To most people, the nondescript structure in Plymouth Township is nothing special. But in Roger Newton’s eyes, the nearly abandoned building will soon be bustling from morning to night with scientists and entrepreneurs who share the cause of building embryonic biotech startups into full-fledged companies. He envisions wet labs teeming with researchers, offices filled with innovators, and a cafeteria where workers from up to 10 different companies can feed off each other’s ideas and insights. Esperion Therapeutics, the company he built from scratch, took public, sold to Pfizer for $1.3 billion, and then won back during Pfizer’s restructuring, now sits as the anchor in what’s fast becoming a life-sciences incubator. And Newton, co-discoverer of the top-selling cholesterol drug Lipitor, is once again concentrating on making novel drugs that better the lives of people suffering from hardening of the arteries and cardiovascular disease.
That Newton is gifted is obvious. He’s an accomplished scientist, a proven entrepreneur, a skilled negotiator, a charismatic leader, and — in his words — one very lucky man. He doesn’t describe himself as the smartest, or the savviest, or the slickest. Instead, he works hard, listens to those he trusts, and follows his heart. He readily credits others for his success: the scientists at Warner-Lambert/Parke-Davis, where he championed the drug that would become Lipitor amid skeptics and naysayers; his fellow co-founders at Esperion, who followed him from a secure corporate environment into Esperion’s startup mayhem; his mentors and professors, some of whom he’s acknowledged through fellowships; and his wife, Coco, whose advice and support helped him hack through many a professional and emotional thicket.
“I’ve learned that you don’t do what you do every day to get recognition from others,” he says. “You do it because it’s right.”
The gift connecting his many accomplishments is the ability to recognize potential where most people see failure, and then persuade others that he’s right. He did that with Lipitor, a drug almost mothballed in the 1980s that now brings in more than $12 billion in annual sales. He did that with Esperion, a company built in 1998 around a drug orphaned in an acquisition. He did that with the latest version of Esperion, which Pfizer was prepared to place in its throwaway bin in 2007. And now he’s acting on his convictions again.
“He’s a very important resource to the state of Michigan,” says Michael Finney, president and CEO of the economic-development organization Ann Arbor Spark, and part of the incubator planning team. “He’s probably the most successful entrepreneur that I’m aware of in the past 20 years [with] a homegrown company that achieved a tremendous success. To have him here and be available as a resource — first, to do again what he did before, and second, to be a resource for other entrepreneurs in the region — is incredible.”
At 58, Newton says he has no interest in retirement, although financially he could’ve swapped work for relaxation more than a decade ago. And no, his passion for battling atherosclerosis (hardening of the arteries) isn’t for personal reasons. Blood tests show his cholesterol levels are phenomenally good, thanks to an active lifestyle and sound eating habits. “You are what you put in your mouth,” says Newton, who holds a doctorate in nutrition. “I don’t take any medicine at all, and I’m not planning on taking any. And I’ve worked in the pharmaceutical industry for 27 years.” He has a deep knowledge of how the body takes in, makes, and uses low-density lipoproteins, or LDL, the “bad” cholesterol, as well as high-density lipoproteins, or HDL, the “good” cholesterol. Too much LDL can lead to plaque, a buildup of fat in the lining of arteries that can rupture and cause heart attacks or strokes. HDL helps eliminate LDL from the body. People with atherosclerosis often have too much LDL, too little HDL, or a combination of both.
Newton rose to fame starting in 1981 while at Parke-Davis, a subsidiary of Warner-Lambert, where he joined an atherosclerosis team in Ann Arbor. Newton and his colleagues had a monumental task in front of them. Parke-Davis was behind rivals Merck, Bristol-Myers Squibb, and others in the race to develop a safe and effective statin drug. And statins were tricky. They could have unacceptable side-effects and could damage the liver.
