A Drunkards Walk

'A Drunkards Walk' was a fine read. The reason it has resonated so much with the CCS is due to the randomness of the biotech business model. In our science, desired outcomes make everyone happy. When outcomes are not favorable, the laboratory technician who ran the experiment, the statistician, clinical trial doctor..., is grilled to determine what he/she did wrong. Does the desirability of results bias the judgment on experimental outcome?

In a Drunkards Walk the relationship between randomness and our interpretations of life are explored. On one hand, we have got some serious scientific problems when it comes to biology level scientists trying to distinguish between random and non-random events. But the scientists don't really put a company on the map. Investors do, and we need them to be ignorant of the lessons taught in "A Drunkards Walk".

Check out this comment from a biotech company yahoo finance message board: "@#$%^&* will either hit a home run or will be made to look like an idiot. Either way, I am still invested. Lottery ticket, hopefully a payout. I have lost before."

Thank you for investing sir.

At the End of the Day

I've been interested in the financial meltdown lately and how it is related to CCS. I recently watched a DVD with the Economic Hitman, John Perkins. As I've mentioned, I work in biotech for the money. The money is the sole reason for waking up and going to work each day. In better times perhaps I would try harder to find meaningful work. As it stands, I'm a son-of-bitch. John used to be the same way. Only he made a lot more money.

In the DVD, Mr. Perkins mentioned that the people who worked in the "Economic Hitman" field were not necessarily bad people. In fact, they may have been very honest people who believe they are working in the best interest of others. Yet Mr. Perkins, who worked in the same field, now feels the need to carry on a crusade to educate the world about the ways in which the rich are getting richer. He's different. He feels what was done was dishonest and those who work in high places should know better.

Cargo Cults are run by people who have always desired to be the boss. These people have always existed and they always will. Some are preachers in local churches. Some are CEOs and politicians. They love the power but feel most insecure when it is time for the planes to come. Religious leaders have it the easiest. The planes don't come in our lifetime. The afterlife is the promise. CEOs on the other hand have a problem. If shareholders start losing money then the CEO musts go. Politicians must pray the CEOs and religious leaders are pacifying the people during times of strife.

The scientist however thinks thoughts in a world aside from CCS leadership. He knows the ways to make the planes land, whether or not he/she has access to what is needed. CCS leaders have the power to keep themselves and their friends employed at the top for as long as they can stand it. Just look at the US Treasury and the Wall Street relationship. In spite of their failure, they have survived and they got even richer in the process. But John Perkins knows a thing or two about them and how they do it. John doesn't have the power unfortunately. He has his thoughts and he sees the damage before it is done. When the damage IS done, and a handful of people prosper as a result, he is not surprised.

So at the end of the day, when I head home from a day of Biotech non-science, I hang my head and hope for the day when I can work away from CCS. Is there a place in the world for people like John Perkins who leave lucrative positions and try to point out negative things to a tribe of people who only want to hear stories about the cargo. The world needs people who send out warnings that repeatedly come true. Not everyone wants to be rich. Some have a deeper purpose.

Are We Different?

Over the course of a few years I've come to a conclusion about biotech people. They are no more scientific nor any less religious than any other group of people. Most believe in the christian diety. Most have never heard of Richard Feynman. The story of N-Rays seems pointless.

Long ago people began to look at the world and wonder if they could discover things that no one had yet explained. By taking measurements for example, they soon learned that water boiled at the same temperature (more or less). When they were convinced that they had a fact they told others and challenged them to prove them wrong. A certain kind of person would find the study to be... interesting. Another kind of person would be confused as to why the would-be scientist had bothered to pursue their research.

In a group of 100 Americans, how many would be in the latter sub-group?

In the Cargo Cults, everything is known. The rituals are well established. The only thing to do is wait for the Gods to deliver the goods.

So in our biotechnology laboratory we can make proteins and cell lines and send them forth into the blood streams of animals to establish the simple fact, that our drug is the real deal. Our drug is going to be that airplane in the sky. We see it clearly.

In a group of 100 Americans, how many would see it clearly? Let's say that those 100 people work at the biotech company who made the drug. Do we all believe?

Did You Learn How to Believe?

I have a bad attitude regarding Biotechnology. I believe the financial interests spoil any chance of science taking place. In its place we build Cargo Cult Airports and occasionally make a whole lot of money from fools who believe our stories. The biggest fools however, are the ones who toil in the laboratories. They stand duty in that wooden hut with two wooden pieces on their head like antennas and they soon start to believe that they are indeed the controller of the airport. They wait for the airplanes in spite of what they have learned. They are now believers.

