Stanford Doctor to Get $191 Million for Cancer-Fighting Biotech
Stanford Doctor to Get $191 Million for Cancer-Fighting Biotech
(Bloomberg) -- A Stanford University professor and stem cell pioneer whose first job in science paid $25 a month is poised to receive a $191 million windfall from the sale of the immunotherapy biotech firm he co-founded.
Irv Weissman, 80, owns 4.2% of Forty Seven Inc., which Gilead Sciences Inc. agreed to buy for about $4.9 billion, a remarkable amount considering the company’s market value was less than $250 million just five months ago.
Forty Seven is named for a molecule found on healthy and cancerous cells that emits a “don’t eat me” signal that allows cells to go undetected by the immune system. Working in their Stanford lab, Weissman, fellow founder Ravindra Majeti and Siddhartha Jaiswal identified the role of CD47 proteins in the progression of cancer stem cells into a more malignant form.
“The whole system is set up to be able to look at dangerous cells and eat them,” Weissman said in a phone interview. CD47 can interfere with that, allowing cancer to spiral if ignored by the body’s defenses.
The role of CD47 has formed the basis of Menlo Park, California-based Forty Seven’s therapies and research, which focuses in part on blocking signals instructing the immune system to attack, or eat, cancer cells.
Weissman, a native of Great Falls, Montana, is a leader in stem cell research and was the first to identify and isolate blood-forming stem cells from mice.
He became fascinated with science at age 10 after a teacher gave him “Microbe Hunters,” a book about early microbiologists such as Louis Pasteur. In high school he began working in the lab of Ernst Eichwald, a local pathologist. His starting pay: $25 a month.
“He allowed me to act as if I were a grad student,” Weissman said in the interview Thursday. “He was maybe under the delusion that I was a straight-A student.”
Less-than-stellar grades notwithstanding, he learned at the lab that he had “an affinity for discovery.”
After graduating from Montana State College in 1961, he attended Stanford’s medical school, drawn to a curriculum that allowed ample time for research. He’s been there ever since and now heads its Institute for Stem Cell Biology & Regenerative Medicine.
He credits the support of the nonprofit Ludwig Institute for Cancer Research and the state-funded California Institute for Regenerative Medicine with funding Forty Seven’s early clinical research and development. Determining which CD47-blocking antibodies worked best was risky. The wrong type or dosage could be toxic, even deadly for cells.
Druckenmiller, Rockefellers
Biotechs saw it as too dicey to invest at an early stage, Weissman said. So he and Majeti formed Forty Seven, with Stanford getting an equity stake and future royalties that it agreed to share with the state.
Stanford’s payout from the sale is $67.1 million. Other winners from the deal include billionaire Stanley Druckenmiller’s Duquesne Family Office and the Rockefeller family’s venture capital firm Venrock Associates. The entities, which own stakes of 0.8% and 1.2%, respectively, acquired their holdings in the last quarter of 2019, filings show, when the shares traded for as low as $5.53 and as high as $45.39.
“Once you’ve made a fundamental discovery, it’s heartbreaking to see possible therapeutics not making it to market because of the judgment of money people who don’t see the benefits in terms of profit exceeding costs and risks,” Weissman said. “Business people are constrained, of course, I don’t fault them at all.”
“The real problem is federal and state governments didn’t realize we had to pick up the ball between discovery and therapy,” he said. “You could say Forty Seven’s purchase price is a demonstration even to the money people that you can create value.”
Gilead announced Monday it will acquire Forty Seven for $95.50 a share, almost double its closing price the preceding Thursday, before Bloomberg News reported on the potential for a deal. Co-founder Majeti’s stake is worth about $120 million.
Forty Seven is the fourth company started by Weissman, who also served on the founding scientific advisory board of Amgen Inc.
He said he intends to make himself available to Gilead to advise on Forty Seven’s treatments and hopes research will continue for other potential applications such as treating scleroderma and fatty liver disease.
His next project will put him back in the lab. Weissman said he wants to gather funding and refocus on research he started decades ago that involved extracting, purifying and transplanting blood-forming stem cells in patients with aggressive breast cancer.
He formed a company to commercialize the treatment and sold it and the patents to Sandoz, now a unit of Novartis AG, in the early 1990s. The research stalled and Novartis shuttered the program in 2000.
These days, Weissman said he sees too many scientists focused on a payout. The doctor, who’s written a children’s book about stem cells, said he always has high school students and undergrads working at his lab -- at a point in life “when they’re very idealistic.”
It’s something he tries to encourage.
“When you meet the patients who would’ve died except for your intervention -- that’s the best.”
To contact the reporter on this story: Devon Pendleton in New York at dpendleton@bloomberg.net
To contact the editors responsible for this story: Pierre Paulden at ppaulden@bloomberg.net, Steven Crabill, Peter Eichenbaum
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