Richard Heyman made headlines for leading two San Diego oncology biotech companies - Aragon Pharmaceuticals and Seragon Pharmaceuticals - each acquired in >$1 billion deals in just two years. Prior to those companies, Heyman was VP of Research at Ligand Pharmaceuticals from 1990-1999. He subsequently co-founded X-Ceptor Therapeutics to develop treatments for metabolic diseases, acquired by Exelixis in 2004.
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SYNAPSE: How did you go from your postdoc to Ligand Pharmaceuticals?
HEYMAN: I went to San Diego to do my post-doc at the Salk Institute, and the lab I was working in made important discoveries on the molecular action of hormones including cloning the first set of nuclear receptors in the 1980s. This led to the creation of Ligand Pharmaceuticals. Initially I started off consulting for them, and then joined as a scientist. The technology was right out of the lab, and they needed people that had expertise in molecular endocrinology and transcriptional signaling.
SYNAPSE: What was the San Diego biotech ecosystem like at that time?
HEYMAN: There were probably four or five reasonably large academic institutes - the Salk Institute, Scripps Research Institute, University of California, San Diego, and Sanford Burnham Prebys Medical Discovery Institute. They helped spawn quite a few biotech companies. In the 1990s there were dozens, now there are hundreds.
SYNAPSE: You were at Ligand for almost a decade, from 1990 - 1999. What came next?
HEYMAN: I took some technology from Ligand and helped start another company called Acceptor Therapeutics. The technology was from two different places, the Salk Institute and University of Texas-Southwestern Medical School.
SYNAPSE: How did you acquire the technology for Aragon?
HEYMAN: In 2008, I got a call from Charles Sawyer from Memorial Sloan Kettering Cancer Center along with the head of the National Cancer Institute. Sawyer had some ideas why some drugs for prostate cancer work and some fail. He had deep insights into the molecular mechanisms of resistance, but he needed someone with molecular endocrinology expertise to evaluate whether this would be a good idea to start a company with. I did some diligence, liked the idea, and told them there was a great opportunity to create drugs that treat prostate cancer.
But I also thought, why not consider treating a broader range of cancers, and in particular, breast cancer? The basis for the two cancers are similar, in that 80% of breast cancers are driven by estrogen. Estrogen binds to its receptor in a normal healthy woman, and is involved in reproduction, bone production, and other processes. The same thing happens in men, but with testosterone or androgen. We said that if we have some new insights on how to treat hormone-dependent cancers, we’re onto something. So that was the origin for Aragon in 2009. The company had two focuses, one treating the molecular basis for prostate cancer, and one for breast cancer.
SYNAPSE: What was on the market at the time for prostate or breast cancer?
HEYMAN: Some were anti-hormonal agents that block the receptor, like Thermodox and Casodex. The other type of drugs were enzyme inhibitors (inhibitors of aromatases, which make estrogen). But tumors are smarter than we are, so these drugs failed and Charles Sawyer had some good insight on why that was.
SYNAPSE: How do the therapies you developed work?
HEYMAN: The hormone receptors we target are ligand-dependent transcription factors. This means the receptor binds the hormone, goes into the nucleus, and turns on the transcription of particular genes. Our drugs - selective estrogen receptor degraders or SERDs - bind to the receptor and block its ability to interact with estrogen. The bigger advantage is it will also change the receptor’s conformation to make the receptor look like a misfolded protein, so it gets ubiquitinated and degraded by the proteasome.
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“I really like that whole picture, being able to say, ‘Look, we’ve done really interesting, good science; understood the disease; and came up with treatments for it’, and if it gets to the patient, that’s really rewarding.”
SYNAPSE: When Johnson&Johnson bought out Aragon in 2013, what was in the pipeline?
HEYMAN: Aragon had two different programs: anti-androgen for prostate cancer and anti-estrogen for breast cancer. We developed the anti-androgen, which was tested in Clinical I Trials and had very good results. We expanded to Phase II, and had very encouraging results. We treated about 100 men who had late-stage metastatic prostate cancer. At the same time, our breast cancer program was developing but was a little behind, and we needed to raise a little more money. We thought, maybe we could find a company that would buy Aragon, but we could convince them to allow the entire breast cancer portion to go into a new company. I call it a ‘buy-spin’: buy us, and spin out another company. That’s exactly what we negotiated with Johnson & Johnson in 2013: they bought us completely, simultaneously made a new company, and took the assets to the new company, all over a weekend. They terminated the employees at Aragon on a Friday and invited all of them back on Monday under a different company name - Seragon. Johnson & Johnson took all the prostate cancer assets, so Seragon was only focused on estrogen signaling and breast cancer.