Yet I work in one of the Cargo Cult Airports. Why?

Money.

Life Coaches for the Life Sciences

Why do we have a life coach at our biotech company? Our "scientists" do need guidance in the ways of managing other human beings. That can be an important aspect of the service. But managers are hired to manage. Why not hire a "science coach"? The managers are also hired to do science.

The coach shows up in a 1992 Honda Accord. His 6'4" frame towers over the little car as he emerges desperately dialing someone, anyone, to make sure he looks busy on his way to our door. He could be here to visit our clinical trial leadership. He could be here to visit the HR person to recommend a new book for the in house leadership book club. Or perhaps the director of R&D... CEO? All people he has consulted with.

Does he have another job? Night shift at Target? Does he have an office? Does he know what DNA is or an antibody? No matter. He has his skills. We're dying to know what they are. But that is not information that is shared with most. It is another secret. Because we have secrets. The coach is one. What could he be teaching a science based company?

What to Say?

Lately I've been mulling over several topics.

Eli Lilly has a couple of cargo cult irons in the fire. Yesterday http://www.biospace.com/news_story.aspx?NewsEntityId=167679

But we expect dishonesty from those who practice the cargo cult science. More interesting is their own angst over being burned by the same kind of silliness. http://online.wsj.com/article/SB20001424052748704247504574604503922019082.html

Warren Buffet is qouted, "You don't ask the barber if you need a haircut". Is big pharma starting to get this concept?

The economic meltdown is another topic. Think of the financial system as a CCS airport. The meltdown is merely the locals who have given up on the arrival of the planes and gone home. It's an abstract concept. Is monetary value real or imagined? Do we gamble on the imaginations of "geniuses" or do they really have a system?

Lastly, tonight, Shadow Elite. I've just purchased this book, and have yet to read it. However I am intrigued by the notion. Is it possible that we look at our own Cargo Cult Airport and eagerly await the scholarly words of the leaders, yet off in the distance, there are those who know that the planes aren't coming? If so, how do they succeed in this type of pursuit?

These Airplanes Are Fake!

Imagine the leaders of the Cargo Cult Airport leading a group of people around their airport. They bring the people close up to the airplanes but never close enough to actually touch one. They show them the workers but never allow a conversation. If they did they would see that the airplanes are merely wooden replicas and the workers have no clue what they are doing.

This is a biotech website. Those who chose to look will see the white lab coats.

But alas, not all who contribute to the biz are cargo cult scientists. For example, some are there to make the product that goes into the clinical trials. These people have experience and expensive equipment that make biological products. They cannot survive for the long term making wooden replicas. They make real biological products. It is up to the biotech company to use the products to create the dream that one day the airplanes will come.

Now we see someone who has a real concern about the quality of the airplanes/drugs. The airplane/drugs must have certain attributes that are not properly ascertained by looking from a distance.

Long story short, we (my biotech co.) are being discovered. A contract manufacturer is asking questions about how we produced and purified and packaged our drug, an antibody. Not just how, but why did we do what we did. Our answers we not sufficient. The CMO is now doing what it does with less and less help from the little biotech who is paying them to do their job.

The moral of this story is that not all biotech is Cargo Cult. Although it is embarrassing to be on the wrong side of right and wrong, I am pleased to see a contract manufacturing company asking the right questions and getting the wrong answers... and knowing that they are wrong. 

A River Runs Through It

I'm currently faced with a situation that would have pushed me over the edge in my younger days. We are working in "process development" in a small biotech company. We spent a few years getting by, purifying antibodies on a routine basis. All of our methods seemed to have come from a contract manufacturer who was hired years ago to produce a drug candidate for us. Our people knew nothing to begin with, and after watching the contract manufacturer do their work, they knew very little. What our people did was to find out what buffers were used. That is all they came away with. They did not know why the buffers were chosen but they knew that they worked.

What we have now is a clear "Cargo Cult Science". (CCS)

Our contract manufacturers succeed. They must or they will not continue as an entity. We on the other hand can carry on for years, because we do not have to produce anything other than charts and graphs that can be presented at meetings with affluential people. Contract manufacturers produce our drug and they must not only convince the world that the protein exists, but it is in the very vials that they send forth! And they do it very well. We don't know how.

