Putting Patients First

The pharmaceutical industry has some big challenges ahead of it. No one in the industry could sit in a strategic planning meeting the last few years and not come out with the conclusion that the place to be is in specialized disease areas – high unmet need disease areas with truly breakthrough innovative medicines. This is Kurt Graves’s view, and it’s one with which most industry observers would agree.

“The industry does need to change,” says Graves, EVP, Chief Commercial Officer and Head, Strategic Development at Vertex Pharmaceuticals. “ The companies that are going to be successful and shape the next 20 years of the pharmaceutical industry are ones that focus on innovative medicines for serious and specialized diseases.”

Graves has seen enough of the industry to know what he’s talking about. He has worked for some of the best in big pharma, he was part of start ing and grow ing a new pharma company from nothing, he helped turn another one around after a major merger, he has extensive global experience and now he’s engaged in transforming and building Vertex into one of the leading specialty focused pharma ceutical companies of the future.

Graves started his career at Merck in the late 1980s, then went to AstraMerck where he helped “start the company up from scratch in a warehouse”, as he describes it. He was there for nearly six years, running GI marketing, then the GI business unit and building the company at the same time. Within five years, the business had grown from $170 million to $4 plus billion.

He might have stayed longer, had the CEO of AstraMerck not left and taken a job with Novartis, as Graves explains, “ He and another executive a t Novartis called me and said, ‘Okay, Kurt, you’ve done big pharma. You’ve built one of the biggest brand s in the indust r y . You’ve done a startup. But you’ve never done a major turnaround.’ They kept after me for months because they knew I loved big challenges, so I finally agreed to join them.”

Within two years, Novartis had become the fastest growing company in the country. Graves stayed at Novartis for nine years, in two different roles: as Head of Commercial Operations and the Primary Care Franchises for the US, reporting to the CEO, and then as Chief Marketing Officer and Global Head of the General Medicines business, based at the head office in Switzerland.

So what prompted Graves to leave what sounds like an ideal job? It certainly wasn’t dissatisfaction with the company: “I wasn’t disappointed in Novartis, but I looked back at my career over the previous 20 years and realized I’d learned a lot of things. I asked myself, ‘What are the next 20 years of my career going look like and what kind of impact do I want to have on the industry?’

“Then a Vertex b oard member with whom I had worked in the past asked me if I might be interested in meeting with Vertex ’s founder and CEO. Within a couple weeks of weeks, Joshua Boger came to see me in Switzerland and we spent a weekend in a hotel talking about vision and values and the kind of company we wanted to build. That was pretty much it – I decided this was what I wanted to do as my next challenge.”

The need to specialize

One of the main questions facing Graves is how to use his role to transform Vertex from an early development-focused biotech to one with innovative and competitive commercial operations. “The interesting thing about my role is, if you look at what Vertex is and has been, without a doubt it’s one of the most innovative scientific organizations in biotech and even in the industry. If you look at the productivity of our research organization, I’d benchmark it against anyone’s. That’s our current towering strength to build on.

“My role will dovetail with that – we’ll use a market driven, patient-centric approach to bring those insights back into the earliest stages of development. First, I have the portfolio management and the project leaders that start development from when it first comes out of research, so we can connect what the market needs and how we will develop the drug right from the earliest days. Not too many companies have been able to organize themselves to do that effectively throughout the entire life cycle.

“Second, this is seamlessly integrated with our commercial organization; and third, when we don’t have what we want in our own research and drug development pipeline, I have the responsibility to connect with our corporate group and our business development group to get what we want on the outside.

“The beauty of it is if we’re building franchises around specialized high unmet need disease areas between our own research and what we want to get on the outside, we don’t have to fight across silos , which sometimes have different agendas in big organizations. We’ve got it lined up all the way through research strategy to drug development strategy to commercial strategy to corporate strategy.”

Innovative thinking

During his time in big pharma, Graves oversaw a number of projects aimed at optimizing and reinventing the commercial model within the industry, running extensive innovation pilots globally, benchmarking major companies and using competitive intel to see what they were doing to experiment and change.

His conclusion, after four years of doing dozens of pilots and trying to get countries and teams to develop and buy into innovative models, was that it’s really hard to fundamentally change what employees have been doing and what they’ve believed in for the previous 20 years .

“That doesn’t mean that we didn’t make progress and that people aren’t still making progress in the industry, but the amount of change that’s required and the speed with which a lot of big companies can do that is a major challenge for big pharma companies.

“I contrast that with where we are at Vertex right now. If you look at today’s commercial model, I think anyone would agree that the hallmarks are: How many reps do you have? What’s your share of voice in doctors’ offices versus your competitors? How differentiated is your drug? That’s an oversimplification, but that’s a lot of it. And the fourth dimension I’d add is: What’s your access in managed markets?

