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Bucking The Odds at Amylin


At least once a day, Ginger L. Graham follows a routine that many people with diabetes know all too well: She pricks her finger and tests her blood sugar. Graham, chief executive of Amylin Pharmaceuticals Inc. (AMLN), does not have diabetes. But her company just launched two new drugs to treat the disease, and Graham believes that to truly understand her customers, she must live the diabetic lifestyle. "I just think we don't appreciate how hard their lives are," she says. So she watches her diet, taking notice of foods that can cause dangerous glucose swings. But it's the finger sticks that are the toughest to get used to. "I dread it," confesses Graham, 50. "It's so unpleasant."

Those daily jabs are pretty much the only pain Graham is experiencing these days. In the spring, after 18 years of regulatory setbacks and near-death experiences, San Diego-based Amylin pulled off a rare feat in biotech, scoring Food & Drug Administration approval for both its first and second products. The back-to-back wins -- which Graham celebrated by jumping into the fountain outside Amylin's headquarters -- instantly transformed the company from a pure research outfit to a player in the pharma business. And Graham, who has been CEO since 2003, found herself facing brand new challenges, from cobbling together a salesforce to gearing up for commercial manufacturing. "We needed to hire 300 people all at once," she says.

For the most part, Amylin's transition is going swimmingly. In March the company introduced Symlin, an engineered form of a human hormone that insulin-dependent diabetics can take along with insulin to smooth out dangerous fluctuations in blood sugar. Two months later, Amylin launched Byetta, a drug derived from a hormone found in the saliva of desert-dwelling Gila monsters. The injected hormone, aimed at diabetics who are not yet dependent on insulin, helps them control their blood sugar. That, in turn, could keep patients from sliding toward insulin dependency. The company is on track to report 2005 sales of $122 million, analysts estimate. Because of its frantic expansion, Amylin's loss is expected to jump 38% over 2004, to about $216 million. But analysts believe the company could turn profitable by 2008 and surpass $1 billion in annual sales the following year.

Graham already has her scientists working on an improved version of Byetta, which may have to be injected only once a week, as opposed to twice a day. And the drug may offer an additional benefit: In August the company announced that in an early clinical trial, patients taking the longer-acting drug lost an average of nine pounds.

Considering that most diabetes treatments cause patients to gain weight -- which in turn aggravates their condition -- investors were stunned. "I don't think anyone has seen such compelling data," says Kris H. Jenner, a biotech analyst for T. Rowe Price Group Inc. (TROW), which holds shares of Amylin. Hopes for the next generation of Byetta, which could be introduced by 2008, helped push Amylin's stock up 58% in 2005, to $39.70.

DIRE STRAITS

There was a time when Amylin's fate seemed as precarious as that of the threatened Gila monster. In 1998, Graham was an executive at device maker Guidant Corp. (GDT) and serving on Amylin's board when the company suffered some setbacks. Johnson & Johnson (JNJ) pulled out of a key research partnership, Amylin's share price fell to 31 cents, and it was nearly delisted from the NASDAQ. Six weeks from running out of cash, the biotech stripped down from 300 employees to 37.

Amylin was in such dire straits that some board members invested their own money to keep it afloat. Graham contributed $200,000 to the cause. "I thought: 'This is somebody who puts her money where her mouth is,"' says Chief Operating Officer Daniel M. Bradbury. The company raised $33.5 million altogether, allowing it to continue studying its flagship drug Symlin, as well as Byetta, which Amylin acquired from its inventor in 1996.

SLEEPING BEAUTY

In 2003, Graham was mulling early retirement when Amylin's board asked her to take over as CEO. She quickly abandoned the idea of spending her days riding horses and learning to play the harp her husband bought her as a retirement gift. But shortly into her tenure, Graham realized the job might be harder than she anticipated. Unexpectedly, the FDA said it wouldn't approve Symlin without more clinical trial data.

It was the second such request -- and a chilling warning that the drug might never see the light of day. On the other hand, early studies of Byetta indicated that it might be a billion-dollar drug. Graham deliberated briefly before shifting all but 20 of the 350 employees then working at Amylin over to the Byetta team.

For the many employees who had staked their careers on Symlin, the move was painful. The mood at Amylin was grim, especially for Graham, who was simultaneously mourning the death of her mother. In a pep talk to the staff, Graham explained that Symlin was like Sleeping Beauty: "She was still beautiful, but she had to go to sleep." After Symlin was approved, Graham came to work dressed as the newly awakened Sleeping Beauty and handed out hardbound copies of the fairy tale.

Graham has always had a penchant for the theatrical. As a child growing up on a chicken farm in Arkansas, she competed in local rodeos, earning the title of Arkansas High School Rodeo Queen. "I could rope a calf or tie a goat or run barrels and poles," she says. As an undergraduate at the University of Arkansas she won the 1976 state title and then competed at the national Miss Rodeo America Pageant. Her speech about Arkansas garnered her the top prize in the public-speaking portion of the contest.

Competing in the male-dominated world of rodeo prepared Graham well for her first corporate gig, selling agricultural chemicals for a division of Eli Lilly & Co. (LLY). As a woman working in agriculture at that time, Graham was such an oddity that her very presence offended some customers. One of Lilly's largest buyers refused to work with Graham and called her manager to demand that the previous sales rep -- a man -- return to the account. Her manager refused, and an undaunted Graham kept calling on the customer. "I hung out there, I got to know all the staff," she says. Her stubbornness paid off: He became a loyal customer.

The normally soft-spoken and approachable Graham can turn crusty if she's not getting her way. After returning to Lilly in 1986, Graham worked in a variety of divisions, ranging from finance to pharmaceuticals to medical devices. In 1987 she managed the sale of Elizabeth Arden to Fabergé for $735 million -- then the largest cosmetics deal ever. When one of the Morgan Stanley (MWD) bankers dragged his feet, "she had him backed into a corner and she was screaming at him," says Michael Hunt, who worked with her on the deal. "She was holding him accountable." In the middle of the negotiations, the Black Monday market crash forced the parties to restructure the financing. Still, Graham and Hunt managed to close it at the originally agreed-upon price.

Today, Graham is facing a delicate balancing act. She has to transform Amylin into a sales-driven company without letting go of the scrappy culture that inspired those original 37 survivors to stick by two promising drugs. "How do you infuse that into all these new people who didn't go through the Valley of Death?" asks Joseph C. Cook Jr., Amylin's former CEO and now chairman of the board. "Ginger worries about that." Graham vows to continue to spend heavily on research, nurturing Amylin's experimental drugs to treat obesity and heart failure. And she spends much of her time on the road, speaking to all of the newly hired salespeople.

The rodeo-queen-turned-CEO revels in telling new recruits about Amylin's two-decade fight for survival. One of her favorite stories describes an early Amylin investor who was so determined to nurture new treatments for his diabetic daughter that he FedExed a $6.2 million personal check to the company. Graham refers to these specimens of corporate lore as "cave paintings," and at her San Diego office she surrounds herself with symbols of Amylin's history, including figurines of Gila monsters and her personal copy of Sleeping Beauty. Every day they remind her of the challenge she has taken on. "I need to transfer what was," she says, "to what we're about to become."

By Arlene Weintraub


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