We were founded just over 11 years ago by me, Bob Tjian from UC Berkeley, and Steve McKnight, who is now at UT Southwestern in Dallas. The idea was to create a drug discovery and development company based on an understanding of gene regulation and signal transduction pathways—to come up with products that would interact with particular targets and be small-molecule drugs rather than protein drugs. I guess you could say we were completely focused on understanding cellular networks and discovering small-molecule drugs that could reprogram those networks.

  Was there a single technology on which you were basing this philosophy?

It wasn’t a technology so much as this idea and hiring very good people. McKnight, Tjian, and I had high standards in terms of what kind of scientists we were going to hire to work around the general idea of gene regulation and signaling pathways. We believed that if we could be a biological leader in the field and supplement that with the appropriate chemistry, we could create a new class of drugs.

  Now that it’s been over a decade, how do you feel it’s panned out?

When we set out to do this, we believed it would take 20 years to build a pharmaceutical company. So we’re a little over halfway there and we’re sitting in a good position. We have lots of very interesting targets and we have, in our view, a deep biological understanding of our particular areas of focus. That gives us a big advantage. We have built the chemistry resources we need. We have four drugs in the clinic now and others are heading there. It will take a few more years to see how they pan out. We now have the discovery engine in place that should, on a continual basis, be able to put two high-quality drugs into clinical testing each year. If we say we get a 25% success rate, that’s one new drug coming out every two years once we reach a steady state.

It’s pretty hard to say. People have numbers that are all over the place. Investors always want to hear higher numbers. The technologies are so good now that you can get better drugs going into the clinic, but the reality is drugs fail for all sorts of different reasons. We have very rigorous standards for what it takes to get into the clinic. But the jury is out. It’s going to be five more years before we know whether that 25% is realistic or not.

That was almost an obvious paper that fell out of earlier work. I am a little surprised to see it cited that often. I think maybe why it got cited so much is that it addressed separate pathways—activation of Nf-Kappa-B by TNF is not only an interesting pathway in itself, but it feeds back and inhibits the cell-death pathway at the same time. With both Nf-Kappa-B activation and cell death being very hot things at the time, this became an easy paper to cite for both pathways.

The company focus is really on getting drugs, and we make the discoveries required to get there. There is not a major emphasis on publications per se. We don’t have a lot of people publishing routine stuff. We emphasize the idea that if we are going to publish, it should be very significant work. That is one way to get scientists to focus on drug discovery. Scientists don’t come here to get publications. They come here because they’re committed to discovering drugs. Our view is if you do a good job at discovering drugs, publications will come as a consequence of that. That is probably one of the major reasons our citation rate per paper is so high. Our scientists could probably publish twice as many papers, but that might dilute the impact of the major ones they do publish.

We have a lot of flexibility. People move around. They help out where they’re needed. It’s really a very different structure than a standard academic laboratory. We have very small group sizes. The majority of lab heads are full-time bench scientists. They might have one post-doc and one research associate working together as a team. They’re also collaborating very closely with other labs. It’s different from a lot of academic labs, where you have a big operation sharing the same physical facility. Here you might have four or five senior scientist lab heads, who would be professors or associate professors at universities, all sharing one physical laboratory, working side by side.

On these biological papers it’s not so complicated. We do have in-house patent counsel, and they will review publications and file appropriate patents. But I’m not aware of any time when patent counsel ever held up publication of a paper. They can work off a draft and can usually get a patent filed quicker than the authors can get the final manuscript prepared. We have not yet decided that we’re not going to publish something for competitive reasons. We figure if it’s important someone else is going to do it fairly soon anyway, so we might as well get it out there. It helps establish our position in the field and maybe will help us get a partnership with a big pharmaceutical company. Although it might turn them off, too.

We have reached a stage now with intellectual properties that requires a bit of a different approach. That’s when we’re dealing with medicinal chemistry, with matters of the drugs themselves. With drugs that are on their way to being products, it’s better not to publish until the patents themselves or the patent applications have been published. That’s usually about 18 months after submission. We’re just reaching that transition now. So we’ll probably be having papers coming out describing some of our drugs or drug candidates that are not written at the same time the discovery is made but follow about 18 months later. That is for competitive reasons. If another company gets its hands on your chemical structure before a patent is issued, it has the opportunity to do a lot of work to get around your patent.

I’m hoping that 10 years from now we are a profitable corporation with substantial product sales of important new drugs treating important diseases. That’s been our goal all along. If we’re in that position, there will be a lot of money pouring back into research to keep the cycle going. Meanwhile, I think the whole field will benefit from companies taking similar approaches to what we’re doing. And there will be a lot of drugs coming out in the next 10 years from this approach of modulating gene regulation and signal transduction pathways.

I think it would be about all the steps required for small-molecule drug development. There are more steps and more things that can go wrong than in protein drug development. We’ve been able to solve problems as they come up, but more roadblocks can be tossed in your way when you’re starting with a biological observation and trying to come up with a small-molecule drug that’s going to be safe in humans. If you asked 11 years ago, would I think we’d be at the stage we are today, I’d have said no, we’d probably have been further along by now. But, still, having had the benefit of all these years, I’m able to look back and say I think we’ve done quite well. I don’t think many people would start a company if they thought it was going to be 12 years before they could prove one of their drugs works in the clinic. Everyone always think it’s going to be faster in the beginning.