Founder-led biotech companies are becoming increasingly common. While we are seeing inspiring companies emerging, there is still a lot of skepticism around this concept. It’s important to remember that this is not an entirely new phenomenon and that (even very technical) founders have built and led very successful, multi-billion dollar biotech companies.
Some of these companies were started when running a biotech company as a founder was unheard of, VCs and financial backers were extremely skeptical, and the support infrastructure from today, such as contract research organizations and manufacturers, was almost nonexistent.
I find it very inspiring that despite these challenges, the concept of founder-led biotech generated some of the most well-known companies that are now saving countless lives through innovative, science-driven technologies. It was fun to read about many biotech founding stories and I wanted to summarise a few of my favorites below.
High-level takeaways
What most founders below had in common was they had a very strong conviction that the technology they want to build will make a huge difference in many people’s lives.
These were and are extremely smart people, who often left prestigious positions, well-paying jobs, and secure career paths. They started companies because they identified a very high-unmet need, wanted to create a different culture to foster innovation, spotted an opportunity or potential in a technology no one else saw, figured out a way to run processes better and more efficiently, or simply built things that people wanted.
Almost all of them who started companies for the first time and who had no experience building and running a biotech, received a lot of skepticism and pushback. Most of them had to show a lot of perseverance to get their companies off the ground. None of them became successful in the first few years and some needed decades until the breakthrough came.
Gilead Sciences
- Founded 1987
- By Michael L. Riordan, MD
- Run by the founder as CEO from 1987 – 1996
- Market cap of ~ $105 B (as of 11/18/2022)
- 24 marketed products
Gilead was founded in 1987 by the M.D. Micheal Riordan and a small Seed investment from Menlo Ventures. As a solo founder and a recent graduate without much leadership or financial experience, fundraising wasn’t straightforward. He was turned down by many investors, including Warren Buffet, who he asked to become the Chairman of the Board and/or an investor in the company.
What set Gilead apart from other biotech companies, however, was its unique focus on sexually transmittable diseases, a high-unmet need at the height of the AIDS epidemic. With a lot of persistence, Micheal raised additional capital before taking the company public to support the capital requirements of drug development.
Without generating much revenue for almost ten years, the first breakthrough came with the approval of Vistide, a treatment against the Cytomegalo Virus, improving the quality of life of patients suffering from AIDS.
Today, Gilead has a market capitalization of ~105 billion dollars (as of 11/18/2022) and brought 24 products to market, including breakthrough curative treatments for HCV.
Further reading:
San Francisco Chronicle Article (2013)
Intuitive Surgical (Medtech)
Medtech companies are often perceived as less exciting and less impactful than biotechs but innovation in the medtech sector holds enormous potential.
- Founded 1995
- By Frederic Moll and John Freund and Robert Younge
- Run by Frederic Moll as CEO 1995 – 2002
- Market cap of ~$93B (as of 11/18/2022)
Frederic Moll was a surgery resident who was fascinated by the concept of minimally invasive surgery to make the procedure less burdensome. He left his residency and started two smaller companies developing novel surgical tools, one of which was acquired by Eli Lily.
As the medical director of Guidant, a surgical division within Eli Lily, Frederic became increasingly interested in utilizing robotics to make routine surgical interventions less invasive and safer. During this time he came across a surgical system that a non-profit organization developed (SRI International) together with the Defense Advanced Research Projects Agency (DARPA) to perform surgery on wounded soldiers remotely. This system was the very early prototype of the da Vinci Surgical System – the flagship product of Intuitive Surgical.
Frederic tried to convince the Guidant leadership team to back the further development of the prototype but fell on stony ground.
In 1995 Frederic met his future co-founder John Freund who had recently left a medical diagnostics company. John negotiated a license option agreement with SRI, and together with their third co-founder, Robert Younge, they started Intuitive Surgical.
After several prototypes and iterative improvements, Intuitive Surgical got the clearance to market their da Vinci Surgical System in Europe in 1999 and in the US in 2000 for general laparoscopic surgery and one year later for prostate surgery (and many other procedures later on).
