More than three decades into his career, James Sapirstein is right where he wants to be: on the small side of New Jersey’s pharmaceutical companies.
That’s because, according to him, the industry’s model has changed — in a way that has been a boon for companies such as his Edison drug company.
But Sapirstein shared the perspective of major pharmaceutical companies for a large part of his career. And now, as CEO of ContraVir, he has to look at things much differently.
“We can’t have one of our drugs go belly-up,” Sapirstein said. “We can’t afford the cost of something going wrong during (drug) development like a large pharmaceutical company can. They have a variety of other products that are coming in behind it.
“For us, it’s the death knell if one of our products fail. So we’re careful, we risk mitigate everything we do.”
That doesn’t imply he’s nostalgic about his time with billion-dollar businesses such as Bristol-Myers Squibb or Roche.
“These behemoth companies weren’t capable of being very efficient with their research dollars,” he said. “It created an environment (that’s good) for small pharmaceutical companies such as mine.
“We’re much more efficient in what we do with our staff, our product and our clinical development programs.”
Sapirstein has already seen the payoff of the gamble he made in leaving New Jersey’s big pharma scene.
When he left the very profitable Bristol-Myers Squibb in 2000, he went to work for what was a small California company known as Gilead Sciences.
“Gilead is now no doubt the most profitable and the largest biotech company in the world,” he said. “I don’t think they even dreamed, back in the year 2000, that it would be such a big company.
“They built the dream and kept acquiring assets that were complementary to what they had.”
And, though it’s often held that small pharmaceutical companies are just looking to be acquired, Sapirstein said that’s not the whole story.
“My goal is to build,” he said. “This is my third startup; neither of the other two were acquired. … Do I want to partner with another company? If I have to, I will. But my vision is much larger.”
The lead drug candidate of ContraVir, which was formed after a spinoff from Synergy Pharmaceuticals, is in phase 3 of clinical development; it’s being targeted for the treatment of herpes zoster, or shingles. Its other candidate, which is in phase 2, would treat the hepatitis B virus.
“If I can acquire other compounds to complement those and build a multifaceted pharmaceutical company, that’s what I’d like to do,” Sapirstein said.
Besides enjoying the flexibility of a smaller drug company, he’s glad to be in the Garden State. He said it’s the place to be for building a pharmaceutical startup.
“The environment here is just rich to do that because of the abundance of talented people (in New Jersey),” he said. “A lot of folks that leave the (larger) pharmaceutical companies are available.
“We’ve also got a couple of great pharmacy schools here that articulate to their students the importance of this industry.”
To show for that, ContraVir has a recruited what it feels are quality graduates from local universities for its 15-person staff, as well as a college intern.
Through New Jersey organizations such as BioNJ, of which Sapirstein is on the board, ContraVir has a lot of interaction of state’s wider life science industry.
“It gives us exposure,” he said. “And you get to know (heads of) large pharma as well; so if they are looking to form a partnership with a company such as mine, it opens a line of communication.”
But even with being the right size, in the right place, pharmaceutical companies sometimes have to count on having the right drug.
Sapirstein has a few ideas of what it will take to transform ContraVir into more than a small business:
“Primarily, we get there by being smarter than other folks and being opportunistic. I don’t know if you need that blockbuster drug to bring a whole host of revenues right away. But eventually you might.
“It’s really about finding the right opportunities and the right people to partner with; not necessarily a large pharmaceutical company, it can be a managed care organization that will get you to the right audience.”
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Product hopping is not an issue near and dear to startups.
Richard Gearhart, CEO and president of the Summit-based Gearhart Law, directs his life science practice toward startups. He said it’s really more the multinational pharmaceutical companies, the kind many of these startups are hoping to be acquired by, with an eye on this topic’s legal outcome.
Here’s what he said a startup should instead be fixated on:
“They need to use confidentiality agreements when working with prospective business partners, vendors and investors. Anytime they talk about the technology outside of their company, there should be an agreement in place.
“That’s important, because public disclosure of their idea can result in the loss of their patent rights.”