John Maraganore: The Importance of Being Unreasonable

Yeah, thank you. It's great to join you guys today. I'm looking forward to the conversation.

So I grew up in Chicago. I was born in '62, so I've been around for a little bit of time. I grew up with Greek immigrant parents. My mom and dad came to this country with very little money and with a big dream of building a life in this great country. Obviously very proud of my Greek heritage. I was blessed in growing up. My mother gave me an important gift: she gave me a gift of optimism. So I'm generally a very optimistic person, which turns out to be a very useful characteristic if you're going to ultimately be a CEO. I didn't know that at the time, but I've learned that since. And then my father gave me the gift of a passion for science. He was a physician. He really loved medicine. His love of medicine and science ended up creating for me this drive to do something in the sciences and in the medical field. That was really pretty important in my upbringing. I was a bit of a nerd growing up. I grew up in a near north suburb of Chicago called Skokie. Didn't do anything too crazy as a kid. I had some fun but not too much. I went to the University of Chicago for college and fell in love with research at Chicago. I stayed at Chicago to get my master's degree and my PhD, which I managed to get pretty quickly for lots of interesting reasons. From there, I was able to go into the pharma industry. I did a postdoc at the Upjohn company, which is now part of Pfizer, and from there started my career in biotech.

Well, my dad wanted me to be an MD. As a physician, he was hellbent on having both of his sons becoming MDs. My brother fulfilled his dreams and became a neurologist, but I deviated, which often happens with middle children as I was. I became passionate about doing scientific research. When I was at Chicago starting my sophomore year, I joined a lab as a lab assistant, lab tech, doing research, working with some of the PhD grad students and postdocs that were in the lab, doing protein structure function work and work on snake venom phospholipases. I fell in love with being in the lab. I enjoyed it. I felt that every day I was doing research, I was doing something nobody was doing in the world. There was that real feeling of exploration, that feeling of new discovery that I think accompanies the passion characteristic of just about anybody who's doing live research around the world. For me, it was something that was truly exciting. I would spend time between classes to go in the lab and get an experiment set up, or after classes go and do a few experiments before going to the library to study. It became part of my daily grind, if you will, but I loved it. It was just so much fun. That drove me to make the decision to go down a PhD path versus an MD path at the end of the day.

Well, actually, most of my graduate work and my early scientific work was on proteins and peptides, not on RNA. My transition to RNA formally occurred when I became the CEO of Alnylam in 2002. I was obviously familiar with what was going on in the RNA therapies world with antisense oligos and companies like Ionis Pharmaceuticals, which at the time was called ISIS Pharmaceuticals, and some other RNA players out there. But for the most part, my time to become a leader or get more involved in nucleic acid-based medicines was much later in my career, 2002.

You know, my initial plan was to be an academic scientist. Back in the early 80s, mid-80s, it was pretty unusual for somebody to go into industry. It's not like today. It was viewed as being sort of a selling out moment if you went to the quote unquote dark side. Although at the time, it was the beginning time of biotech, and I was fascinated by what was going on in the biotech arena. Genentech had been started, Biogen had been started. There was a lot of even lay press coverage of recombinant DNA work and how it could transform the future of medicine. So I was intrigued by all that, but my original plan really was to be an academic scientist. But my thesis advisor at the University of Chicago ended up getting recruited to go be a lead scientist at the Upjohn company. When he went there and I finished up my grad work at Chicago, he invited me to come over and do a postdoc with him and just sort of finish up some unfinished lab work that we had been scheming about. I took him up on the offer. In that one year I spent at Upjohn, I became excited about biotech and pharmaceutical type research because unlike academic training where you are very focused on one specific topic and subject and you publish on that work and you're the world's expert on that piece of research, in a biotech pharma environment it's much more of a team sport. You're working with many different people and you're thinking about how your work can ultimately become important as medicines. I felt both the team aspect of a pharma biotech experience and the application of that experience for medicine and for patients was invigorating. That was the change point. It was about 1986 that happened in my life, and from that point on I've been in the biotech industry.

Yeah, I mean, it's not like you get exsanguinated of your scientific interest by going into industry. In fact, I think some of the science that's done in industry is about the best in the world. Obviously the funding is very robust depending on the environment, but it can be very positive in that way. I found it to be very exciting and very scientifically challenging as well.

