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The little biotech that could
Dr. Chiang Li is not the kind of guy you'd expect to be living on a minimum- wage salary. A graduate of the Harvard-MIT Division of Health Science and Technology and Harvard Medical School, he completed his residency and fellowship at Brigham & Women's Hospital/Dana-Farber Cancer Institute and Beth Israel Deaconess Medical Center before moving on to found or co-found Cyclis Pharma and Cequent Pharma, both of which were later acquired, and ArQule Oncology. Li has more than 60 inventions to his name and has translated a number of his medical innovations to patients for the treatment of cancer and other life-threatening disorders.
Would you like fries with all of that?
Li is not some down-on-his-luck life-science casualty of a poor economy, though. Quite to the contrary, he is the founder, chairman, CEO and chief medical officer of Boston Biomedical Inc. (BBI), a private biotechnology company with a clinical-stage product pipeline targeting cancer stem cells based in Norwood, Mass. So why is he subsisting on a minimum-wage salary?
In 2006, when Li learned that he and about 30 other employees of ArQule Inc. were on the chopping block due to a company restructuring, Li decided to take a major leap of faith. He approached ArQule's executives with a novel idea: He would form a new company that would, via an eight-month, $5 million contract with ArQule, perform the early research work that ArQule no longer wanted to handle. Li would use that $5 million to start BBI and give jobs to the nearly three-dozen employees facing layoffs—saving ArQule significant costs, negative media reports and shareholder disappointment in the process.
"It truly was a win-win situation," Li tells me. "Still, the idea made sense, but no one had ever done this before," he concedes. "We were not going to be a spinoff, so there was some concern about who was going to lead the new company. I volunteered myself to lead this initiative."
BBI successfully completed its outsourcing contract with ArQule, but there were other challenges waiting in the wings. By late 2008, the economic recession hit with full force. BBI temporarily downsized its employees, but then hired them all back—and to ensure that no one lost a job, Li cut his own salary down to minimum wage.
"It was a tough time to be an entrepreneur," admits Li, who lived on this meager salary for five years, until last month when the unexpected happened: Top Japanese pharma Dainippon Sumitomo Pharma Co. Ltd. (DSP), with whom BBI had an exclusive product option license agreement for the development of a cancer stemness inhibitor program in Japan, swooped in to acquire BBI for a cool $2.6 billion (see "Pharma pink-slippers find pot of gold, " on our cover this month).
"To be honest, we were not looking to be acquired—we were just mainly focusing on product innovation," Li says. "But after partnering with us on BBI608, the team liked what they saw, not just from the program's data, but also with how BBI operates. Our teams collaborate so well together, so an M&A felt very natural. We came to the conclusion that teaming up with DSP was a good idea because of its resources, expertise in other areas and track record would help us accelerate this program. "
All BBI employees get to keep their jobs when the acquisition closes, and with $2.6 billion in the can, Li can probably give himself a much-deserved raise—but he laughs, "truthfully, right now I am too busy to think about getting my salary back. "
Knowing what he knows now, would Li have done anything differently?
"If I had to do this all over again, I might be more scared. If I knew that one year later, the recession would hit, I probably wouldn't do it," he admits. "But sometimes, the best solution is to take a risk. Sometimes, the risk is not taking a risk. From an executive's standpoint, I am excited because we have created a world-leading portfolio that provides a new direction for cancer stem cell treatment. From a business manager's standpoint, I'm glad things worked out so that no one was out of a job. The moral to our story is that this provides an example of what can be done."
And a biotech story with a happy ending is something we can all enjoy.