Not so long ago, B.C.’s biotech industry was on a roll, with QLT leading the way and a couple of others following it into black-ink territory. Then QLT began its long, slow slide, and fate dealt a losing hand to Angiotech, one-time poster child for B.C.’s biotech industry.
We like to think that the business world is a meritocracy; that companies owe their success to the genius and hard work of the people who run them. And why not? The greatest business leaders – think of legends such as Henry Ford, Bill Gates and Steve Jobs – not only build industrial empires; they revolutionize how people lead their daily lives. The worst of the bunch – hello, Enron’s Ken Lay, or former Lehman Brothers boss Dick Fuld – can blow up the world’s economy along with their companies.
But how then, do we explain the rise and sudden collapse of B.C. biotech cornerstone Angiotech, which filed for bankruptcy protection this year? Just six years ago, the province was building a biotech cluster around the company, whose principal product had generated $1.4 billion in sales in just its first nine months on the U.S. market. Now B.C. has been left without a single profitable biotech firm, and frightened investors are starving the sector of capital. The usual culprits – hubris, lack of foresight or vision – are missing. Looking back, it’s hard to attribute Angiotech’s downfall to anything but the fickleness of fate.
The company had built its fortunes on a single device called a drug-eluting stent. A coronary stent is a tiny thing. Picture a fishnet Slinky shrunken down to a diameter of 2.5 millimetres, and inserted into your blood vessels like the submarine of the campy sci-fi classic Fantastic Voyage. In 1966, the year of that film, such life-saving medical devices didn’t exist, so to fix a blockage, the filmmakers imagined sending a nano-sized Raquel Welch in to clear things up. Times changed. In the 1970s, doctors began inserting and inflating balloons to open clogged arteries. Unfortunately, nearly a third of arteries closed back up after surgery. Surgeons tried lasers, shavers, and rotational polishers to keep blood flowing, but the problem persisted. Then came the stent, a metal scaffolding meant to prop open the blood vessels, first used in 1986. It was effective, but still a quarter of treated arteries kept reclosing.
Arteries often didn’t take to the miniature Slinkies embedded in them. Scar-like tissue would build up and grow through the stents’ scaffolding like a jungle reclaiming old ruins. That scarring, known as restenosis, stifled blood flow. In the early 1990s, a radical, potential solution sprang from the UBC campus. William Hunter, then a third-year medical student, was giving a talk about using cancer drugs in small doses to combat localized misbehaviours of non-cancerous cells. Interventional radiologist Lindsay Machan – the kind of doctor who puts catheters, stents and other little devices into small spaces – listened to the talk, and afterward tossed Hunter the idea of combining those cancer drugs with some of his devices, thinking it might make an interesting combination. Machan never expected that Hunter would come back to him a couple of months later with a proposal to do exactly that. The two men, along with Hunter’s then-graduate supervisor, Larry Arseneault, founded Angiotech in 1992.
Years of determination in labs and boardrooms produced Taxus, a stent that kept restenosis at bay by gradually releasing a repurposed anti-cancer drug called paclitaxel.
The revolutionary combination of drug and device was released in Europe in 2003, won regulatory approval to enter the critical U.S. market in 2004, and went on to be sold by the millions through a partnership between Angiotech and Boston Scientific Corp. Angiotech grew into a $2-billion-plus market-cap company and a jewel of Canada’s new economy. Shares soared more than tenfold from 1999 to 2004. Five million patients’ lives were renewed by Taxus stents. B.C. investors and politicians dreamed of the province blossoming into a biotech cluster – a Silicon Valley of life sciences. All of this was due in large part to the serendipitous meeting of those two minds, and their subsequent invention.
But suddenly, it all came falling apart. Even as Taxus made its first sales, Angiotech began to be pummeled by a series of financial and scientific difficulties. Questions arose about the safety of Taxus stents, questions that, along with competition, gutted the company’s central pillar of revenues, beginning in the fall of 2006. Angiotech had piled up debts attempting to broaden its sources of income, but the startling loss of revenues made those debts unsustainable.
The slide was swift, and Angiotech filed for protection from creditors under the Companies’ Creditors Arrangement Act in January of this year; it was subsequently delisted from the TSX and NASDAQ stock exchanges and old shares became worthless. Once a beacon of hope for B.C.’s biotech industry, Angiotech has also become a lesson about how quickly dreams in this sector can shatter. The rest of the province’s biotech firms have been anxiously following Angiotech’s saga, and trying to adapt to life in its wake.