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At Novartis, a winning formula

Fishman’s research tack, Cambridge ties pay off

Dr. Mark Fishman (center) spoke with drug researchers at Novartis in Cambridge. Dr. Mark Fishman (center) spoke with drug researchers at Novartis in Cambridge. (Dina Rudick/ Globe Staff)
By Robert Weisman
Globe Staff / January 4, 2011

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CAMBRIDGE — When drug maker Novartis AG tapped a Massachusetts General Hospital cardiologist to run its global research operations in 2002, some company insiders chafed at his ambition to reinvent drug discovery here on the banks of the Charles River, nearly 4,000 miles from Novartis headquarters in Basel, Switzerland.

Most big drug companies have been tightly integrating their research and marketing efforts, targeting drugs that might yield the largest sales pop. But Mark C. Fishman, the Novartis research chief, took a different tack. He got doctors involved in early-stage research, kept marketers at bay, and focused on medicines that might treat smaller numbers of patients but also yield insight into ways to fight other diseases.

“It was tough and lonely for a while,’’ Fishman said of his early days in Cambridge. “There was a great resistance to the notion of excluding marketing from the research process and going into rare diseases.’’

Nearly nine years later, while other companies are scaling back drug development, Fishman, 58, is overseeing an expansion of Novartis research here and around the world. As president of the Novartis Institutes for BioMedical Research, he has emphasized more science, struck fresh academic and commercial partnerships, and pioneered what he calls a “new grammar’’ of drug development in fields ranging from cancer and muscle growth to cardiovascular and infectious diseases.

“He’s transformed drug discovery at Novartis,’’ said Douglas A. Melton, professor of natural science at Harvard Medical School in Boston, who sits on the Novartis scientific advisory board. Melton said Fishman insisted that researchers pursue the most effective drugs rather than those that treat the most common conditions. For instance, Novartis has ceded to other companies research on costly vanity drugs.

Fishman’s strategy appears to be working. Last year alone, Novartis won Food and Drug Administration approval for four new drugs, including Afinitor, the first medication for patients with benign brain tumors associated with tuberous sclerosis. The company has nearly 50 drugs in late-stage clinical trials, a large number even for a big pharma company, and in recent years it has roughly doubled the number of drugs that have made it through early-stage trials.

Approval of Afinitor was a triumph for Fishman because it validated his research strategy: developing treatments that give researchers a better understanding of the “molecular pathways’’ that control multiple diseases. Such an approach makes Novartis research more focused and productive, he said.

“We’ve been able to increase significantly our output,’’ Fishman said in an interview at the refurbished factory that serves as the company’s research base.

Novartis has also emerged as a growing force in the region’s life-sciences sector. It has forged alliances with many leading hospitals, universities, and biotechnology start-ups. And it has kept hiring at a time when leading home-based companies, such as Genzyme Corp. and Biogen Idec Inc., have been shedding jobs and selling businesses to boost their share prices.

“Novartis has been a tremendously powerful catalyst to the whole biomedical enterprise in the region,’’ said Susan Hockfield, president of the Massachusetts Institute of Technology, which is collaborating with Novartis on projects ranging from understanding molecular pathways to improving drug manufacturing. “[Fishman] was the one who picked Cambridge as the site for their research and development operation, and he’s created a dynamic and productive environment here.’’

This fall, Fishman said, Novartis Institutes will double the size of a planned office and lab complex in Cambridge, investing $600 million to boost research, and hiring 200 to 300 more employees. That will bring its local workforce to about 2,000.

Worldwide, the company spent $7.5 billion on research and development in 2009, one of the highest figures in the industry relative to its sales. But its spending still trails some other giants, including Swiss neighbor Roche Holding AG.

“We have a unique advantage in our setup because we have pharma and diagnostics within the company,’’ said Severin Schwan, the Roche chief executive. “Novartis and others have to work together with specialized diagnostic companies.’’

But while many drug makers have reduced in-house research and expanded their drug pipelines by buying smaller biotech firms, Fishman won a commitment from the Novartis board — chaired by the man who recruited him, Daniel L. Vasella — to maintain its level of investment. When the company said in late November it would cut 1,400 US sales jobs, the Cambridge operation was left untouched.

“If you take your investment down, there’s no question you can increase your short-term profit, with the emphasis on short term,’’ Fishman said.

Vasella acknowledged he was criticized by European colleagues for moving the research headquarters to Cambridge, and Fishman faced in-house skeptics when he was made president of the Novartis Institutes, which operates eight other research sites around the globe.

Some bristled when he invited clinicians into Novartis labs to aid in early-stage research. Others questioned his insistence that Novartis could become more productive — and more profitable — by concentrating on molecular pathways. Such pathways, which control interactions between molecules in a cell, can shed new light on multiple ailments. To better understand them, Fishman decided to run “proof of concept’’ trials for drugs that treat diseases afflicting relatively small numbers of people.

Early on, he recalled, some dismissed his presentations as “least relevant’’ to Novartis’s business prospects. Others hoped he wouldn’t last long in his new job, he said. “There were a lot of folks who I heard were literally saying, ‘This, too, will pass,’ ’’ Fishman said.

Melton, the Harvard professor, said Fishman’s approach was popular with scientists in the organization. “He didn’t want to let the marketers define the disease targets,’’ Melton said. “He wanted to be guided by the science. My suspicion is there was a lot of tension on the business side.’’

Fishman, however, had the backing of top management and the board.

A turning point came early on when he suggested using an experimental drug to treat children with tuberous sclerosis, which can cause brain tumors and seizures. Initially, some in the company were not enthusiastic, because there weren’t a lot of patients with the disease, limiting potential sales. So he took them to Cincinnati Children’s Hospital Medical Center to spend a day making rounds with pediatricians.

“They became convinced when we met the patients and their families,’’ Fishman said. Novartis went forward with the drug, which became Afinitor. The same team returned to Cincinnati recently. “The patients were really, really grateful,’’ he said.

The lesson was that the targeted approach Novartis used to attack a relatively rare disease could be replicated to treat diseases affecting larger groups.

In pushing for more robust in-house research, Fishman has bucked the trend of big pharma companies to add new products by acquiring venture-backed biotechs. Those drug makers are betting that biotechs, by licensing technology from academic labs, will be more successful in discovering new drugs. But a recent research-and-development comparison study by Gary P. Pisano, a Harvard Business School professor specializing in life sciences, found biotechs are no more productive than established drug companies.

“[Fishman] has a strong scientific vision about how to do drug discovery,’’ Pisano said. “They think about internal research and external collaborations as complementing each other. What other companies are doing is substituting collaborations for doing their own research and development. . . . That’s not going to be a winning strategy in the long run.’’

Some of the area’s most promising biotechnology companies and researchers have gravitated to Novartis because of the way it does research. One is Alnylam Pharmaceuticals Inc., an eight-year-old Cambridge company that partnered with Novartis in 2005 to work on a new way of developing specialized drugs.

“The pathways-based approach they’ve really pioneered at Novartis is one that others are focusing on,’’ said John Maraganore, Alnylam chief executive. “You might learn something about pathways in one disease setting that would allow you to use the same or related medicine for other diseases. And that makes the whole drug discovery process more targeted and more efficient.’’

Maraganore said the impact of Novartis research is only beginning to be felt.

“Of all the pharmaceutical companies that have come into the Boston area, I think the Novartis experience has been one of the most successful,’’ he said.

Robert Weisman can be reached at weisman@globe.com.