Well, Alnylam, no, it's Arabic actually. The name Alnylam, which was coined before I joined the company, so I inherited the name. The name Alnylam is Arabic for string of pearls. It was also the name of the center star of Orion's belt. So if you look at the constellation Orion, the three stars that go across, the center star is Alnilam. Paul Schimmel, one of our founders, coined the name. His favorite aunt was an Arab scholar, and in a nod to her, as a sign of respect to her, he suggested the name Alnylam would be good for the company in part because string of pearls is an interesting analogy to a string of nucleic acids in the RNA molecule. And so that's where the name Alnylam came from. I loved it. It takes people a while when they don't know the company name to sort of look at it and understand how to pronounce it, but it's a great name.

Yeah, it's definitely unique. I feel like I see a lot of companies have like Greek sounding names like Dia, so it's good to just change it up a bit. It is actually the name of the company before it got changed to Alnylam was Precision Therapeutics, which is a completely blah, you know, who cares name. I'm so happy that Paul renamed it Alnylam Pharmaceuticals for sure.

Yeah, absolutely. Look, I joined Alnylam as the founding CEO in December of 2002. The company was started on the big bold vision of harnessing the RNAi pathway that had just been discovered in cells. It was 1998 that Fire and Mello described their seminal work that led to their Nobel Prize in 2006. But it was very, very new RNAi at the time. We had a vision that if we can harness the RNAi pathway in cells and silence genes at the level of mRNA, we could effectively create a whole new class of medicines. So it was a big bold vision based on incredibly exciting newly discovered science. At Alnylam, our challenge was to figure out how to make drugs out of the small interfering RNA molecules, siRNA molecules, that are the molecules that mediate RNAi. And it turns out it was really hard. We had a lot to figure out over many years of doing a lot of science. The biggest challenge was figuring out how to get these small interfering RNA molecules from the outside of the cell into the inside of the cell, specifically in the cytoplasm where they could harness the RNAi machinery to silence an mRNA. That took a lot of work, almost a decade of work, before we really had solutions that were acceptable for human testing at the end.

Oh yeah. I mean, we started the company as a venture-backed company like most biotech companies get started, and we went public in 2004. One thing that's important to mention is I had about 20 years of experience in biotech companies before I started as CEO of Alnylam. That's really important. I try to tell people, young people especially, who are really eager to go into a CEO role quickly, 'Wait a second. You've got a lot to learn.' Because it's a very complicated industry. How do you raise money? How do you do clinical trials? How do you think about manufacturing your drugs? How do you think about going public or staying private? These are all really hard things that there's no book that says here's what you do. So you got to live it. I did 20 years of time at Biogen and Millennium before I ultimately became CEO of Alnylam. I think that prior 20-year experience was critical to basically be ready to be a leader of a company as CEO. That put me in a good position to think about when do we raise money, when do we go public, when do we have to bring our first drug to the clinic, and so forth. So that experience was helpful.

Absolutely. I'm a huge proponent of industry experience. I would say this, Jen: the young entrepreneur, recently minted scientist or business leader, they should go to a more established biotech company like an Alnylam, like a Biogen, like a Vertex if they're in the Cambridge area or on the West Coast. There are a lot of great companies, BioMarin among others. They should learn in those companies from very experienced, very successful leaders and soak it in. Think of it as your postdoc before you go and try to do something more entrepreneurial, more at the startup stage. Definitely get that experience before you're in a leadership role in a newly minted company. That's my vote. A lot of younger people these days seem very eager to go into being the CEO right away. That may work in the tech industry where you have so many examples of very successful recently minted graduates going into tech leadership roles, but it doesn't work that great in biotech unfortunately. It just takes a little bit more experience. It's more complicated.

Well, the first role could be as a scientist within those companies. When you join a company, especially a larger biotech company, as a scientist you get exposed to a lot of things. You see a lot of what's going on in the company. But what I always tell people is they have multiple different paths they can go down if they want to get a little bit of business experience. They can go into being a program manager or program leader, or they can go into business development and get skills in the entirety of the efforts that go on in a biotech company. Those are the sort of steps from a career standpoint that would be really good if somebody wants to go from being a scientist to being a business leader at the end of the day. Program management, program leadership, business development, alliance management — those are all roles that are really good if you want to transition into the business side of it. But you can go from being a great scientist in academic research and become the head of R&D someplace as a leader over time once you learn and demonstrate success. But it takes time, and people need to take the time to do it.