Intuitive Surgical currently has a market capitalization of $92 billion (as of 11/18/2022) and was led by Frederic Moll as its CEO from 1995 – 2002.
Further reading:
Forbes: Robotic Surgery Pioneer Cuts It Close
NY Times: Prepping Robots to Perform Surgery
Regeneron
- Founded 1988
- By two scientists Leonard Schleifer (CEO) & George Yancopoulus (CSO)
- Still run by the founders
- Market cap of ~$80 B (as of 11/18/2022)
- 9 FDA-approved drugs on the market
Regeneron was founded in 1988 by Leonard Schleifer, M.D., Ph.D., an assistant professor at Cornell University, and one year later joined by George Yancopoulos, M.D., Ph.D. as their first lead scientist who later became the CSO of Regeneron.
Their vision was to create a company driven by science where researchers work together to achieve a common goal of developing better therapeutics to help patients.
Regeneron had a bumpy start and took almost two decades to become successful. Not having the options of contract research organizations like today, they had to build their own drug manufacturing facility. Their first investigational drug failed in Phase III clinical trials in 1997, almost a decade after the company was founded. Its stock dropped by almost 50%, and the company had to re-focus. At the same time though, Regeneron developed a proprietary platform technology that allowed the high-throughput engineering of the mouse genome, which became the cornerstone of several future products.
Staying resilient, the first breakthrough came almost another decade later with the approval of ARCALYST for the treatment of recurrent pericarditis. Now more than 30 years after its inception, Regeneron has developed 9 FDA-approved drugs, a market cap of $80 billion (as of 11/18/2022), and is still run by its original scientific founders Leonard Schleifer (CEO) and George Yancopoulos (CSO).
Further reading:
Forbes: Regeneron’s Billionaire Founder Battles The Drug Pricing System
Vertex Pharmaceuticals
- Founded 1989
- By scientist solo founder Joshua Boger (CEO)
- Run by the founder from 1989 – 2009
- Market cap of ~$81 B (as of 11/18/2022)
- 4 FDA-approved drugs on the market
Vertex was founded in 1989 by the organic chemist Joshua Boger, Ph.D. As a scientist at Merck at the time, he felt that the company became too hierarchical, and bureaucratic, which was killing innovation. Motivated by this experience, Joshua started his own company, without a concrete plan, patents, or a team. It’s important to note that this was during a time when Merck was one of the highest-regarded companies in the US and one of the most exciting pharmaceutical companies to work for as a scientist. Leaving Merck was considered an extremely risky move.
Most biotech founders at this time either spun out companies from their academic research or were pharma executives that were recruited by VCs. One advantage Joshua had was that he came directly from an industrial research group, and was able to see firsthand the problems larger corporations were struggling with. This helped him come up with ideas on how to do things better. He wanted to start a biotech company with a flat organizational structure to foster innovative thinking and collaborative research to get new drugs faster to patients [1].
Fast forward, Vertex now has 4 drugs on the market helping patients suffering from cystic fibrosis, a market cap of ~$80 billion (as of 11/18/2022), and has been operating for almost 34 years. The scientific solo founder, Joshua Boger, served as the CEO from 1989 to 2009.
Further reading:
The Billion Dollar Molecule: One Company’s Quest for the Perfect Drug
Genentech
- Founded 1976
- By Robert Swanson and Scientist Herbert Boyer
- Run by Robert Swanson as CEO 1976 – 1990
- Acquired by Roche for ~$47 B
- 13 marketed products (until acquisition by Roche)
One of the most well-known biotech origin stories is that of Genentech, the company which kicked off the biotech revolution in 1976. Genentech was founded by Robert Swanson and Professor Herbert Boyer.
Robert worked as an associate at Kleiner & Perkins and was fascinated by recombinant DNA technology and its potential. His interest in this topic eventually got him fired after a major disagreement with one of Kleiner & Perkins’ portfolio companies that believed the technology to be too unproven and risky.
