Please subscribe and tell your friends why it’s worthwhile. Quality journalism costs money. When you subscribe to Timmerman Report at $199 per year, you reward quality independent biotech reporting, and encourage more.
Please subscribe and tell your friends why it’s worthwhile. Quality journalism costs money. When you subscribe to Timmerman Report at $199 per year, you reward quality independent biotech reporting, and encourage more.
Please subscribe and tell your friends why it’s worthwhile. Quality journalism costs money. When you subscribe to Timmerman Report at $199 per year, you reward quality independent biotech reporting, and encourage more.
David Shaywitz
As drug developers consider how to leverage AI and other emerging digital and data technologies, they look to related businesses, such as healthcare systems, for lessons and learning.
We would be hard-pressed to find a better guide to AI in healthcare than Ziad Obermeyer, an emergency room physician and health science researcher at the University of California-Berkeley. His research focuses on decision-making in medicine and on the equitable use of AI in healthcare.
Obermeyer was recently interviewed on the NEJM-AI podcast by co-hosts Andrew Beam and Raj Manrai (both faculty in the Department of Biomedical Information at Harvard). The entire conversation — reflective, nuanced, and chock full of insights — should be required listening for anyone interested in potential applications of AI in biopharma. The most relevant highlights for biotech are summarized below.
Obermeyer didn’t set out to become a doctor. He initially studied history and philosophy, then did a stint as a management consultant before eventually applying to med school. He hit his stride once he began his residency in emergency medicine.
Ziad Obermayer, associate professor and Blue Cross of California Distinguished Professor at the Berkeley School of Public Health
“I really, really liked being a doctor,” he says, “and I think there’s something about that exposure to the real world and the problems of patients that I think it’s shaped the problems that I work on in my research as well.”
Obermeyer began to see medicine as “a series of prediction problems,” and saw artificial intelligence (specifically, machine learning) as a tool that could help make doctors better by assisting them with challenges like establishing a diagnosis, assessing risk, or providing an accurate prognosis.
If you walk into a doctor’s office today, he readily acknowledges, you’re not overwhelmed by a sense of futuristic technology as you fill out paperwork and listen to the fax machine hum.
However, he notes, AI is already widely used in medicine – it’s just operating at the back end, behind the scenes. “On the population health management side, on a lot of other operational sides, like clinic bookings, things that have a direct impact on health, these tools are already in very, very wide use.”
Medicine today is still quite artisanal, guided by rules of thumb and local traditions, Obermayer says. Much of the problem, he suggests, is that it’s hard for doctors to wrap their heads around the volume and variety of healthcare data, which are “high-dimensional” and “super complicated.” To make the best possible predictions given the number of variables, he argues, requires assistance through approaches such as machine learning.
The question isn’t how we think about AI plus medicine; rather, he says, “that is medicine. That is the thing that medicine will be as a science.” This perspective is shared by others in the field including Harvard’s Zak Kohane, who often asserts “medicine is at its core an information- and knowledge-processing discipline,” and progress requires “tools and methods in data science.”
Casting his eye towards the future of AI in medicine, Obermeyer can envision both bear and bull scenarios.
His fear is that AI tools, in addition to harboring biases (see below), will be used for “local optimization of a system that sucks and that isn’t proactive, that’s very oriented towards billing and coding.” He can envision “a very unappealing path where we just get a hyper-optimized version of our current [suboptimal] system.”
”There is a certain lack of ambition in how people are applying AI today,” he said.
More hopefully, he can imagine a future where AI helps solves some of healthcare’s most vexing problems. One opportunity area he sees are addressing conspicuous “misallocation of resources” – essentially, improving our ability to provide the right treatment for the right patient at the right time.
For example, Obermeyer points out that many patients die of sudden cardiac arrest, while at the same time, the majority of defibrillators implanted to prevent sudden cardiac deaths are never triggered. It would be far better medicine, he observes, if more defibrillators were implanted in the patients who would ultimately need them.
He also envisions how AI might enable new discoveries around the pathophysiology of disease by linking biological understanding, biomarkers, and outcomes. A squiggle on an ECG isn’t just an image that an AI can recognize, like a cat on the internet. “We actually know a lot about how the heart produces the ECG,” he explains. “We know what part of the heart leads to what part of the wave form. We have simulation models of the heart that we can get to produce waveforms.”
