Simon Best — Striking the Right Chords for Success

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Striking the Right Chords for SUCCESS The one-time tour manager of a successful British pop band has adapted his leadership skills to some highly taxing and complex areas, such as cloning and genetic modification. Simon Best is taking the lessons he has learned in the music business and the life-sciences industry to turn Ardana Bioscience into a leader in reproductive health. Simon Best is one of a kind. The chairman and founder of Ardana Bioscience Ltd., a British specialty pharmaceutical company focused on reproductive health, has one of the most diverse backgrounds in the life-sciences industry. And at each step in his career, Mr. Best has been on the cutting edge. As a music student at The University of York, he formed his own jazz fusion band. He was tour manager of the 1980s British pop band, The Human League, which was one of the first garage bands and keen proponents of emerging technologies such as synthesizers. Later, Mr. Best became deeply involved in two controversial areas of science: genetic modification and cloning, the former at Zeneca Plant Science, and the latter at the Roslin Institute in Edinburgh, Scotland, most famous for Dolly the sheep. While there are clearly stark contrasts between the music and biotechnology and biopharmaceutical industries, Mr. Best notes that both require a high level of creativity and teamwork to succeed. “While at Roslin and Zeneca, I was dealing with early-stage science, where the skills required were maximum creativity, maximum teamwork, and intense team communications, which are not dissimilar from the music world,” he says. Today, his growing company, Ardana, is benefiting from that diverse, yet focused background. “Being an entrepreneur in the music industry and being involved in starting up several companies I learned a lot about leadership and teamwork,” he says. Ardana’s mission is to discover, develop, and market innovative products that promote better reproductive health. The company was founded in 2000. In May 2004, Ardana launched its first product, Striant SR, a testosterone replacement therapy for men with primary or secondary hypogonadism. Ardana focuses its therapeutic discoveries and acquisitions on five key areas: androgen replacement for hypogonadal men; prostatic disease; endometriosis and the associated infertility in women; and male and female sexual dysfunction. To help the company achieve success, Mr. Best has drawn on his experience and understanding of the biotech industry to ensure Ardana avoids the mistakes that have been made by other start-ups. “Although the biotech industry has clearly delivered hundreds of products, what it hasn’t done yet is fundamentally change the risk/reward time-scale dynamics of drug discovery and development,” Mr. Best says. “The reality is, on a compound-by-compound basis, the statistics of finding a product that might have a benefit, and then the attrition rate through discovery and development has remained constant for quite a long period of time.” The Ardana chairman attributes this failing in part to the fact that many of the platform technologies that generated excitement in the late 1990s have not lived up to their promise of changing some of the fundamentals within the industry. As a result, there was a downturn in investment and valuations from 2000 to the last year or so. “The industry is going to have to examine its business models more realistically and find ways to build companies that can really withstand the risks and timescales,” Mr. Best says. “Ardana has a business model that promotes funding, and that allowed us to reach profitability relatively quickly, and therefore control our destiny by reinvesting profits into early-stage science. We do not have to rely on much more costly and risky forms of capital.” Calling the Tune Coming from a musical background — Mr. Best’s mother was an accomplished pianist — and recognizing that he had an aptitude for composition, Mr. Best studied for a bachelor of music degree at the University of York in England. “To me, music does things that practically no other medium can,” he says. “I like the way music integrates emotion, intellect, and body, harnessing and stretching each of those. As I’ve moved into other areas, I turn to music not only to relax but to exercise areas of my brain. I find that stimulating and relaxing at the same time.” While in school, Mr. Best formed a jazz fusion band called The Best Friends. After graduating, he returned to Edinburgh to work in the music business and became tour manager of The Human League. “The Human League was different and for that reason people slotted the group as part of the New Wave movement in the early 1980s, but they also created pop hits,” he says. “The Human League was one of the first synthesizer bands based on new music technology. At the same time they wanted to be a pop group while remaining original. So it was a very exciting time.” After several years in the business, Mr. Best says working in the music industry was destroying his love of music. “Most of what one hears about the music industry is true and, while it was great fun as an extended adolescence, I grew out of it,” he says. Fate, he says, took a hand. He met some