Who needs those pesky scientists? At least those who work at big pharma? After all, the best ones want to work at smaller biotechs, right? And those left behind have no idea how to innovate. Says who? Chris Viehbacher, that's who. The Sanofi ceo let loose at the CED Life Sciences Conference this week,
MedCity News reports, and was not shy about saying what he thinks.
Asked about investing in internal R&D versus smaller biotechs, Viehbacher quickly acknowledged the philosophy behind recent moves to cut R&D costs, which are being slashed by 12 percent from 2008 levels to about $1.1 billion, excluding Genzyme, which Sanofi purchased last year. Those leafy R&D enclaves, though, are prime targets.
"What Sanofi is doing is reducing its own internal research capacity," he said. "The days when we locked all of our scientists up in a building and put them on a nice tree-lined campus are done. We will do less of our own research. We’re not going to get out of research. We believe we do certain things well in research but we want to work with more outside companies, startup biotechs, with universities."
He was asked if this is cheaper? Yes, he said. "But research and development is either a huge waste of money or too, too valuable. It’s not really anything in between. You don’t really do things because it’s cheaper. The reality is the best people who have great ideas in science don’t want to work for a big company. They want to create their own company. So, in other words, if you want to work with the best people, you’re going to have go outside your own company and work with those people...
"And, you want to work with them, why do they want to work with you? The reality over the last 10 years is, (a small biotech) wouldn’t get caught dead working with one of these big cumbersome pharma companies. Once you have a funding gap, suddenly there’s a much greater willingness of earlier-stage companies to work with Big Pharma. We’re looking earlier and people who are early need help," Viehbacher declared.
So the best people in science do not work for large drugmakers? If so, this means that Viehbacher is saying his scientists are not the best, which justifies the cuts? We wonder how this will boost morale among Sanofi scientists. Probably not by much. But those who are truly insightful will find a way to start their own operation or sign on with a biotech somewhere, proving his point, yes?
Why work with venture capital firms, though? "There’s two reasons," he said. "One is, they can sometimes bring competencies we don’t have, like for instance in how to help a startup company. The second thing is to give you a second opinion. Somebody in your company is going to love the science and be championing this internally. But you want to have a second opinion. If you have a venture capital company that’s willing to put money in, that kind of gives a little validation of that."
So Viehbacher presumes that venture capitalists are always correct. If his own staffers determine an outside investment may not be a good idea, their opinions will be downplayed because they lack sufficient competency? Not every deal with a biotech and venture capital firm will work out, though. But with fewer scientists on hand, he may have no choice but to seek those second opinions.
"The new model, where we’re trying to go, we believe that Big Pharma has competencies in validation. So, if a Big Pharma company does a deal with a smaller company, the smaller company’s share price goes up because people believe that Big Pharma has depth of competencies to judge whether this science is any good or not," Viehbacher went on to explain.
"Now, big companies, and not just Big Pharma, big companies I believe, are not any good at doing innovation. There has to be some element of disruptive thinking to have innovation and I can tell you that big companies do everything to avoid any disruptive thinking in their companies. So, you want to work with companies that are a little bit more disruptive in thinking, but bring those competencies together."
In other words, Sanofi scientists who have not yet begun looking for a job should do so? Well, if they can't innovate and their opinions don't count, they may as well, yes?
Hat tip to In The Pipeline
89 Comments
At least he's honest, I suppose. There are plenty of CEOs that feel the same way but never actually express these thoughts.
What little morale the scientific staff at Sanofi had is definitely gone, though.
Somebody might want to send him the quip:
Learned 1000 ways how NOT to make a lightbulb.
Hey Ed,
Your discourse around Viehbacher's statements are polemic in the extreme. If we take what he says as examples rather than absolutes, he does make a lot of sense. He is NOT saying that VCs are always right and that his scientists all suck; he's saying that there are alternative models of research and innovation and Sanofi is willing to explore these. He has not completely wiped out research but wants to diversify what he does.
Big Pharma is excellent at the D of R&D but not so hot at the R. He's rightly trying different R models to boost productivity and efficiency.
Since when did you become a tabloid writer? :)
Cheers,
Pete
Hi Pete,
Thanks for the note and I understand your point. I recognize that he is not trying to eliminate all research, which has been noted in the past on this site. The R and D are increasingly being separated, yes, as Big Pharma adopts the Hollywood model. Nothing new there. Just playing out in real time now.
