Ardea Floats Freely In Pool With A Much Bigger Fish

Published in San Diego Union-Tribune, September 28, 2015

Big fish eat little fish. It is the way of the ocean and of all species. Except sometimes.

When a big pharma buys a small biotech, the large company usually integrates the new technology into its existing operations and closes down the little company. This has happened over and over in San Diego and could have been repeated when AstraZeneca purchased Ardea Biosciences in June 2012 for $1.26 billion.

Instead, Ardea has thrived as an independently operated company within AstraZeneca. The number of employees has grown to 170 from 100, and Ardea recently filed an application with the Food and Drug Administration for Lesinurad, a novel investigative treatment for gout that affects about 8 million people in the U.S. In other words, they became symbiotic — what is sometimes called reciprocal altruism. It is the perfect marriage — “Honey, I am better because of you.”

“Because of what I saw when I did the due diligence, I recommended to our AstraZeneca board that we retain Ardea as a free-standing entity, because I thought that it would add value to have a living, breathing biotech within the large pharma,” said James Mackay, who was a global product vice president at AstraZeneca before joining Ardea as president and chief operating officer in 2013.

When he first visited San Diego in early 2012, Mackay said he was surprised by the vibrancy and friendliness of the San Diego biotech ecosystem — another factor in why he recommended that Ardea remain autonomous. “Our goal was to retain the culture so we didn’t change the name or the senior management, we didn’t change email addresses, signage or job titles because we wanted the staff to feel that they were still working for Ardea,” said Mackay.

Mackay’s strategy is to have Ardea focus on what it does best — research and drug development — and to reach out to its corporate parent only when it needs to go outside this area or when it needs to tap into some specific expertise that AstraZeneca already has.

“It benefits our AstraZeneca employees to work with a small biotech, so they can experience the ‘entrepreneurial spirit,’ the rapid decision-making. It’s energizing for us and them,” he said.

In this case, when Ardea developed a gout treatment, it turned to AstraZeneca for manufacturing expertise, and if the product is approved by the FDA, it will be produced at a plant in Sweden.

Started in 2006 in Orange County as a spinoff from another company, Ardea moved to San Diego in 2008 to be part of the emerging biotech community. The company was originally focused on oncology and anti-viral products. During clinical trials for an anti-viral product, a metabolite of the lead molecule was discovered to have properties that could be used to develop treatments for inflammatory diseases like gout.

Recognizing this was a big opportunity, in 2008, the company quickly pivoted, and even though no one at that time in the organization had any expertise in this area, “they went for it.”

(Note: I love serendipity, and most importantly I applaud Ardea for being willing to go outside their comfort zone.)

Mackay is excited about the potential.

“Gout is a misunderstood disease by the public, patients and physicians. There is a myth that it is caused by diet and alcohol when it’s really caused by genetics,” he said. “All the medicines on the market today only treat one aspect of the disease by stopping the production of uric acid. But gout patients can’t excrete enough uric acid, and our unique approach is to ultimately combine our product with existing drugs so that patients can take one tablet that contains both molecules.”

There is some hip and some cool as well. The walls and the floors at the company are decorated with photos and images that explain the history of the company and the technology. Different floor murals illustrate key metrics related to the FDA filing — 100,000 samples analyzed, and the submittal itself (equivalent to 6.3 million pages) was completed 107 days faster than the industry average. That’s very impressive for Ardea’s first NDA submission to the FDA. Having all the Ardea employees in one building creates a dynamic magic.

Rule No. 440

Reread Aesop’s fable – “The Lion and the Mouse”

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