Consequently, he views the idea of “tying together that pipeline of biological understanding of the heart and how the heart generates data,” and connecting data about patient outcomes is “super-promising,” and suggests it may eventually lead to new drug discoveries. “There are a lot of things you can do once you get the data talking to the biology,” he says.
The exceptional promise of applying AI in medicine seemed to be matched only by the challenge of implementing it.
Obermeyer described hurdles in four key areas: data, talent, bias, execution.
Data. AI depends on data as its foundation. This can be a particular problem in healthcare Obermeyer says, noting that “getting the data that you need to do your research is a huge, huge preoccupation of any researcher in this area.” The problem, he continues, “is that the data are essentially locked up inside of the health systems that produced the data. And it can be really perverse… it’s Byzantine and it’s very frustrating, and I think it’s really holding back this space.”
Obermayer established an open-science platform (Nightingale) to make it easier for researchers to get access to datasets from healthcare systems. One example: the team digitized breast cancer biopsy slides that “were literally collecting dust on a shelf in the basement” of a hospital and linked these data to EHR information and cancer registry data.
Getting started wasn’t easy. He approached 200 healthcare systems, he said, and only five agreed to participate: several large non-academic health systems and a few small county hospital systems.
Obermeyer has also set up a for-profit company, Dandelion Health, that aspires to serve as a trusted data broker to make it easier for healthcare AI tool developers to think about their creative applications, rather than spending too much time wrestling to get access to the data in the first place. “There are so many insights and products that could directly benefit patients that are not getting developed today because it’s so hard to access those data,” he says.
Talent. Obermeyer sees healthcare systems as operating at a disadvantage in the digital and data world. “Hospitals can’t hire all the computer scientists that they would need” to do the necessary data science,” he says, “and they’re not going to win the war for talent against Google or Facebook or even just computer science departments of different universities.”
Obermeyer also doesn’t feel that it’s feasible to pair a healthcare expert and an AI expert; he believes it far better to have a “single brain,” even though he acknowledges this “seems ridiculously inefficient” because of the time and effort required to gain this kind of medical and data science expertise. (See here for a contrasting perspective from Dr. Amy Abernethy, championing the collaboration approach.)
The good news, though, is that Obermeyer shares the optimism of venture capitalist Bill Gurley that there’s a huge amount of useful, free information available online, and motivated individuals can find a lot of the training they need; this seems to be how Obermeyer himself became proficient in artificial intelligence.
Obermeyer suggests two conceptual paths for healthcare experts interested in mastering AI. One, he says, starts with statistics, since he (somewhat controversially) regards AI as “an applied version of statistics with real datasets.” In his view, there’s “no substitute for learning the basic statistical stuff. And I think as a starting point, that is an amazing place to start to get a handle on thinking about how AI works, where to apply it, where it can go wrong”
The second route into AI, Obermeyer says, and the one he took, begins with the microeconomics “toolkit,” which he argues was designed “for dealing with data that’s produced by humans and is messy and error prone and driven by incentives. That seems a lot like medicine to me.”
Obermeyer sees the ultimate goal of data science training as learning how to formulate problems effectively – “how to take an abstract question and then think about what is the data frame that would answer this question.”
Obermeyer also points to how helpful AI itself can be to trainees. ChatGPT is particularly helpful in writing code, he says, and approvingly cites AI expert Andrej Karpathy’s quip, “The hottest new programming language is English.”
Obermeyer sees the ultimate goal of data science training as learning how to formulate problems effectively – “how to take an abstract question and then think about what is the data frame that would answer this question.”
Bias. Obermeyer’s research is focused on bias and AI; he seeks to root out hidden bias, as well as to use AI to reduce bias.
Obermeyer is especially well known for a 2019 Science paper that identified an unexpected bias in a population health algorithm. The tool he studied looked at health data from a population and tried to predict which patients were most likely to get sick in the upcoming year, so they could receive extra attention, pre-emptively, and thus stay healthier.
When Obermeyer’s team looked at how this worked in practice, the team found that Black patients predicted to be at same health risk as White patients were far more likely to get sick.
