Isolating the Leadership Gene

Jim Mullen's company invented a blockbuster treatment for multiple sclerosis, and it spends $1 million a day experimenting on revolutionary new medicines. Mullen himself is experimenting with the new challenge of leadership: How do you exude confidence and command in a high-stakes business fraught with big risks and head-spinning complexity? Here's what he's discovered.

Bob Hamm arrived at Biogen for a job interview in the fall of 1994 with a vivid sense of how vast hierarchies operated. Hamm was fresh from a career that included time with the Air Force, the National Security Agency, and Mobil Oil, where his last job was to supervise the company's gasoline supplies for the United States. In those days, Biogen, the biotech pharmaceutical company that's based in Cambridge, Massachusetts, was anything but a vast hierarchy. It had about 400 employees and sold no products. One of the first people Hamm interviewed with was a 36-year-old guy named Jim Mullen, who was then Biogen's vice president of operations.

"I sat down in his office," says Hamm, "and the phone rang. He picked it up and listened for a few seconds. He looked rather annoyed. Then he said, 'Wait, wait, wait. Stop! Is this a fact, an opinion, or a wild-assed guess?' He listened another moment. 'Okay. Uh-huh. See you later.' Then he hung up."

Hamm asked Mullen who had called. "That," said Mullen, "was the CEO" -- Jim Vincent, who still serves as chairman of Biogen's board. Hamm laughs. "I thought, Okay, that's the way he talks to the CEO. I can work with this guy."

Less than six years later, Mullen himself was made CEO -- and was chosen by Vincent. At 43, James C. Mullen is running an operation that may never be a vast hierarchy, but that has become one of the small handful of the world's grown-up biotechnology companies. In an industry filled with as much hype and hoopla as the dotcom world in its heyday, Biogen is a company with products, revenues, profits, and prospects. It has one market-leading drug with nearly $1 billion in sales, a second drug awaiting FDA approval, and the wherewithal to spend $1 million a day on research and development. It has research or clinical trials on treatments for a range of diseases, from congestive heart failure to Crohn's disease and cancer.

In Mullen, Biogen has a CEO with a crisp, incisive, analytical leadership style that is perfectly captured by his impertinent question to his then-boss: Fact? Opinion? Or wild-assed guess?

"Jim has a lot of guts, but no illusions," says Hamm, now vice president of Biogen's international operations. "It's clear at Biogen that the people who are the most objective have the most opportunity to influence what happens. That means we end up managing by facts, not by people's perceptions. And that allows you to get to the right answer more often."

In developing new medicines, "getting to the right answer" is harder and chancier than outsiders realize. Biogen, despite being 24 years old, and despite having already won the U.S. National Medal of Technology in part for developing (and then licensing) the vaccine for hepatitis C, remains a company with more potential than performance. If the FDA approves Amevive, which was developed to treat moderate to severe psoriasis, it will only be the second time Biogen has had to launch and sell a product. Its first medicine -- the pioneering multiple-sclerosis drug Avonex -- came out in mid-1996. Since then, the company has spent more than $1.2 billion on R&D -- about $20 million a month -- without yet producing another salable product.

It takes at least 10 to 12 years to develop a new drug. Often, drug "ideas" don't fail until the middle of human trials, two-thirds of the way through a very expensive process. Indeed, at best, only one in five new drugs makes it out of "the clinic," as the human-testing stage of drug development is called.

Running a company in such a high-stakes, high-risk setting -- where you know that four-fifths of your R&D and four-fifths of the efforts of your MDs and PhDs are going into ideas that are doomed by the mysteries of human biology -- can turn the principles of leadership on their head. Biotech research is at once so complex and so specialized that making decisions often means taking a leap of faith.

Mullen's senior vice president of research, Michael Gilman, was until not long ago a working research scientist. With only slight exaggeration, he says of the research he supervises, "I am completely ignorant about three-quarters of the stuff that goes on. And my colleagues on the senior management team? They are 98% ignorant."

Such are the challenges facing the CEO of a mature biotech company -- extreme versions of questions facing executives in most industries: How do you make the right strategic bets when you know that many will be losers? How do you solve problems that are, by their very nature, too complex for you to understand more thoroughly than the people who work for you? How do you convey confidence and command when so many factors in your business are beyond your control?

