David M. Mott was in his mid-twenties, a Dartmouth-educated Wall Street investment banker. Wayne T. Hockmeyer was in his mid-forties, a former doctor at Walter Reed Army Institute of Research, the founder of a biotech start-up that later became known as MedImmune Inc.
Hockmeyer's business plan had crossed Mott's desk and dazzled him. So they met often at Ben Benson's Steak House in Manhattan to talk, over grilled prime rib and red wine, about their shared values and their vision of building a winning biotechnology company.
One night, Hockmeyer told Mott that he envisioned a day when the young banker would succeed him as MedImmune's chief executive. "That was the plan," Mott said. They stuck to it, although they couldn't have predicted some of what followed.
Now Mott is 38, and he has been chief executive of MedImmune for four years. He runs one of the few biotech firms boasting four products on the market, not just in the labs. MedImmune has a sleek new headquarters in Gaithersburg, 1,900 employees, and nearly a billion dollars in annual revenue as of last year.
But the company gets most of its revenue from Synagis, a vaccine for a potentially dangerous respiratory virus in certain babies that has probably maxed out its market. Last year's launch of the nasal flu vaccine FluMist was, as Mott recently told an investor's conference, "a debacle of the first order." And the company doesn't expect to launch a new product until at least 2007. All of which calls into question Mott's forecast of $2 billion in revenue by 2009.
"It's a very challenging time," Mott said.
Hockmeyer, now MedImmune's chairman, said the ability to handle such tough situations is precisely why he courted Mott for a year and half, hired him as vice president of business development and eventually promoted him to chief executive. "He has a great sense of what it takes to be successful in five years or 10 years," Hockmeyer said. "He's someone who can function at high levels day to day, but still keep their eye on the goal line."
When Mott joined MedImmune in 1992, it was a homecoming of sorts. He grew up outside Hagerstown on a farm with "horses and cows and pigs and ducks and rabbits and chickens." He played football and lacrosse at the St. James School, went to Dartmouth, and eventually landed a job at Smith Barney in New York. Like Hockmeyer, he is given to sports metaphors, referring to potential drug products as "shots on goal."
Unlike his mentor and others in the first generation of top biotech executives, Mott has never treated patients in a hospital or isolated genes in a laboratory. But despite his lack of science training, he speaks easily and confidently about the workings of monoclonal antibodies and selective cytoprotective agents.
At the same time, Mott knows how to talk effectively to his former colleagues on Wall Street.
Elise Wang, an analyst at Smith Barney Citigroup, the successor to the firm for which Mott once worked, said his candor has allowed him to "corner a certain level of credibility in the market, and a lot of people are willing to be patient because of that."
"Although he has these challenges ahead of him, I get the sense that there's a certain level of faith in David and his team," said Wang, who does not own MedImmune stock, though her firm does.
Mott has yet to bring his own blockbuster drug to market.
Synagis, the company's first home-run drug, came to market when Hockmeyer was chief executive in the late 1990s. Though Mott has steered it to nearly $900 million in sales, he acknowledges the market for the drug has evened out. At a recent investor conference, Mott said the company has to work "through the curse of our success with the maturation of Synagis."
One way was an acquisition.
"We are going through now the same thing that basically every large, successful biotech company has gone through, which is a pipeline gap that emerges on the other side of your first blockbuster," Mott said at the conference. "We had one opportunity to sail through that without our growth slowing down."
So Mott leveraged 14 percent of MedImmune's stock to acquire the firm developing FluMist. MedImmune promoted FluMist aggressively, and the drug got wide national attention because of its potential consumer appeal as an alternative to a flu shot.
But FluMist's launch last year was disastrous for a number of reasons: the company's inability to win approval for vaccinating young children and the elderly, poor marketing by MedImmune and corporate partner Wyeth Pharmaceuticals, and the difficulty of storing FluMist because the first-generation version of the drug must be kept frozen.
The company's stock traded at $34.47 a share last September, as the flu season began. It closed Friday at $23.27.
In an interview, Mott expressed frustration that he still has to answer questions about FluMist, which MedImmune is selling at a cut rate as it works to launch a more broadly approved version in 2007.
"The emphasis by the media and Wall Street was way out of proportion with the impact on our business," he said. "Even if the launch had been successful, the product still would have represented less than 10 percent of our revenues." He added cheerfully that he and his family are faithful users of the vaccine. "We eat our own cooking," he said. How does the vaccine feel shooting up his nose? "Wonderful," he said.
Now, Mott told investors at the recent conference, "we're going to become a company people think about as a pipeline company," working on a new version of Synagis and drugs for cancer, the virus that causes mononucleosis, and lymphoma.
Those who have worked with Mott say he constantly gathers and processes information, dropping in on employees throughout the company and encouraging a collaborative workplace. "I often tell people we're recruiting from the outside at the executive management level that we have no executives at MedImmune," he said in an interview. "We are all workers. There is very little hierarchy or bureaucracy. It's a roll-up-your-sleeves and get-the-job-done kind of place."
MedImmune's new $88 million headquarters features laboratories in the center of the building, surrounding wide exposed staircases. He expanded the company's executive committee from six to 15 members.
"He's able to lead, to really guide the process, and build upon the strengths of his individual team members," said Michael S. Richman, a former senior vice president at MedImmune and now chief operating officer at MacroGenics Inc. in Rockville. "He's very bright and very motivated."
As Mott has settled into his chief executive's role, he is increasingly leveraging his reputation in the local and national biotech communities. He is on the boards of the Biotechnology Industry Organization and the Tech Council of Maryland. He said he would like to help guide the local biotech community out of its slump. That's one reason MedImmune formed a venture capital company to invest in young companies.
"We're at a crossroads," Mott said. "Several years ago, during the genomics bubble, there was a tremendous amount of momentum in this region within the biotech industry," including mammoth stock gains, followed by losses, at companies such as Celera Genomics Corp. and Human Genome Sciences Inc.
"With the pullback in that space, it has had a big impact on the critical mass in this region," he said. The company feels the impact in recruiting, with potential employees wondering what else they could do if things don't work out for them at MedImmune.
In Boston and San Francisco, he said, there are hundreds of companies. "Here's it's more like tens of companies."
Hockmeyer said he talks frequently with Mott, though not every day. He said his former dinner partner has infused the company with the qualities that impressed him at the Manhattan steak house.
Asked to size up his protege's performance so far, Hockmeyer said, "Aside from our stumble with FluMist, it's been an excellent tenure."
Staff researcher Richard Drezen contributed to this report.