Imagine you were just named CEO of a long-running business. Your business model, admittedly, is rather loosely defined: You hire the smartest people in the world—the vast majority of them on the cheap—and leave them alone to invent stuff. But as crazy as it sounds, it works—or at least it has worked for a number of decades. Your company has invented and brought to market countless amazing things: life-changing medicines, new technologies that make virtually every aspect of our daily lives easier to manage, and even tools to probe the great mysteries of nature and human life.
As the new CEO, though, you want to make some changes. First, you rework your longstanding hiring practices, screening out would-be inventors who come from certain areas. (Not everywhere—just a handful of places you don’t trust.) Then you introduce some new rules for company meetings, telling your senior staff to put visitors through a modest interrogation process before letting them in. The screening isn’t onerous, necessarily, it just takes time. You hear grumbling from your top talent—but hey, every company has grumpy talent. So you ignore it.
You’re still the No. 1 company in your field. You’re the top banana and everybody knows it. Except there’s one nagging issue that worries your investors: It’s that damn amorphous business model: There’s no special secret sauce to it. There’s no barrier to entry—meaning any of the company’s competitors can copy it and grab market share.
Sure, the company has been the overwhelming market leader for a long, long time—but then, so was Kodak. So was Sears. So was Encyclopedia Brittanica.
This, in case you missed it, is the story of American science.
And that cacophony you hear now around the world is the sound of a market share under siege: of purple markers scrawling out formulas at the Karolinska in Stockholm, of patents being filed by researchers at the University of Jiangnan, of revolutionary ideas being bandied about in an incubator at Hyderabad.
The truth is, scientists from around the world have complained for years about the onerous process (through a Visa Mantis review, for instance) that many face merely to attend a meeting in the U.S. (Worth reading, for some context, is this 2006 article from Science.)
But in the wake of President Trump’s Jan. 27 executive order banning people from seven predominantly Muslim countries entry to the U.S. for 90 days, the cry from the global community of scientists and biomedical entrepreneurs—the world’s storied inventors—has gotten only louder.
Some are urging a boycott of the U.S.—arriving at the obvious conclusion that there’s no need to have a global scientific gathering in any one country. And yesterday, an impressive array of more than 150 biotech company entrepreneurs, executives, and investors published an open letter in the journal Nature Biotechnology’s blog bashing the ban in no uncertain terms:
“If this misguided policy is not reversed,” the authors wrote, “America is at risk of losing its leadership position in one of its most important sectors, one that will shape the world in the twenty-first century. Indeed, it will harm an industry dominated by smaller companies and startups, the very kind of industry the administration has said it wants to support. It will slow the fight against the many diseases that afflict us, as well as carry negative economic consequences for the United States.”
Sy has more on the story here.
Ideas, good and bad, have no border. They sweep across the world, as knowledge does. There is no reason that the U.S. has to remain the center of life sciences innovation and entrepreneurialism—and that’s a realization that many outside our borders have come to already.
More news below.
Chan Zuckerberg Biohub doles out $50 million to 47 scientists. Tech billionaire Mark Zuckerberg and wife Priscilla Chan's nonprofit research charity launched with the staggeringly ambitious goal of tackling all human diseases. That may get some sneers from the skeptics - but the Chan Zuckerberg Biohub (a separate entity from the Chan Zuckerberg Initiative) is forging ahead, doling out $50 million in funding to 47 researchers from the University of California, Berkeley, Stanford University, and the University of California, San Francisco. Two of the major projects underway at CZ Biohub are the Infectious Disease Initiative, which aims to combat pandemics like the Zika and Ebola outbreaks, and the Cell Atlas, in which scientists will attempt to create a comprehensive biological map of human cells in major organs to better understand diseases. Just yesterday, the Chan Zuckerberg Initiative announced that it was donating $3 million to fight San Francisco's affordable housing crisis.