molecular biology Ph.D. students from the University of Edinburgh who got him interested in the emerging biotech industry. Just as small record labels were shaking up the music industry in the late 1970s and early 1980s, the science world was experiencing a turnaround with the emergence of the first biotech IPOs, such as Genentech, Amgen, and Biogen. “I saw a structural similarity with what I’d been doing, and then I got the bug from friends of mine who were working in the leading edge of science,” he says. Aware that his background was not obviously suited for a quick switch to biotechnology, Mr. Best spent two years at the London Business School getting his MBA, during which time he did some consultancy work for biotechnology and biotech-related companies, both in pharmaceuticals and agriculture. He attracted the attention of a venture capitalist firm, now called Apax but then known as Alan Patricof and Associates. The company gave Mr. Best its first venture capital prize to develop a business plan around medicinal plants. But just as the business plan started to fall into place, his founding scientist was lured away to work as a biotech analyst, and Mr. Best found himself in need of a job. “I was hired by ICI, which at the time was the biggest British diversified chemical and life-science multinational company,” he says. “The company had a CEO who was very tolerant of creative mavericks. I never expected to stay very long, but much to my surprise and that of ICI, I ended up staying for 13 years.” The company split in the early 1990s, with the chemical part of the business remaining ICI and Zeneca being formed as the life-sciences division. In 1991, Mr. Best was given $10 million of internal venture capital by Zeneca and was sent to the company’s U.S. headquarters in Wilmington, Del., to build a food-oriented agriculture/biotech company. “That became Zeneca Plant Sciences (ZPS),” he says. “In the end, this was my first biotech startup, which was a corporate venture.” Under Mr. Best’s leadership, ZPS became widely recognized as one of the world’s leading biotechnology enterprises. On Jan. 5, 1995, ZPS became the only company that had secured regulatory approvals for the sale of a genetically modified (GM) whole-food on both sides of the Atlantic. In February 1996, it became the first company to introduce genetically modified food in Europe with a U.K. launch of processed tomato products through two major supermarket chains, J. Sainsbury and Safeway. From Zeneca, Mr. Best became CEO of Roslin Bio-Med (RBM), which was founded in April 1998 as a spin off of the Roslin Institute. RBM was founded with the objective of commercializing the research that led to the cloning of Dolly. Mr. Best’s mission was to help the company deal with all the medical applications of the cloning technology that emerged from the laboratory. Tackling Controversy At both Zeneca Plant Sciences and later at Roslin, Mr. Best was at the forefront of industries immersed in a science that was both exciting and at the same time generating large amounts of public concern. “I was proud to launch the first GM food in the United Kingdom,” he says. “That was a success. The tomato cans were labeled so consumers could have a choice, and when they had the choice they bought the conventional product two to one. We sold 2 million cans in two years. But that launch was February 1996, which was two months before the BSE crisis in the United Kingdom, which crashed an already low level of public confidence regarding the regulation of biotech.” At Zeneca, Mr. Best had paved the way for the launch of one controversial technology and had developed an understanding about public opinion on such issues and how governments and regulators felt about establishing new regulations and new science. “I came to Roslin Bio-Med in April 1998, which was about a year after the announcement of Dolly,” he says. “I particularly admired the way that from day one, the scientists at the company had been very open and proactive in their communications about a potentially scary science. They made it clear that they would never allow the application of that science to clone people.” The work done by the Roslin Institute and others involved in cloning technologies and stem-cell research is fairly widely supported in Europe. But the public in the United States has been more anxious about these technologies. “The work being done at Roslin was something that the public in some parts of the world, in this case in the United States, was very cagey about,” Mr. Best says. “In the United Kingdom, we’ve been able to win the public over to controversial science, such as embryo research and stem-cell research, by avoiding some of the mistakes that were made by other companies in previously controversial sectors such as GM foods.” His experiences at Zeneca and Roslin have taught Mr. Best the importance of open communication and educating the public. “Genetic modification, cloning, and stem-cell research pose the temptation for the media to present information in a scary way,” he says. “Therefore, it is the responsibility of the scientists involved in the field and the business community to take communications much more seriously. Both sides have to begin laying the ground work years in advance about the real practical applications