The Boss in Mid-Career
After 20 years, the young scientist who left the lab to chase the biotech wave ranks as one of the longest-serving CEOs in
the industry. But elder statesman is clearly not a role that Baldino is auditioning for. Instead, he is out doing deals. Among
the latest: Cephalon's purchase of Zeneus, a British specialty pharma with a strong oncology portfolio, and a co-promotion
with Takeda that adds 750 reps to the Provigil account. Meanwhile, Cephalon is also looking to China, where it plans to roll
out its top drugs.
Cephalon's biggest move, however, is its shift in emphasis from CNS to oncology. The biotech has two cancer drugs in Phase
III: Treanda (bendamustine), for chronic lymphocytic leukemia and non-Hodgkin's lymphoma, and CEP-701 (lestaurtinib), also
for AML—may be as soon as 2008. If CEP-701 gets the FDA nod, it will mark the first drug Cephalon has developed from discovery—and
a welcome validation of R&D head Jeffrey Vaught's longstanding belief in tyrosine kinase inhibitors. "We hoped these compounds
would turn on neurons and regenerate cognitive functions," Vaught says. "Instead we learned, after many failures, they are
much better at turning off cell growth in tumors."
Still, the leap from CNS, where Cephalon is a big fish in a small pond, to the crowded oncology ocean may prove dicey. Going
head to head with the Pfizers of the industry, especially in the race to license and develop new drugs, will test Cephalon's
famously sharp eye for finding the prize. Of course, not being a Pfizer also has its upside. "When you have a billion and a half in revenue, and you are looking to grow 20 percent
a year, you can accomplish that nicely with niche drugs," Harvard's Pisano said. "I see no reason that Cephalon can't continue
to grow in the oncology market, especially given its track record for knowing the nuances of a market and a field."
Neuroinvestment's Tracy, while acknowledging Cephalon's business smarts, views the leap into oncology as a "second-best choice" and a "sign
that the company has chosen to follow, rather than blaze, paths." He also pays the biotech and its boss the honor of a nostalgic
what-if. "With its money and development expertise, Cephalon could have made itself the world leader in CNS," he said. "Imagine
what the company might have done if it had gotten in on the ground floor with a schizophrenia drug or Alzheimer's drug." He
laments that Baldino seems to have exchanged the bold risk for the main chance, refusing these days to license preclinical
drugs—as he did with Provigil—in favor of Phase IIs and IIIs. "He's fallen in with the Street."
That's not a bad place to be. Still, to hear Baldino tell it—once our conversation has been safely rerouted from the performance-enhancement
track to the pipeline-promises one—the company is just hitting its stride. The expected triple-play in oncology is only the
beginning for Cephalon's R&D. "Treanda is important because it's going to be sort of a paradigm shift in cancer, especially
for non-Hodgkin's lymphoma," he says. As for the other Phase III oncology possibility, CEP-701, he explains, Vaught and his
team have ID'd biomarkers that could be developed as "a blood test and tell with 100 percent accuracy whether you're going
to respond to the drug or not." Baldino smiles. "So it's nice to be on the cutting edge of this evolution in personalized