Will Lewis Transcript
Clint Betts
Will, thank you so much for coming on the show. Tell us how you became the CEO of... How do I say this? Insmed?
Will Lewis
Insmed.
Clint Betts
Insmed. Yeah, I thought I was saying it right. I bought literally every name for anything. I probably couldn't say "Jack" if somebody was on here and said their name was Jack.
Will Lewis
Well wait until we get to the names of some of the medicines we work with then you'll really have a challenge.
Clint Betts
Tell us what Insmed does and how you became CEO.
Will Lewis
So Insmed is a company that is focused on developing drugs that help patients who face serious and rare diseases. And we have really the patient at the center of the company as our primary focus. In the 12 years that I've been here the company's undergone quite a change. When I started there were about 30 people I think, and today we number just close to 1200.
Clint Betts
Oh wow.
Will Lewis
In that period of time, we've had a lot of growth and success by keeping focused on the idea of creating medicines that will make a real difference in the lives of patients. A lot of companies are involved in this sector and are trying to do that. I think what we try to bring to bear is sort of a broader lens to ensure that it's not just about the medicine, but it's about the experience that the patient has with the medicine, the experience that the medical community has with it, and the positive role that we hope we can play in surrounding all that and supporting it in an appropriate way.
Clint Betts
What is the process like for developing a medicine? What's the first thing you need to do?
Will Lewis
Well, the truth of that the answer to that question is that it's a long and arduous process. People talk a lot about this, but maybe I can dive into some specifics here about what that looks like. You can really break it down into two components. The first is what's called preclinical research, and that's before whatever your drug candidate is gets into a human. And so that involves work in the lab, chemistry, physics, all kinds of really original hardcore science. From that process, you distill out a drug candidate that you want to test in humans. Before you can do that, regulatory agencies around the world insist that you first test it on animals to approximate what the effects might be, both in terms of efficacy and safety.
So that process typically takes about five years and can take as much longer, but just to get to a point where you have a drug candidate, you're looking at at least five years, it's fair to say. Once you have that, you can submit a request to begin human testing. And that's called, in the US, an IND. From that moment, you start what is called the phase one, two, and three portions of drug development, and each of those takes about an equivalent number of years. So phase one is about a year, sometimes a little more; phase two, two years plus, and phase three, three plus, and so on. So, overall, you're looking at a 10 to 15-year timeline to get from start to finish, and that process is somewhat unique in that you're building an impactful product, you hope. And the end of that, when you're finally approved for use, it's expected that you're ready to, the very first day, be able to manufacture, distribute, make available that drug around the territories where you've developed it, which means that you have to invest a tremendous amount of money in that possibility before you ever know what's going to happen.
So you've got 10 to 15 years of development timeline, you've got, on average, about $2 billion for each drug, and your success rate after phase one is about 12%. So that puts into stark contrast how difficult this process is, but it also highlights that when you are able to get through that, it's a really dramatic moment in a biotechnology company's life cycle. When your drug works and you're through phase three, you're transformed almost overnight into a very different kind of corporate entity.
Clint Betts
Is that 15-year process useful? Is it necessary to be 15 years old? Or is that government regulations? Is that industry regulations? It seems like, hey if you're going to put a drug out to the general public, it probably should go through some sort of arduous process. 15 years. Is that a good thing or a bad thing that it takes that long?
Will Lewis
So yeah, it's definitely a heavily regulated industry, and I often make reference to the fact that a lot of the most intense creativity comes in the period of time until you create your drug candidate. From the moment you create a drug candidate and you say you're going to put it into humans, for obvious reasons, you can't change it. Nothing can change about that drug profile, or you have to start all over again. And so the challenge is making sure that the drug candidate you have, that you're about to test in humans, is really the very best you can come up with. And then I would say that process is necessary in terms of the oversight that's provided. I think there is an opportunity for improvement there, and that'll come from thinking about the regulations that govern it and the opportunity for technology that can be brought to bear to shrink that timeline. There's no magic in the 10 to 15 years; the shorter it can be and still have that assurance that you have a safe and effective drug, the better for everyone.