But we, in this little company, take the proteins in the vials and we take them to the Cargo Cult Airport. We incorporate them into our rituals and invite our investors to sit with us and wait for the airplanes to arrive. So far nothing but a whole lot of money.

Pfizer Shuts Down Several Airports

As part of its integration of Wyeth, Pfizer said it will close a total of six research facilities and ultimately reduce the work occurring at 20 research facilities into five main research campuses and nine specialized units around the world.

What were they doing wrong? Here they are admitting that the planes were not landing. They've restructured. Will the planes land?

It all seems so random. To the investor or the executive they have a new path. But what was really wrong? Why couldn't the millions of dollars, pHDs up the arse, cutting edge technology and the latest advances in medical science produce promising candidates?

Something was missing...

Science, Sequences and God

I used the Henderson–Hasselbalch equation to calculate the amounts of acetic acid and sodium acetate needed for a certain buffer. When the pH of the solution was taken it was exactly what it should have been.  This is the kind of science that the CCS likes.  Now consider the human genome project.  

After a fortune was spent on the project, and more than a few "leaders" of the sequencing became famous, what do we really have? Has anyone ever truly used it logically? It's a bunch of As Ts Gs and Cs.  I originally thought there would be patterns that a computer could pull out that would help us to understand what a gene is.  Unfortunately, most people believe they already know what a gene is.  The genome project has only resulted in the kind of science the CCS dislikes.  You take a finite set and you select a piece of the set that best describes your pre-conceived notion.  In the case of the genome project, they selected five people and they began sequencing their DNA.  When they were done they said, "wallah, the human genome, now go and cure diseases.  But don't ask us how to use this tool."  The "how" is science.  The sequence is a whole bunch of sequencing machines working day and night.  

Another such science is RNAi where you select a set of sequences to knock out a gene.  You select the best one.  You can't lose.

In the Henderson–Hasselbalch example, you can lose.  You can screw up the math and get the wrong pH.  Biotech companies practice the genome project and RNAi type of science.  A company selects a drug or some service and hires "scientists" to prove that it works.  The leadership are university trained scientists who find work in laboratories to be unpleasant and better suited for the lesser intelligent university trained scientists.  

This brings me to the point of this post.  One of the scientists who gained some fame from the genome project has been promoted to NIH director.  

http://www.bloomberg.com/apps/news?pid=20601087&sid=atJa8QDGj8QU

Here is the craziest part of it.

http://biologos.org/

Randomly Fumbling Through the Day

Quite often in our business we move from one experiment to the next, never analyzing the previous set of data.  After a while people begin to believe that such a logical process is not possible in our special set of circumstances.  

Take for example the case of the gender assay from AcuGen Biolabs Inc.  They claim a 99.9% accuracy in guessing the sex of your baby as soon as 5 weeks after conception.  Due to patent issues, they claim, they are unable to share with anyone the data from where this accuracy was calculated.  Statistically, how many tests would have to be done to verify that they can significantly predict male, female or twins with a 99.9% accuracy?  Can't we test this biotech company to make sure they are not selling a bogus product.  

But kudos for their method of sidestepping the FDA.  Each day we in biotech attempt to create data that we think will satisfy the FDA.  They do not tell anyone ahead of time what to do so we fumble along looking for things we think will help our case.  The real skill then becomes how to avoid exposing bad data.  Randomness allows less than favorable data to be hidden.  Well thought our research leaves you wide open for failure.  And that is a bad business model.

Stats

My career in biotech has been maddening.  But it is not biotechnology that is the issue.  The issue is statistical analysis of data.  This became very clear last week when some of us sat through a course in a software product that analyzes data.  A lot of time was spent debating what a sample was versus what a population was.  We even had people arguing over the term bogus results versus "not validated".  The useful aspect of statistics was not of interest to our group.  

There was a simple illustration about a lady who could tell the difference between tea with milk added versus milk with tea added.  The design of the experiment to test this lady was rigorous.  The people testing the lady were highly skeptical about her claim.  The design of experiment however, left out the possibility of bias on either side of the question.  In the end they all agreed, the lady could tell the order in which her tea and milk were combined.