Unemployed, with no funding, no patents, and only a vague concept, Swanson decided to reach out to scientists working on recombining DNA technologies. Not many responded, and even fewer were interested in meeting. However, one of them was Herbert Boyer, an Assistant Professor at UCSF, who later became his co-founder.
Focussing on making recombinant insulin as their first product, Swanson pitched the idea to his old employer, Kleiner & Perkins, and started Genentech with only $100,000 (~ $500,000 in today’s money).
By 1978 Genentech was able to produce human recombinant insulin and entered a strategic partnership with Eli Lily for its production. This revenue stream enabled the company to kickstart several other projects and attract scientific talent.
Moving away from the contract research organization model and developing its own therapeutics, Swanson took Genentech public and started focussing on growth hormones. The first FDA-approved growth hormone developed by Genentech was Protropin fueling the company’s success.
Swanson served as Genentech’s CEO until 1990. Genentech was acquired by Roche for almost $47 billion.
Further reading:
Genentech: The Beginnings of Biotech
BioNTech
- Founded 2008
- By Scientists Uğur Şahin, Özlem Türeci, and Christopher Huber
- Run by Uğur Şahin (CEO) 2008 – present
- Market cap ~$40 B (as of 11/18/2022)
- Developed one of the most successful COVID vaccines
BioNTech is based on the immune engineering work of husband and wife Uğur Şahin and Özlem Türeci and their mentor Christopher Huber, all three professors at the University of Mainz in Germany.
Prior to BioNTech, Uğur, Özlem, and Christopher founded the non-profit private research organization TRON and the biotech company Ganymed Pharmaceuticals, developing a new class of monoclonal antibodies to treat esophageal and gastric cancer. Özlem ran Ganymed Pharmaceuticals as the CSO from 2001 to 2008 and later as the CEO from 2008 to 2016 until its acquisition by Astellas Pharma for $1.4 billion.
The early goal of BioNTech when founded in 2008 was not to develop vaccines against infectious diseases but to develop new immune therapies against cancer using mRNA technology. The company was not very well-known and was mainly in an R&D phase without many substantial breakthroughs until 2020. When COVID-19 was declared a pandemic and pharma companies rushed to develop life-saving vaccines, BioNTech saw the advantage of its mRNA technology and entered a partnership with drug giant Pfizer to develop one of the most successful vaccines against SARS‑CoV‑2.
This success enabled BioNTech to fuel its other programs and it has now several assets in Phase 1 and Phase 2 clinical trials against different forms of cancer.
BioNTech has currently a market cap of almost $40 billion (as of 11/18/2022). Uğur Şahin is running BioNTech as its CEO since its foundation.
Further reading:
NY Times: The Husband-and-Wife Team Behind the Leading Vaccine to Solve Covid-19
Kite Pharma
- Founded 2009
- By Arie Belldegrun and Joshua Kazam
- Run by Arie Belldegrun (CEO) until the acquisition in 2017
- Acquired by Gilead for ~$12 B
- First CAR-T cell therapy approved
Kite Pharma was founded in 2009 with the concept of engineering patient’s own immune cells to fight cancer. Its main founder and CEO Arie Belldegrun, an Israeli-American oncologist, started two other biotech companies prior to Kite that were acquired by Astellas and JnJ, respectively.
What set Kite apart from his prior successes was that it was pioneering in the unproven territory of autologous immunotherapy – removing patients’ own T-cells and introducing cancer-specific receptors (chimeric antigen receptors) that are priming the T-cells to attack the tumor.
Kite was acquired by Gilead for ~ $12 billion and its first CAR-T cell therapy was approved in 2017. Aire Belldegrun left his position as the CEO and started the new venture Allogene.
The mission of Allogene is to make cell therapy possible by using donor cells moving away from patient-derived cells, which would solve logistical bottlenecks making this kind of therapy more widely available.