“At Vertex, we aim to take a different approach, using a different lens. We have the opportunity to because I don’t have to change anything. Our lens has to be different if we’re going after a disease like hepatitis C or we’re going after a disease like cystic fibrosis; they’re more specialty focused, so we don’t need huge sales forces.

“The other feature of these diseases is if you take a step back and say, ‘Our mission is not only to develop great drugs but to get as many people that need our drugs the therapies to help them,’ you find an interesting statistic. If you look at most disease areas, on average 50‑plus percent of people are undiagnosed and untreated. With some diseases, it’s as much as 70 or 80 percent.

“Those are big numbers. If you look at the way pharmaceutical companies have gone at go-to-market models today, they’re all fighting over people who are already being diagnosed and treated. If you look at where they put their money, it’s predominantly in the ‘ red ocean’ of sales reps focused on doctors.”

Graves underlines the fact that Vertex will be thinking innovatively about how they can not just play in the market as it exists, but also what they can do to get to the people who need to be diagnosed , referred and treated by specialists. In his view, this is as important as focusing on how to compete in the market that’s already in the doctor’s office.

Patients at the center

“The thinking behind this whole model is the patient-centric approach. If you put the patient in the center of everything you’re doing, what you have to do is follow all the patients that exist with the disease and understand why they are or are not diagnosed, why they are or are not treated. And , for the ones who are being treated, why they are or are not on the best possible therapies. Once they’re on those therapies, why they are or are not complying with those therapies to get to the most optimal outcome they can. With h epatitis C, we ’re bringing something that can cure patients, and with c ystic f ibrosis we hope to be able to bring breakthroughs that might modify the course of the disease and extend the lives of children with this terribly deadly disease .

“That’s the kind of patient-centric equation we’re building our commercial model around. Put the patient in the center, then look at how we can optimize diagnosis rate s, treatment rates, adherence behaviors, and ultimately optimize patient , provider and payor outcomes.

“In the future, we probably won’t have such a rep-centric, potentially physician-centric model like the one that exists today. Serving doctors will continue to be important for obvious reasons , but we ’ll have to focus more on patients , on health economics, and on what we do directly and indirectly through others around screening , diagnosis and other interventions that get more people treated who really need it.”

In addition, this means that when someone comes in who will be on hepatitis C therapy, he or she will need to be educated and motivated to stay on that therapy to get cured the first time around; unlike today where many patients sometimes need to be treated two, three and four times.

According to Graves, in most disease areas 90-plus percent of commercial investment in pharmaceutical companies goes to reps and what happens in and around the doctor’s office. “ You can step back and look at diseases and say, ‘Why is it that everyone’s spending upwards of 90 percent of their commercial investment in reps in the doctor’s office when its over saturated and 50 percent or more of the market isn’t even diagnosed and treated?’ That’s an interesting question.

“Everybody’s afraid that if they don’t have the same share of voice as everybody else, they won’t be successful. It’s a zero-sum game. Once one competitor does one thing, the other competitor matches them. In such a hyper-competitive market, you’re not adding value, you’re destroying value. That’s what’s going on in a lot of big pharma markets today.

“It becomes a lose-lose situation. No one will tell you that what’s going on with today’s commercial model is the best way to serve patients. How can it be, when 50 percent of them are undiagnosed and untreated? And no one will tell you that the doctor loves to see 20 reps a day. And certainly if you go ride around with reps in the car for a day, that’s not a fun or fulfilling job for them.

“ Are we playing the right game with today’s commercial models? Is the maximum value for the billions invested being created or captured ? Are we staying true to our core purpose to serve patients? T hose are some of the belief s behind how we’re going to go about building a commercial model in a different way.”

Different strokes

Having worked for big pharmaceutical companies, and now for a smaller biotech one, Graves is in a good position to appreciate the differences between the two. “What’s the same is our missions are to do the best possible job we can for the patients. Certainly that’s what Vertex is very focused on.

“What’s different about us is what I’ve learned from being in big companies – in starting a pharmaceutical company and doing a turnaround and watching them grow over ten years or so, I’ve learned that when you’re young and entrepreneurial and a startup, you’re lean and fast. You’re usually quick at decision making. And , most importantly, the focus and the risk tolerance for being innovative is higher in the small entrepreneurial biotech companies.

“You don’t see people taking big swings in all young companies, I’m not saying it’s true for everybody, but at Vertex we really do. For example, when I interviewed here with the Head of Research, I asked him, ‘How did you get these great compounds and what differentiates your research approach versus Merck or Novartis or GSK? What is it that’s special about what you guys do?’

“And he said, ‘Over the door of the research department in Vertex hangs a sign that we live by, which reads, ‘Celebrate fantastic failures. Punish mediocre advances.’ That speaks to the mindset and the spirit of how the researchers operate. They will not tolerate themselves or their colleagues focusing on projects and new approaches that are just mediocre advances of what already exists in medicine.”