As the authors explain, “The bias arises because the algorithm predicts health care costs rather than illness, but unequal access to care means that we spend less money caring for Black patients than for White patients.” In other words, by using health care costs as a proxy for health care needs – a common assumption of convenience — the algorithm developers inadvertently overlooked, and ultimately propagated, an underlying bias.
David Cutler, Otto Eckstein Professor of Applied Economics, Harvard University
Obermeyer has also explored how AI might be used to reduce healthcare disparities. He explains that the project was inspired by a talk from a friend and colleague, Harvard healthcare economist David Cutler, on the consistent observation that “black patients have more pain than white patients…even when you control for severity of disease.”
For example, if you consider patients with equally severe knee arthritis, based on standard X-ray scoring, Black patients on average will report more pain than White patients. Cutler attributed this gap, Obermeyer says, to “stuff that’s going on outside knee” – psychosocial stressors, for instance. But Obermeyer thought the issue was something in the knee, and together they decided to study the problem.
Obermeyer’s team trained a deep learning algorithm to predict patient’s pain level – rather than a radiologist’s arthritis score – from the X-rays. “This approach,” the authors report, “dramatically reduces unexplained racial disparities in pain.”
According to Obermeyer, “the algorithm is doing a much, much better job of explaining pain overall, but it’s doing a particularly good job of explaining the particular pain that radiologists miss and that black patients report, but that can be traced back to some pixels in the knee.”
Execution. Motivated by both his sense of purpose and innate curiosity, Obermeyer was clearly frustrated by the slow pace of some of the research in academia, in contrast to an urgency he noticed from colleagues from industry.
“One of the things that I’ve really come to appreciate about the private sector and basically my new non-academic friends and acquaintances,” he said, “is, boy, do they get [stuff] done.”
“They don’t have projects like I have that have gone on for eight years. If it goes on for eight days, it’s like, what’s going on? What’s taking so long? So there’s an impatience and a raw competence that I’ve been trying to learn from that world.”
Obermeyer’s experience can’t help but resonate with drug developers. Ours, too, is a business focused on “a series of prediction problems.” Our work tends to leverage digital and data technology far less than many other industries, yet (as I’ve discussed) there are pockets (such as in manufacturing and supply chain management) where there is a remarkable level of sophistication. There would seem to be a profound opportunity for drug developers to make better use of multi-dimensional data. There is already a strong focus on applying emerging technology to improve near-term efficiencies, and the earnest hope these technologies also can be used to identify and elucidate profound scientific opportunities to improve human health. Access to high quality data remains a crippling problem for industry data scientists focused on R&D. Great talent is always in demand, and upskilling employees is an industry priority, while figuring out how to integrate most effectively talented drug developers with skilled data scientists remains a work in progress. Bias is, of course, an area of exceptional concern and focus, and the notion of using technology to promote equity is particularly appealing. Finally, the ability of industry to execute when inspired reminds us of what we can achieve, while the relatively limited impact of AI and data science in R&D across the industry to date, particularly when contrasted with the outsized potential, reminds us of how far we still have to go.
Recent Astounding HealthTech columns on Gen AI
Please subscribe and tell your friends why it’s worthwhile. Quality journalism costs money. When you subscribe to Timmerman Report at $199 per year, you reward quality independent biotech reporting, and encourage more.
Please subscribe and tell your friends why it’s worthwhile. Quality journalism costs money. When you subscribe to Timmerman Report at $199 per year, you reward quality independent biotech reporting, and encourage more.
Please subscribe and tell your friends why it’s worthwhile. Quality journalism costs money. When you subscribe to Timmerman Report at $199 per year, you reward quality independent biotech reporting, and encourage more.
Today’s guest on The Long Run is Yung Lie.
Yung Lie, president and CEO, Damon Runyon Cancer Research Foundation
Yung is the president and CEO of the Damon Runyon Cancer Research Foundation. The New York-based foundation supports some of the best young scientists around the US and gives them funds to pursue their bold and brave ideas.
To give just one example, it bet on cancer immunotherapy research when it was considered a fringe concept, years before it became a mainstay part of everyday treatment.