And I know that he was not trying to 'dis' every single staff scientist. But one can imagine how his remarks may be interpreted by some of his own scientists. He really does not say much to build their confidence in their value. Like it or not, he sort of put his foot in his mouth when viewed this way.
As for tabloids, I spent several years at New York Newsday. And as I like to say, you can take the boy out of the tabloid, but you can't take the tabloid out of the boy.
Thanks for writing in :) ed
We have a winner for the moron CEO award. He clearly doesn't understand how drugs are made and the research and screening has to be done and paid for by someone.
May I observe that this quote stunned me!
"The new model, where we’re trying to go, we believe that Big Pharma has competencies in validation...."
This is the first time I have ever observed 'upper management' appearing to espouse "the V-word" ... but perhaps I don't get out enough? Or could it have been a typo and he meant to say "valuation?" Just asking ...
Hmmm, did "big pharma" hire anbody throughout the last 10 years? Or did they simply kick out scientists by thounsands? The best leave first, usually, but some stay, trying to make a difference
And the guys from the biotech start ups are the absolute stay-aways, as they never learned what is the difference between a protein and ready-to-market-drug. So FDA has to teach them... :-)
The really good scientists don't even think about pharma.
There hasn't been a sign of decent employee morale at s-a formerly s-s, and now sanofi alone again for years. All of the scientists are lousy at innovation? Okay, and his purchase of Genetech has put them back in the top 3 NOT EVEN CLOSE.
I wonder how all of the bunch in Cambridge feels about his striking statements. Scientists are not important? Okay...whatever you say Chris. Leaving there was the best move of my career and I was lucky to get out before he came in.
@keiner - you know the answer - the real problem is that the 1000 ways how NOT to make a light bulb experience went with them...and we have 2 year light bulbs only lasting a year...
Either way, the US needs to quit subsidizing Pharma research for the rest of the world.
No worries. By May of this year he'll be able to quickly and easily identify all of the really good scientists at his organization: they'll be the ones who've already packed up and left.
The reason the VC guys are correct more often than the internal guys is that they have skin in the game. Internal staffers are alwsys playing with other peoples' money. Therefore there is no financial penalty for a wrong decision.
Where are the best scientists? Most of the good ones emigrated from pharma to biotech and VC long ago, as well as the life science divisions of the big investment houses. The smartest scientists I've met in the past 15 years work for Goldman Sachs, Morgan Stanley and Merrill Lynch.
corroborates our research on organization climate in Big Pharma R&D. Our article was just published today in Life Sciences Leader and Viebacher's comments underscore why over 70% of big pharma scientists aren't psyched to go into work in the morning...because they work for guys like this. Very motivating. And given what's going to happen to the BW site the CEO's comments certainly demonstrate he's "walking the talk."
Sanofi scientist here (thought, maybe I should be reconsidering that). Some very unfortunate remarks from our CEO.
So... he's aying that he, and the other top brass are not responsible for the state of their industry? What are we paying them the huge salaries for then?
Lisa, He bought Genzyme, not Gene(n)tech, but I know what you mean. P
Excuse me, but yes. that was what I meant. His remarks shook me to the core. I knew he was an arrogant jerk when I first started to hear about his tirades, but this just takes the proverbial cake.
Sanofi did not buy Genentech. Roche did.
@oii - "...Where are the best scientists? Most of the good ones emigrated from pharma to biotech and VC long ago, as well as the life science divisions of the big investment houses. The smartest scientists I’ve met in the past 15 years work for Goldman Sachs, Morgan Stanley and Merrill Lynch...."
You really do exist in an alternate universe.
VC *skin in the game* is the skin they peeled off of the scientists after Glass-Steagall was overturned.
The big badge of being big time in NJ is having the connections to push to the front of the line for a lung transplant, and that's really old *technology*.
Maybe the future will be as simple as everyone having a lab set up in their rented space and they can mix up their own meds - as tobacco road will tell ya, the chemicals cost pennies, the *packaging* is everything.
Hey, dz, don't diss so bad on my Wall Street buds. Sometimes they are wrong too. One of them even lost more than $200,000 on his 2012 bonus.
Just ask Roger Newton, discoverer of Lipitor where he got the money to start Esperion Therapeutics in 1998. Here's a screenshot of Roger's Board of Directors. As you can see they are mostly VC guys and investment bankers.