Well, I think obviously if they want to be a founder, that means they've got to come up with some good ideas of a piece of science to pursue. In the course of gaining experience in a biotech company, they should stay in close touch with academic leaders and academic scientists to see what other ideas might be out there. They should be very active in networking. I'm a huge fan of people interacting in a community so that they stay in close touch with what other people are doing. I think it's an important part of career development to maintain a very active network. I've always done that in my life and encourage other people to do it as well. But if somebody who's in a career growth mode learning in a biotech company ultimately wants to go run their own or start up their own company, they need to really stay in close touch with people on the science side, but also begin to develop relationships with people that have the money. Learning about the venture community, networking with people that are on the venture side, getting that exposure is super important as well.

Well, as Friedrich Nietzsche says, whatever doesn't kill you makes you stronger. I think failure ought to be a learning. It ought to be something which you bounce back from. You learn from it, you become stronger, you become better, bounce back from it and go do it again. But you also can minimize the failure rates when you have a lot of experience. That gets back to the earlier point about making sure that the founder entrepreneur is not somebody who's necessarily just out of grad school or out of high school or out of kindergarten, but somebody who might have actually had a career in a biotech company learning what the business is all about. I think that's super important.

Yeah, no, very different. Very different.

Yeah, I've had that experience way too many times, I have to say. I think decision making and making high-quality decisions without delaying them too much, by doing them relatively quickly, is something I believe in strongly. I've always told people, I'd rather make a decision today with 80% knowledge than wait for the next three, four, five, six months to get to that elusive 99.9% knowledge level on a decision. I think that's because sometimes especially in entrepreneurship and business building, you have to take some risks. You can't just have 100% certainty. In fact, I don't think you can ever have 100% certainty in what we do as a business. So you have to be willing to take those risks, make those decisions quickly. We had many during the time we built Alnylam over 20 years that I was leading it. We had many points in time where we had to make key decisions, and the decisions were true forks in the road where go down one, you'll have a completely different set of outcomes versus the other. Whether it was what programs to put into the clinic, which ones to stop — those are some of the most important decisions. When to go public versus stay private — we made that decision in 2004. That was an important decision. Do a partnership with a major pharma company or not, work with this partner versus that partner. Many examples during my time leading Alnylam where we had to do that. But as always, you want to make decisions in a data-driven way, in a science-based manner. You want to get input from people. I'm a big believer that most decisions should be made together with other colleagues, but sometimes the CEO needs to make the final call, and there were several examples of that as well. But it's always best when it's done with the group where there's good alignment, good consensus around what to do.

Yeah, at the board level, the board is the CEO's boss essentially. So that does require getting consensus with your board and getting alignment with your board, but that almost always happens. With your team, it's more frequent that there are some levels of disagreements or misalignment. Maybe a couple people on the team want to go one direction, other people on the team want to go another direction, and the CEO has to play Solomon and make that choice at the end of the day. My view is, unless that decision is somehow political or capricious or unfounded by science and facts, once that decision is made, everybody needs to align behind it. They always do, or they should always do. That's important. But there are many examples where ultimately the CEO has to make a final call on something.

Yeah, well, I would call it... it's not a democracy. Leadership of a company can't be a democracy because no one person has all the information in a way that allows them to make the right decision. So ultimately you need to have an individual leader who can make the final call, but again, 99% of the time it's done with strong consensus by the team.

I mean, it's really clear. For one, if you need to shut down a program, I'll give you some examples of programs that we had to shut down and why. We had a program that we were developing in a liver cancer indication, and it had some interesting and encouraging data, but nothing that was blowaway data early on. Then we had a resource allocation-based decision to make. We could have continued that program and continued investing millions of dollars in it and putting lots of people behind it, or we could have pivoted our dollars and our people to a set of programs that were much more compelling at the end of the day, namely the TTR programs at Alnylam. We made that decision very clearly, walking away from something that was in the clinic that had some promising data but nothing that was going to be a game changer. That was a tough decision, but it was the right one because it allowed us to focus on the programs that ultimately led to our first approved drug.

Again, nothing blew away to basically go after this other space that we thought could be an unbelievable new therapy, and that was the right decision.

We had a program that was in Phase 3 development, and it ended up having a safety liability in humans. In a placebo-controlled trial, more patients receiving the drug were dying than patients receiving placebo. Well, that's a problem.