Over its more than 75-year history, Damon Runyon has invested more than $430 million in almost 4,000 scientists. Thirteen have gone on to win the Nobel Prize, and 97 went on to be elected by peers into the National Academy of Sciences.
Yung is a scientist by training herself and was a recipient of one of those prestigious Damon Runyon Fellowships when she was a postdoc. She eventually joined the organization full-time, and worked her way up until becoming president and CEO in 2018.
I am particularly interested in Damon Runyon, as I have started doing volunteer work for the organization this summer. I’m recruiting a team of biotech executives and investors for the Timmerman Traverse for Damon Runyon in February 2024 on Mt. Kilimanjaro. Our goal is to raise $1 million.
I’m committing because I believe in the organization’s mission and am impressed with its ability to execute on a national scale. You’ll hear more about this expedition in the months ahead on Timmerman Report, but if you are interested in joining the Kilimanjaro team, or sponsoring the team, email me at luke@timmermanreport.com.
In this conversation, Yung talks about the philosophy of the organization, how it got started, its accomplishments, and a few challenges it sees for young scientists.
And now for a word from the sponsor of The Long Run
Occam Global is an international professional services firm focusing on executive recruitment, organizational development and board construction. The firm’s clientele emphasize intensely purposeful and broadly accomplished entrepreneurs and visionary investors in the Life Sciences. Occam Global augments such extraordinary and committed individuals in building high performing executive teams and assembling appropriate governance structures. Occam serves such opportune sectors as gene/cell therapy, neuroscience, gene editing, the intersection of AI and Machine Learning and drug discovery and development.
Connect with them at
Now, please join me and Yung Lie on The Long Run.
Please subscribe and tell your friends why it’s worthwhile. Quality journalism costs money. When you subscribe to Timmerman Report at $199 per year, you reward quality independent biotech reporting, and encourage more.
Please subscribe and tell your friends why it’s worthwhile. Quality journalism costs money. When you subscribe to Timmerman Report at $199 per year, you reward quality independent biotech reporting, and encourage more.
Please subscribe and tell your friends why it’s worthwhile. Quality journalism costs money. When you subscribe to Timmerman Report at $199 per year, you reward quality independent biotech reporting, and encourage more.
Please subscribe and tell your friends why it’s worthwhile. Quality journalism costs money. When you subscribe to Timmerman Report at $199 per year, you reward quality independent biotech reporting, and encourage more.
I’m delighted to share some good news.
The Timmerman Traverse for Life Science Cares has hit its goal in 2023. Together, we have raised more than $1 million to fight poverty in five biotech hubs around the US.
The funds will help fulfill basic human needs like food and shelter. They will also go toward education and job training to help people get on a path to fulfill their dreams.
Summit of Mt. Washington, Timmerman Traverse for Life Science Cares 2022
I’d like to thank the 20 biotech executives and investors who committed to this cause early in 2023. They are training to hike the Presidential Traverse in New Hampshire in August.
I also want to thank our 50 corporate sponsors. You can see the list at lifesciencecares.org. A shout out goes to top sponsors HSBC and Fenwick & West, and to Jeb and Sonia Keiper for an exceptionally generous donation.
This is a special milestone.
Staying fit. Making friends. Enjoying nature. Giving back. Impact in our communities.
That’s what these campaigns are all about.
Want to be a part of it? Email me at luke@timmermanreport.com.
Please subscribe and tell your friends why it’s worthwhile. Quality journalism costs money. When you subscribe to Timmerman Report at $199 per year, you reward quality independent biotech reporting, and encourage more.
Today’s guest on The Long Run is Kevin Conroy.
Kevin is the chairman and CEO of Madison, Wis.-based Exact Sciences.
Kevin Conroy, chairman and CEO, Exact Sciences
Exact Sciences has grown over the past decade into a success story for cancer screening and diagnosis. It’s best known for marketing the noninvasive Cologuard test that screens people for colorectal cancer.
It also markets the Oncotype DX test that’s used to predict the likelihood that a patient with breast cancer will have a recurrence, and whether a preventive round of chemotherapy is likely to be beneficial. Exact is also developing a blood-based screening test that it hopes will be able to detect early signs of many, many types of cancer that aren’t routinely detected until the disease has already caused a lot of damage.
