NEXTiNNovaTioN
Most pharmaceutical companies
steered clear of biotech back when its
methodology—cultivating living cells
and using them to churn out complex,
large-molecule drugs—was still being
perfected. But Wyeth took a big risk.
In the 1990s, it acquired two of the
country’s most promising biotech
companies, Genetics Institute and
American Cyanimid. Over the follow-
ing years, it combined them into
Wyeth Biotech and spent more than
$3.5 billion to grow them.
The result has been a rich symbiotic
exchange. Fed by the resources of its
parent, Wyeth Biotech has blossomed.
And the upstart unit has changed Big
Wyeth, too, persuading managers to
emulate its ambitious approach and
rewarding employees not for showing
up but for performance. It has also
produced some of Wyeth’s best-known,
most-lucrative drugs, including the
pneumococcal vaccine Prevnar ($2
billion in revenue per year) and
rheumatoid-arthritis injection Enbrel
($3.5 billion). Even with disappointment
TEam EFFor T
above, from left: Wyeth’s hubert Scoble, kevin
hanley, Jeff deetz, and mike kamarck have
led a charge that has seen lucrative biotech
products emerge from the firm’s labs, right.
over bapineuzumab, there are scores of
biotech products in the pipeline, from
anti-inflammatory drugs to treatments
for cancer, and “40% to 45% of our
revenues now come from biotech,”
says Mike Kamarck, Wyeth’s president
of technical operations and product
supply. “In a year or two, it’ll be
more than half.” Wyeth as a whole is
performing well despite challenging
market conditions. Profits have risen
12% in the past two years. In July, the
company hiked its earnings guidance
for 2008, and in October, it confirmed
it was on target to make those numbers.
Perhaps the best measure of
Wyeth’s biotech success is that other
Big Pharma companies are now trying
to follow suit. In October, Eli Lilly
won a bidding war with Bristol-Myers
Squibb for ImClone, a prominent
biotech company with several cancer
drugs in its pipeline, with an offer
of $6.5 billion. In July, Roche made a
gargantuan $44 billion bid to gain full
ownership of biotech leader Genen-
tech, in which it had a partial stake.
And GlaxoSmithKline announced that
it would focus more on growth areas
like biotech. But in a Credit Suisse
report issued last fall, research analyst
Catherine Arnold gave Wyeth an edge,
calling it “one of the most attractive
targets in the global pharmaceutical
space” and citing the strength of the
company’s biologics products as well
as its research pipeline.
Wyeth’s biotech focus was born
of uncertainty within the company.
In 2002, a government-sponsored trial
of one of Wyeth’s flagship products,
Prempro—a drug designed to relieve
menopausal symptoms—ended
prematurely for safety reasons. “It
was one of our biggest products,”
Kamarck says, “and it had its legs
taken out from under it.”
Amid the turmoil, Bernard Poussot,
then president of Wyeth’s pharmaceuti-
cal division and now CEO of the entire
company, pondered the firm’s biotech
gamble—and decided to double down.
He felt that large-molecule drugs, which
can be endlessly customized, would
eventually transform
the industry. “The
small-molecule world
was shrinking in terms
of innovation,” Poussot
says. “With large
molecules, you can
be a lot more specific
in your treatment
approach—you can
correct a lot of devia-
tions at the cell level.”
But when Poussot
floated his biotech
hunch in meetings with
senior management,
he met resistance. “The
question was, ‘Can we
actually do this?’”
Kamarck says.
Poussot parried
the naysayers with a
vehement “Yes!” and an
unprecedented gambit.
In 2003, to build the
company’s biotech
focus, he created a new
business unit devoted
to marketing Wyeth