of any new technology that could affect people’s everyday lives.” Mr. Best says while at Zeneca and Roslin he recognized that about one-quarter to a one-third of his time would have to be devoted to communications or policy-type work to win public support and licenses from big governments around the world to apply those sciences. “There are still very few scientists or business people involved in biotech who are willing to give that much time to these issues,” he says. “Unless more is done, it shouldn’t be taken for granted that companies are going to have the license to operate.” By the end of 1998, huge breakthroughs in human stem cells were announced in a paper from the University of Wisconsin, and within a year Roslin was sitting on another exciting and — potentially controversial — technology. Roslin had the capabilities to bring together everything that might be needed to develop stem-cell applications as a way to open up regenerative medicine, Mr. Best says. The excitement generated by both Dolly and the stem-cell breakthrough attracted the attention of Geron, a leading company in the stem-cell field in the United States. In May 1999, Geron acquired Roslin. Mr. Best stayed on as managing director of Geron Bio-Med for about a year. “It was a very good deal for the Roslin Institute, since it gave the company six years of secure research funding,” Mr. Best says. “It also was beneficial for the local science community since Geron ended up doing a high proportion of its human stem-cell research in Scotland. But, in the nicest possible way, I’d done myself out of a job.” With the money he had made through his work at Roslin, he decided there was an opportunity to take on another risk, this time forming a new company. Ardana is Born In July 2000, Ardana was created to commercialize research developed by the Medical Research Council (MRC) Human Reproductive Sciences Unit (HRSU) in Edinburgh. The HRSU is one of only four academic centers of excellence in human reproductive biology in the world. The choice of the name Ardana fits the company on a number of levels. Firstly, the name is drawn from a Hindu deity, which is appropriate given Mr. Best’s own family’s strong ties to India. “My wife is Indian, and she was brought up and remains a practicing Hindu; and we are educating our children on Hindu practices,” he says. Ardana is derived from the Sanskrit word for a South Indian religious statue, Ardhanarishvara, which embodies both the male and female form, with half as the male god Shiva and half as the female god Parvati. “Ardhanarishvara’s meaning embodies the male aspects of women and the female aspects of men,” Mr. Best explains. “Despite obvious anatomical and hormonal differences between the two sexes, men and women share many of the basic mechanisms of reproductive biology. For example, how the brain controls the sex steroids essentially is the same mechanism in men and women. In addition, rDNA — recombinant DNA — is hidden within the name.” Furthermore, given the company’s base in Scotland, the name has a geographic connection with Ardnamurchan, which is the western most point in the country. “We later found out that Ardana also is the name of a planet in an episode of Star Trek, so Trekkies like us as well,” he jokes. “The name had some very nice affiliations and meanings around reproductive biology that really had something concrete to do with the company.” At its inception, Ardana signed a five-year pipeline deal with MRC, which still has six months to conclude and for which the company is negotiating an extension. Through this deal, Ardana gave the government shares in the company, and the MRC holds 10% of the founding equity. That investment underwrote the costs and risks of leading-edge research. The deal also gave Ardana exclusive options on new technologies emerging from HRSU. (See box on page 64 for more information.) Mr. Best then raised venture capital funding, which enabled Ardana to hire an experienced, commercially oriented business management team with clinical-development capabilities. The venture capital also allowed the company to buy a balanced pipeline from front end all the way through to commercial products. “We set out to build a mini-pharmaceutical company quickly, which meant having a pipeline going back to leading-edge research that is broad enough to withstand the risks and attrition rates of the industry,” Mr. Best says. One of the earliest members of the team was Dr. Maureen Lindsay, who came on board in January 2001 as chief operating officer having previously been president of Pharmacia Corp. in New Zealand. At the time, Mr. Best was Ardana’s CEO. In April 2004, he stepped up from that role to chairman and Dr. Lindsay took over as CEO. In July 2002, Ardana acquired the French company Europeptides and a substantial intellectual property portfolio from Degussa/Zentaris. The company also signed deals with American companies to get European marketing rights for close-to-market products. Ardana has a product on the market in the United Kingdom, one in registration, one in later-stage trials, and several under investigation. The company’s financial success and stability have been significant to its achievements to date. “We’ve raised £43.3 million ($80.2 million) of which we have still have a substantial