And I would just think about the drug candidates that come along. One of the interesting areas that's being discussed now is if we think about some of these diseases, a pediatric disease that's particularly devastating that is going to be fatal. Does the standard of review for that drug need to be the same as something that is perhaps still important but perhaps more cosmetic? And I think if you're a parent that has a child that is going to not survive because there's no available medicine and this is going to be something that's going to hit your child by the age of five, your willingness to try and get on the risk curve a little bit more, with the doctors, is probably greater. And I think the regulatory agencies recognize that they want to work with industry and work with families to bring forward the most impactful medicines in the most ... Working that risk balance in the right way.
So for some diseases I think we could see some evolution there, some willingness to go a little bit more out on the risk curve because of the devastating alternative, but for some that are perhaps less life-threatening, it is appropriate to take extra time to make sure that this is not going to do any harm. Because the first admonition we have here, do no harm, and if we can help then so be it.
Clint Betts
I don't know if we're supposed to talk about this or not, but who cares? This isn't a political point. Is that what happened with the COVID-19 vaccine? Why was it able to go through so quickly? It's like, hey, this is a once-in-a-generation pandemic, millions of people are dying, all that type of stuff. Let's get this thing through the process. Because it was developed in a year, wasn't it?
Will Lewis
Yeah, a lot of groups came together to sort of lock arms to expedite this process. One of the most important things that operates, at least in the US regulatory environment, is the FDA's control over the pace at which you can develop a drug. And so I think there was a clear view that we wanted to expedite this because the alternative was self-evidently harmful. Through that process, we made a number of changes, some of which stick with us today. The advent of telemedicine, for example. We weren't able to see people in person in the same way we used to, so let's make more use of what we're doing right now, which is interacting through a video conference. And a lot can get done that way. It's not going to replace in-person medicine, but it's certainly a nice tool and complement to help things along. When we think about the development of a vaccine, there were all kinds of normal steps that were able to be expedited because the agency and industry were working hand in glove at every step of the way. And that's not always possible. Because there's so many medicines being developed, but in the case of COVID-19 we had to really focus on that because it was a proximate threat to everybody.
Clint Betts
How do you decide what medicine to make? Meaning, what disease to go after? What is going on... You have to put a lot of factors in there. One, you're in a business where you get the right medicine, and you save people's lives. And so that's incredible to be in that. But you've also got to, like ... Is there a market for this? How do we make it profitable? If we're going to put two billion dollars and 15 years into it, let's try to get something out of it. Even with the 12% return rate, you want to get something out of these things. And so, how do you choose what type of medicine to make and what type of disease to focus on? If that makes sense.
Will Lewis
Yeah, it's a great question. I think my first reaction to that is you start with the best possible people that you surround yourself with. One of the things we've been very fortunate with at this company is that from the earliest days, we had just some incredible scientists around, and they're able to work that balance of trying to decide where we can be impactful. And I think there are a lot of places that you can potentially go to. We like to start out in areas where we know there's either nothing approved for patients who have that condition or where what is approved has a clear opportunity for a major improvement. One of the things we like to say is we're either going to be first in class, class meaning drug or disease, or best in class. And so that impact has to be very visible.
It goes back to the original point I made about the reason for this company's existence. We want to make medicines that are going to make a huge impact on patients' lives. I like to refer to it when I'm with my American audience as the Thanksgiving test. And that's where you're sitting around the table of Thanksgiving; god forbid someone in your family has to announce that they have some condition, and then you, as a person representing industry, say, "We have something for that." And you know as you slide that medicine, metaphorically, across the table, that everyone in your family is going to approve of the improvement that that medicine is going to have, the impact it's going to make, and you can sit there confidently knowing that you set the threshold at the right level. And I can tell you I came to this business after some personal experience in my own family with watching medicine play a role, and that has always set the standard in the back of my mind, is are we sure that this medicine is going to make a big difference? If it were someone from my family, would I be satisfied or would I say go back to the drawing board?
So, some of the medicines we are developing right now are aimed at treating some of the most intractable diseases. Because we started out and had success with one medicine, we have enough credibility that we can bring to bear more resources and more investment behind these other more ambitious goals. But that's what allows us to continue to contribute. And I have to say; as you mentioned, there really is nothing more satisfying than being a part of a company that is trying to make an impact on patients who are born or inherit a raw deal. One of my favorite collections in the other room where my office is letters that I've gotten from patients that describe the positive impact that something we've been involved with has had on them. And those are pretty compelling.