Been this way for a long time, pal. Time to smell the coffee. Hint-it's the color of money.
http://www.esperion.com/about-us/board.php
Really... you're arguing that VC guys, and investment bankers know what they're doing? Pick up a newspaper (starting 5 years ago) and that's the coffee that everyone has been smelling. The 'masters of the universe' are emperors without clothes. Everyone knows it now.
William, the VC science types that I hang around with are too smart to ever let their names get in the papers. They don't need to. They are highly compensated for giving expert advice to start-ups and for keeping a low profile.
I've sat with their counterparts in pharma Business Development and Licensing, sitting around conference tables and reviewing licensing opportunities. Mostly comprised of ossified non business types who get put out to pasture when the company can't find any other department to hide them, but yet they're too young for retirement. Most of those guys couldn't recognize a good opportunity if it jumped up and bit them on the nose.
oii - your characterization of pharma BD types is as ossified as your view of 'them'. That was the case years ago but now, not so much. And no, I am not one such. Risk Averse - absolutely; solitary in the corner office? You need new clients dude.
All the sick stuff, like disease shopping (blood lipids increased, GERD, worst thing: female sexual dysfunction), life-time extension by patent "inventions" and so on and so on started with the smart Wall Street guys comming in to big pharma at the top level.
Pharma is so contaminated by the neolib bullshit thinking that it will go down with the investment banks and hedge fonds in the mother of all economic crisis' looming...
I think most people in the world would agree that the 'finance guys' have been exposed for the fraud that they are. From the quants on Wall Street to the leaders of Motorolla, Yahoo, or Home Depot. They are simply, "about as smart as all the other guys in the room". The gig is up.
Clod.
JB
This is an amazing spin on Groucho's old joke about not wanting to belong to any club that would have him as a member.
If "big pharma" is competent in "Validation," that quickly yanks Sanofi out of the bucket of "big pharma" companies. @$$ hats... They should focus on sharpening competencies such as, oh, "reading", "writing", "writhmitik".
Yes, clod indeed.
FAS
Where are the best scientists? Go to Yale's medical library, randomly pull an armfull of journals off the shelves, open them and there they are.
They can also be found in unemployment offices collecting their ration of foodstamps.
It's a problem bigger than Sanofi. If it weren't, they would easily be flicked off the map. Oh, wait...
SF
Lisa if you need a fast $50 million, the VC "finance guys" usually work better than running it up the pharma flagpole internally. u Pedant, sounds like you wou've done BD&L also. Then you would know that with dozens of projects hitting the group weekly there is nary time to give them all a good review, hence a good reason to outsource some of this.
Pharmalot friends, let's begin this glorious day of Friday, with a prayer for Chris Viehbacker, borrowed in part from National Lampoon's Vacation:
Please bow your heads;
O God, ease our suffering in this, our moment of great despair. Yea, admit this good and decent man into thine arms in the flock in thine heavenly area up there. And Moab, he laidest down in the land of the Canaanites. And yea, though the Hindus speak of Karma, I implore you, give him a break.
Baruuuck attaaa! Hallelujaaah!
Happy Friday! Clergy
It should be no mystery to any reasonably intelligent observer of the life sciences industry over the past 10 years. When your primary objective is size and scale, innovation suffers. Where the top pharmas were once the innovators, they have now become primarily purchasers of innovation.
Unless Big Pharma takes the unlikely step of breaking themselves up into smaller, more independent, nimble specialty pharmaceutical companies, I don't see this trend changing any time soon.
Viehbacher could certainly have chosen some of those phrases more carefully - and I imagine there might be just a little internal feather-smoothing after that speech.
But there is certain refreshing honesty in such an open public statement. The objective jury seems to still be out on whether the most effective long-term Pharma strategy is internal basic research, licensing/buying innovation, or some structured combination (probably split by therapeutic areas?). Some companies seem to shift strategies based on their most recent acquisition or the need to 'make noise' with a change of the calendar year. If Sanofi has picked an "external innovation" strategy, based on aggressive business development and deal-making, and is willing to stake that claim publicly then that's more clarity than most organizations have.
Time will tell if Viehbacher's blunt summary gives his company a strategic advantage or just fills the bars near Sanofi's labs - it's got to be a rough week to be in Sanofi Research (let alone Genzyme).