When Feynman said, "So we really ought to look into theories that don't work, and science that isn't science." he seemed to touching on the powers of statistics to analyze experimental design.  Psychics and people who speak to the dead are best exposed using statistics.  Biotechnology can also be analyzed this way.  The real trick for our future is to find ways to get Biotech and the pharmaceutical industry to allow outside groups to analyze their data and their analysis of their data.  The thought of a group of MDs locking themselves in a conference room to make a recommendation to the FDA regarding research seems absurd to me.  The Design of Experiments is the whole issue behind the Cargo Cult Scientist.  

Can't Blog Very Well

http://www.youtube.com/watch?v=0XgmrMZ0h54&playnext_from=PL&feature=PlayList&p=BA10ADCB66375592&index=3&playnext=4&playnext_from=PL

Large Groups of Humans

Deliver Us From Evil, http://www.deliverusfromevilthemovie.com/index_flash.php, is a disturbing documentary that depicts an organization that cannot fail. The Catholic church was organized to promote the christian religion and to perhaps improve the morals of society. What it has become is a highly immoral group of men who do horrible things and protect each other from prosecution. They continue to sell their product, christianity and morality, but they've been outed. For those who choose to open their eyes to reality, the Catholic church is truly a criminal organization.



Something happens to large organizations after they reach a certain level. Banks aren't allowed to fail. Corporations are protected. Think of them as groups of people who got together and started making rules, setting up legal protections and hiring people to advance the cause. Eventually, they reach a certain level. Success. They can't fail. At this point a certain type of person begins to emerge as management material. That person understands that the group must not fail. When enough of these types surround a corporation they begin to protect the organization from any harmful reality. If your church is employing pedophiles who are raping the children of the congregation, you must protect the church from the negative press. When your corporation is losing money, you get creative with the accounting.



Which, of course, brings me to the merger of Merck and Sherring Plough. Their products are meant to make our lives better through chemistry and biology. But they were already big. The problem was that they were not succeeding at making new drugs. They know all about the FDA and fill finish production lines. They are good at many things, but not at creative science. So they merge. They know how to merge. It involves paperwork and meetings. There will be plenty of paperwork and meetings surrounding the merger.

Where will the new improved drugs come from? When large companies fail to develop their pipeline they go to the smaller companies. They must then make decisions that involve millions of company dollars. Decision making becomes more and more beaurocratic. Distancing oneself from accountability while remaining close enough to claim a piece of possible success is an artform. Not a science. The new protectors of Merck/Sherring will have to be very careful yet find replacements for the billion dollar drugs that will be losing patent protection. What will they do? With 90 thousand employees they have plenty of humans working on their cause. What will they do?

Optimism For the Seattle Cargo Cult Airport

http://seattletimes.nwsource.com/html/businesstechnology/2008667376_biotech25.html

"I'm fairly optimistic that this year will see good things for the industry," said ZymoGenetics President Doug Williams.

"We have some great, great research institutions here," said Chris Rivera, the new president of the Washington Biotechnology and Biomedical Association.

Next year at this time I will try and revisit this article. The CCS is not optimistic. It's not about the money. It's about things like RNAi and PhDs trying to be businessmen. It's about the product. In other words, the airplanes. Are they coming in 2009?

Is It Over Yet?

MDRNA Cuts Executive Pay, Freezes Salaries as Cash Runs Out
Luke Timmerman 1/23/09
MDRNA is running out of cash, and is drastically cutting down payroll expenses, according to a source close to the situation. The Bothell, WA-based biotech company (NASDAQ: MRNA) has asked executives to work for no pay, and has frozen employee salaries at $1,250 for the final two weeks of January, according to the source.
Matt Haines, a spokesman for MDRNA, said the company hasn’t done any layoffs, although he declined to comment on specifics about any payroll cuts. “As a public company, we cannot get into details of any cost-cutting we are taking at MDRNA,” Haines said in a voice message.
The company, formerly known as Nastech Pharmaceutical, has been trying to reinvent itself over the past year from a company that specialized in nasal delivery of existing drugs into one that develops new medicines that work via RNA interference, or silencing problematic genes. The company changed its name in June to MDRNA, removed CEO Steven Quay from the top job, and replaced him with Michael French.
The new boss has a track record in RNAi, as a former senior vice president of corporate development at Sirna Therapeutics, a San Francisco RNAi drug developer that was sold to Merck for more than $1.1 billion in October 2006. Still, he joined MDRNA when its work was at the very early stages of development and would require significant capital investment to create something of more value. MDRNA said it has 4 issued patents on RNAi technology, and has 304 pending applications. None of its RNAi work has yet advanced into clinical trials, leaving it behind leaders in the sector like Cambridge, MA-based Alnylam Pharmaceuticals.
MDRNA’s effort has also been plagued by its rapidly dwindling cash reserves. The company slashed 23 jobs in August, mostly among people from the nasal delivery business, leaving it with 58 employees at the end of September. But the cuts may have been too little, too late. The company had just $10.9 million in cash and investments left at the end of September, down from more than $41 million when it started the year. At the end of September, MDRNA’s last formal financial update to investors, the company said it had just enough cash to last “into the first quarter of 2009.” Since then, the company has been notified that it is in jeopardy of having its ticker symbol de-listed from the NASDAQ. The company’s stock traded today as low as 25 cents, with a market valuation of just $8 million. It hasn’t announced any new round of investment.
MDRNA in its various forms has been in business since 1983, and never developed a successful marketed product to push it consistently into the black. The company has run up an accumulated deficit of more than $241 million from its beginning through the end of September 2008, according to its most recent quarterly report. When French was hired, his starting base compensation was set at $340,000, and he was given 1.26 million company stock options, according to a regulatory filing.

