Whatever happened to the next big thing?

$8b Millennium deal serves up reality check on lofty genomics expectations

The genomics revolution was not a flop. It just needs more time.

Millennium Pharmaceuticals Inc., the Cambridge biotech firm that came to symbolize the genomics breakthroughs of the past 10 years, was never able to both develop and market a single drug using its genomic expertise. Yesterday, Japanese drug maker Takeda Pharmaceutical Co. said it would buy the company for $8.8 billion. However, the medical and scientific advances promised by the mapping of the human genome continue to reverberate throughout the biotech industry, according to scientists, executives, and investors.

"I just walked out of a meeting two minutes ago with a potential collaborator on work that is completely facilitated by the sequencing of the genome," said George Q. Daley, an associate professor at Children's Hospital Boston. "Genomics has revolutionized every aspect of research."

Daley and others said those involved in commercializing genomics became overeager when the complete map of the human genome was made public by competing government and private teams in 2001.

"I think we were just a little bit premature to be able to translate that knowledge directly into a whole new wave of drugs," said Daley. "I think the lag time is probably longer than eight years."

Nobody did more to raise those unrealistic expectations than Mark J. Levin, Millennium's cofounder and longtime chief executive. In December 2001, he told Technology Review that Millennium would use ge nomics to become wildly successful. He said: "Over the next five to 10 years, our goal is to become a company that's leading the world in personalized medicines, a company that is leading the world in productivity, a company with a value of over $100 billion, a company that has five to 10 products on the market that are making a big difference in people's lives, a company with the strongest pipeline in the entire industry."

But beyond building lavish headquarters and striking licensing deals worth hundreds of millions of dollars to Millennium, the company didn't produce. Its two cancer-fighting drugs, Campath and Velcade, came about the old-fashioned way: Millennium bought the smaller companies that developed the drugs. Millennium has since sold its rights to Campath to Genzyme Corp.

Yesterday's buyout stands in stark contrast to the unbridled enthusiasm investors and analysts had for all things genomics in 2001. It was said that knowing all the genes that make up the human "map of life" would revolutionize drug discovery by providing specific targets at which drug makers could aim their concoctions. Moreover, the gene map would generate enormous understanding of the underlying biological mechanisms of diseases, instead of just the visible symptoms.

Steven H. Holtzman, who headed business development at Millennium from 1994 to 2001, and is now chief executive of Infinity Pharmaceuticals Inc. in Cambridge, said people misunderstood the impact of genomics.

"At the time, we thought of genomics as a revolution in drug discovery," said Holtzman. "What it really was, for its first decade or more, has been a revolution in biology. Biology as it is practiced today didn't exist without genomics, and we are now starting to reap the benefits of that biological revolution in drug discovery."

Many big, old-line drug makers are descended from chemical or dye makers, Holtzman said. The biological approach to drug discovery will make it easier to develop drugs - but not right away.

"We raced ahead in our minds to where genomics will take us, and the road is longer than we expected," said Holtzman.

Nicholas Galakatos, managing director of Clarus Ventures, a Cambridge firm that invests in life science companies, said the genomic approach is speeding up clinical trials and increasing the likelihood of success. Drug makers can now target narrow population groups with specific genetic vulnerability to a disease.

Still, he admitted, "It's clear in hindsight that genomics is not the silver bullet in drug discovery."

Samuel D. Isaly, founder and managing partner of OrbiMed Advisors LLC, a New York firm that manages life sciences mutual funds, said genomics has turned out to be a lot like rehabbing an old house: "It took longer and it cost more than we expected."

Millennium's shares peaked at $86.50 in November 2000, and then went through a long decline. But Isaly placed a bet on Millennium at just the right time. He said one of his funds, the Eaton Vance Worldwide Health Sciences Fund, owned more than 2 percent of the shares outstanding at an average price just above $10. Yesterday, the share price closed at $24.34.

Jeffrey Krasner can be reached at krasner@globe.com.