amount in the bank, and we’ve built a little pharma company that has sales and revenue,” Mr. Best says. “In four years, that’s quick.” Mr. Best says the company’s location also has been an important part of its success. “Reproductive medicine is an unusual area in that it’s one of the few fields in which U.S. research doesn’t dominate,” Mr. Best says. “That has a lot to do with the fact that the United States is intrinsically a more conservative society in many ways these days than Europe. And it’s not a coincidence that the strongest reproductive research is happening in the United Kingdom, in Australia, to some extent in Singapore and pockets of Asia.” According to Mr. Best, Scotland’s strength in this field of medicine is well-established and explains why Dolly emerged from Edinburgh and why there are strong efforts on stem-cell research in Scotland. “Scotland is very strong in several other areas of medicine,” he says. “Dundee is a global powerhouse in cancer research, and there are companies such as Cyclacel, which is on the leading edge of cell cycle modulators for cancer. Glasgow is a strong base for antiviral, human genetics, and cardiovascular research.” Making it Happen “Very creative people aren’t necessarily very comfortable being focused,” Mr. Best says. “They’ll have bursts of focus when they get enthusiastic about something they love, and that’s typically what drives a band or artists to their first successful album. Then there’s the little problem of the follow-up album.” Mr. Best learned some tricks during his time in the music business for keeping creative people motivated: set targets and then expose them to new ideas or new instruments. “I’ve had the privilege to work with leading-edge scientists throughout my career and now with HRSU in Edinburgh, which is arguably the global leader in reproductive medicine,” he says. “These are creative people who are fundamentally driven by generating new knowledge, but inevitably they get a bit frustrated about the disciplines imposed by timelines or the steps that must be taken in filing patents before publishing. In my role, it’s important that I show respect, have an understanding of the science, and share their excitement about that science. I also need to understand what it is that’s restraining their creative side, which might be the need for extra resources, or introductions to other academics, or bridging the gap for them between their academic work and another industrial group.” Mr. Best believes passionately in the biotech industry and its potential for solving problems, be it diseases in humans, animals, or plants, in ways that minimize the impact on other systems surrounding the target, be that the organ, cell, or creature. “Biotechnology has opened up the ability to understand living systems both in their healthy state and in disease states,” he says. On a more philosophical level, the connection between bioscience and nature is profoundly comforting for Mr. Best. “Bioscience is by its nature incredibly intimate with the control mechanisms of life,” he says. “I find that intimacy reassuring, but it’s exactly that intimacy that scares people, and there’s the paradox. “It’s communicating that paradox that I learned the hard way in agriculture,” he says. “The industry described itself as having revolutionary technology, regarding cloning and embryo research in stem cells, and it did that because companies needed to raise money. It’s much more exciting to be dealing with something revolutionary, but the reality is most applications are evolutionary. They’re based on small changes to deal with very specific problems and have a much more intrinsically narrow risk of unexpected consequences than most previous technologies. That doesn’t mean that this knowledge couldn’t be used for ill gain, so it’s important to make sure that regulations are in place to stop that from happening.” At Ardana, Mr. Best’s goal over the next five years is to take the company from a mini-pharmaceutical company to a medium-sized one, one that is profitable and that has a pipeline of potential blockbusters that will allow it to become a large pharmaceutical company in the next 10 years to 15 years. “At the moment Ardana is still at a very interesting stage, and we’re going to have to look at ways of making the company much bigger,” he says. “We could do it through M&A, which could be funded a number of ways; we will look into whether an IPO would be the right thing to do for the company. We have extremely good investors, and if we need to raise more money we have an investor base that would help us do that.” As the company continues to accelerate its portfolio, Mr. Best says his role at Ardana will shift to become more hands off. “I want to remain chairman, and it will take a significant amount of my time, but as the company progresses I will start to examine more closely some of my other interests,” he says.F PharmaVoice welcomes comments about this article. E-mail us at A Balanced Pipeline Ardana’s goal is to become the leading specialty pharmaceutical company focused on reproductive health. The company has rapidly built a balanced pipeline spanning early research to commercialized products. In April 2004, Ardana received UK marketing authorization for its first product, Striant SR. The product is the