SYNAPSE: So Seragon retained all of the staff and investors from Aragon?
HEYMAN: Essentially, yes. The investors for Aragon had done well financially and reinvested in Seragon. In the summer of 2013, when we started Seragon, the idea was to start early clinical trials for breast cancer. We filed an IND (Investigational New Drug Application) and started clinical trials in women that had advanced metastatic breast cancer. Six to nine months later, after the results started coming in, a few companies approached us, including Genentech/Roche.
SYNAPSE: What made you choose Genentech over the other companies?
HEYMAN: First of all, they’re a great oncology company with very deep expertise in breast cancer. They have a very exciting drug, Herceptin, that targets HER2 receptors and sells about $7 billion a year. But this only targets about 20% of the market, with the other 80% being estrogen-dependent cancers. I think they recognized that to expand in breast cancer, this was a great opportunity.
SYNAPSE: Seragon was sold to Roche when its most advanced product was in Phase I. Why be acquired instead of raising capital and conducting Phase II and beyond internally?
HEYMAN: We had raised $30 million dollars, spent about half of it, but they came in and said, “Look, you have 25 people at the company. We’ll quadruple the number of people on the project, run many more trials, and pay you $750 million up front and a billion in milestones.” So you do the math. They were committed and taking all of the risk. It made sense. It was bittersweet since we all worked so hard, but too hard to pass up.
SYNAPSE: In recent years, the trend has for been big pharma to gobble up smaller companies with promising early clinical trial drugs rather than do the R&D themselves. Why do you think this is?
HEYMAN: I would guess that if you talk to people in big pharma, about 50% of their drug lineup comes from small companies. They have a lot of money and expertise for the later stages - Phase III trials, marketing, commercial infrastructure, etc., but maybe aren’t as efficient in the early stage work that is done by smaller biotech companies.
SYNAPSE: Do you think small biotechs will continue to drive innovation in the future?
HEYMAN: Definitely. I’m not saying big pharma can’t either, but I think more and more will get done in the smaller companies. The small biotechs have more flexibility, and a very deep commitment to a very specific area, often the best in the world. We were the best in the world for developing drugs for hormone-dependent cancers. If you look at some of the companies in this space, Agios has deep expertise in cancer metabolism, Epizyme in epigenetics, Bluebird in gene therapy. You live and die by that expertise in a small company. Whereas in a big company, not every program has to win.
SYNAPSE: What was the transition like from postdoc to CEO, running an entire company and managing scientists?
HEYMAN: When you’re a scientist you really need deep expertise in a select few areas. The thing I like about a company environment where you grow into the management side is that it’s more integrated. We’re dealing with finances, intellectual property, and all the scientific areas - chemistry, biology, pharmacology, drug safety, clinical. I never went to school for business, but you kind of learn it on the fly if you have good mentors. I really like that whole picture, being able to say, “Look, we’ve done really interesting, good science; understood the disease; and came up with treatments for it”, and if it gets to the patient, that’s really rewarding.
SYNAPSE: What’s next for you, now that Seragon has been successfully acquired by Genentech?
HEYMAN: I’m on the Board of Directors of a few companies: Receptos, Biocom, and Organovo. I love taking cool technology out of academic labs and licensing it, raising money, building an internal team, and driving the technology forward, so I’m involved in two new companies. One is a cancer company based in San Francisco. The other is in San Diego focused on metabolic diseases (diabetes, fatty lipid disease, obesity), where I helped license its technology, raise the money and build the infrastructure. I also joined the board for two academic institutes, the Salk Institute and UCSD Cancer Center.
SYNAPSE: Any final words for students interested in pursuing a career in biotech?
HEYMAN: I never knew I wanted to go into biotech. I always thought I was going to stay in academia, so I encourage people to be open and consider pursuing different things. I’m still a fan of a rock solid science foundation, and when I hire people I look at if they really understand the science. But, you don’t have to be in the lab to be at a biotech company. There’s finance, venture capital, regulatory, business development, and much more. Have fun, and you have to do what you like. Never do it for the money. Be passionate about what you do.