Further reading:
UCLA press release: UCLA scientists’ biotech firm to be acquired by pharmaceutical corp
Cougar Biotech: Johnson & Johnson Completes Acquisition of Cougar Biotechnology
Late-Stage, First-in-Class Prostate Cancer Treatment Strengthens Presence in Oncology
About Kite Pharma (old website – archived)
10x Genomics
- Founded 2012
- By Serge Saxonov (CEO), Ben Hindson (CSO), and Kevin Ness (CTO)
- Run by Serge Saxonov 20012 – present
- Market cap of ~$4 B (as of 11/18/2022)
- 2022 revenue $131 M
Serge was the first employee at 23and Me and led its R&D program. 23and Me specializes in sequencing genes and Serge quickly realized to really interpret the genome we need better tools.
He got together with a previous colleague of his, Ben Hindson, who co-founded Quantalife, where Serge served as the VP of applications. Both sat down in a coffee shop in San Francisco and started brainstorming ideas to find solutions for fundamental problems in research that needed to be addressed.
Single-cell RNA sequencing allows us to get information about what kind of genes are activated in a certain cell type at a certain type. This information is extremely powerful and has a wide range of applications. Before 10x Genomics, performing this kind of sequencing was very laborious and time intensive. To solve this bottleneck and make this powerful assay more widely available, Serge and Ben came up with the idea of developing a benchtop system by using clever engineering to automate a large part of the process.
By keeping the upfront costs for the main device affordable and also selling the kits and reagents for the system, 10x Genomics was able to create a very wide customer base ranging from small research labs to large biotechs.
10x Genomics has currently a market cap of $4.5 billion (as of 11/18/2022) and is still run by the original founders Serge Saxonov (CEO) and Ben Hindson (CSO).
Further reading:
10X Genomics website. Executive Team
Genetic Engineering and Biotechnology News: Technological Threefold Way Leads to Biological Wisdom
Forbes: Buzzy Startup 10x Genomics Buys Spatial Transcriptomics In Bet On Genetic Tools
Ginkgo Bioworks
- Founded 2008
- By graduate lab mates Jason Kelly, Reshma Shetty, Barry Canton, Austin Che, and their former supervisor Tom Knight
- Run by Jason Kelly (CEO) 2008 – present
- Market cap of ~$4 B (as of 11/18/2022)
Ginkgo Bioworks was born in the lab of Tom Knight and started by four of his graduate students with the mission to reprogram microorganisms to generate products much more cost-effectively than what is currently possible.
Without much interest from investors for the first few years and a lot of No’s, the team had to support itself with the help of government contracts and grants. After six years of exploring and being equipped with a much better plan, the company was accepted into Y-Combinator increasing its exposure and fueling outside interest. Strong interest came especially from the tech community that quickly drew parallels between programming and recoding the DNA of microorganisms.
After YC, Ginkgo raised a $1 million Seed round followed later by a $9 million Series A. The combination of its unique business model of providing genetic engineering as a service and automating redundant workflows to engineer genes at super high throughput without compromising on quality enabled its rapid growth.
Ginkgo Bioworks had its stock market debut in 2021 and has a market capitalization of roughly $3.8 billion (as of 11/18/2022). It is still run by the same graduate lab mates that founded the company originally with Jason Kelly as its CEO.
Further reading:
Bloomberg: Ginkgo Bioworks CEO Wants Biology to Manufacture Physical Goods
Thanks to Bianka Seres, Matt Krisiloff, Lucas Harrington, and Pablo Hurtado for reading the drafts of this post.
The summaries of the founding stories have been pieced together from different sources and I added my own interpretations based on what kind of articles I was able to find. If you think that parts are not accurate or misinterpreted, please let me know – would love to hear your feedback to improve the post. Please also note that market caps are approximations and are mainly meant to illustrate how much the companies have grown since their inception. alexander@scifounders.com
[1] This is true now too. Industry scientists are in a unique position to start their own companies because they are the closest to the real-world challenges companies that are translating research are dealing with. My teammate Matt Krisiloff wrote an interesting blog post about this topic you can check out here.
Alex Schubert 