Hi everybody, thanks for joining us. Welcome to Post Talk Live. I'm Drew Armstrong, your host and the executive editor of Endpoints News. It is Wednesday, May 27. So I'm actually at the Financial Times offices here in New York, which accounts for the different and unusual background behind me. But I was at breakfast this morning in the West Village with somebody who works with a lot of the very biggest companies in biopharma, and we were talking about how it feels like there are a number of moments right now where the industry is facing some really big changes. There's our relationship with China, drug pricing, supply chains, AI, and how all of those topics shake out is going to affect what the industry looks like over the decade to come.
So today we're going to be talking with somebody who has worked in almost every part of biopharma. Jeremy Levin has led dealmaking at Bristol Myers and Novartis. He was the CEO of the generics giant Teva. He's founded a biotech and he's chaired the board of the biotech industry group BIO. He's also got a book out right now, Biotech in the Balance. And before he joins us, I have just a little bit of housekeeping. If you're joining us for the first time, hello and welcome. Thank you. Post Talk Live brings us the reporting, the analysis, and the discussion that usually happens behind the scenes in our newsroom live to you. If you're on YouTube with us and you're not already following us, please hit that little subscribe button down below our feed to get alerts about future live streams. You can also sign up for the Post Talk email on your Endpoints News subscription page. And if you are with us on YouTube today, you can join the chat and conversation. Our producer will pass along questions to me.
So Jeremy, welcome to Post Talk Live. Thank you for being with us. It's a real pleasure to have you on the show. You're always one of the most fun conversations of folks I talk to in biotech. You are never short of opinions, commentary, and you know, and unlike some people, you have the experience to back those things up. But I was actually curious because I don't know this about you: how did you get your start in this industry and in the life sciences? What is like, what's your origin moment for being in biopharma?
Drew, first of all, thank you very much for having me on. What a lot of fun, and I don't think I've ever been asked that question. So I was at Hôpital Cantonal de Genève as a...
You're going to have to explain for our non-French speaking readers what that is.
I was doing a fellowship at the European hospital in Geneva. It's a teaching hospital, and I went skiing. I bumped into a banker and he said I should come and help him understand a new entity called — and he called it Biogen. And I thought, okay, I don't know what Biogen is, but I went off to a meeting and there everybody's dressed in wonderful suits. They were all looking very, very seriously. And there was a gentleman there by the name of Wally Gilbert,
And Wally Gilbert, who's one of the founders of Biogen, basically was saying blah blah blah, give me $70 million. And I blinked because I'd never seen this before in my life. I'd never understood this, never heard of an entity like this. But the one thing I was sure about, he was talking about a drug called interferon. And I knew factually what he was going to be talking about was nonsense because I had just developed a drug called Captopril with Bristol Myers and I knew how many years it took. Wally was saying, 'I've got interferon, give me $70 million. Two years from now, I'll be selling it.' So I thought, you know, this whole thing called Biogen and this whole area called biotechnology, which was fresh and new, seems pretty amazing. I better have a look at it. And so that's what took me out of academic medicine to the United States to learn about biotechnology. And I've never looked back.
You have a book out, and obviously we have to kind of fast forward through all the various things that you've done, which we will come back to because I have a lot of questions for you about your perspective on the industry. But you have a book out right now. Tell me what the book's about, why you decided to write this right now, and because you're a busy guy, so why write a book and what did you decide you wanted to write about and how'd that turn out?
The book is about an idea and a concept which says that right now, if we do not take action as an industry, then five to ten years from now the American innovation industry — in other words, the biotech innovation — will have suffered an enormous setback, a blow, and innovation will migrate to other parts of the world, capital will migrate to other parts of the world. So the book is a celebration of the incredible capabilities that we've developed. It is also the recognition that innovation will not stop no matter what. But it is an analysis, in simple language, of the system that allowed this incredible area of biotech to start with one or two companies to grow to nearly 2,000 in the world — sorry, in our country.
