Lyman BioPharma Consulting LLC

Advice and Resources for the Biotech Industry

Advice and Resources for the Biotech Industry

Stacks Image 1108

Can Changing A Biotech Company’s Name Really Alter Its Fortunes?

Shakespeare tells us that a rose, by any other name, would smell as sweet. Its alluring fragrance is a quality independent of what we call it. Is the same thing true in the land of biotech? Would changing its name really free a biotech company from an established reputation as a substandard performer? Or is changing the name of a company simply pretending to solve a problem, equivalent to putting air in one of the tires when the check engine light comes on?

I’ve been mulling this over for the past few years as several local biotechs have changed their names. The stated reason is usually associated with some transformative event at the company, be it a change in business focus or a merger/acquisition. When one studies these press releases, however, it frequently seems more like an excuse or justification from someone who doesn’t really have a good, clear explanation for the name change. Let me share some examples:

The Change Name Game
Oncothyreon recently
changed its name, and not for the first time. It originally was known as Biomira, then it became Oncothyreon, and it is now known as Cascadian Therapeutics. In an earlier iteration, Biomira was focused on “on the development of vaccines containing synthetic antigens and novel strategies for cancer immunotherapy.” Cancer immunotherapy, of course, is the hottest area in biotech these days. Back in the 1990s, however, this approach had yet to show much in the way of clinical benefits. Unfortunately, the company’s breast cancer vaccine, Theratope, was found in 2003 to be ineffective in a phase III trial. In 2007, Biomira changed its name to Oncothyreon (and moved from Canada to the US). At that time, CEO Robert Kirkman saidWe are a different company today than we were just twelve months ago, and our decision to change our name to Oncothyreon reflects that transformation. Oncothyreon is derived from the Greek words for "tumor" and "shield" and appropriately describes our goal to develop new therapies that protect against the deadly effects of cancer.” That name stood for nine years.

After transforming itself into Oncothyreon, the company moved forward with Stimuvax, a lung cancer vaccine. In 2012, that vaccine
failed to show a survival benefit in a large phase III trial, ending the prospects for that drug. The company pushed ahead with a different drug, tecemotide, which was targeted at treating patients with Stage III non-small cell lung cancer. Unfortunately, that drug also flopped in the clinic in 2014. In a phase I/II trial, it failed both its primary endpoint of overall survival as well as secondary endpoints of progression free survival and time to progression. Earlier this year, CEO Kirkman retired and left the company. The name change came in a few months later. According to its new CEO, Scott Myers, the name change was done “to emphasize our organization's transformation and vision for the futureto underscore our transition away from therapeutic vaccines to developing innovative targeted therapies for cancers.”

Of course, nothing screams out “innovative targeted cancer therapies” like the name Cascadian Therapeutics. News of the name change caused the company’s stock message board to light up with a number of
cynical comments, most of which implied (or boldly stated) that the name change was meant to distance the company from it’s past commercial failures. I wonder just how much effort the company put into choosing the new Cascadian Therapeutics name. Want confusion? A quick search revealed that there are already three existing Northwest-based companies with very similar names. Cascade ProDrug (which is also focused on developing cancer treatments) and Cascadia Life Sciences (a stealthy “developer” of broad spectrum anti-viral compounds) could generate some confusion among folks seeking out the company. And none of these companies should be mistaken for Cascadia Behavioral Healthcare, an organization focused on helping those with mental health and addiction challenges.

Another Seattle biotech, Cell Therapeutics, which has a less than stellar reputation for drug development, went through a
name change in 2014. It became CTI BioPharma Corp. Big change, right? Donald Trump might describe it as “huuuuge”. According to CEO James Bianco, "The rebranding… comes at a defining moment in our company's history and better reflects who we are today and our aspirations for becoming a leader in developing therapies for patients with blood-related cancers.” I’m not sure how this rebranding was tied to a “defining moment” in the company’s history, or exactly what the incredibly minor name change accomplished. The rebranding came 23 years after the company was founded, and it follows a long history of commercial disappointments. An FDA advisory panel unanimously rejected the company’s lead drug, Pixantrone, in 2010. In 2012, the company was granted conditional approval to sell this drug (under the brand name Pixuvri) in Europe. Sales of that medicine have been disappointing, to say the least; it only sold $12.7 million of the drug from 2013-2015.

From where I sit, the company’s defining moment actually came in Oct. 2000, when biotech stocks were “in” on Wall Street. Its stock hit an all-time, split adjusted
high of just over $80,000. Since then it’s been all down hill. The price of the stock has declined by over 99.999%, and it’s currently trading at under half a dollar. You can buy more than 13 shares for the price of a Big Mac. The name change didn’t appear to make any difference to the fortunes of the company. Substandard performance prior to the rebranding has been replaced by inferior performance afterwards. I’m also wondering how much money the company (that’s burned through over $2 billion during its lifetime) squandered buying new stationary and business cards for its employees reflecting the name change. Come to think of it, maybe this type of behavior explains why they’ve run through so much money.