Is Vytorin a Failure?

http://www.time.com/time/health/article/0,8599,1703827,00.html



If one had read Gary Taubes' 'Good Calorie Bad Calorie' they would not have been surprised by the results from Vytorins ENHANCE study. To the Cargo Cult Scientist, statins represent the holy grail of our current state of medical research. Statins are the biggest money makers in the industry. And they don't save lives. Diet and exercise are the best answer but you can't sell them in a pill. One study after another proves that they are not the answer. But we must have an answer. And the FDA knows what that answer must be: http://www.google.com/hostednews/ap/article/ALeqM5h6pzZiObVnCNNNsI0McxoMN8WZVAD95J8NK80

Goodbye Seattle PI

While we expect the loss of Biotech companies we do not enjoy seeing honest people lose their livelihood. We do get pleasure when people like James Bianco and Steve Quay are acknowledged as Cargo Cult leaders. They love money and they love power. Science is a bunch of words to them. The words can be used to extract money from investors. That money is used to create companies that create powerful positions.

Another group of people who live by their words are the fine journalists at the Seattle PI. They make less than 100K per year. They put out a product everyday. When they make a mistake they have to retract what they said. They also serve as a watchdog against government and corporate America. Sadly they are going to be silenced.http://seattlepi.nwsource.com/business/395463_newspapersale10.html

In terms of the Cargo Cult world, the newspapers report on the airport. Not just the promises, but the reality of what is happening out there on the runways. They look up to the skies 24 hours a day. Each day they report, " no airplanes have been spotted". Seattle will have only one newspaper. A day will come when a major US city will have no local newspaper. That will be the day when local government becomes as free as a biotech company to report it's own news.

Fires Are Burning Out

http://seattletimes.nwsource.com/html/sundaybuzz/2008613921_sundaybuzz11.html
http://seattlepi.nwsource.com/business/394854_northstar06.html

Note the ending of the first article and how it leads into the second.

...an investment fund with major stock ownership, which in December wrote to Northstar board members: "It would seem that some of you remain content to pay yourselves salaries from cash that belongs to stockholders while contributing nothing of any positive value in return."

With Cell Therapeutics, which has few, if any, institutional shareholders left since it became a penny stock, it's unlikely there's anyone to write that kind of letter.

Zing!

Analysts predict that Biotech will lose a third of its publicly traded companies. One third! They're on to us.

Rosetta

I missed the demise of Rosetta out here in Seattle. Merck bought this company back in 2001 for 630 million dollars. http://seattlepi.nwsource.com/business/22771_rosetta12.shtml

Things were going well in 20004. http://community.seattletimes.nwsource.com/archive/?date=20040325&slug=rosetta25

Then they discontinued the project last October. http://seattletimes.nwsource.com/html/businesstechnology/2008300061_rosetta23.html

It's a classic Cargo Cult scenario. We have a technology that will change the way drugs are discovered. Where are the drugs? Who is talking about why Rosetta failed to do what it promised? Only the Cargo Cult Scientist is wondering why computer programmers couldn't turn human speculations (medical research) into the fountain of youth. Too much BS was piled too high. So long Rosetta. I know you'll get an office or two in New Jersey but you won't produce any drugs. Silly.