And that there are certain things that we have to understand: that all the infrastructure underneath biotech is shaking right now. But we can take action. The good news is, if we do take that action, while we will not be the largest single producer in ten years' time, we certainly will be one of the most innovative and competitive in the world.
So how would you — I mean, you mentioned the kind of shaking of the core infrastructure under this. How would you define what the pillars of that are? Because I talk to a lot of people who do kind of make the case that we've taken some things for granted and, you know, taken some actions that have been damaging, but also maybe just kind of counted on the force of capitalism to keep this thing going and thought that that would be enough. But talk to me about what do you think the pillars are that maybe people have taken for granted that we have here in this country.
So in order to answer that question, you have to think a little bit about where did we come from and where are we now. 1973, you have the extraordinary moment where a scientist meets a venture capitalist and says, 'I've got a crazy idea.' And that venture capitalist then says, 'I'm going to fund you.' And out of that comes Genentech.
Then from that moment comes the evolution of the industry to today. Now, what happened during that period of time? What led up to that aha moment was the extraordinary developments that were occurring through the funding in science, NIH, academia. All of that was the basic premise of science: great scientists and facts. That first fundament is now shaking. We question very facts. We are disassembling the very funding structure that since 1947 has led to the NIH as being the premier engine for innovation in the life sciences. We are challenging across the board academics. Worse yet, what is happening is that we're not attracting the talent that really underlies all of this — the best of the best. We're not having the Albert Einsteins of the nuclear world coming to us in biology. We could do. So that's one area that really suffered.
The next is something slightly different, and that is the capital markets. When that aha moment happened in 1973, which led to Genentech, we've not at all treated the area of biotech as infrastructure. We've treated it as a trade. Essentially, it goes: you get funded, you go onto the capital markets, people trade you, done. And capitalism per se is a very good thing. But within capitalism, there are clear structures that identify the value of different assets. For example, you are a trade like that. If you are in some key areas like the digital world, things change very quickly, or you're a very large cap entity where tiny fluctuations are great. You buy, you sell quickly. All of them have one characteristic in common: very short product cycle lines. Ours is not like that. We have a 10-year product cycle line at least. There is not a single incentive built into the capital structure of our industry which says we are going to incent you to hold that stock for all that period of time. Instead of which, people welcome volatility. That's craziness. Volatility for a biotech means all sorts of changes.
So the tax laws never changed, as they did by the way when they said that housing was an infrastructure issue. Therefore we need to accommodate tax structures to deal with it. Biotech — nothing like that happened. There's no — you can hold your stock for a year and you get a capital gain based on your long-term holding, so-called one year. But imagine a moment if somebody said to you, you know what, I'm going to incent you to hold that stock longer. I'm going to give you a lower tax basis on five years. You hold it for 10 years, you don't owe anything. You will have a completely different stability concept. Now also, you consider that if you take real estate, in real estate you get all sorts of depreciations, you get the right to sell off your debt, all sorts of different things. Doesn't occur with us. So that aha moment many years ago had led us to now live in a world of rapidly cycling buying and selling in the public markets. And just imagine what that's going to look like in a few years' time when AI starts trading all our stocks irrespective of what the specialists are. So that's a second area that's really suffered.
Third area that suffered profoundly is the benchmark, the golden center of our industry, is the FDA. Now the FDA has needed revision and always will do. Doesn't matter. Institutions always should refresh. But what happened last year was catastrophic. You had a moment when the DOGE walked in and wiped out 20% of the jobs in FDA without taking a single moment's thought as to what they actually did. Didn't understand it. Didn't care to understand it. Was an economic decision. Cut. And the cut they did. Sure, there could have been reductions, but not like that. Anybody who's done a reduction in force — and I've done it, and many CEOs have done it — you do it thoughtfully, carefully, and you understand the implications of it. They didn't.