The latest from Stanford: A 1 cent "lab on a chip." In an advancement that could change the way that medical diagnostics are conducted, Stanford Medical School researchers have created a reusable lab that costs just one cent to make. The device was created by combining a silicone, microfluidic chamber where cells can be stored along with a reusable electronic testing strip that was created with an inkjet printer. Besides the extremely low production cost, the lab on a chip is also promising because it can be created by technicians in remote areas who don't necessarily have access to expensive lab machinery. "We designed it to eliminate the need for clean-room facilities and trained personnel to fabricate such a device," said Rahim Esfandyarpour, an electrical engineer who authored a new study on the chip, adding that a single chip can be made in just 20 minutes. (Stanford)
California health data breach stemmed from an unused website. California-based Verity has informed its customers that more than 10,000 patient records have been breached in a hack that persisted between October 2015 and January 2017, when the attack was discovered. The hacker was able to use a physician-operated website that was no longer in use and left unsecured in order to access the records, which included information such as names, the last four digits of credit card numbers, phone numbers, birth dates, and both physical and digital addresses. While there have been bigger health care breaches, Verity's is significantly larger than the approximately 2,300 median records that have been exposed in recent attacks. "We took immediate steps to investigate this incident, notify the affected individuals and appropriate authorities, and ensure enhanced protection of our information systems going forward," said Verity CEO Andrei Soran in a statement. "We are working with a leading cybersecurity firm to further evaluate the integrity of our information systems." (Modern Healthcare)
Are investors beginning to shrug off the White House's drug pricing talk? On Tuesday, White House Press Secretary Sean Spicer stated that President Donald Trump is still in favor of direct drug price negotiations in Medicare as a means of controlling prices. Spicer's comments during a press briefing predictably put a damper on biotech stocks - but it wasn't nearly the plunge the Trump administration's other statements about drug price regulations have wrought. Back when the president said that pharma companies are "getting away with murder," major biotech ETFs fell anywhere from 3.5% to 4%. This time, Spicer's pronouncement only sent the NASDAQ Biotechnology Index down about 0.8% at most, closing less than 0.5% down. But biotech investors are a skittish bunch - and if they sense more serious indications that regulations are forthcoming, expect a far less muted response.
Allergan boasts an impressive Q4 and is bullish on the future. Pharma giant Allergan on Wednesday announced fourth quarter 2016 earnings that beat Wall Street expectations, sending the company's stock up about 2% in morning trading. Allergan reported a year-over-year revenue boost of 7% and is forecasting between $15.5 billion and $15.8 billion in sales in 2017 (compared to analyst projections of about $15.37 billion). The firm also provided updates on its drug price increases - an issue that CEO Brent Saunders, who has pledged to limit branded price hikes to the single digits, has turned into a pet project. Allergan said that its average U.S. price hikes on certain branded products in 2016 were 6.7%. While some of the firm's flagship treatments are facing patent expiration, Saunders has been on a quest to snap up a huge number of biotechs developing drugs for liver disease, Alzheimer's, and other conditions.
Another Alzheimer's drug flops late-stage trials. Alzheimer's therapies haven't had the greatest luck in recent months. And now, Lundbeck and partner Otsuka's experimental treatment for improving cognition in Alzheimer's patients has failed two more phase 3 trials, likely ending any remaining hopes for the drug. While Eli Lilly had hoped that its own experimental therapy would become the first truly effective treatment cleared for Alzheimer's, the company largely wound down development in the wake of a late-stage failure last year. Rival Biogen, however, is still forging ahead with a drug called aducanumab that's shown some promise in trials (although results have been a bit of a mixed bag).
THE BIG PICTURE
More than 150 biotech leaders sent President Trump a letter slamming his travel ban. As Cliff explains in his essay today, a compendium of biotech leaders - 166, to be exact - have signed an open letter slamming President Donald Trump's immigration and travel ban targeting Muslims. In tough language, the letter contends that such a policy undermines the entire life sciences community and sends a devastating message to immigrants who would otherwise bring their talents to the United States, and was signed by some heavy hitters, including Alnylam CEO John Maraganore and Ron Cohen, the chairman of biotech's biggest trade group and lobbying arm. I spoke with Steven Holtzman, who heads up the hearing disease therapeutics firm Decibel and was one of the main driving forces behind the letter, and he expressed that the immigration issue is extremely important to him personally as his parents immigrated from Cuba. "I've been so lucky to come here and run these companies that help cure diseases," he told me. "I don't know if my story is possible in Trump's America." (Fortune)
Poll: A Third of Americans Don't Know Obamacare and the Affordable Care Act Are the Same Thing, by Aric Jenkins
A Surprising Number of Tech Workers Feel Discriminated Against, by Reuters
Google, Amazon, and Microsoft Donated to Donald Trump's Inauguration, by Lucinda Shen
VC Firm Trident Capital Raises $300 Million for Cybersecurity Startups, by Reuters
Find past coverage. Sign up for other Fortune newsletters.