Clint Betts
Yeah, that's got to feel incredible. Is it possible that somebody is working on a medicine or pill that will cure cancer 15 years from now? That is not necessarily the case. I guess it is possible, but I'd love to hear your thoughts on just the time that it would take there.
And then I'm also thinking of Ozempic and Wigavvy and those types of things, and how long those went through trials and things like that, and their efficacy. There's some really big problems that we're really hoping medicine can solve. I don't know if it can or not, but man, that'd be cool.
Will Lewis
Yeah. Well, we're at a very exciting time right now because there's so much of the original science that was done for so long that has unearthed a lot of our understanding and has created a really interesting time right now in biotechnology and medicine in general, where some of these technologies are finally being brought to bear to have an impact not on the symptomatic presentation of disease, but on the origin. So think of something like gene therapy where you're going in, and you're actually introducing something to the body's cell that allows the body to take over and effectively produce the protein that was missing, that caused the disease in the first place. So, corrective at the core, CRISPR-Cas9 is an example of gene editing. We're still in the early days, but we're finally at a place where we can say for diseases that have perhaps simplistic, relatively speaking, origin in terms of their defect, we can go in and potentially correct those things.
So, regarding your question, are we going to cure cancer? Cancer shows up in many different ways. I can speak directly to this from personal experience. There's a cancer that I know that affected somebody and cost them their life that today has a 95% cure rate. So, there is hope out there. There is tremendous progress being made. It's a very exciting time to be a part of this industry for those reasons. And I think as you see more and more of these things arrive that are impactful, like the medicines you just made reference to, we're talking about not just creating a medicine that can lower weight but consequently improves diabetes, all the negative sequelae that flow from that disease. So this is a very impactful moment in medicine development, in my opinion, and it's an exciting time to be part of a company that's in the middle of it.
Clint Betts
How is artificial intelligence going to change all of this, and how are you thinking about it at your company?
Will Lewis
So AI is a hot button for me. I happened to be a huge fan of its potential. In 2023, we announced a very public collaboration with Google to try and bring AI to really every corner of drug development inside our company. And very specifically, we do this in four areas. Drug discovery, drug developments, drug commercialization, and then just general administrative functions within the company.
So, for example, drug discovery is about literally creating computer models of protein binding affinities and figuring out how molecules might react before you ever put them in a Petri dish. Indeed, if you observe them in a Petri dish, how can you improve them through rapid cycles of innovation before you have to experiment more? We're doing that right now. We're working on proteins that are therapeutic, and we're trying to de-immunize them so that the body's immune system does not fight their presence when they are introduced. And we do that by using artificial intelligence to predict how they might evolve in the presence of that challenge.
So, in drug discovery, I think it's going to be a long time to get there because really AI is designed to build off of what we know, and there's still a lot to be learned at the very basic biology, chemistry, physics level, but there's great promise there in what they call in silico drug development, where you're literally doing it on a computer chip. I would say we're probably ten years or more away from that. Some might argue with me on that one, but my perspective is that it's incredibly promising and will be hugely impactful. When we get into the other areas, it's really taking some of that inefficiency you described in that 10 to 15-year journey out of the equation; what might that look like? You do a lot of research on a molecule, then you write up a report to describe everything that happened, and then you hand that over to the regulatory agency. That report might take you three months to write. One of the projects we've initiated is taking AI to generate the first draft. And so what used to take three weeks can now be done in two hours with an accuracy rate that's way north of 90%. We still have humans that are reading through and reviewing all of that to make sure it's accurate. But you can imagine that as you project that out over the timeline, if you can compress the timeline, you reduce the amount of money it costs to develop the drug, and you get the drug to patients faster. It's a win-win all around.
Clint Betts
What does a typical day look like for you?