When VC leveraged 100 to 1, the *skin* in the game was everyone else's...investors got their hands on the fruit of EVERYONE's labor to play with after Glass Steagall was ripped down and it has been tobacco road science ever since...with pockets of *dark* research into eugenics that makes the Tuskagee Experiment seem like benevolent charity by the *rich* - "we monitored how you would die"....
*Refreshing honesty* to say scientists are useless to medical research?! Sounds more like a rationalization to me - you MUST whip yourself into a hate frenzy and *murdoch* with yellow journalism the people you just ripped off...go ahead and fire the scientists with a smidgeon of equity in their lives, but it's not going to be as easy anymore for you to send their names off to the *finance* people down the food chain who are the enzymes in your iniquitous scheme of stealing everything from everybody - "...here's another unemployed for you to feed off of...".
Here's the news flash - every human being has the RIGHT to make their lives less miserable through honest work. This dude is telling scientists that they CAN"T do that anymore - he is taking away their RIGHTS! Get it?
There is no time in any person's life when they are more vulnerable and in need of HONEST and real assistance than when a bout of ill health visits them - and it will visit 100% of us. Women have even WORSE things happen to them - biologically speaking. What QUALITY of people do we want to educate to their highest potential to be of service in the cause of health?!
It's more than JUST to judge what the heck has been going on - and even to start employing *containment* strategies...immediately if not sooner - this is a whole other level of guns vs. butter going on and it WILL be getting uglier.
"every human being has the RIGHT to make their lives less miserable through honest work".
As a CEO, Viebacher is saying "what have you done for me lately?". Apparently the R&D folks haven't done much.
It's strictly business. If you worry about human rights, go work for Doctors Without Borders.
I just want his remarks sent to every office trying to encourage more children to study science, and every pundit who complains that we are being left behind by other countries.
If there's no hiring in academia because of funding cuts, and no hiring in big industry because it's not worth their trouble [they'll just have a few techs scale up the reactions discovered by other cleverer folks], and there's not a great deal of hiring by the little start-ups because they don't have much cash.....
Patent cliffs will be the least of our problems. No sensible child will continue in the sciences because there's more abuse than profit in the endeavor. Your odds of success will be little better than becoming a basketball or football star, and the scholarships/salaries won't be nearly as good.
I agree with Lili. There is no reasonable stable career path in big pharma anymore. Universities and public sector have no money, and working in unstable VC funded biotech companies is a rocky road. All that when we constantly hear that there is a future shortage of workers with STEM degrees. I would not want to encourage a young person to get into science. I would have to say: go get an MBA like everyone else. And bye the way, where would pharma companies be without scientists?
"No sensible child will continue in the sciences because there’s more abuse than profit in the endeavor."
Sorry, Lili, if you want to join the club you have to pay your dues in all careers. We've all taken abuse on our way up the career ladder. Abuse is part of the price you pay to receive the Keys to the Kingdom.
Sorry to burst your child's bubble.
Perfect CEO material. Just tries to save his ass when the ship is going down. And these guys get paid 700% more than the average worker. All this for the proven ability to be a jack ass. What a sad state of affairs.
@oii - what has ANY CEO done for medical research lately besides stuff their pockets!? Medical Research does NOT belong to a person - it belongs to everyone. Not like making iPods...
Agreed, SMK, *scientists* the du jour whipping post for CEOs...although the majority of the ones left who did whatever they were told to do deserve to sink with the ship...
I think the blogger who asked a while back why there are so many psychos in *medical research* is starting to get their answer...
more misery for others = more $$$$ for ME ME ME
Telling everyone to NOT invest their talents and intelligence into the sciences that support medical research is wrong - it's the toughest science there is to get right and will continue to attract the best and the brightest around the world, if not in USA because of the MELT-DOWN in values, ethics and vision.
THIS from a c-suite that got caught fraudulently billing Medicare?
Interesting story and great posts. I have been in research for 20 years and it's painful to read but it is all very relevant. I have worked for three companies and currently work for a large Pharma company in NJ.
Viehbacher's comments sound extreme but they echo the sense you get at the company I work for. The spend has shifted dramatically from inside development assets to compounds licensed or acquired from small biotech companies.
It is interesting and scary that we get very little news on the many many compounds licensed from small biotechs. There are always big stories when the deals are signed and they make the pipeline sound full but we hear behind the scenes that the due diligence was weak and the compounds are tanking one after another.