Morale was catastrophic. Then you add on top of that that 90% of all of the senior leadership has either left or turned over since the beginning of last year. That's hemorrhaging. Hemorrhaging institutional knowledge. Anybody who runs a large organization can tell you straight away: you're either going to do away with that organization or you're going to change the top very slowly, because that institutional knowledge is absolutely what makes it valuable and it's been built up over many, many years. So if I had to pick out a few things and just simply say they are not just shaking, they are rocking backwards and forth: one is the questioning of science and truth and the reduction of this extraordinary engine of innovation at the NIH and our academic centers. Two was the failure over years of us not understanding that we're not just a trade. We are fundamental infrastructure into the national security of the United States, and we should have started — the Congress and the leaders of this country should have understood this and built into their capital structure the understanding of how you get long-term holdings. And then thirdly was the full-on assault against the FDA, which quite frankly has been a great problem. Now, if you have to ask the question: how come the stock market's going up? How come these companies are continuing to get approvals? Just wait. Just wait.
Well, it's interesting. You know, we have some data actually out today. Tom Randall over at Signal, he has his quarterly survey out. It's very interesting to see some of the narrower cuts of that data where you see actually a lot of optimism and growing optimism on a number of different fronts. The one big holdback is the regulatory questions in the US right now, and I think the degree of uncertainty around that and obviously the leadership vacuum that you mentioned at the top of the FDA right now — that's on the front of the website, should be in most of your inboxes. If you're Endpoints subscribers, I recommend you check it out.
I do want to ask you — it's been interesting. We talk a lot about China on this show, and I think it feels like on a national basis, you know, I have not been doing this as long as you have, but I have been doing it for a while. It feels like for the first time ever, the US has a meaningful national competitor in this industry. And you know, I talk to a lot of people who reference the fact that in many ways the US competed and won the big pharma industry many years ago, where Europe really used to be the sole power there, and over the course of many decades the US pharma industry really rose to prominence. But this does feel like the first time where I think US biopharma has been challenged externally, internally by a competitor that is as sophisticated and capable as we were in building this. And I don't want to rehash every single bit of China talk we've had on the show, but I am really curious, given the multitude of roles that you've held, what your view on the China question is.
Well, you know, my view is very straightforward and it's formed because I first went to China in 1974. I've seen China since the post-Mao era, and then I've run businesses in China, and I have great respect for the way that they have accomplished what they've done. Unlike the United States, China really early on said that biotechnology — I'm not talking about pharma. I'm not talking about revenue-generating generic companies, branded companies. I'm not talking about those guys. They basically don't ever raise a single amount of capital by selling their stock. They're revenue generators. The real innovators are biotech. And the amazing thing about the Chinese is that 25 years ago they said they were going to build — explicitly build — biotechnology as a core fundamental strength of their nation, and then every five years they repeated that refrain and they took steps, and we can talk about those steps.
In the meantime, the United States regarded this as incidental, kind of nice to have, did nothing. And indeed, unfortunately for biotech, it got swept under the carpet of pharma and it's been hit with all of the pharma problem. What does biotech talk about? Pricing? Why in heaven's name is that the number one topic that we should be talking about instead of innovation? How do we drive innovation? How do we develop innovation? How do we get great products to market? I'm not worried about the economic number of a deal with a pharma company when you've got an innovative biotech and then you walk to a pharma and say, 'Please buy me' or 'buy the product.' Not a single projection that I've ever seen in any pharma — Novartis, Bristol Myers Squibb, or whatever — has ever predicted what the sales would be from the product they bought from a biotech. Now, I don't know about other pharmas, but I can tell you I have seen over 200 of those and they're all wrong. So don't come to a biotech company and say, 'Tell me what your sales are going to be.' Develop a great product. And unfortunately for us, we've just been treated as part of pharma for years. We've never had a national recognition that this is a strategic asset.
So for me, I made a couple of points there. One, biotech is not a simple incidental. It is infrastructure. Two, the Chinese understand this and have executed superbly on this. And oh, by the way, unless we take action, within five to ten years not only will we have a competitor, we're going to be behind.