Mullen's approach is to be open-minded but unsentimental and objective, eager for wide-ranging debate but decisive. In an increasingly information-flooded economy, where the experts are not necessarily the corporate leaders, Mullen is trying to create a culture of realism in an industry of hope and hype. It may be a formula for leadership beyond the walls of Biogen. "What makes the difference in what companies, and what drugs, succeed?" he asks. "There is an element of serendipity. But it's less than people would like to attribute. You have to be coldly objective. You can wish all you want: If I squint at this data long enough, I'll see a hint of a trend, then I'll do another experiment. You can spend a lot of money making bad bets.

"In the end, you have to be able to say, Here is where I am; here's the good news, here's the bad news. This is all I got."

Medical Marvels (I) Biogen's factory in Research Triangle Park, near Raleigh, North Carolina, delivers on the atmospherics of gee-whiz biotech. Many parts of the facility are accessible only by passing through air locks. In the air locks, employees don bunny suits and wash their hands with alcohol foam before entering manufacturing areas that are much cleaner than a hospital operating room. All to enter "factories" where the important stuff -- cells making medicine inside gleaming stainless-steel tanks -- is sealed off from human contact to start with.

Traditional modern medicine is based on chemistry. Drugs ranging from Tylenol to Lipitor are simply a mix of ingredients cooked up in large quantities in clean conditions. But biotech drugs can't be made by mixing a recipe of ingredients A, B, and C. The individual molecules of biotech drugs are such elaborate Tinkertoy structures, so sensitive to even the smallest errors in construction, that they can only be assembled by cells. In most instances, the drugs are made by an unsung hero of the biotech revolution: cells from the ovaries of Chinese hamsters.

Let the Facts Tell the Story

Jim Mullen is trained as an engineer, and he is well-known inside Biogen for being unafraid to plunge into the huge swells of data that drug research produces, in search of his own understanding and clarity for the scientists and executives around him.

Mullen has what can be an intimidating intellect and an intimidating stature. He is 6 feet, 4 inches tall, with wide shoulders, giant hands, and a kind of loose-limbed agility that gives him the air of a retired NBA player. But he is intimidating only to the degree that insisting on rigor is intimidating. He's personable in a quiet way and has a clear-eyed, often wry view of himself. He uses his intellect to dig for information -- sometimes with the bluntness of a backhoe, sometimes with the care of an archaeologist's trowel.

Despite leaps in technology and understanding, the world of biotech drugs remains an unsettling mix of medicine and business, science and gambling. "We're often making decisions in uncertainty," says Mullen. "If the organization is running correctly, the only decisions that get to my desk are the ones with high uncertainty. You have to be comfortable managing in uncertainty, because you never have all the information."

Such was the case a few years back, when Mullen was impatient to move on with development of Amevive, the psoriasis drug. "No industry spends more as a percentage of revenue on R&D than pharmaceutical companies," says Mullen, "and no industry is less sensitive to timelines than ours."

In 1999, Amevive was well into testing in humans. The first phase of such testing comes only after a drug has proven safe and effective in animals. Phase I human trials is a safety check. Phase II involves giving the drug to a limited group of patients. Phase III trials are placebo-controlled, double-blind experiments, where the drug and placebos go to a wide spectrum of patients.

"We were nearing the end of Phase II trials with Amevive," says Mullen, who was then president of Biogen, a year before he would become CEO. "That's the point where you have to determine the product profile -- how well it works, how quickly it works."

For Amevive, about 200 patients were enrolled in Phase II trials, and the testing was expensive: $30,000 per patient. Phase II -- the point where most drugs are really first tested on sick people -- is also the point at which most drugs fail and are canceled. In meetings over several months, Mullen asked basic questions: "What is the profile of Amevive? What's the speed of onset of action? What percent at two weeks? At four weeks? At six weeks? Like that. This group of physicians that we had working on the product didn't want to answer my questions."

Even two years later, his exasperation is easily refreshed. "I was asking questions more from a commercial, or a customer's, point of view. They apparently didn't think I had a right to stick my nose into it. I kept meeting resistance. Really, it was an attitude problem."

The decision to move from Phase II to Phase III trials is a key moment for a potential medicine. Phase III trials cost up to several hundred million dollars, so you only go forward if you've got something worth investing in. At the same time, if a drug turns out to be effective, a month or two's delay, even if buried back in the process, becomes millions in lost sales. "This was a critical program," says Mullen, "at a critical stage, and we weren't making the progress we should have been."

