Wyeth’s Front Man

Source: The Philadelphia Inquirer
Publication date: 6/6/2005 6:06:00 PM

Jun. 5–By day he is Robert R. Ruffolo Jr., research chief at Wyeth Pharmaceuticals, industry cheerleader, devoted Republican, and confessed geek.

By night call him Bob the Wannabe Rock Star, playing “Money for Nothing” and channeling Ted Nugent in a garage band.

“Doesn’t fit the image, does it?” the besuited version admitted in an interview. “The band didn’t help. At home, they still refer to me as ‘the geek.’ ”

Such are the ambitions and incongruities of Bob Ruffolo. At 55, the president of Wyeth’s research and development division is a star of the global pharmaceutical industry, credited with raising productivity at Wyeth’s once-struggling labs in Collegeville, Montgomery County.

Guitar fantasies aside, a big ambition looms for Ruffolo. As Wyeth’s $21 billion diet-drug litigation winds down, Ruffolo hopes to vault Wyeth – with 5,000 employees in Montgomery County, 62,000 worldwide – into the lead among drugmakers.

“It’s on Bob’s shoulders,” said George Poste, Ruffolo’s longtime friend and former boss at SmithKline Beecham, now GlaxoSmithKline P.L.C. “They’re at least 75 percent of the way there in research and development, and the prognosis for success is enormously positive.”

Wyeth’s consumer-products division, based in Madison, N.J., markets well-known over-the-counter medicines such as Advil, Centrum and Robitussin.

Its Collegeville-based pharmaceutical division, however, is responsible for most of the revenue. Its biggest drugs are the antidepressant Effexor, heartburn drug Protonix, pneumococcal vaccine Prevnar, and arthritis treatment Enbrel.

Wyeth, for many years, has been near the bottom of the top 10 drug companies as measured by U.S. sales. As of March, it was No. 10 with U.S. sales of $8.4 billion, less than a third of industry leader Pfizer Inc., according to IMS Health, a research firm.

Ruffolo’s challenge, identical to one facing every drug company, is expanding Wyeth’s pipeline of future drugs at a time when traditional R&D productivity is falling across the industry.

His strategy is ambitious: Seek FDA approval of two breakthrough drugs a year, either from Wyeth’s own labs or with partners, in any of three platforms: traditional drugs, vaccines, or biotech innovations that old-line firms like to call “biopharma.”

Ruffolo, at the same time, eschews cranking out so-called me-too drugs to compete with similar drugs already on the market. Identifying new molecular or biological entities, in theory, can be just as good for business by commanding higher margins and qualifying for “accelerated” FDA approval, which gives a company more time to earn patent-protected profits.

The trade group Pharmaceutical Research and Manufacturers of America has given its Discoverers Award to six scientists from Wyeth since 2003. In January, the trade publication R&D Directions named Wyeth one of “Ten Pipelines to Watch.”

Now, Wyeth faces the pressure of rising expectations after years as the underdog. Its $2.7 billion R&D budget this year amounts to about 15 percent of last year’s sales, the low end of the industry average.

“I’ll never forget somebody actually laughed at me when I said I was coming here,” said Ruffolo, who came to Wyeth in 2000 after being a top scientist at Eli Lilly & Co. and Glaxo.

Ruffolo was a key force behind Glaxo’s hypertension treatment Coreg, which overcame some initial concerns to become a $790 million seller for his former employer.

Coreg also earned Ruffolo the lead in one of PhRMA’s national TV commercials in the mid-1990s, leaving this unusual souvenir: Ruffolo is one of the few pharmaceutical executives who is also a card-carrying member of the Screen Actors Guild.

An indefatigable booster of a besieged industry, Ruffolo lamented that benefits of drugs like Coreg were too-quickly forgotten in the debate over safety, prices and profits.

“We live longer than ever before. Who do you think did that? We don’t die from infections anymore. Who did that?” Ruffolo said. “I consider this to be a noble industry. Not that the criticism isn’t all deserved. But people are not facing up to the benefits.”

