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Wednesday, August 07, 2013

Thermo Perkin VLST and Me

In my former life as a researcher for several biotech companies all up and down the west coast, I pumped a lot of other peoples money into high quality companies like Thermo Fisher Scientific and Perkin Elmer. These companies provide analytical instruments, reagents, antibodies chemicals, glassware, vials, pipettes balances, centrifuges, lab benches, bunson burners, software and so many wonderful things. If you really love nerdy science things, you want to work in a lab and you know these companies have PRODUCED over the years. Sadly, they are joining the layoff party. 655 people, 1.7% of the total workforce of Thermo, have been let go. 265 at Perkin Elmer will get their walking papers. That's 920 middle income jobs lost. Do we blame Obama for this one?

These are research related job losses. This this a canary in the coal mine. When money stops flowing into the biopharma businesses, circulation is cut down to just paying the C-level guys to "create value" from behind their Wizard of Oz curtains. The nerdy science world taking place in the laboratories goes silent. Workers go unemployed. No one is left to purchase the products sold by Perkin Elmer and Thermo.

Every research laboratory, large or small, academia or industry, uses these products. With the decrease in grant funding and massive industry layoffs, it's hard for Thermo and Perkin Elmer to find customers with purchasing powers. Here is an example of a lost customer from the Cargo Cults of Seattle. VLST lasted about nine years. They came out of Accelerator Corporation, a business incubator that funds ideas to the tune of a couple million dollars and a one year "proof of concept" period. They provide lab space, administrative help and leave the science up to the founders of the idea. Since 2003, when I the CCS arrived in Seattle, Accelerator has raised over $221 million. VLST burned through around $50 million in its nine year run. In September of 2012 they cut the scientific staff and redirected the flow of money into the hands of the C-level execs "creating value". Today we get word that they have been defunct since June! Marty Simonetti, CEO of the late VLST said he's been enjoying some time away from work during this beautiful summer in Seattle. "There were a lot of long days," he said, during his 7.5 year reign. 

Fifty million dollars is not a large pool of money for companies like Thermo and PerkinElmer to go to for sales. It is the accumulation of companies that have laboratories that leads to profit. Each failure is one less Thermo/PerkinElmer customer. It is up to the customer to use the Thermo/Perkin Elmer products properly and to advance their science into useful technologies. However, Thermo and PerkinElmer can lead these horses to the water but they can't make them drink. 

Most of these little Seattle biotechnology companies are staffed with the usual suspects, all early stage discovery trained scientists. As I have come to believe, they are masters at the narrative, but not very good at reproducible science. Non-reproducible science is vehemently defended by the career minded professional, but it is not useful in the world where science is to become a technology. And technology is right there in the  word, bioTECHNOLOGY. When you hand over $50M to the usual suspects they are going to do the same thing they did at the last company. They will defend their narrative just as they learned to defend their PhD thesis. They weren't taught how to make money from useful products while in the University. In Seattle, putting the usual suspects in charge of spending your money means, odds are, that you will lose your investment. Work for them and you will lose your job. Think independently and you will lose your sanity, if you understand the Cargo Cult speech.

Marty Simonetti is enjoying the summer off. "When the right opportunity comes along, I'll take a look at it." Thanks Marty, maybe your fellow Accelerator graduate Allozyne can use your asset liquidation skills.

The 920 people who lost their jobs at Thermo and PerkinElmer will join the unemployed, looking for the next job where STEM degrees are piling up. We somehow need to "create value" in ourselves. The Cargo Cults employ people who create value where none exists. In VLSTs nine years of trying, there were no clinical trials initiated from the "technology" advertised. They had to go and buy an antibody from the clearance rack at Pfizer. That too has been resold along with the "technology" that didn't work in the hands of VLST. What does this sort of value creation mean for the future of companies like Thermo and PerkinElmer, who provide the tools needed to do laboratory work? What does it mean for the 920 unemployed people at home with their PhDs, M.Sc. and B.Sc. sitting in a drawer collecting dust? Marty Simonetti is out there waiting for opportunities to take a look at. Accelerator is out there waiting to create the next VLST, using the usual suspects of Seattle and the same business model. Someday they may all get together again.

The next wave of biotechnology companies needs to focus on reproducible science. The unemployed include the usual suspects, like VLST execs and Accelerator dreamers.  But they also include skeptical curmudgeons like me. People who aren't looking to get rich quick. People who think reproducible science is less expensive than non-reproducible crap. People who have a passion for what they do. People who read Retraction Watch waiting for publications with their own names on them to come tumbling down! People who read Xconomy every day to keep abreast of the folly of our leaders. There is a system in place that has lead to an industry modeled on the University system, where our leaders are shaped. The model will get you published and it will get you early stage funding. It is not a system that leads to long term ever advancing science and technology.

I still feel that the Consumer Report of Science is a viable dream. There is a large pool of unemployed highly educated people with nothing to do all day but apply to Cargo Cult companies. The curmudgeons and skeptics need to come out of the dark and admit that they were only working for the paycheck. They can be useful, now, by reading the papers, analyzing the work and the conclusions. They need to be separated from fame and fortune, and made to feel an important part of something bigger than themselves. Like the un-named people who test drive cars and report on their findings in Consumer Report, an unemployed PhD can be anonymous and give an honest report on the latest oncology paper. The unemployed VLST laboratory worker should be able to discuss why they feel VLST took off like a $50M Led Zepplin. Imagine a place you can go on the  internet where you can read a thoughtful hones intelligent analysis of a paper you are interested in using for research. Imagine using the analysis to help you defend your research when it doesn't match the hoped for results. Scientists Unite!

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