Then they're bought. Most of them are bought. When they get a product, not all, but most. Some go on to commercialize their product, but very rare because the cost of commercializing is incredibly expensive.
So, the giants who are out there, these giant pharmaceutical companies, are very different. Their great skill and their great capability is a constancy of presence. They never sell stock. They earn huge amounts of cash.
That cash flow they use within their companies. Sometimes to buy, as I support strongly, young biotech companies with novel products. Sometimes, and something I don't support, buying back their stock. And sometimes, and hopefully, investing in infrastructure that helps them be successful in manufacturing and distribution.
These types of companies have a very, very different psychology. The young innovators, incredibly desirous of risk. Very close to the patient. The big giants, focused on constancy, cash flow, status. And really like giant ships not moving.
The irony is that 70% of all innovation comes from the little guys. All of those new medicines, 70% of them come from those and go into the big companies who distribute them and largely get them to patients.
So, culturally, these are completely different organizations in industries. The biotech has never really been recognized as a separate one. Unfortunately.
The legislators think about the industry. This is as if you're saying, 'I am a chip company versus I am a computer company.' Completely different. One sells through Walmart or through Apple, it doesn't matter. The other one sells, you know, just this tiny little chip, never gets out, just goes straight to the other factory.
So, a component, it's very critical to understand that difference. And then, unfortunately, and this is the truth, when the public sees and takes issue with the pharmaceutical companies because of pricing, access, or lack of insurance, etc., etc., and legislators then move to attack all the pharmaceutical companies and impose restrictions on them.
That has an enormous and disproportionate effect on the innovators. Enormous. They are simply the casualties of an attack on a giant industry.
And venture capitalists get worried. They move their money out of it. They move their risk money out of biotech, while the pharmaceutical companies continue. They continue no matter what.
Two questions on that. One, sharper end of the stick, and that is, you know, something I've tried to make clear to the most ardent Inflation Reduction Act supporters of the new sort of price mechanism, a la price control or MFN on President Trump's side.
At some point, you know, they talk about AARP just put something out that said the government could save, not patients, but the government could save $200 billion if we put price controls on XYZ drugs.
At some point, 200 billion out of the industry, 300 billion out of the industry, it does flow down, right? It is the pockets of these large companies is not where the impact stops.
Would you agree with that? That that impact, if we do suck these revenues entirely out of the system, what are the consequences for that chip maker in your analogy? For that biotech?