first transbuccal product for testosterone replacement therapy in men with primary or secondary hypogonadism. The company acquired European marketing rights to Striant SR, excluding Italy, from Columbia Laboratories Inc., which received U.S. approval in June 2003. “In less than four years we’ve filled our pipeline from broadly based research to our first product, Striant SR, which we launched in May in the United Kingdom,” says Simon Best, chairman and founder of Ardana. In October 2004, Columbia completed the European Mutual Recognition Process for Striant SR, and the company received a positive opinion from all major markets, including Germany, France, Spain, Portugal, Italy, and the Scandinavian countries. Ardana executives expect product roll-out to begin in the second quarter of 2005. Striant SR will compete in the European testosterone market, which is valued at about $45 million. “It’s not huge, but its big enough to justify the construction of a specialist endocrinology and urology salesforce, which we’ve done in the United Kingdom and which we will be doing in a number of European markets over the next few years,” Mr. Best says. A second product, Invicorp, is in registration as an injectable erectile dysfunction compound. Senetek Plc. licensed the product to Ardana in June 2004 for marketing in Europe. Under the agreement, Ardana assumes full responsibility for completing the European drug-regulatory process and seeking national marketing approvals throughout Europe. “Invicorp has a Danish registration, and we’re working to put mutual recognition in place for the rest of Europe so that it can be launched in 2006,” Mr. Best says. Invicorp will compete in the European non-oral erectile dysfunction market, which has an estimated value of $34 million. The company has a sustained-release gonadrotrophin releasing hormone antagonist, Teverelix LA, in Phase IIa trials for treating prostate cancer and benign prostate hyperplasia. The product also is in Phase I trials to treat female indications, such as endometriosis and fibroids. Ardana acquired full global rights to Teverelix LA from Zentaris. Teverelix LA will compete in the global markets for GnRH antagonists and drugs for the treatment of benign prostatic hyperplasia (BPH). The GnRH market is valued at about $2.6 billion and the BPH market at about $2.9 billion. “All of the above drugs, as well as others at an earlier stage of development, are targeted at Ardana’s core customers, specialist endocrinologists and/or urologists, and we are, therefore, well-placed to leverage the investment we’ve started to make in our European sales and marketing infrastructure,” Mr. Best says. Ardana has relationship with the Medical Research Council’s (MRC) Human Reproductive Sciences Unit (HRSU), which has yielded several advantages. During the four-year relationship, Ardana has filed about 30 patents, and it will be taking about 20 of those products forward into trials. Ardana 13525 is in preclinical development as a next-generation prostate cancer treatment. “That’s our most advanced compound from in-house research, and it could be in humans in a couple of years,” Mr. Best says. “We have a nice portfolio of proprietary targets, such as G-protein coupled receptors, for modulating inflammation, the immune system, and sex steroids in the reproductive track, that are ready for small-molecule work.” To me, music does things that practically no other medium can. I like the way music integrates emotion, intellect, and body, harnessing and stretching each of those. Harmonizing Life and Work In an exclusive interview with PharmaVOICE, Simon Best, chairman and founder of Ardana Bioscience, talks about why he believes in sciences that the public sometimes considers controversial, how he runs a company, and the people who have influenced his life. In Europe, there has been a backlash against genetic modification. Where do you believe the greatest benefits and opportunities lie, and what are some of the difficulties that need to be overcome? One of the problems with genetic modification in developed-world applications is that we, by and large, have more than enough food. The public is fairly ignorant about how food is produced, and people aren’t very interested in the details of environmental benefits that could come through genetic modification. So, there isn’t a crying need that is obvious to consumers in the developed world for genetically modified foods. The greatest need is in the developing world, where agriculture is a horrendous struggle for billions of people and where appropriate uses of genetic modification can make a real difference to drought tolerance, to pest tolerance, and to unique diseases that are only found in the developing world. I work on a pro bono basis as a governing board member of an institute in India called ICRISAT, which is responsible for the improvement of staple crops for the world’s poorest farmers in the semi-arid tropics. For example, groundnuts were, until the last 10 years or so, a major protein source in the West African diet, but that crop has been crippled by a virus that has decimated its yields. There isn’t a chemical solution to tackle this disease and unless it’s solved, some of the world’s poorest people will face food shortages and an ongoing protein deficit. That’s