And it's not limited to the compounds. There is a major effort underway at my company to shift the Phase I, II and III development to CRO's outside of the company. This is less about innovation and more just about cost. The argument is that the monitoring etc is too heavy under our policies and that CRO's can push the studies faster and cheaper.
And I fear that what the industry will see of the next decade is a series of clinical trial issues that raise questions about investigator conduct and the appropriate protection of participants.
Scientific development is not like the mext marketing campaign. It doesn't happen in a meeting with some accenture consultants and it isn't always quick and cheap. Apple is very innovative but Apple doesn't expose cancer patients to seriously toxic agents that could cure them or kill them.
We are a research industry that of course needs to have innovation at the center. If we cannot find novel medicines we have no reason to be and no reason to charge the prices that we charge. But finding those novel compounds that work effectively with safety risks that are reasonable has never been and never will be quick easy or cheap.
Twenty years ago many of the big pharma companies were run by scientists. Today they are all run by sales marketing and deal guys. And the science is less and less a focus of any of the discussions.
It is a big test and I guess time will tell. But increasingly they are looking at medicines like iPhones and it's sad.
I used to be extremely proud of the industry I worked for. Now I accept the shortcomings of the leadership and press forward on the science hoping for a better day.
Insider, I don't have a child in this game.
I'm a professor who teaches scientists to write, and non-scientists to understand scientific work. In many universities, there are projects to "get more children excited about STEM careers"....and I'm not sure that it's entirely ethical to bring more people into fields that are busy downsizing.
There's nothing wrong with paying dues, and even with having some lousy jobs along the way. That doesn't necessarily equal "abuse".
But if you actively recruit and educate people to be scientists...so they know that there are thousands of interesting unknowns, and hundreds of disease conditions that we don't yet understand well enough to treat...then announce that society is instead going to just wait for some VC magic to create products, rather than let the researchers do what they were encouraged to do? That's wasted investment.
http://www.qualcommtricorderxprize.org/
I guess people will start sue-ing themselves for malpractice :-) I like the marketing schtick - "...it'll be better at diagnosis than your MD..."
Next up, an app to get the recipe for your generic lipitor so you can make it in the kitchen while BBQ-ing the steak.
Everybody should have the opportunity to contribute to medical research and provide mano-et-mano health care to the best of their ability if that's what they choose. Industry and institutions veering off - philosophically - in order to deny those RIGHTS to people to make their lives less miserable need to be shut down. Period. They have no reason to exist.
You have to fight for the better day :-)
I think that a combined PhD/MBA program is the way to go these days. Here's the overview and link for the program at UConn Medical Center:
"The rapid growth of the biotechnology, pharmaceutical, and health care industries has created a demand for biomedical scientists with knowledge of business principles and practices. The combined Ph.D. in Biomedical Science/M.B.A. program is designed to provide selected Ph.D. students with a thorough grounding in contemporary business by blending and balancing technical rigor, management theory, practical application and individualized concentrations.
http://grad.uchc.edu/prospective/programs/phd_mba/
Why would anyone want to go down with the pharma ship? I was always schooled to believe that the best time to get a job was when you already had a job. I followed that mantra during my career and thus never had to face the grim reaper, even back in the days of so-called job security.
Researcher at a Big Pharma here... It's not the researchers that have no vision at Big Pharma it is the business group. I can count 10 products that our research group would have loved to bring to market, but the business dept said it would cost too much (maybe $500,000 + 1 million for a clinical trial) and only save the lives of like 5000 people a year. No point. So people leave go to start ups and then guess what the big pharma buys the start up for meg millions! Way to save money guys!
"So people leave go to start ups and then guess what the big pharma buys the start up for meg millions! Way to save money guys!"
This is exactly why Big Pharma has problems. Nobody has contributed to the difficulties more than the likes of Mr.Viehbacher, and the other Wall Street guys like Hank McKinnell. Talking to my friends at Sanofi, Cris has now made a huge contribution to the problems he bemoans.
These are the men most responsible for the environment in Pharma today. (Layoffs for stock buy-backs, giving the farm to China and India for personal greed...). Since when did an accountant, or McDonald's executive know how to run a science company? (Is it possible... that Wall Street got it wrong...?) That's hard to imagine.
Chris Viehbacher answers to Wall Street. That is an instant fraud alert today.
@oii
"Ifthey don't have bread, why don't tey eat cake?"
You have not really understood what's going on out there, hmm? Maybe you should leave your brunch+golf ghetto and have a look on real life.
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