NEW YORK, Nov 2 - Gunnar Weikert may not have name recognition in the scientific community, but he has been behind some of the biggest deals the genomics sector has ever seen As senior vice president and global head of physiomics at Bayer, he was a key player in the
As senior vice president and global head of physiomics at Bayer, he was a key player in thedecision to form blockbuster partnerships with Millennium and Lion Bioscience. In addition to giving Bayer access to cutting edge technologies, the equity investments the company made in Lion and Millennium have scored huge returns. At current prices, the holdings are now worth about 20 times the original investment.
After proving his acumen for picking winners, Weikert, 36, decided to leave Bayer to form Inventage, a venture capital fund in Dusseldorf, Germany.
GenomeWeb recently caught up with Weikert, who holds an MD, PhD, and MBA, for a chat. In Part I of the interview Weikert talks about the thinking behind the Millennium and Lion deals. In Part II, which will run on Friday, Weikert discusses his novel approach to venture capital.
GW : Why did you decide to partner with Millennium?
Weikert : When we were making our decision to go in the direction of genomics and biotechnology and bio IT, the big question was how do you choose the right partner. What we were looking for were platforms. Once you can identify a platform, you can find a stable partner who will be able to adapt to new trends and new technologies.
Take Microsoft. Microsoft's stable platform was the DOS and the Windows operating systems and from there they had a way into the applications. If you take that model and transfer it to Millennium, you see Millennium has a very solid, broad, stable platform. They have all the technologies from sequencing, PCR, chip technologies, to mass spec in-house. Besides a couple of other criteria, this I would say was the most valuable for us. We knew that if a new technology were to come out tomorrow, Millennium would be able to integrate it into their existing process and technology platform.
GW : Why did Bayer need an external partner for this?
Weikert : Pharmaceutical companies should identify drugs and sell those drugs in the market. That's what they're there for, and they shouldn't deal with technologies.
Look at the car industry maybe 10 or 20 years ago. Large car companies were doing everything - producing the engine, the seats, the bumpers, the carpets inside. They learned over time that it makes sense to specialize and give those highly specialized job to other companies.
The whole genomics/biotech area is now changing so fast, with so many technologies, so many different concepts. At first people were totally enthusiastic about chips. Now maybe proteomics is extremely hip. In a half a year or so it will be another technology. So, in that kind of environment, large corporations should be focused on the stuff they're really good at.
Large pharma companies should focus on optimizing the drug discovery process and making sure they get the best support from the outside.
GW : Millennium has forged several deals with big pharma. What did Bayer do to ensure that there wouldn't be cross-licensing problems down the road?
Weikert : That was definitely an issue with the Millennium business concept, but we have made sure that at least in the areas we focused on we would have the exclusive rights.
What's different about the contract we have with Millennium is that we own the target exclusively. The contracts Millennium has signed before say, “We're identifying a target with you and once we have the target, we get the IP rights only for the target and the disease areas we agreed on before.”
That is something we couldn't accept because based on genomics, you don't know whether something will really be a target in a specific disease area or whether it can be used somewhere else.
And therefore once we have a chemical compound, we have the right to use it wherever it may work.
GW : In terms of the deal with Lion Bioscience, what did they offer that others did not?
Weikert : Once again, I would say they have the platform. They had a very interesting SRS platform, which is integrating or has the potential to integrate all the public databases and bioinformatic databases. And we believe those databases are still a very rich source for good targets.
On top of that, they have interesting applications. But I wouldn't have made a deal with Lion if they would have done only applications like a specific prediction tool for some genes like transporters. That is something you cannot base a broad collaboration on because next year somebody else will come up with another tool and then you have to switch horses again.
With Lion you know they have the stable SRS data platform integration tool which gives you, first, an ability to integrate that data and, on top of that platform, you can imbed all future applications.
GW : After Bayer strikes a deal with a Lion or a Millennium, what does the company do to integrate the new team and smooth over any internal employee resistance?
Weikert : Whenever you start a large collaboration you have such problems. I think it's extremely important to make sure that your new partners are well-integrated into the existing organization. Of course, for individuals in the organization that might not be the best situation compared to the situation they had before.
But Bayer made a lot of effort to nicely integrate it. We first established a very nice integration concept with the Millennium guys where we sent people over to Cambridge to work on the Millennium site to have a lot of joint meetings.
We transferred that concept, at least a bit, into the Lion collaboration. And also there, we have sent some of our people from the Bayer informatics group to Lion Bioscience’s research company.
GW : What did you learn by working with Millennium?
Weikert : Together we changed how genomics work is done quite significantly over the last two years and I think we learned a lot and they learned a lot about process-control, process-design, process-optimization.
GW : Why is it so important that genomics companies focus on process?
Weikert : I think focusing on process allows you to make sure you understand where you can create value, how much money you should spend per step.
Normally researchers find something and believe it’s so interesting they want to work and work on that stuff. But drug development is also about making a decision and saying, “Okay, this is over now, we have to jump onto something else,” because it will be too expensive to answer those very interesting questions and it will not create value.
Process is also important for quality and for determining the reliability of the outcome data. There are so many potential errors in the whole process, you really have to control it. You have to think, you have to understand. And for that you need to control the entire process even if you have to give the individuals in an organization guidelines explaining the process.
GW : Do you think this will help to drive down the cost of developing drugs over time?
Weikert : No, I don’t think this process will become cheaper. In general you could say now we have more access to targets. But I think it will cost more or less the same, although the quality will improve.
The cost won't decrease, but the quality of what you move into development and from development to the market will be higher.
GW : Would you expect to see Bayer form a proteomics collaboration in the near term?
Weikert : We have done some things in proteomics already, small deals. Before I would go into proteomics, I would really need to see at least one company with technologies that are better than genomics technologies in terms of real term data and quality and reliability. But so far, at least to my knowledge, I haven't seen any company that is offering anything that is promising and delivering on that.