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In his new book, , Nathan Vardi provides deep insights into how blockbuster drugs are developed -- particularly, how strongly the investment community and the science are intertwined.

Vardi tells the "extreme" story, as he calls it, of the development of two Bruton's tyrosine kinase (BTK) inhibitors that changed the way doctors treat chronic lymphocytic leukemia (CLL). Part of what makes the story extreme is its wild cast of characters, which includes two hard-charging investors, Bob Duggan and Wayne Rothbaum.

That story ends with the sale of Duggan's company, Pharmacyclics, to AbbVie for $21 billion, and Rothbaum's company, Acerta Pharma, to AstraZeneca, for almost $7 billion.

名媛直播 spoke with Vardi in a video chat about the book. An edited transcript of the conversation follows.

What's your background, and how did you come to this story?

Vardi: For many years, I was a senior editor at Forbes where I was responsible for big investors – billionaires, hedge funds, private equity. People making big investments. So, my world was not siloed.

Between 2010 and 2020, which is the era when this book takes place -- and I view that as a golden age for biotech -- I found that, of all the industries I was looking at through an investment lens, biotech was the most interesting.

I didn't see any other industry that was having as big an impact on human beings. You have to remember what was going on during this period. There was Facebook, and there was a big social media revolution. There was Netflix. Those were the big stocks. As much as those were revolutionary, I just didn't think they were having as big an impact for human beings as what was going on in biotech.

Then I stumbled onto this specific story, which I really thought was extreme in nature and epitomized this era. Also, I thought it was just a good story, which I think you need to write a book.

Right, ibrutinib (Imbruvica) and acalabrutinib (Calquence) extended survival in CLL. Netflix wasn't saving lives.

Vardi: When Facebook went public -- and Facebook was the big IPO of that era -- people really looked at it as this world-changing technology that was bringing people together. That's what the company and the people who worked for it would espouse. Now we look at Facebook as this socially divisive and problematic technology.

At the time, people in Silicon Valley really talked this talk about how they were in it to change the world, which I always thought was kind of hollow. Now, money plays a huge role in biotech. But I think that the biotech people could much more credibly say that they were really making a difference.

Let's talk about the role of the investment community in biotech. There was a scene in the book from the American Society of Clinical Oncology meeting in 2010, where doctors and investors were together at a private dinner meeting. It was an investor who really pushed finding the maximum tolerated dose for ibrutinib at that gathering. Throughout the book, there are many examples of how the investment community drives the science. Can you talk about that relationship?

Vardi: I think that we need to be honest about the role that money plays in drug development, and not be afraid of it, or somehow gloss over it. That's what I tried to do in this book.

Wayne Rothbaum is a stock trader and an investor. And he was the chief financial backer of Acerta, which is the company that developed Calquence. If you look at the key clinical trials that have been published for acalabrutinib, you will see that Wayne Rothbaum is a co-author on those peer reviewed trials. He has no scientific training whatsoever.

I think that he contributed a lot to the development of acalabrutinib. So I'm not saying that that is some kind of a corruption of the process ... What I was trying to do with this book is to reverse-engineer what is an unambiguously good outcome. No one can look at these two drugs and say, "This is bad." These drugs have made a huge difference for patients. How did that happen?

I think that for your readers, maybe they can grapple a little bit with this idea that Wayne's name is on the papers. He helped write them and played a role in the direction of the science. He contributed a lot to that process.

There are interesting questions about that, and I tried to share that as much as I could in the book.

The other main investor character is Bob Duggan. He was a bit quirkier than Rothbaum, and perhaps it was more unexpected for him to have kind of the influence that he had on the science.

Vardi: Again, this an extreme story, which is why I thought it was interesting. There are a lot of extreme characters, and I think that Bob Duggan is one of them.

There's a scene in the book where I say when he was CEO of Pharmacyclics, which was the biotechnology company that developed Imbruvica, he was literally reading children's books to better understand human biology.

And yet, again, it's not debatable -- he navigated that company and that drug through clinical trials to approval in a very, very fast time. And he didn't screw it up, which, I think, is another really important thing to think about. Because often you only get one shot at these things.

So again, here's a guy who is not a scientist. He was a Scientologist. He had no experience in the industry and never graduated from college. But he had a track record of success in business and was able to apply some of that to the development of Imbruvica.

I mean, luck played a big role as I show in the book, and circumstance played a big role. But I think that sometimes having an outsider like him in the mix can be helpful.

In the end, Bob Duggan made $3.5 billion selling Pharmacyclics to AbbVie, and Wayne Rothbaum made $3 billion selling Acerta to AstraZeneca. Is that really the incentive we need to develop new cancer drugs?

Vardi: So, the Economist wrote a very generous review of my book. And the reviewer at the end of the review asked a really good question, which was, There's all this money floating around, and [all this] testosterone, and all the science seems soaked with cash. Is there not a better way? There's gotta be a better way. There must be, right?

And the answer is, I don't know if there's a better way or not.

This way we know produces certain outcomes. We saw that over the last decade. About 400 new drugs were approved in the United States, many of them were oncology medicines. Some of them were great; some were not so great. But there was a lot of really cool innovation that went on in this system that we have. There is no other system that has ever produced 400 drugs like that over the course of 10 years.

Cancer drug development is very expensive. And part of it is because of the regulatory requirements that exist. And we all agree that they should exist, at least I do. So it's really unclear to me. I mean that truthfully, but I really don't know if there's another way to do this.

These are public policy issues that people are wrestling with, and we're going to find out because the landscape that existed in the last decade has changed. We'll see if we get the same amount, or, if not, what the impact on innovation is going to be.

I'll tell you one thing that I find troubling is that some people profess that they do know, they're very sure that they know that this is not going to impact innovation. I don't know how anyone could say that, because there's so much going on here. It's so complex, and it's so hard. I can't understand how someone could categorically just say that if you change the rules and the factors, that it's not going to have an impact. I'm not saying that it will, but I just will see. I don't, I really don't know.

The current system is obviously responsible for a lot of innovation, but is it also leaving out a lot of innovation? When you look at the rare disease community, families try to do drug development and often have to raise so much money to try to get just the basic science going. Are we preventing some treatments from being developed because we're pulling others up to this bar where the rest of biotech is at?

Vardi: I don't know. I think these are really, really good questions. My only argument is that they're really hard. Like, this is really hard. I certainly don't know what the answers to those questions are.

They're really complex. Let's take the example of the Inflation Reduction Act (IRA). Now, Medicare is going to negotiate the prices of its most expensive drugs. If you look at the IRA, the clock on that starts ticking the moment a drug is approved.

So what does that mean? Let's look at the drugs in my book, Calquence and Imbruvica. Both of those drugs were approved, initially, in mantle cell lymphoma, which is a very small indication with not a lot of patients. It's not lucrative compared to CLL, which is arguably the biggest indication in blood cancer.

Would those companies have pursued a mantle cell approval if they knew the clock was going to start ticking when the mantle cell approval came in?

These are the questions that I think drug companies are carefully wrestling with right now. The motivations are good: let's lower drug prices. We all agree that's a good thing. But you don't know when you start mucking around with the rules, how that's going to play out.

I look at the IRA and I say, I just don't know. Maybe by trying to reduce drug prices, we'll get less innovation for rare cancers or rare diseases. It seems like it's possible. To me that just shows how complex and difficult this all is. And I certainly don't know what the answer is.

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