Will Lewis
Well, I'm not an early riser, but I usually get up around 6:00 A.M. I try to exercise in the morning. I know that my routine is one where the morning hours are where I work the most efficiently. Whatever minimal extra energy or brain power I have, it's pretty much gone by 10 or 11 A.M., so I have to bring it to bear on my most important tasks first thing in the day. I spend a lot of time when I'm in the office just driving by people's offices and checking in on them, seeing how I can help, including staying out of their way, which is sometimes the best way to help. But the trick, I think, in our business is to create a culture where, whether you're present or not, people are going to feel like they can come forward and do their best work.
It's really not about managing per se, it's about creating an environment. These are very smart people who are very capable and can go anywhere, but they choose to bring their work and their best efforts here because the environment supports their pursuit of that. Today, we were having a discussion about a particular drug development program, which I can't go into detail about, but I can say this is a disease that is devastating. It affects pediatric patients. It's a neurological challenge that they face, and there is nothing in development, and there is nothing on the horizon for development. And we have locked arms with the patient advocacy group to figure out a way to bring forward a medicine that may be able to, at the causal, have an impact there. So we're super excited about those kinds of opportunities, and when we bring those into the company, boy, the best minds that we have are just unleashed. And then it's not about my checking in or directing, it's about saying, "What do you need to get the work done?"
Clint Betts
What is leadership to you? How do you lead? I know you kind of answered it a little bit in that previous question, but what are the values you try to portray? What are leadership lessons that you've learned over the years?
Will Lewis
So it's a really interesting question. I love studying this area. I have always wanted to do this job better. I think it starts with a genuine awareness that your job in a C-level position is to coach, not to direct. You really want to have, as your primary objective, the ability to bring out the best capabilities of the people around you. I think the way you do that as a leader is to start out by always being curious. This is a field that is just ... There's so much knowledge in operation that you have to constantly digest what's going on in the industry, understand what the trends are, learning as best you can from those who are skilled in the arts. You can support them. It's really a crucible between capital, human knowledge, unmet medical needs, and trying to harmonize that in a culture where people can come forward and solve those really intractable problems. I think you have to stay curious in that environment about how you can bring that about and what those trends are.
I think the second trait would be a self-improvement. You've got to constantly be striving to bring forward the next best innovation. If there's one field where this is needed above all else, it's anything related to human health. Because we have to have the very best of the best to have the impact that we want to have, and any compromise along the way is likely to cost somebody in a way that is not acceptable.
And then I think, finally, it's humility. Because there is so much changing and so much going on, and you really are surrounded, in some cases, as we are, by some of the smartest people in the world in the field. So you have to know how to help support them and give them their opportunity, knowing full well that you are not going to be the one who has all the answers to the challenges that they're facing. Indeed, you're working with them to solve those problems, and since you're not going to be the author, you have to figure out how to be the best support player you can be.
Clint Betts
What do you read? What reading recommendations would you have for us?
Will Lewis
So I'm a big fan of biography. Having made fun of my father his whole life because he read biographies, I've found that as I've gotten into my 50s here, I read almost nothing but biographies. So I'm a huge fan of authors like Isaacson and Walter Isaacson, and his books on Jobs and Musk sit at the top of my favorite shelf. I think those reviews are incredible. I think what those folks did... All the color commentary surrounding them notwithstanding, they rewrote half a dozen industries each, and it's worth paying attention to how they were able to accomplish that. I love people who break the mold, who draw outside the lines if you will because I think that's really the key: if you want to do things differently and you want to have a major impact, you have to go outside the lines. So, I spent a lot of time reading biographies of people who did just that, and I looked for the common threads between them and tried to extract leadership lessons through that process. And that has served me well for the brief period of time I've been here at Insmed.
Clint Betts
How do you think about our macroeconomic environment right now, and how big of a role does that play in what you're doing? When you're thinking in 15-year increments, the current economy might not matter as much as future growth and future outlook. How do you think about it? Because we're in this odd economy, we're in this odd environment politically; we're just waiting to see what we're going to be in 2025. What do you think about that?
Will Lewis
Well, it's an interesting set of challenges always, but I think if you look at some of the rules that generally govern our area, our ecosystem, healthcare, if we dig a step back, 30, 40 years ago, healthcare represented about four or 5% of GDP spending. Today, it's close to 18%. So, there is a massive shift in the resource allocation around healthcare. The vast majority of that is spent on hospitals and physicians. More than 50% of it. Prescription drugs are about 9%. That's pretty much where they've been over the last 20, 30, 40 years. Hasn't really changed. What's interesting about that is that those drugs, if they are developed and they can have an impact, can reduce all the other consequent costs that are in that ecosystem we're just describing. But that backdrop means that we've got to constantly be looking to innovation and productivity tools to reduce costs, reduce the time it takes to develop medicine, and get ourselves into a better spot.
