Former Amgen R&D lead Sean Harper talks exclusively to In Vivo about his new role as a venture capitalist, joining veteran industry investor Beth Seidenberg as co-founder of Los Angeles-based Westlake Village BioPartners.
Sean Harper: Proximity is an underestimated asset in the VC space. It is easy to drop in and take a stake in someone’s series A or B round, but today’s life science entrepreneurs expect a lot more. They value someone being there with them right from the start, with the incubating support and seed money that builds traction with key stakeholders. That full-on kind of assistance works best at close quarters and it is much harder to do it remotely. Geography counts – in fact, it is the premise that led Beth and I to launch Westlake Village BioPartners in September 2018 with $320m in committed capital. Los Angeles was a natural fit for our mission because both of us have deep roots here. I am a fourth generation native Californian and most recently served as global head of R&D at Amgen Inc., based in Thousand Oaks. At Amgen I was frequently asked to advise scientists and entrepreneurs on how to take their discovery work beyond the lab by creating a commercial business. I told them that, while the academic infrastructure and talent was abundant, Los Angeles lacked a venture capital presence sufficient enough to attract enough seed money to help a start-up become a functioning pre-revenue biotech. It meant that funding usually had to be found outside the area, in places like Boston, and when the IP went back east with the money, the business itself was airlifted out of here as well. It was a message I had to convey many, many times. When Beth approached me about leaving her post at Kleiner Perkins in the Bay area to move closer to her home in Thousand Oaks, both of us realized that our collective experience and reputation could be leveraged. Together we can fill the business need for a supportive pool of funding dedicated to local innovators here in Los Angeles. After 17 years in the R&D business at Amgen, I too was ready for a new challenge. With the creation of Westlake Village BioPartners, we can fill the missing money link in the local life sciences ecosystem, helping entrepreneurs find new places where capital and talent can find a productive home.
Harper: The local talent situation is improving. Amgen is working hard to create an ecosystem of biopharma human capital in the Los Angeles region that can match Boston or the Bay area. As the most recent head of Amgen R&D, I’d get emails every day from people in the industry who are looking to relocate to the area because of a spouse that has landed a management job in the services sector here, which is as large or larger than other US metro areas; or I went to med school out here but did my post-doc at MIT and want to come back. Amgen, for example, has recruited great people from everywhere, in diverse fields related to life sciences in general. With time, it has forged a pool of expertise that gets larger every year. At Westlake Village BioPartners, our record so far speaks for itself: five companies started and we’re still rolling.
Harper: The trajectory of industry innovation is often one of long fallow periods followed by a spurt of explosive growth. This is true of biology. Innovation in human therapeutics was flat for decades but is now producing exponential returns. Gene therapy is a great example: it languished and was even abandoned after some bad safety signals in the 1990s but in the last five years it has become a viable treatment path starting with two FDA approved products in 2017. Today, there are some 350 companies active in the field, with hundreds of products undergoing clinical trials. We are in a new golden age of drug development, paced by computational biology, robotics and so many other technologies that add up to a far more predictable pathway to treatments that actually work in patients. It is a far cry from what I thought was possible in human therapeutics a decade ago. What really excites me are all the new technology platforms like human genome sequencing, including the ability to sequence individual tumors as an entry point for precision medicine. Computing power brings the capacity to take target discovery and validation beyond the mice models directly to humans. That’s a transformative change itself. One of the best things we did at Amgen was to acquire Iceland’s deCODE Genetics, a major source of population-based data that provided us with the information necessary to identify drug targets from large-scale screening of genes associated with many common diseases. When we bought deCODE, no one had been able to sequence an entire population – some 300,000 people – in all its genetic diversity to obtain those targets. Now we can. In my view, it gives Amgen’s R&D team a deeper understanding of the underlying biology of disease, putting them much closer to finding cures. But this is not all. Back when I was a post-doc at MIT, we could spend 10 years solving the crystal structure of a single protein. Today, the technology exists to structure the smallest molecule in that protein or to co-crystalize different proteins interacting with each other – an inter-disciplinary feat that bridges the physics of movement with biology. And a single company can produce 500 of these in a single year, not a decade. I know that artificial intelligence and machine learning get over-hyped, but these are emerging fields that already show promise in advancing unheard of efficiencies in areas like clinical trials. Add this up and you see that science and technology are working together to bend the curve on what’s possible for patients. There is vast potential for investors willing to get into the weeds for a closer look.
Harper: The opportunity set in biopharma has changed significantly. Today is a true golden age in the history of biotechnology. Three-quarters of all products in late-stage development come from smaller enterprises relying on venture capital as their principal source of funds. Roughly a third of new launches into the marketplace originate from independent biotech firms. The excitement about the innovations coming from the start-up community is real; evidence from the number of FDA novel drug approvals over the past few years indicate this is not a fluke. Frankly, as a veteran of R&D in the big established players, I think the start-up culture is hard to replicate. Big money and large-scale resources result in people getting too comfortable and losing their edge. It’s one reason why I think all these funding mega-rounds can be dangerous to the scrappy mindset of a start-up because it makes things too comfortable, too complacent. You lose the advantage over the people who are working on the same therapeutic target at Pfizer. Too much money and more time means you lose that focused hunger to succeed. Bigger still is what I call the sustainability factor that tends to afflict R&D in the biopharma top ten. Let’s consider if you are head of R&D in one of these companies five years ago. You’ve studied hard, consulted wide and conclude that the company needs to make a big investment in gene therapy – enough to be a leader in this emerging field. Then you stop and realize how many existing priority programs would have to give way to finance this new effort, especially when your board will default to the position that gene therapy investment must come from the existing budget. Does that mean you as R&D leader will have to find the funds by halting safety surveillance on a marketed product? Powerful internal forces will slow you down because it risks the work they’ve been pursuing for years. Building a gene therapy capability within the company becomes a no go. But consider if you took an alternative path and decided to march into the boardroom with a plan to acquire an emerging company – say Spark Therapeutics – along with its potentially transformative lead asset in gene therapy. In that scenario, you not only get the money from the balance sheet to purchase the company outright, you’ll also be given the P&L dollars to operate the new acquisition going forward. The incentives are aligned to buy the technology, not create it in-house. This is a fairly universal truth in big pharma. It’s a long way of explaining that making the transition from a major operational role in big pharma to the boutique VC space is logical because the momentum in innovation is now with smaller companies with a pressing need for financing. We are filling a major unmet need in the drug development ecosystem. I don’t see the dependence of big pharma on start-up innovators going away soon.