Within four years, Newton became head of the atherosclerosis group and built it to a diverse 30-member team. Despite their talent, they tallied strikeout after strikeout. One promising candidate reached the scale-up stage, only to be trumped by a competitor’s first-to-file patent status. Two other formulations proved toxic, and another was taken up by organs other than the liver. Management and marketing began grumbling about cost and competitive disadvantage. Newton, convinced that they could succeed with a drug that improves patients’ lives, insisted they stay the course. “We had four failures before we found …” Newton, a stickler for dates and names, pauses to get it right before rattling off a 10-digit code for the compound. “It was typical research. It’s kind of like the Aretha Franklin song: re-re-re-re ‘Respect.’ It’s research, not search. You have to do it many times to believe it.”
Even then, their last-gasp compound initially looked only minimally better than Merck’s Mevacor, a cholesterol-lowering drug approved for sale a year earlier and a first-to-market leader. Newton’s team then realized that their compound existed in two mirror forms, like a right hand and a left hand. One version was potent, the other only a hundredth as effective at lowering cholesterol. Weed out the ineffective version and they were in business. Newton still had to beg with the company’s review team — the story goes he went down on one knee, jokingly, to implore them to approve a small clinical trial — and wrangle with Parke-Davis management to keep the project afloat. He later paid a price for his persistence, but over the next several years of clinical trials, the drug that would be trademarked as Lipitor proved better than anything on the market. Lipitor won U.S. Food and Drug Administration approval in 1996, and went on sale in 1997. Sales surpassed $1 billion in its first 12 months and reached $12.7 billion in 2007, making it the top-selling prescription drug in the world. Pfizer bought Warner-Lambert, Parke-Davis’ parent company, in 2000 to add Lipitor to its portfolio.
Newton credits his team for its success, while team members point to Newton’s passion, leadership, and willingness to battle corporate bureaucracy. “There needs to be a champion within Big Pharma to get to proof of concept,” says biochemist Michael Pape, a collaborator on Lipitor and co-founder of Esperion. He now heads up the scientific due-diligence team at Sigvion Capital in Chicago. “You have to have someone who can communicate the data. … Roger was persistent and aggressive.”
As Lipitor’s star rose, Newton’s career plummeted. The leadership he had challenged over the decade marginalized him in a restructuring, taking away his administrative position, dispersing his research team, and diminishing his influence. He recalled advice from his late father, who believed his boss undermined him and stole his ideas. If you lose the support of your boss, his father had advised, leave. “It was a blow to my ego, but what I realized is I couldn’t stay at Parke-Davis,” Newton says. “I couldn’t trust the people.”
Newton says the experience initially made him doubt his leadership ability. But then, with Coco as a sounding board, he began to reflect about his motivations and aspirations. He also consulted books like Deep Change, a guide by University of Michigan business professor Robert Quinn that tantalized Newton with the back cover blurb, “Don’t let your company kill you!” Quinn, now one of Newton’s confidants, encourages executives to examine their personal and professional goals and behaviors, and stretch beyond their comfort zones.
Newton was ripe for a career change when he was approached by David Scheer with a proposition to develop a new cholesterol drug. Scheer, head of a life-science advisory firm in Connecticut, was helping Upjohn and Pharmacia sell intellectual property that neither wanted after their merger, including a candidate that focused on HDL, the good cholesterol. Scheer thought Newton was not only the right man to make the drug, but also to build a startup company. “[Newton] had functioned successfully in a big company and wanted to segue into a place where he didn’t have constraints, a position where he had more empowerment and encouragement,” Scheer recalls. At Parke-Davis, Newton had shown he was more of an entrepreneur than a conventional manager bent on appeasing bosses. “Roger at Parke-Davis was like a fish out of water,” Scheer says. “He focused on looking at problems in a sober, objective fashion. He didn’t develop his career in a politically correct fashion.”