Exciting breakthroughs

Vertex is tackling major diseases through transformational medicines, using metrics about how it looks at what a transformational medicine is from both the scientific point of view and a patient -centric marketplace point of view. “When you’re a young company and you don’t have anything to lose, you’re willing to make bets on some big innovations. With good scientists like we’ve recruited here, we’ve obviously been able to hit some of those big swings and create some potentially transformational therapies.”

One such innovation in the company’s portfolio is its hepatitis C drug, which Graves says is showing that it has potential to almost double cure rates over existing therapies in half the treatment time. “You can take cure rates from the high- 30 s to nearly 70 percent. The therapy today is 12 months of interferon and rib avirin, which is really hard for many patients to tolerate and comply with. We ’ve shown the potential to cut that in half to six months.

“If you look at our cystic fibrosis drugs, to take another example, they offer the first ever approach to correcting the fundamental protein defect that causes the disease, in which most children diagnosed with the disease live to be in their mid-thirties. ”

Vertex also has breakthrough drugs in cancer, some of which are partnered and others that have been developed inside the company. Graves cites these developments as examples that the company is driven by the mindset and the spirit of celebrating fantastic failures and punishing mediocre advances, which he says is different in a biotech company than it is in many big pharma compan ies.

Upcoming products

Vertex has some exciting projects in its pipeline to build this new model around. One major disease area the company is concentrating on is antivirals, in particular for hepatitis C. It has three innovative protease inhibitors in development, the lead one being telapr evir, with two second generation protease inhibitors waiting in the wings. Hepatitis C is the first disease area in which Vertex is trying to build a leading franchise position with multiple drugs.

The company is also focusing on cystic fibrosis, where it is developing the first oral therapy that targets the protein defect, as Graves explains: “ We have a CFTR potentiator compound – it corrects the gating defect that is a key underlying cause of CF. We’ve shown in that drug , in our first 14-day human study , that we completely normalized some of the biomarkers that are used to diagnose the disease. In 14 days , they already saw a 10 percent improvement in FEV (1 ) or lung function capacity. That’s the equivalent of what CF patients lose over 5-10 years with th e disease.

“The other compound in early development is a CFTR corrector compound that corrects the defective protein that’s causing a processing defect . So we have two novel oral compounds that address the underlying protein defects that cause this deadly disease.

“Both of those drugs may work in monotherapy – we know one already shows major potential. The other one we’ll know later this year. The ideal therapy will probably be those two drugs used together. If we get lucky , these could be real disease modifying therapies that could potentially add years of life to patients with CF.”

The company’s third area of focus is anti-inflammatory immunomodulated diseases. It has two JAK3 inhibitors, which have broad application to up to seven major diseases such as: transplant, multiple sclerosis, rheumatoid arthritis, psoriasis, inflammatory bowel diseas e, respiratory diseases and lupus.

“We’ve also got several projects going on in oncology,” Graves says. “For the most advanced projects, we’ve partnered with Merck. That’s our aurora kinase program for which Merck is developing several compounds.

“And then the last two disease areas are pain and neurosciences, because there’s good potential overlap there in research and we have some early innovative approaches in that area. If they continue to progress, they’ll be breakthrough therapies as well; brand new mechanisms and approaches to the diseases.”

Looking ahead

Vertex is currently looking at which areas to focus its future efforts on – what it will be bringing forward in its own pipeline and what it will partner. “We need to figure out what we want to bring in from the outside to complement what we have. For example, in hepatitis C there are a couple of other interesting mechanisms that could be very complementary to our own protease inhibitors.

“We’re in the process of working with companies to gain access to polymerase inhibitors and have the best portfolio of oral direct-acting antivirals. That’s one of our top priorities for the company this year, because we’re aiming to build leading multi-drug franchises in our key disease areas.

“One of the big strategic questions we need to make as we continue to grow is how long will we stay US-focused versus keeping the rights to our compounds and becoming a global pharmaceutical company? That’s also at the forefront of some of the big projects I’m working on right now.”

As he works to launch the company’s first blockbuster, expand the company’s focus, and build a new, patient-centric commercial model, Graves should have his hands full for some time to come. “Vertex can be a prototype of how the industry will evolve. The way we’re building it , the team s we ’re building , and the vision we have, will make us a role model for the future. I’m excited to be part of that and the impact it can have on the industry and on the lives of millions of patients.”

About Kurt Graves

Kurt Graves is EVP, Chief Commercial Officer and Head, Strategic Development at Vertex Pharmaceuticals. He has responsibility for three areas in the company: the commercialization aspects of the organization; the strategic drug development group, including portfolio management and project leaders who lead the projects that come out of research through development and into ultimately commercialization; and corporate strategy, mergers and acquisitions and business development.