How to Master Innovative Failure

In a field where success often comes after many years and failures, Nouhad Husseini and Regeneron Pharmaceuticals believe that it’s worth waiting for true innovation

Among larger pharmaceutical companies, there has been a significant industry trend of abandoning internal investment in early-stage research and development. This is in large part due to the perception from company boards of directors that preliminary R&D is too risky or, perhaps, that it’s better-suited to academic institutions or smaller, venture-backed biotechnology companies. As a result, these larger enterprises have increasingly opted to access early-stage science through business deals that, despite significant fees, are often still considered more attractive than the risk and expense associated with early-stage, in-house R&D efforts.

Regeneron Pharmaceuticals, however, has taken a different approach. Throughout its nearly thirty-year history, the company has remained dedicated to rigorous scientific research and developing meaningful innovations at its in-house labs. According to Nouhad Husseini, VP, business development, this philosophy has enabled the company to leverage knowledge gained from its past in-house efforts as building blocks that have led to its current discoveries and successes.

This includes failures that did not turn out as planned. For example, Husseini points to Regeneron’s initial focus on neurotrophic factors to address diseases such as Alzheimer’s, Parkinson’s, and amyotrophic lateral sclerosis.

“As much positive attention as these technologies are getting, they are still very early in their development. It might not be until version 4.0 that we see the full impact of what they
can deliver.”

Although this endeavor was ultimately unsuccessful, the basic science it generated led to the company’s Trap technology and EYLEA, its treatment for age-
related macular degeneration and other retinal diseases that threaten sight. Additional early-stage research at Regeneron resulted in VelocImmune, the company’s antibody discovery platform, and VelociGene, its pioneering mouse-genetics platform.

“It’s unusual for a company of our size to continue investing as much as we do in early-stage platform technologies,” Husseini says. “But so much of our success is rooted in the kinds of skunkworks projects that most large companies have moved away from. Instead, we decided to maintain the direction we started in.”

The latest example of this strategy is Dupixent, an Interleukin-4 and -13 (IL4/13) blocker currently awaiting FDA approval. The drug has shown great promise in clinical studies as a possible treatment for a variety of allergic diseases. Its power and potential, however, are based on what Regeneron learned in the early days of its IL4/13 cytokine Trap technology, a molecule that did not live up to expectations.

In the same way that Regeneron has stayed true to its innovative roots, Husseini has been instrumental in helping the company pioneer a groundbreaking approach to business development. Rather than putting effort into identifying traditional deals to purchase external innovation, he and his team look for collaborative relationships with companies that have developed complementary science and technologies. For example, Regeneron recently reached an agreement with Intellia Therapeutics through which the companies will work together to develop therapeutics based on CRISPR/Cas (gene-
editing) technology. This arrangement leverages an area where Regeneron has already developed significant in-house expertise from internal research.

Aside from the financial aspects of the agreement, Husseini is quick to point out that Intellia benefits by gaining access to Regeneron’s science and technology. This includes the Regeneron Genetics Center (RGC), which is vying to be the largest human genetics-
sequencing effort in the world. RGC has established dozens of collaborations with medical centers and academic institutions around the globe, and it is on track to sequence DNA from more than five hundred thousand people over the next five years.

“By bringing together the RGC and CRISPR, Regeneron and Intellia have a unique opportunity to accelerate efforts to make CRISPR-based therapeutics a reality,” Husseini says. “At the same time, we make new discoveries about what genes to target and how to fix them. That’s the cornerstone of our business development strategy: identifying companies with complementary technologies and cultures and then leveraging our own discoveries to create relationships where one plus one equals three.

The Intellia agreement is also notable in that it marks the first time Regeneron has made a significant investment in an outside entity. That change required a shift in the company’s culture, which Husseini describes as having moved from continuing processes that have been successful to looking for partnerships. “Our technologies are great, but they can be even better with the help of a like-minded partner,” Husseini says.

The shift was made easier by the fact that Regeneron staff recognized the complementary nature of Intellia’s capabilities and culture almost immediately. As a result, they have embraced the combination of new philosophy and collaborative partnership as an important and strategic way to maintain Regeneron’s position of scientific leadership.

When asked about the future of innovative technologies such as CRISPR and chimeric antigen receptor T-cells (CAR-T), Husseini says he believes that a majority of the markets and the public are overly focused on their near-term applications. As such, they are ignoring the long road ahead before they reach their full potential.

“As much positive attention as these technologies are getting, they are still very early in their development,” Husseini says. “It might not be until version 4.0 that we see the full impact of what they can deliver, which we hope will be offering cures for a broad set of diseases. That’s why we stay committed to a science-based approach that focuses on perfecting innovative technologies and therapies over the long-term.”

With decades of scientific rigor, institutional knowledge, and a core scientific team that has been with the company since its earliest days, Regeneron is well-positioned to continue delivering that kind of meaningful innovation.

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