As you imply, what became the “TRV Model”—a platform company which enters into one or more broad, “foundational” partnerships early in its existence—was grounded in your start-up experiences before and at Millennium. What I think is worth noting, and acknowledging as truly original, was that model when you initiated it at Millennium.[17]
The first generation biotechs (the recombinant protein companies) had broad product platforms that could have provided the basis for such broad foundational partnerships. However, what history shows is that they chose, instead, to partner product candidate by product candidate.[18] For example, a Genentech could have entered into a single, broad partnership with a diabetes company for all secreted proteins relevant to diabetes or a single agricultural health company for all secreted proteins potentially relevant to the area (e.g., bovine and porcine somatotropin, the bovine and porcine interferons, etc.).
Similarly, one of your earliest start-ups, Cell Genesys, developed the first genetically engineered mouse capable of generating fully human antibodies, and established a broad patent position on the technology covering any such mammal produced through germline homologous recombination as well as any (human) antibody generated by such a mammal.[19] Cell Genesys (Abgenix) could have entered into a broad foundational partnership, either covering all antigens/hMAbs relevant to a disease area[20] but did not, instead doing antigen/product by antigen/product deals while forward integrating on a specific product of its own, namely a hMAb directed to EGFR.[21] In the event, it did not.
What I would argue was your second radical innovation at Millennium was broad foundational partnerships based not on (potential) products but on novel biological insights (targets). In other words, Millennium was not a Genus 1 Product Platform Company; it was an extremely broad—and arguably the first—Genus 2, Species A Platform Company. Its “disease-by-disease” large-scale partnering model was (at least to me) interesting for helping to elucidate a distinction that gets lost in speaking about the “genomics” revolution of the 1990s and the companies from that era.
There were in fact two distinct classes of “genomics” companies.
The first comprised the large-scale sequencing companies (e.g., HGS and Incyte). For them, “genomics” meant high-throughput DNA sequencing. The outputs of sequencing (= the genes), through new bioinformatic techniques, could be grouped according to biochemical class, e.g., GPCRs, ion channels, enzymes; however, sequencing in and of itself provided no disease annotation.
The second class comprised the large-scale genetics companies (e.g., Millennium, Sequana, and Myriad [with deCODE following a few years later]). Genetics, of course, starts with a phenotype (such as a disease phenotype). The genetics companies then used the new large-scale technologies to isolate in the genome (what was called “positional cloning”) the gene or genes that were responsible for, or contributed to, the disease phenotype.
Thus, for Millennium, “genomics” was not, or not simply, high-throughput DNA sequencing. We came to define genomics very broadly as the application of high-throughput process technologies (robotics), micro-miniaturization (microfluidics), and the advanced information sciences to the elucidation of biology. Hence, beyond large-scale sequencing and SNP analysis,[22] Millennium also implemented large-scale transcriptional profiling and large-scale proteomic analysis in the context of specific disease-area programs.[23] It also meant that Millennium built up multiple disease biology groups in areas such as diabetes, obesity, immunology, cardiovascular, oncology, and CNS. It was this combination of technologies and expertise in multiple diseases that enabled Millennium to enter into its string of multiple, large disease-area alliances, a partnering approach not available to the large-scale sequencing genomics companies.
That said, since large-scale sequencing featured among the “genomics” technologies put in place by Millennium, by 1997 this provided the basis for Millennium to establish large alliances that were not based on a disease area. Thus, Millennium established a subsidiary, Millennium BioTherapeutics,[24] which had the rights to exploit genes encoding proteins elaborated on the cell surface to develop therapeutics comprising secreted protein and MAbs. “MBio” entered into a foundational alliance with Eli Lilly to share the output of these efforts.[25] The parent company, Millennium, retained the right to exploit all other (biochemically classed) genes that came from MBio’s sequencing efforts.
The establishment of that massive-scale sequencing capability for MBio (with half the funding provided by Lilly) and the sequence database it generated, then enabled Millennium to enter into two large, seminal, “second-generation” alliances. The first, also in 1997, was with Monsanto. Monsanto was in the initial phase of buying up seed companies for all of the major crops. Germline “gene therapy” is the heart and soul of plant genetic engineering. Monsanto needed to rapidly sequence the genomes of all of the major crops in order to not be pre-empted by its competitors. The fastest way to do this was, effectively, to enlist Millennium to do it for them. However, Millennium decided that it did not want to get into the agricultural arena, even via a subsidiary. So, instead, Monsanto established, literally next door to Millennium, a wholly owned research subsidiary (Cereon) to which Millennium transferred its sequencing and bioinformatics technologies for exclusive use in the field of agriculture.
The sequence database generated by MBio, and Millennium’s retained right to use the database for drugs other than secreted proteins and MAbs, then enabled (in 1998) the large alliance with Bayer. In this alliance, Millennium provided to Bayer (hundreds of) potential targets for small-molecule drug intervention defined by biochemical class (e.g., GPCRs, intracellular enzymes, and ion channels).
Why do I recite this history of Millennium first- and second-generation partnerships, particularly to you who lived and led the company?[26] I do so because I fear that in speaking of “The TRV Model” (based in “The Millennium Model”), too many current generation start-up biotech leaders (and their venture backers) fail to appreciate the subtlety and art necessary to practice “the Model”; as it were, they think it is rote. In reality, using large partnerships to create out-size value requires a keen sense of the external partnering environment, identifying the potential partner(s) which at that specific moment in its/their history has/have come to perceive a critical need for what you have, and crafting deals in which you, while you sell rights, retain the potential for value creation by, for example, retaining ownership of the knowledge. That, not a cookie-cutter model, is your legacy in this arena.[27]
[15] The obvious example of this was the dilemma faced by Millennium when it acquired Leukosite in late 1999. Leukosite brought with it CAMPATH for the treatment of CLL which was approaching submission for approval. Millennium could not afford to let its value be viewed through the lens of CAMPATH as: (1) its approval, or failure to be approved, was a binary event; and (2) the product was projected to be a “small” product, which alone could never justify Millennium’s valuation. Hence, Millennium downplayed CAMPATH as a product and, instead, encouraged the market to see the acquisition of Leukosite as an acquisition of clinical development capabilities which Millennium would need as it began to forward integrate with the products that would soon be emerging from its platform. This strategy proved successful. In the immediately ensuing genomics bubble of 2000, Millennium was able to maintain its reputation as the leading genomics (not CAMPATH) company and, in the course of that year, completed two stock offerings which, together, raised ~$1 billion.
[23] Since there were not yet commercial suppliers of transcriptional profiling and proteomic technologies (e.g., Affymetrix was just getting off the ground), Millennium had to develop these technologies itself. (This led to the interesting business challenge, by the company’s third anniversary, of financing an annual CAPEX budget of $50 million/year.)
[26] Note: I have left out the formation of Millennium’s other spin-out, Millennium Predictive Medicine—which exploited Millennium’s retained rights to use all of the technologies and information generated in all of its alliances in the field of pharmacogenetics, pharmacogenomics, and diagnostics (and entered into major alliances with Becton Dickinson, BMS, and Roche). I have also left out the third-generation alliances in immunology (with Aventis) and diabetes and obesity (with Abbott), which were based on the earlier alliances (with Astra and Roche, respectively) in these areas which, by 1999/2000, had expired. –The biotech business model of “rent a program” is, to my mind, underappreciated.
https://leadershipandbiotechnology.blogspot.com/2018/08/early-stage-biotech-value-creation_15.html