Yet another Seattle biotech, Mirina Corp.,
changed its name in mid-2011 to Groove Biopharma. David McElligott, VP of Research, said this about the name change, "We feel that our technology is distinct from less evolved technologies in the field and we wanted a name and image that reflect that distance from the competition. The name Groove, also reflects our corporate philosophy in that creating something new requires improvisation and not just playing the same notes as everyone else." Groove, unfortunately, has disappeared. It no longer has a website, and the incubator where it was housed confirmed that it was out of business. I guess that we’ll never get to hear exactly which notes it wound up playing, but it likely struck the chord of insolvency.

British Columbia-based Tekmira
changed its name to Arbutus Biopharma in the summer of 2015. According to the company website, “the name change affirms the successful integration of OnCore BioPharma and Tekmira Pharmaceuticals into a combined company with the goal of delivering a cure for chronic HBV.” The company has moved away from it previous work on RNAi therapeutics and the development of a treatment for Ebola to focus instead on developing a treatment for hepatitis B. The company thinks this could be an even bigger market than that for hepatitis C drugs. If you are wondering (as I was) about the name Arbutus, it is a genus of flowering plants in the family of Ericaceae, and is Canada’s only native broadleaved evergreen tree. The new name might tell the cognoscenti that this is a Canadian company, but it offers no clue as to if they are making lamps, running a plant nursery, or attempting to develop drugs. How the new name “affirms success” is beyond me.

Yet another Seattle biotech company, antibody drug maker Spaltudaq, changed its name to Theraclone in 2009. Company
founder Johnny Stine, a member of the Snohomish tribe, originally named the company after a Native American healing ceremony. The new name, according to CEO David Fanning, was picked to “highlight our ability to clone and express clinically relevant, naturally fully human antibodies for clinical and commercial benefit.” This name change might be the exception that proves the rule, as it created a name that more people are likely to associate with a biotech company than the company’s previous moniker. Sadly, CEO Fanning died suddenly the following year at the age of 48, dealing a significant blow to the company.

The most prominent name change in the industry over the past few years was at antisense company Isis, which
changed its name to Ionis in late 2015. Sharing your name with a terrorist group is never a good idea, and it didn’t matter that the biotech company took it first. It’s doubtful that company lawyers would have gotten much traction negotiating with the jihadists to get them to choose a different name (even though they also go by Isil, Islamic State, and Daesh). Sometimes bad stuff happens, and you have to just deal with it and move on. Since Ionis does not market its drugs directly (it has partnered its medicines with others), the name change will be invisible to consumers. No harm, no foul.

My pick for best biotech company recent name? Warp Drive Bio. Sure, the first thing that comes to mind is Star Trek, but by adding Bio to the name, they combined three different vibes (cool, retro, and bio) into one stellar appellation. According to their website, they are in the process of “building a legendary company.” Lets hope the legend comes to stand for outstanding products, and not failed trials and wasted money.

When Biotech Names Were Chosen to Match the Company’s Focus
In the early days of biotech, companies chose names that were clearly biology-based, with many tied to recombinant DNA technologies. Think of Immunex, Genetic Systems, DNAx, Genentech, Oncogen, and AMGen (Applied Molecular Genetics). Also think of everyone’s favorite imaginary company at the time, the Italian firm Gen-Italia. It was pretty clear from their monikers what their basic business focus was, and what their modus operandi might be. These days, those direct links to biology have flown out the window when choosing company names. I guess there’s a limit to how many names can be generated out of these root words. Check out three of the most prominent players these days in the white-hot field of immuno-oncology. Their names are as clear as mud. Based on their names alone, and if given a hint that these enterprises are biology related, one might guess that Bluebird Bio is focused on deciphering the DNA of songbirds to develop new musical algorithms, Kite Pharma is studying the physiological changes that come with increasing elevation to develop new altitude-sickness drugs, and Juno Therapeutics studies whether having patients pray to ancient Roman goddesses can cure them of acute lymphoblastic leukemia. Name changes may be in their futures if they fail to execute on their business plans.

Name changes, of course, are not restricted to biotech or pharma companies. They often are done to remove an association with some unhealthy product or evil activities. Death-peddler Philip Morris changed its name to Altria (based on the Latin word altus, meaning high), but I know it’s still a cigarette company. Andersen Consulting became Accenture to distance itself from a series of accounting scandals, including the Enron debacle. Kentucky Fried Chicken changed its name to KFC, although its product still tastes like, well, chicken. I read that even the KKK tried to rebrand itself in 2011. Whether this actually served to convince anyone that they are a less racist and anti-Semitic organization remains to be demonstrated.

If readers can think of any biotech companies that were unsuccessful at first but achieved real success after changing their names, please bring this to my attention. I’ll add their names below as an addendum. As for now, it looks like most biotech company name changes serve to highlight a “non-transition” from a poorly performing company into one that will also fail to achieve success. Maybe some economist will study this fad to determine if a company name change should be accompanied by a “sell the stock” recommendation. As as the Bard might put it if he were alive today, “
A bad biotech, by any other name, will perform as poorly.”

Follow me on Twitter @lymanbiopharma to ensure you don't miss any of my blog posts!