The Cologuard test has now been run 12 million times.
Kevin has a fascinating personal story, starting with the environment where he grew up — Flint, Michigan. He joined Exact Sciences as CEO in 2009 when the company was on the ropes. Kevin and his colleagues set audacious goals, and persevered to build a company that now has a market value of more than $16 billion.
In this conversation, Kevin shares this company story, along with some of his insights into building a company in the Upper Midwest, the importance of partnerships, and where cancer screening and diagnosis is heading.
And now for a word from the sponsor of The Long Run.
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It’s summertime, which means it’s time to plan for the next biotech team expedition. The Timmerman Traverse for Damon Runyon Cancer Research Foundation is scheduled for Feb. 7-18, 2024. I’m assembling a team of biotech executives and investors to hike to the summit of Mt. Kilimanjaro. If you are up for this trip of a lifetime and want to be part of a team that raises $1 million to support bright young cancer researchers all over the US, send me a note: luke@timmermanreport.com.
Now, please join me and Kevin Conroy on The Long Run.
Ron Cooper, former CEO, Albireo; board member, Generation Bio
Since 2018, about 90 biotech companies have been acquired for more than $500 million. That’s only about 15 to 20 companies per year, a tiny fraction of the approximately 10,000 biotechnology companies around the world.
I was privileged to be part of one of those transactions, the sale of Albireo Pharma to Ipsen in January for $952 million upfront, plus contingent value rights that could push the value to well over $1 billion.
The acquisition will help more patients around the world gain faster access to the innovative medicines Albireo developed. It’s a win for those patients – mostly children with rare diseases – as well as their families, our investors, and the people at both companies.
That’s the triumphant narrative common in M&A press releases. But a lot of things happened behind the scenes to get there. Here are a few lessons I picked up along the way.
Brief Background
Albireo Pharma started as a spinoff from AstraZeneca in Sweden. When I joined the company in 2015, we were privately held with 10 employees, we had great science and an ambitious goal: to design breakthrough drugs for children and bring hope to families.
But like many other biotechs, the development cycle was ahead of the funding cycle. That’s one way of saying our product candidates were advancing rapidly in the clinic, gathering the evidence needed to succeed in the marketplace, but investors weren’t yet convinced to provide the support we needed.
Out of necessity, we decided to divest or shelve some of our R&D programs and put most of our remaining resources behind odevixibat for rare pediatric liver diseases.
In the early days in the mid-2010s, there were some weeks where we nearly ran out of cash. At times, some people questioned our unconventional strategies such as seeking feedback on our phase III trial from FDA and EMA before the phase II study was completed and conducting a single Phase III study with two different primary endpoints. And even though the biotech financial markets were generally trending upward most of these years, the markets always pressured us to be at our absolute best to secure every dollar of funding.
By 2022, we’d cleared many of the hurdles inherent to development-stage biotech. We’d grown to ~200 employees globally. We created four different medications for liver diseases. The first to receive regulatory clearance in the US and Europe was odevixibat (brand name Bylvay) a bile acid transport inhibitor. It was approved and marketed in the U.S. and Europe for a rare pediatric liver disease for which there was no other FDA-approved medical treatment.
That was a publicly visible triumph, but behind the scenes, 2022 was a tumultuous year. We were focused on launching Bylvay globally and advancing two new clinical stage assets when we were first approached to sell the company in February.
We rejected multiple initial offers either because the price was too low or we didn’t think the timing was right for the Company. We finally agreed to undergo a period of diligence and finalized a counterproposal. We thought this was a good match and were hopeful the deal would go through. But in May, the potential acquiror’s board decided to walk away.
It was a shock and big disappointment on many levels.
After this exhausting process which ultimately led nowhere, we decided to get back to focusing on what we do best — developing and delivering important medicines for liver disease that would increase value for Albireo shareholders.
Surprisingly, it didn’t take long for multiple different suitors to come calling again. We went through an intensive due diligence and negotiation with three of these companies up until just before the JP Morgan Healthcare Conference in January 2023.
Our board ultimately determined Ipsen’s global R&D and commercial capabilities, together with the terms Ipsen provided, presented the best option for all stakeholders. We announced the merger agreement and offer on the opening morning of the JP Morgan event in San Francisco. The sale was formally completed on March 3, 2023.