Ruffolo parts ways slightly from his peers on how to fix the industry’s image. Sure, better “public education” will help. But his main prescription: make better products and image will follow.

“It will come from one company doing one act at a time,” he said. “It won’t be through ad campaigns.”

The jury is still out on his strategy. The company does not expect to hit its two-drug-per-year goal until next year and this year only has one, Levo/EE, a form of its oral contraceptive, not a breakthrough product. It anticipates FDA approval this month for Tygacil, an antibiotic for skin infections, pneumonia and other conditions.

“Over the last five to eight years, they’ve done a good job focusing their R&D and looking at their early-stage pipeline that could develop into blockbusters,” said Michael Zbinovec, an analyst at Fitch Ratings in Chicago. “Now you see the fruits of their labor.”

But Timothy Anderson, an analyst at Prudential Equity Group, downgraded Wyeth’s stock in January after figuring that Wyeth’s new drugs may cost huge amounts of money to launch, stunting its profits.

One of its drugs is Enbrel, a biotech-based antibiotic Wyeth co-markets with Seattle-based Immunex. Global sales hit $2.5 billion last year. But Wyeth has had to build a costly plant in Grange Castle, Ireland, to boost production. And it must share U.S. revenue with Amgen Inc., the company that bought Immunex.

Asked what he considers his biggest success, he paused briefly before citing a management – not scientific – innovation to raise R&D productivity.

Under his bonus system, instituted in 2001, Wyeth scientists earn or lose points by meeting goals and deadlines at many stages in the research process, from drug discovery to preclinical testing. Bonuses are determined by point totals, not by subjective reviews from bosses, the usual standard for many companies.

“We held scientists accountable. We didn’t want scientists to do things commercially irrelevant,” Ruffolo said. “I’d rather have 6,000 average scientists all aligned on projects than 6,000 Nobel laureates.”

Ruffolo did not single out any Wyeth project as irrelevant. But he said he does require scientists to work on more than one compound at a time, to prevent them getting too attached to a single idea and losing sight of its faults, as he once did as a young scientist at Lilly.

“It’s a challenge to manage scientists. They’re not typically best at managing money and people. As a scientist, I can say that,” Ruffolo said.

Ruffolo’s point system drove out some scientists, he conceded, declining to say how many. But within a few years, people adapted and began getting bonuses, some as high as 30 percent of their pay, he said.

Initially “there was some resistance and discontent,” said Pearl Frier, president of the R&D recruiting firm Cambridge BioPartners, in Boston. But since 2004, “it’s been very different. When I speak with candidates at Wyeth, it’s much more difficult to get people to interview. It’s difficult to get them to leave.”

Most important to Ruffolo, the point system has helped increase the novel compounds under development from three to 12 per year. It has 68 total projects in the works, up from 49 in 2001.

Friends say Ruffolo “enjoys intensity” and is passionate about everything he undertakes.

A registered Republican, Ruffolo in the last three years has given $13,750 to GOP candidates and Wyeth’s PAC, which gives mostly to Republicans, according to campaign disclosure records.

As a boy in Long Island, he used to “blow things up and dissect animals,” he said. In college, Ruffolo was a competitive swimmer, quitting after realizing he could not improve his speed enough (100-yard free-style best of 48.1 seconds) to be a champion.

Now, he is learning the electric guitar, earnestly declaring his dream now “to be a rock star,” notwithstanding a little anxiety at a first performance.

“We didn’t stink,” he said. “Actually, I didn’t enjoy myself at all until the seventh song.”

Age: 55.
Titles: President of Wyeth Research, senior vice president of Wyeth.
Location: Collegeville, headquarters, with 10 U.S. and 4 foreign locations.
Division: 6,000 employees, of whom one-quarter hold doctoral degrees.
2005 budget: $2.7 billion.
Compensation: $1.45 million (2004), plus onetime award of 1.2 million shares redeemable in 2007.
Education: Doctorate in pharmacology, Ohio State University; postdoctoral fellow, National Institutes of Health.
Publications: Author or editor of more than 500 scientific articles, 17 books.
Personal: Wife, Stephany; three children.
Residence: Spring City, Chester County.

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