a problem for which the obvious appropriate solution is genetic modification. And I’m proud to be involved with some of the attempts to adapt this type of technology on an appropriate basis while maintaining global standards of regulatory oversight and environmental and food-safety monitoring. So although I fully understand why parts of the developed world, and in particular Europe, are very concerned about genetic modification, the effect of this slowdown is to hinder the adoption of those technologies for people who badly need them. How do you describe your management style? It’s all about communications, trust, maximum delegation, and considered risk taking. The first thing that’s critical is hiring exceptionally good people. I have a philosophy that everyone senior who works with or for me needs to think like an investor as well as a manager. During the growth phase of a company, I delegate responsibilities so that people get the chance to grow in experience and skills, allowing them to step into bigger roles. I’m also an assiduous communicator. Given the realities of managing a global business with a small team, a lot of communication has to be through e-mails, but I’m a very efficient user of short, focused e-mails, both upward to my board and investors and horizontally to my colleagues and throughout the organization. I also make sure there’s face-to-face time on a regular basis to keep things held together without having too many formal, bureaucratic systems. I’m an entrepreneur. I believe a company succeeds best on an 80-20 basis — 80% right decisions versus 20% wrong, but decisions made in a timely manner. Are there people who have influenced you in your musical career and your biotech career, and who helped you realize your own capabilities and achievements? My cultural heroes are people who have reinvented themselves creatively and stylistically throughout their careers. My jazz hero is Miles Davis. I wrote my undergraduate thesis on him and very nearly went through a Ph.D. on him before I went into the pop music industry. He was a great builder of new teams, of new bands; he was a great selector of young musicians; he changed styles, he was an innovator right up until his early death in his 60s. In classical music, my comparable hero would be Stravinsky, who was most radical as a young man and then became more conservative in his middle years, but still very innovative. He then adopted a radical avant-garde style again when he was 75 and carried on until he died in his late 80s. Picasso, who at times was a bit complacent, nevertheless changed styles and reinvented himself throughout his career. I find these types of people inspiring. Within the science and biotech world, a very significant influencer was Roger Salquist, who was the CEO of a company called Calgene, which eventually was acquired by Monsanto. Calgene launched the first genetically modified food in the United States. Although the company was a competitor, Roger provided many insights on how to build public understanding and confidence in science, what the real activist agenda was and how to cut across the noise to deal with real public concerns. He taught me a great deal about communications and public issues. Defining Events SIMON BEST — RESUME April 2004 — present. Chairman, Ardana Ltd., Edinburgh, Scotland July 2000 — April 2004. Founder and CEO, Ardana Bioscience, Edinburgh, Scotland May 1999 — July 2000. Managing Director, Geron Bio-Med, which was formed through the merger of Roslin Bio-Med and U.S. biotech company Geron Corp. June 1998. Chief executive of Roslin Bio-Med, Edinburgh, Scotland 1986 — 1998. Joined ICI Agrochemicals as a senior analyst; later appointed chief executive of Zeneca Plant Sciences, Wilmington, Del., following ICI’s demerger. 1978 — 1982. Worked in the music industry, including tour manager of The Human League Education 2004. Honorary Doctorate from the University of York 1985. MBA from London Business School 1977. Music degree from the University of York Boards and Appointments Present. Director of the Doyle Foundation and the Edinburgh Technology Fund September 2001 — present. Appointed to the board of ICRISAT, the CGIAR research center in Hyderabad, India, which is responsible for the improvement of staple crops for the world’s poorest farmers in the semi-arid tropics January 2001. Elected as vice chairman of the UK Biotechnology Industry Association (BIA) June 2000. Invited to chair the Biotechnology Industry Organization’s (BIO) Bio-Ethics Committee, Washington, D.C. September 1999. Nominated as Science and Technology Venturer of the Year by the Financial Times, the British Venture Capital Association, and Cartier June 1998. Re-elected to the BIO Board as CEO of Roslin Bio-Med July 1994 — june 1996. Elected to serve as the chairman of the Food and Agriculture Division of BIO, as well as its vice chairman and a member of its executive committee 1994 — 1998. Governor of the Food and Agriculture Section of the World Economic Forum (WEF). Nominated by the WEF as a Global Leader of Tomorrow (GLT) in 1999, and in 2000 as a Technology Pioneer of the Year, cochairing the GLT “Technology to Alleviate Poverty” Task Force and was a member of the GLT Global Basic Healthcare Task Force

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