In 1998, Newton launched Esperion Therapeutics, where he took on the roles of co-founder, president, and CEO. Esperion concentrated on a new approach for treating atherosclerosis. While Lipitor successfully lowered cholesterol levels in some patients, it had no effect on plaque that had accumulated in arteries. Esperion’s new drugs were expected to reduce plaque by increasing the amount and effectiveness of HDL in blood. HDL ferries LDL, the bad cholesterol, from the body.
Scheer says Newton’s track record with Lipitor, his outgoing nature, articulateness, and “a certain element of charisma” helped him attract funding and top talent. Newton recruited several scientists from his former Lipitor group who welcomed the chance to use their expertise unencumbered by bureaucracy, Pape says. “He began to build a team and then allowed the team to do their thing.”
Newton also proved adept at raising the large amounts of money needed to develop synthetic forms of HDL, growing Esperion’s initial pot of $16 million to more than $200 million in venture capital and equity financing that included a $62-million initial public offering in 2000, a $24-million private investment in 2001, and a $67-million secondary round of financing in 2003.
Fundraising had its disadvantages, as well. It required Newton to travel extensively, first to drum up venture capital and later to oversee the pre-IPO road show and subsequent financings. Newton says he gained 25 pounds, missed out on family experiences, and lost control of Esperion’s expansion. The company grew too quickly, forcing him to lay off a quarter of the staff in March 2002 to save funding needed for upcoming clinical trials. “The consequence was I had to say goodbye to 22 talented people,” Newton says. “It took a long time to regain the trust and respect of the remaining [employees].”
In November 2003, researchers at the Cleveland Clinic reported on a small trial testing Esperion’s lead candidate, a drug administered intravenously. The study showed that five doses given weekly to patients with acute coronary disease reduced plaque in their arteries significantly. Pfizer, looking for drugs to complement Lipitor and feed its cardiovascular pipeline, presented Esperion in December with an acquisition offer for $1.3 billion, along with a provision to keep the company semiautonomous. Esperion’s board accepted.
Newton chose to stay at Esperion after the acquisition to shepherd the HDL project. He had to make a drastic change in plans in January 2007, when Pfizer announced the shutdown of much of its R&D program and layoffs of 2,100 workers in Michigan. Esperion was on the hit list. But Newton, with his gift for salvaging what others discard, saw another option. By May, he had negotiated with Pfizer to make Esperion an independent company. Pfizer kept an undisclosed stake in the company, and Esperion retained a drug candidate that, if it succeeds, would be taken as a pill — a preferable and more marketable regimen than an intravenous drug. Newton lassoed nearly $23 million in venture capital from former Esperion investors Alta Partners and Domain Associates, as well as new investors Aisling Capital and Arboretum Ventures in Ann Arbor. He estimates he’s raised three years’ worth of capital research.
“We have a lot of confidence in the team, and investors always look for unmet medical needs,” says Alison de Bord, a director at Alta Partners who has a nine-year history with Newton. Newton’s success as a manager and researcher appeals to investors, de Bord says, and he remains passionately committed to finding therapies that improve health. “Roger hasn’t lost a speck of spark.”
Newton likens the nearly two-year process of setting up the incubator, called Michigan Life Science and Innovation Center LLC, to his experience developing Lipitor. He says the notion that salvaging a facility designed to bring biotech innovation to fruition occurred to him soon after he learned of Pfizer’s looming layoffs and shutdowns. But he needed a team of economic developers with complementary skills who shared his commitment and vision to make it a reality. “This took a long time to nurture,” Newton says. “And [it’s] the vision of many people.”
As with Lipitor, the journey underwent tortuous fits and starts as they encountered and resolved gnarly multi-agency and financial challenges. Nor was it as simple as handing over the keys; certifications and accreditations for conducting biotech research that Pfizer obtained were not transferable, so the paperwork needed to be started anew. The board for Esperion was anxious, and rightfully so, Newton acknowledges.
But now “there’s an electricity in the air,” he says, as his seven-and-a-half-person staff concentrates on building their drug portfolio and preparing for preclinical drug development. “I always felt this is the place we were meant to be.”