One Friday, Mullen was at yet another meeting with the Amevive group. They'd brought the data sheets for each patient enrolled in the trials. "I said, 'Give me the data sheets,' " Mullen recalls. "They handed me one sheet, for one patient. I said, 'No, give them all to me. Right now.' "

Over the weekend, Mullen pored over the data, patient by patient, making histograms of Amevive's performance. "I discovered things about the drug that none of these doctors knew," he says, "because they hadn't taken the time to look."

This turn of events is no secret at Biogen. Indeed, for Mullen, the story is an anti-leadership parable: Doing the data analysis himself was the right solution to a problem that never should have existed. It was almost an intellectual temper tantrum. In Mullen's world, ego is a sorry substitute for judgment, and judgment begins with data. "That group had the wrong values for this company," Mullen says. "FYI, they no longer work at Biogen."

Medical Marvels (II) Chinese-hamster ovary (CHO) cells are happy and productive in a brown broth of nutrients held at the same warmth as the human body. In order to make Avonex, Biogen's MS drug, copies of a human gene are inserted into CHO cells. The gene is the one that tells a cell how to assemble interferon beta 1-A, a substance that everyone's body makes in small amounts. Each CHO cell doesn't get just one copy of the interferon-making gene; it gets hundreds of copies. The CHO cells crank out interferon in massive amounts. They also reproduce themselves, and the new cells also crank out interferon in massive amounts.

The process starts with a vial of CHO cells the size of a test tube. As the cells reproduce, they get larger and larger containers in which to live until, after four weeks, they end up in a 2,000-liter tank. What is the result of those CHO cells turning out all that interferon? When the medicine that the CHO cells have made is purified out of the soup, what is left is one-tenth of 1% of the original volume -- a container of concentrated Avonex the size of a 2-liter bottle of Coke.

Faster Is Better

At 44, Gunther Winkler is a veteran of Biogen, his tenure stretching back to 1988, when Biogen was burning through money. In those days, it thought of itself as a "research boutique" -- with 250 employees working on 105 development projects. Winkler remembers his first impression of the place. He was staying at the Marriott hotel across the street, and the night before his job interviews, he couldn't sleep. Several times he looked out the window. "Every time, there were people in the lab, all night long," he says. "I said to my wife, 'That's the kind of place I want to work.' People put their heart and soul into discovering drugs."

But commercializing drugs requires more than heart and soul. It also requires discipline and accountability. For almost half of his time at Biogen, Winkler headed clinical operations, the group that runs human trials. For much of that time, Mullen ran manufacturing. (Even before a drug is approved, companies have to make it in order to test it.) "Biotech manufacturing is very different from classical drug manufacturing," says Winkler. "You have large tanks with thousands of liters of broth in them, and the cells swim around, and they have their own temperaments, of course. And it's easy for them to become contaminated. We'd had a string of 'bad luck' with our manufacturing. When Mullen took over, he figured out how to push the bad luck out. He turned manufacturing into a science here."

Winkler is now the program executive in charge of Amevive, the psoriasis drug awaiting approval by the FDA. Once human trials are finished and a company thinks it has a viable, valuable, and safe product, the company has to submit an application to the FDA to market and sell that drug. The application is really a story, an argument, about the drug, its value, its effectiveness, and its side effects, along with the test data to support the story. Applications run to hundreds of thousands of pages.

The fact that Amevive is six months into the lengthy review process at the start of 2002 is itself another bit of Biogen lore -- a further chapter to the saga of the weekend data sheets. In the spring of 2000, Winkler sat down with Mullen to talk about planning Amevive's FDA application. Human trials were nine months from completion. "It was a routine meeting, and I presented a timeline for completing the application. It was for six months, 180 days. Jim said, 'Gunther, I have a challenge for you. I want you to do it in 90 days.' Frankly, I was speechless. I took it to my team, and they were as speechless as I was. We were simply not sure it could be done."

Thomas Bucknum, Biogen's executive VP and general counsel, remembers the reaction to the 90-day challenge being more pointed: "They were trying to be polite to him, but really, it was like, No fucking way can we do this. What's the boss smoking?