It was a tough decision to sell the company. It meant breaking up a highly committed A-Team and changing the nature of the close ties we had developed with ourselves, patients, families and their clinicians. But we knew that Ipsen could accelerate access to Bylvay and ensure that the three new product candidates would be maximized.
Biotech is not for the faint of heart. Ditto for commercializing medicines globally, taking a company public and navigating a complicated acquisition process It takes extreme dedication, and grit, as a company to get through these challenges. Culture gets tested by these normal events in corporate life – a strong culture stays together, while weaker ones can come unglued.
We had a few things going for us that helped us through the hard times. We believed in the science. We believed in our team. And we believed in our unrelenting commitment to bring hope to the patients and families we served.
Did we do everything right? Absolutely not. In the first potential deal, I engaged too many people too early and failed to adequately discern alignment with the acquiring firm’s philosophy. (More on that later.)
Everyone makes mistakes, but I wanted our team to learn from ours and not to repeat the same ones over and over. When something was clearly working well, we sought to turn it into a standard procedure, a hallmark of our culture.
While no transaction is the same, here are seven strategies I’d repeat if I sold another company:
If you’re exploring or navigating a biotech sale, I hope these lessons learned can help. The journey isn’t easy, but when you find the right acquiring partner, it’s worth it. We know our drug will able to reach the vast majority of the approximately 100,000 patients out there around the world who might benefit from it. Our shareholders, employees, and our community are sharing in the financial rewards.
I would not trade my Albireo experience for anything. It’s been a true gift to build an amazing team and work with wonderful parents, clinicians, investors and bankers to serve our patients. And with Ipsen’s acquisition, I’m confident that the work will continue. A large percentage of the Albireo employees plan to stay with Ipsen, while the ones who leave will have freedom to pursue other life interests and career opportunities on their own terms.
I look forward to my next leadership role and if I’m fortunate, I may get to apply these lessons learned again. In the meantime, I am taking a six-month “sabbatical” to enjoy my family, catch up on life and get ready for my next challenge.
Please subscribe and tell your friends why it’s worthwhile. Quality journalism costs money. When you subscribe to Timmerman Report at $199 per year, you reward quality independent biotech reporting, and encourage more.
Today’s guest on The Long Run is Jodie Morrison.
Jodie is the acting CEO at Waltham, Mass.-based Q32 Bio. It’s a company developing treatments for autoimmune and inflammatory diseases. It has an antibody in development with Horizon Therapeutics aimed at IL-7 receptor alpha, in Phase II for the treatment of atopic dermatitis. It also has wholly-owned programs aimed at the complement system of the innate immune system, with the intent of making treatments that are tissue-targeted.
Jodie Morrison, acting CEO, Q32 Bio
She came to this position after a series of executive roles and board positions. Her first stint as a CEO, at Tokai Pharmaceuticals, didn’t end well. She dusted herself off and came back to play a role in back-to-back successful outcomes at Syntimmune, Keryx, and Cadent Therapeutics.
In this episode, we talk about how Jodie developed the confidence to lead from some of her early career experiences, how she thinks about hiring, and, at the end of the conversation, she provides some advice to young women seeking to grow and advance in the biotech industry.
And now for a word from the sponsor of The Long Run.
Occam Global is an international professional services firm focusing on executive recruitment, organizational development and board construction. The firm’s clientele emphasize intensely purposeful and broadly accomplished entrepreneurs and visionary investors in the Life Sciences. Occam Global augments such extraordinary and committed individuals in building high performing executive teams and assembling appropriate governance structures. Occam serves such opportune sectors as gene/cell therapy, neuroscience, gene editing, the intersection of AI and Machine Learning and drug discovery and development.
Connect with Occam:
Now, please join me and Jodie Morrison on The Long Run.
Please subscribe and tell your friends why it’s worthwhile. Quality journalism costs money. When you subscribe to Timmerman Report at $199 per year, you reward quality independent biotech reporting, and encourage more.
Please subscribe and tell your friends why it’s worthwhile. Quality journalism costs money. When you subscribe to Timmerman Report at $199 per year, you reward quality independent biotech reporting, and encourage more.