One thing biotech does in quantity is it deploys a lot of capital. As I just described, $2 billion for a single drug, and only about 12% of those are going to actually be successful. It tells you that you really need to have access to capital in order to be able to try for that innovation, so when you talk about the economy, that yield curve performance is going to be really important. The lower the interest rate environment, the better the availability of capital for the pursuit of this kind of innovation and all its consequent benefits. So that's probably the single most important thing I watch in the macroeconomy: what does that yield curve look like, and what overpressures are there going to be on the ability to access capital to bring to bear on these problems?
And so over the course of the time that I've been CEO at Insmed, we've had to go back to the well, as it were, to raise capital. I've been here 12 years. We're still losing money every year in large quantities, even though we have a drug on the market, and we're making revenue from that. We have a long way to go before we're profitable. And that's just a part of the way this ecosystem is designed. You have to forward funds to the potential day when you're able to make enough to actually have positive earnings.
Clint Betts
Yeah. I want to go deeper on the financing a little bit, because it's so much different than a SaaS company or a tech company where you try to go get customers and revenue and maybe a seed round can get you five years and you can get to profitability, whatever it is. This is so much different. How do you finance these? Who puts the money in? How much of your job is raising money?
Will Lewis
It's a huge part of it. Particularly in the early years of biotech, I'd say 50% of your time is courting investors to deploy capital behind the company. And, of course, it depends on whether the company is private or public. But if we just start in the typical spectrum of company development, the idea gets funded oftentimes by venture capitalists through ABC rounds of funding. And that might be a few hundred million dollars already out of the gate before you're even public. Then you go public, and you begin the journey to build a public value that allows you to access more capital, which is a constant return. So you're there every year, every two years, asking for more capital. During that timeframe, you have to show progress, or you're done.
And that is where biotech can get quite violent in terms of the future and survivability of the company. There are plenty of companies that make it part of the way and then just collapse because the drug just doesn't work or it doesn't work well enough. Indeed, there are some cases where drugs get developed, and perhaps they didn't meet that threshold of having enough patient impact, and so they don't perform well. And in that world, those companies can also die off. So, there's a constant replenishment cycle going on in the biotech ecosystem where companies are trying to build drugs effectively. If they are successful, then they have to commercialize them. That takes a whole other level of investment and risk. And then, if they develop, commercialize, and get to a point where they're profitable, they join that rare group that is sustainable. That is a handful of companies.
We've just gone through a transformation at Inmed where we had one of our drugs have a very successful phase three trial readout, and the consequence of that was our stock went from, I don't know, 22 to 70 dollars overnight. And people say, "Oh, how did that happen?" I say, "Well, it was 12 years in the making." But the point is when you get there, we're now in a place where we have this different profile, and yet we still have years to go before we're going to be profitable, assuming that the drug gets approved and gets launched and is successful.
So this journey is a long and arduous one, and it sits in stark contrast to the tech world where after just a couple of years, you can not only be profitable, but you can be getting an asymmetric return profile to your investors because of the scale you're able to go. In the end, what we target in terms of patients represents the totality of the market. And thankfully, for the most severe diseases, we want that to be as small as possible. And if we're impactful there, then we put ourselves out of business, and nothing would make me happier. It's a strange ecosystem from that point of view.
Clint Betts
It's really fascinating. And with so much money on the line, so much money going into this from investors and all these types of folks, so much IP attached to everything you're doing. How often are you thinking about that? I'm sure you have competitors that are working on similar drugs. I just can't even imagine the competition in here, given the numbers you're throwing around, the high stakes, and everything like that. How often are you thinking about IP, protecting IP, protecting things like that from competitors, from investors, and all that type of stuff?
