GM: How is Wyeth Biopharma organized?

CR: We started four-and-a-half, five years ago to form the BioPharma group, and what we debated at the time was whether it would be beneficial to go into biotechnology and pull our assets together as a stand-alone organization integrated into the pharmaceutical division or some other high-bred models that are out there. What we realized is the strength for Wyeth was our ability to work across multiple platforms and take advantage of technology, people, and systems.

GM: When did Wyeth begin to invest in biotechnology?

CR: It was originally started in biotech with the merger between Cyanamid and American Home Products, which forms the basis for Wyeth, when in the R&D area they had an agreement with CellTech. Plus, they also had an agreement with Immunex, and at the same time the Wyeth organization had an agreement with Genetics Institute. So, this goes back almost 15 years ago where Wyeth had stakes in Genetics Institute, they had them in Immunex, plus the R&D area for CellTech which is a U.K.-based company.

GM: What kinds of investments have you made since you began looking into biotechnology?

CR: We’ve made several significant strategic decisions. We bought out the rest of Genetics Institute, we continued to invest with our colleagues at Immunex at the time and to different proteins, one of which was Enbrel, in addition to licensing other technologies. The formation of Wyeth in biotechnology really goes back 10 years ago as we began to get all of these pieces together and build the momentum.

GM: Where does Wyeth stand among big pharma players in the biotech market?

CR: When you take a look at biotechnology companies and pharmaceutical companies that have biotechnology, Wyeth is among the top 10 companies in the field. For us, biotech made up about 35% of our sales in 2006.

GM: How many products are marketed by Wyeth in the area of biotechnology?

CR: We have seven biotechnology products. They span from Enbrel, which is one of the world’s largest biotechnology products and one of the fastest growing. We had year-ended growth of 33%. We have Prevnar, which is in the vaccine area, which is the world’s largest vaccine, but also the world’s largest biotechnology vaccine. We have two hemophilia products, Benefix and Refacto. We have two oncology products, Mylotarg and Numega, and we have what is the most successful combination of device and biotechnology combined in a product called Infuse with our partner at Medtronic Inc. out in Minneapolis and that is essentially a bone-growth product that has both a device component and a drug component, where we did the drug component and they did the device component.

GM: How many products do you have in the biopharmaceutical pipeline?

CR: In the pipeline right now, about a third of the R&D programs are for biotechnology, comprising about 22 different projects.

GM: As well as having your own in-house R&D organization, is partnering a trend that is commonplace across the pharmaceutical industry, or are you seeing other trends?

CR: There’s certainly a tremendous amount of partnering going on in the industry and there’s also a tremendous amount of acquisitions going on in the industry. If you take a look at the products that we currently have on the market and those that we have in the development area, there’s a significant number of our products that have a partner in some way shape or form. We’re not opposed to acquiring certain companies for technologies, but our history has been actually sitting down and trying to partner and take the advantage of what a smaller or midsize company has with the advantage that we have in trying to create something greater.

GM: Why did Wyeth enter the biotech arena when you did?

CR: It was much more strategic than it was opportunistic. By that what I mean is that part of what happened 10 years ago was that there was a lot of new technology coming out, biotech being among them, but the other thing that Wyeth had recognized at that period of time was that biotechnology offered another route to addressing human diseases. So, in and of itself, the technology was interesting but the belief was if that technology continues to mature it could provide us a whole new platform to go after the same diseases that we were targeting with small molecules.

GM: How much of Wyeth’s salesforce is dedicated to BioPharma?

CR: It’s a very small number. Our total number of sales reps on the biopharma products are less than 300 people, so it’s not one where the sales-force size is the key determinate. The number of sales forces we have applied to it is disproportionately small compared with the sales, but the amount of medical and manufacturing and marketing resources are quite significant for the company.

GM: How much did you invest in biotech manufacturing?

MK: We started investment for these biotech products from 2000 to 2006. We made investments worth $3.5 billion dollars, these were capital in infrastructure investments. Those were at six manufacturing sites, throughout the world, in the United States and outside the United States and actually involve either building or renovating 22 discreet manufacturing suites where a special manufacturing operation takes place. So, a huge strategic investment was made, a capital investment in terms of bringing the infrastructure up. And, of course that involved a lot of discussions about what the balance of risk was, and fortunately all the decisions we made were correct and justified by the rapid growth of all the products that we have in the biotech arena.

GM: What was the main challenge to investing in biotech?

MK: The challenges, of course, making those investments in a strategic way so that 10 years later you don’t have too much facility, too much capacity. What we did in exact parallel with that set up investments is also about 2001 is we invested in our process development. Process development are basically the ways that we make these products, and because in biotechnology these products are so new, there’s lots of opportunities to improve the way that we make them, the productivity, the yields, etc.

GM: Can you talk about the Alzheimer’s disease product in development, bapineuzumab, from the manufacturing aspect?

MK: We have an Alzheimer’s product, that we just announced is moving from Phase II to Phase III. This is a process that we have improved dramatically in the last couple of years, in terms of the efficiency in which we make these products. It’s an antibody product. The risk is, in the past if you had a product of this size, we would have had to decide two or three years ago to make a major new facility investment, but because of what we’ve set up as our process efficiencies in process development we can make a very modest investment in accommodating even the upsides of even this product within all our existing facilities.

GM: What are Wyeth’s long-term growth plans in the area of biotechnology?

CR: We’re expecting continued growth in the United States. Our first-quarter U.S. results were about 34% growth. We’re expecting regional growth through Europe, Asia-Pacific, and Latin America, and we expect that growth to be pretty significant. For example, we were at about 45% growth in Europe in biotechnology in the first quarter, about 15% for Asia-Pacific, and about 90% for Latin America. What’s driving that growth is the launch of our current biotechnology products and how important they’re becoming in terms of affecting health care in those countries. The other thing that’s worth noting on the commercial side is the distinction of being the only company that in the same year launched two biotechnology products in Japan — one for oncology and one for rheumatoid arthritis — which is, of course, for a global company what every company dreams of. We’re focusing a lot on this period of time in several areas where we’ve done significant deals or where we expect to see continued growth. One is the area of oncology. We’re taking a look at lymphomas, taking a look at the various leukemias and solid tumors. We’re also going to be expanding and continue to expand in the area of immunology. We’ll be focusing on rheumatology, we’ll be focusing on lupus, we’’ll be focusing on a broad range of autoimmune diseases and looking for opportunities there. And then the third area has been the neuroscience area, we’ve taken a pretty aggressive biotech approach with products like bapineuzumab for Alzheimer’s and we’re continually looking for other options within the neuroscience areas, including the areas of MS and potentially other diseases.