Good morning.
I took note last week when Pfizer and Flagship Pioneering, parent of Moderna, announced they were teaming up in a “novel agreement” to create a pipeline of innovative medicines. The two companies proved their commitment to rapid innovation during the pandemic, when they both developed new vaccines in record time, so I felt their $100 million deal deserved extra attention. I spoke yesterday with Pfizer CEO Albert Bourla and Flagship CEO Noubar Afeyan and asked them: What makes this agreement “novel”? Here’s Afeyan:
“Flagship is strong in a number of things. It makes these scientific leaps, it makes platforms that haven’t existed in the past, and it creates the potential for many products. And, of course, Pfizer has a long history and a very strong current capability of taking products and applying them to meet unmet needs, developing them and then commercializing them. Historically these things have happened quite separately, and the only time they meet is when there is some product [that] has success in clinical trials, and then people do partnerships. Here, what we are thinking about is if you have enough of a long-term view, and you can actually think about up to 10 products coming out of this work, then you can think about coexisting and collaborating as an alliance, as opposed to a one-off partnership. That’s what I think is novel…the points of connection can be many and there can be a lot of learning of how to do this, in a best of class way.”
Here’s Bourla:
“Let’s take a step back to how I see the research environment developing. It’s very different today than 10 or 15 years ago, and it is driven by the tremendous proliferation of scientific knowledge. Ten or 15 years ago, the number of biological targets that we knew of were relatively manageable, and the number of modalities we had to go after them was also manageable. In that environment, it made sense for very big companies like Pfizer to place singular bets…But now, for every unmet medical need, there is so much knowledge about biological targets, and the modalities to go after them are so, so big that it’s impossible for anyone to place a singular bet…What is unique with Flagship is they have 40 different companies under one umbrella and most of them are organized around a technology…like Moderna and mRNA. We can put together our brains and say let’s try to find a way to meet unmet medical needs.”
Bourla and Afeyan said they began talking about this new approach in the depths of the pandemic, when they were “partners-slash-competitors,” as Bourla puts it, in the effort to create a vaccine. Will their partnership lead to a new model for drug development that accelerates medical innovation? Here’s Afeyan again:
“Every new thing is kind of a voyage. But there is a big impact prize at the end of this, and a willingness to learn, and the patience it takes to create an alignment…Our hope here is that both of us have an institutional patience and the resources to do some early iterations until we get this right….It is a new model in the life sciences.”
Adds Bourla:
“You can’t find partnerships of pharma and biotech companies in the early exploratory phases right now. Its only when a product has demonstrated significant chances of success that the two can join resources. What we are doing now, I don’t think anyone has done so far.”
Given the track record of these two leaders, this one is certainly worth watching.
Separately this morning, be sure to read Jeremy Kahn’s brilliant Fortune story on the $160 billion threat that generative A.I. poses for Google, and how the tech giant is responding. It’s a business dilemma on a grand scale. Other news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Can ChatGPT replace the CEO?
New A.I. technologies may be able to automate not just the work of low-level employees, but that of the top brass as well. One April study suggests that chief executives are high on the list of jobs whose work could be significantly transformed, if not eliminated, by A.I. But experts tell Fortune’s Geoff Colvin that CEOs can perhaps rest easy: Companies may want real people to better sell and explain an A.I.-generated business decision. Fortune
The demise of dieting
New weight loss drugs like Novo Nordisk’s Ozempic and Wegovy threaten to disrupt the $80 billion weight-loss industry. Dieting companies like WeightWatchers and Noom are now expanding into telehealth to give customers better access to these drugs—which have proved more effective at weight loss than decades of dieting advice. “The science has evolved—and therefore we should as well,” WeightWatchers CEO Sima Sistani tells Fortune’s Maria Aspan. Fortune
Archegos fine
UBS will pay $387 million in fines to U.S., U.K., and Swiss authorities regarding misconduct by its recent purchase Credit Suisse. The fines cover dealings with collapsed family office Archegos Capital Management, whose implosion cost Credit Suisse $5.5 billion in losses in 2021. UBS had previously warned that legal costs from Credit Suisse’s stumbles could swell to as much as $4 billion over the next 12 months. Bloomberg
AROUND THE WATERCOOLER
Alphabet boss Sundar Pichai is about to give the most important business update since he became CEO of the Google search empire by Stephen Pastis
Commentary: The war on DEI is the beginning of a coordinated attack on the Civil Rights Act of 1964 by Alphonso David
Sam Altman’s Worldcoin token nears $350 million market cap, potentially netting OpenAI CEO even more cash by Ben Weiss
How Blackstone hit the $1 trillion mark—and which PE firm might be next by Anne Sraders
Gen Z is rejecting everything they’ve been taught about tipping. It could be the start of a big shift by Jane Thier
Commentary: Why AT&T and Verizon’s infrastructure woes run much deeper than lead cables by Jeffery Sonnenfeld and Steven Tian
This edition of CEO Daily was curated by Nicholas Gordon.
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