OCTOBER 18, 2019 RICHARD G. HAMERMESH KATHY E. GIUSTI SUSIE L. MA Breakthroughs at Blueprint Medicines In June 2019, the excitement was palpable at Blueprint Medicines in Cambridge, Massachusetts, as CEO Jeff Albers and COO Kate Haviland (MBA ‘05) prepared for an all-staff party to celebrate the submission of the company’s first New Drug Application (NDA) to the U.S. Food and Drug Administration (FDA). The NDA was for avapritinib, an investigational precision medicine that showed tumor reductions in 86% of clinical trial participants with a genetically-defined form of gastrointestinal stromal tumor (GIST), a rare cancer affecting the digestive tract.1 An NDA was the last step in the FDA’s review before a drug could be marketed to the public. FDA drug approval took an average of 12 years from discovery to final approval, and only 11% of drug applications made it through the entire process (see Exhibit 1 for the average timeline).2 Blueprint was founded in 2011 by biotech entrepreneur and venture capitalist Alexis Borisy and by 2013, the company had identified the compound that would ultimately become avapritinib. Albers and Haviland felt optimistic they would receive final approval from the FDA in the first quarter of 2020— paving the way for the company to bring to market a lifesaving drug in nearly half the average time. The company had more to celebrate than just avapritinib. Blueprint expected that its second drug candidate, pralsetinib, used to treat non-small cell lung and medullary thyroid cancers, would be ready for an NDA filing in the first half of 2020. (See Exhibit 2 for Blueprint timeline). Blueprint was moving at breakneck speed, juggling the upcoming debut of its first commercial product, avapritinib, with pralsetinib close behind. The company had approximately 240 employees, and planned to double its staff in connection with the planned commercial launches.3 Albers and Haviland wondered how to prioritize programs and manage growth as Blueprint expanded from a startup to a full-fledged company that encompassed all aspects of drug development, from research to clinical to commercialization. But for now, they would take a deep breath and enjoy the party. The Early Years In 2009, Borisy was building the company that would become Foundation Medicine (Foundation) when he started thinking about what it would mean to the biopharmaceutical industry if Foundation was successful. Foundation was a precision diagnostics company that provided patient DNA sequencing to help identify the mutations that were driving a patient’s cancer with the goal of informing treatment with medicines targeting those mutations. Once Foundation built up a database Professor Richard G. Hamermesh, Senior Fellow Kathy E. Giusti, and Case Researcher Susie L. Ma (Case Research & Writing Group) prepared this case. It was reviewed and approved before publication by a company designate. Funding for the development of this case was provided by Harvard Business School and not by the company. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. DRAFT Breakthroughs at Blueprint Medicines of information gleaned from sequencing, Borisy hoped that it could provide a layout of mutations across all cancers. He explained what this would mean in the long term: Within some period of time—a few years or a decade—we were going to have the roadmap of the genetic aberrations across all cancers. We could create THE precision medicine oncology company because if you know what is driving that cancer, you can create a super selective molecule for it. Borisy realized this implied a different kind of business model for drug discovery since, if he could make a drug that could precisely hit a specific target, the chances that the drug would be highly effective should substantially increase. If this were the case, he thought: The number of patients needed for clinical trials should go down, so you should get proof of concept more definitively earlier and more quickly, so the allocation of resources should decrease and the time to develop should decrease. If your resource allocation and time are decreasing, and trial effect size and probability of success are increasing, and if you can do this again and again, that is a compelling business proposition—for patients and for medicine. Borisy sketched some ideas on a lab notebook and stashed it away in his desk drawer. But not for long. Early in 2010, he started discussing the idea with oncologist Brian Druker and biochemist Nicholas Lydon, who led the team that created Gleevec, one of the first successful genomically-targeted drugs developed at Novartis to treat chronic myeloid leukemia.4 In the fall of 2010, Borisy brought on two experienced biotech executives from Third Rock Ventures, where Borisy had recently become a partner, to lead the fledgling company.5 Chris Varma became Blueprint’s first CEO, and David Armistead served as chief scientific officer. As they incubated Blueprint, the founders decided to focus on a promising but understudied drug target—kinases. Kinases were enzymes that helped control the growth activities of a cell—such as signaling and division—and were associated with cancer. There were 518 kinases in the human genome, but only around 30 FDA-approved kinase medicines that targeted less than 5% of kinases.6 Gleevec was a kinase inhibitor, and Borisy felt there was an opportunity for Blueprint to create drugs like Gleevec that could block cancer-causing mutations in kinases. Building a Different Kind of Library Pharmaceutical companies amassed libraries with millions of compounds, seeking to build as many chances for successful drugs as possible. In 2011, Blueprint began developing its library of compounds that might inhibit kinases. The team knew this would be challenging because outside of Gleevec, the biopharmaceutical industry had been largely unsuccessful in developing highly selective kinase inhibitors. As the leadership team investigated why this was, they realized that there were few compound libraries built specifically for kinases, and the ones that did target kinases focused largely on variants of just a few kinase inhibitors. This led to large libraries of similar compounds. Blueprint took an agnostic approach to its compound library by casting a wide net, looking to create a diversity of compounds not directed at any particular kinase target, but seeking to cover the entire kinomea tree (see Exhibit 3 for the kinome tree). Borisy remembered that this was a radical idea at the time, and he recalled advocating: “Let’s make different shaped libraries and test them without an idea a The kinome is the complete set of kinases encoded in the human genome. 2 Breakthroughs at Blueprint Medicines DRAFT of specific target. Let’s explore chemical shape without having a particular program. Let’s get chemical matter that lights up different parts of the kinome tree.” Albers compared the creation of Blueprint’s library to compound libraries at most biopharmaceutical companies: The classic model is that you make all these molecules, you pick one, you find out where it’s potent, and then you try to deconstruct what else is it doing. That’s really hard to do. What Blueprint did was sort of turn that on its head by saying, “We’re just going to start making molecules, even if we don’t know what they do.” It’s like a 1,000-piece puzzle, and if you put 20 pieces in the right spot you still have no idea what it is. But as you get 500 pieces in, you start to see a couple of the shapes and you can tell that there’s going to be a lake over here, or a little house over here, or it’s blue sky and all your blue pieces should go over there. This was a risky approach because it required a significant upfront investment. Borisy, however, felt strongly that the idea would work. Blueprint raised $40 million in its series A round in April 2011, led by Third Rock Ventures.7 (See Exhibit 4 for the press release). Borisy said, “We were going to spend $40 million and two years to build the library and would have no idea if it was any good until it was done.” Identifying a Winning Compound In mid-2011, Blueprint recruited a handful of scientists with experience in kinases, and the team scoured academic literature on kinases, looking for any information that could help direct their compound creation. The team slowly began to create molecules and by the end of 2011, they had a library of 1700 compounds; by 2012 it grew to 7000 compounds and ultimately, the library contained 20,000 compounds that reacted to different parts of the kinome tree. But as time wore on, anxiety mounted at the company. In the spring of 2013, management issues forced Borisy to let Varma go, and Borisy jumped into the CEO role. The programs were not working in conventional ways, the library was behind schedule, and the company was running out of money. Borisy recalled partners at Third Rock asking, “Are we going to hit the wall?” Although investors were concerned, Borisy told the team to proceed with business as usual. “I kept telling people don’t worry about the money, the idea is so good, we are so right, and we are going to get this done. I said, ‘I will bring the money, we will get this done,’ and we did.” In November 2013, researchers identified a compound that showed promise against diseases driven by mutations in the KIT and PDGFRA genes, in this case GIST (see Exhibit 5 for KIT and PDGFRA).