"Jim said, 'I refuse to accept that,' " Bucknum continues. "He said, 'Come up with a plan with that as your target. As you work through the details, we'll discover whether that's realistic.' "

Winkler and his group eventually developed a detailed plan for compiling the submission. The Amevive application went to the FDA 98 days after human trials ended -- and was filed for approval in Europe within an hour of being submitted in Washington. Mullen's point: In the biotechnology business, even with decadelong development cycles, time is money. The impact of shaving three months off of Amevive's 120-month development course can be huge -- if you beat a competitor, or if Amevive turns out to be a $500 million a year drug, which means that three months would add up to $125 million in sales.

Even more important, for Mullen, cutting the application time in half helped add urgency across Biogen. "This was nothing fancy," he says. "It was simple stuff. Make it a priority; set a goal. People don't relate to 10-year product cycles. Half the people here haven't even worked for 10 years, let alone 10 years at one company. You have to break the time frames down so a person can have an impact and see the impact."

Medical Marvels (III) The complexity of cellular biology has been a humbling experience for the human brain. CHO cells represent nature's advanced nanotechnology -- effortlessly doing things that people cannot.

A typical man-made "small molecule" medicine has a molecular weight of 500. The molecular weight of a water molecule is 18. But the molecular weight of one Avonex molecule is 25,000. If molecular weight is a crude measure of complexity, then comparing traditional medicines with biotech medicines is like comparing a calculator to a Pentium 4 PC.

If biotechnology looks to be the 21st century's alchemy, it can also seem as if the CHO cells are spinning gold rather than assembling interferon. The values of small quantities of clear fluid are incredible. Says John Palmer, a senior Biogen executive: "We could put a three-year supply of Avonex for all of Europe in the back of a taxi." These days, a three-year supply of Avonex for Europe is worth $750 million.

From Limits Comes Creativity

Jim Mullen has a relentless ability to focus. Unlike many people in demanding jobs, he doesn't do more than one thing at once. When he talks on the phone, he doesn't doodle, and he certainly doesn't read email. It's the same when he's in meetings. He pays attention, but if a meeting turns unproductive, Mullen is known to push back and say, "You aren't prepared. Call me when you're ready."

In the three years that Mullen has been president, and then CEO, at Biogen, much of his time has been spent on the unglamorous work of being in charge: personnel, structure, reviews. Mullen had 15 people reporting to him when he took over; now he has 9 -- and 2 of those are new hires who bring big-company experience to an organization that wants talent to grow into.

Discussions of structure and organization hardly inspire scientists, but Mullen is trying to help Biogen grow up without losing its youthful creativity. "The campfire culture doesn't work here anymore, with people sitting around telling each other what's going on," says Mullen. "We need to be organized looking to the future. The complexity of this company was, and is, rapidly increasing. We need to motivate people to take risks, we need to look for innovation and creativity, and we need to demand results. Why are we doing this experiment? Asking the questions in advance puts some objectivity in place."

Mullen has tried to force decision making in Biogen down, rather than up. "Decisions should be made at the level where there is maximum information," he says. And he's clear about the kind of decisions he should be making. Consider the case of Adentri, a drug for congestive heart failure that Biogen had in development for years, and that worked well. The drug was good at treating patients with acute problems -- lying on a gurney in an emergency room -- and was expected to be effective for treating chronic congestive heart failure. But the Adentri molecule (a creation of Biogen scientists) was so sensitive, it could not be taken as a pill or a shot (Avonex patients inject themselves). Adentri could only be administered by IV. Mullen, and Biogen's scientists and marketing people, knew that patients wouldn't use a drug they had to visit their doctor to take. The company spent millions of dollars trying to solve the delivery problem, without success. In practice, then, Adentri worked well in a hospital but was impractical for ongoing treatment at home.

That was a missed opportunity. As Mullen never lets the organization forget, "It costs the same amount to develop a drug for a tiny indication as it does for something more broad. We have to have the discipline that everything we're doing is both medically and commercially important." So Mullen asked the team to take what they'd learned and develop a new molecule with Adentri's treatment qualities and more ease of use -- "so we can both lead and defend our position," he explains. Within a year, the team was back with an all-new molecule (also known as Adentri), which is already in Phase II human trials.

It was a simple solution that underscored one of Mullen's basic principles: Limits inspire as often as they inhibit. "Sometimes," says Mullen, "you get more creativity when you're in a box than when you can do anything. In really difficult situations, sometimes you get the most interesting thinking."

Senior editor Charles Fishman (cnfish@mindspring.com) wrote most recently about the B-52 bomber. Contact Jim Mullen by email (jim.c.mullen@biogen.com), or learn more about Biogen on the Web (www.biogen.com).

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