Will Lewis
Warren Buffett used to describe the moat that goes around a company as its intellectual property, and I think that's true for every industry. Ours is no different. Having said that, ours is somewhat unusual in that the creation of that intellectual property has to be original in every case. It has to truly be groundbreaking. The development of a medicine no one has thought of before. It's going to have a different approach or mechanism. So, from that point of view, the higher hurdle is actually creating the science behind it, and then you sort of document that through intellectual property.
The way intellectual property works at the moment in this country is centered around a period of exclusivity for the drug once it's approved, which typically lasts about 10 or 15 years. It's not usually more than that. Sometimes it's a little less. I always like to use it as an example to try and put this into perspective. You have that 10 to 15-year period where you have to make up all of the cost investment and risk that went into the creation of the medicine in the first place.
In contrast, I think it was in January of this year or January of next year that the original trademark for Mickey Mouse went off-patent. For 100 years, if you use the image of Mickey Mouse as it was first portrayed, you have to pay Disney a fee for that. So that could live for 100 years and still be a way of making money for Disney. And I don't begrudge them that at all. I'm jealous of it because I would love the day when medicine doesn't have to make up all of its original investment and risk in a 10-year timeframe. That's part of the reason why we get this concentrated attention around the approval of medicine, how long the company has it, how long it gets promoted, and all that sort of stuff. It's this highly concentrated period where you have to get the return profile for the product in a shorter period of time.
Clint Betts
Yeah, I think Disney even got it extended. Somehow they're able to keep it even beyond the laws, which is fascinating.
Will Lewis
I mean, I like Mickey Mouse. I have nothing against Mickey Mouse. But it's been around a long time, that's for sure.
Clint Betts
Oh, Walt Disney is one of the greatest entrepreneurs ever.
Will Lewis
By the way, another great book is Iger's Ride of A Lifetime.
Clint Betts
Yeah.
Will Lewis
I thought his book was really quite good.
Clint Betts
Yeah, Bob Iger's a really great leader.
Will Lewis
Yeah.
Clint Betts
Yeah. I wonder if he regrets coming back, but ...
Will Lewis
Well, you see that a lot now. These sorts of iconic leaders came back and were able to re-energize the industry that they had so clearly had an impact on. And Jobs is probably the most notable early return. He came back in and had such a profound impact his second go around, but he was quite humble about admitting that he probably needed to be fired the first time, so he went back and learned, and then when he came back, he was able to just run the tables, as we all know. It was a tragedy, although I understand it was difficult to work for him, a tragedy that he wasn't around longer to have an even more significant impact on the different industries where he was engaged.
Clint Betts
I know. It's a very curable cancer, too. If they just would've caught it sooner-
Will Lewis
Earlier.
Clint Betts
We'd still have him. Hey, finally we end every interview with the same question, and that is at CEO.com we believe the chances one gives is just as important as the chances one takes. When you hear that, who gave you a chance to get you to where you are today?
Will Lewis
So I was very fortunate. I had a number of different mentors along the way, and I would say it wasn't ... When I reflect on this, because I've listened to a bunch of your podcasts, the thing that catches me is that it's not so much the opportunity someone gave to me. It was at that moment that they chose to convey to me that they believed in me and my ability to do something. And that belief was like a shot of energy or adrenaline in the arm that motivated me to go out and try to prove them right, in a sense, and to take advantage of whatever the opportunity was. It wasn't that I was so much intrigued by a particular field or opportunity; it was that at that moment when I was turning my attention to whatever that task was, and I can think back to summer camp, I can think back to my English teacher in high school, I can think back to my first job in investment banking, my work for the US government, my work at my first biotech company, and each moment in time there was someone there who said, "I think you can do this." And then it was like a chip on my shoulder. I had to go out and prove them right.
And so when I'm in my current opportunity or role, I look for times to tell people, "I bet you can do this." And I think if that gets pulled through the same way it was for me, we're talking about encouraging somebody to go and cure something that might otherwise be a devastating and deadly disease. And so that makes it all come home to me and really closes the circle on the experiences that I've had and how, hopefully, they'll pull through to make a difference in the lives of some other people.
Clint Betts
That's beautiful. Will, thank you so much for coming on.
Will Lewis
It was my great pleasure. Thanks for the opportunity.
Clint Betts
Yeah, that was fun. Thank you.
Edited for readability.