There is a 40-something aerobics instructor in a Dallas suburb whose cholesterol level is so low—a sixth that of a normal person—that scientists think she is nearly certain to be spared heart disease, no matter what she eats. In Berlin, Germany, a small child arrived at the hospital with amazingly well-developed muscles. At the age of four, he could hold a seven-pound dumbbell in each of his outstretched hands.
These people—genetic mutants seemingly out of an X-Men story—are more than just blessed by nature. They are leads to the future of human health, as pursued by one of the most prolific drug hunters of his generation: George Yancopoulos, 53, the chief scientific officer of Regeneron Pharmaceuticals. An experimental treatment he created based on the heart mutation is among the hottest in the industry. A second based on the buff toddler might help cancer patients whose muscles are wasting.
Other Yancopoulos medicines—for asthma, rheumatoid arthritis and cancer—are in testing, too. All are based on a unique method his team has developed of putting large swaths of human DNA in mice and using the rodents to quickly generate human drugs.
“This is why you get into this business,” says Yancopoulos. “You think you understand biology. You think you have an insight. And you think it might cure disease.”
Three of his medicines are already on the market, an amazing feat in an industry where researchers toil a lifetime to develop a single drug and get treated as superstars if they manage two. Alas, of the three, two were commercial duds: A treatment for a rare genetic disorder, and a cancer drug similar to Genentech’s Avastin. But his big hit came in late 2011 with a medicine called Eylea that treats the leading cause of adult blindness. At a time when Wall Street was convinced that the pharmaceutical industry had run out of blockbuster products, it generated $838 million in its first full year, and sales are expected to jump 55 percent this year to $1.3 billion.
But it isn’t just smart science that’s turned Regeneron into one of the world’s most innovative companies (it ranks No. 4 on Forbes’s annual list this year). It’s also smart business. One key reason Yancopoulos has been able to succeed has been the support of his boss, founder and Chief Executive Leonard Schleifer, 61, an MD-PhD who has turned out to be one of biotech’s shrewdest dealmakers and who, for two decades, has protected Yancopoulos from investor demands for results as failures piled up. “George was too talented,” says Schleifer. “The people around him were too talented. It wasn’t a matter of whether we can do this. It was a matter of when we can do this. Would we survive long enough to have a hit?”
They have, and then some. Against the grain of industry trends, the company has found ways to create effective new treatments on bargain budgets. According to a Forbes analysis of 220 drugs approved over the past decade for publicly traded companies, the companies that invented three or more medicines spent an average $4.3 billion in R&D per drug. The big boys spend still more: $5.5 billion for Merck, $7.8 billion for Pfizer and $10 billion for Sanofi, Regeneron’s partner in many of its projects. Regeneron’s cost per drug? Only $736 million. “He’s been successful beyond anything I could imagine,” says Fred Alt, the Harvard Medical School geneticist who first told Schleifer about Yancopoulos.
Accordingly, Schleifer is approaching billionaire status. He’s worth $800 million, largely in Regeneron stock, according to Forbes estimates. Meanwhile, Yancopoulos has made more money than almost any research biologist in history. Last year, he received a $82 million pay package, also mostly stock, which bettered every chief executive in America except Oracle’s Larry Ellison. His estimated total net worth: $400 million.
But for all his success, medicinally and financially, Yancopoulos has yet to create a drug that has really changed the world. His new projects—the heart medicine, the asthma drug—might just be the kind that save thousands of lives or become household names.
“Everything that we’ve been doing for 25 years, it interconnects,” says Yancopoulos. “It’s not like we changed direction in the middle, or we did a new trick. It’s all building on the foundation of those early ideas, and we’re just taking them to the next level.”
Regeneron’s roots lie in a Chinese restaurant. On the Upper East Side of Manhattan, in 1988, Schleifer, an assistant professor of neurology at Weill Cornell Medical College, scrawled a deal on a napkin with a Merrill Lynch venture capitalist and walked out with $1 million in funding, a chief executive job and a new company aimed at healing nerves. He then recruited top scientists to serve as advisors, including three Nobel Prize winners who joined Regeneron’s board of directors.
There were still more failures: A second Lou Gehrig’s drug, a weight-loss drug. Then a new technology emerged out of their efforts to discover growth factors, which work by tripping switches, called receptors, on the outside of cells. At the time, it was easy to find receptors but hard to find growth factors. Yancopoulos’s first hire, the physicist, discovered a way to fish out the right growth factor using the receptor. And then Yancopoulos figured out how to make these receptor-trawlers into a trap that would catch all the growth factor in the blood, blocking it. Yancopoulos called the drugs “Traps”.
Regeneron and Sanofi beat Amgen into clinical trials to prove the thesis. Will patients readily take an injection to control high cholesterol? “It’s the debate of the decade in the pharma industry,” says cardiologist Steven Nissen of the Cleveland Clinic, who is working with Amgen. He thinks that the PCSK9 drugs will do well but will be mega-hits only if they prove they can reduce heart attacks and strokes beyond what can be done with statins, which are now cheap generics. If there is a flaw, it is, as with many of Yancopoulos’ drugs, that he went into an area with too many competitors: Pfizer, Alnylam and Roche are all working on PCSK9, too.
(This story appears in the 20 September, 2013 issue of Forbes India. To visit our Archives, click here.)