Galapagos is an undeniable success story. Set up in 1999, it is now one of the largest and most successful biotechs in Europe. A key driving force behind the company is Onno van de Stolpe, its founder and CEO.
After doing an internship at Biogen while at university, van de Stolpe knew he wanted to start his own biotech company. He became Managing Director of the European arm of US biotech supplier Molecular Probes in Leiden following a few years working in the industry. While there, the opportunity to start a new genomics division at the Dutch biotech Introgene presented itself. Less than a year later, this new division became the spin-out company Galapagos.
Van de Stolpe attributes his success to sticking to his own beliefs and not allowing others to dissuade him from what he wanted to do with the company. Earlier this year, Galapagos added to its many achievements the completion of two successful phase III trials of its drug candidate filgotinib for treating arthritis, which it now plans to put forward for market approval.
As a founder, it’s quite unusual to stay as long as you have at Galapagos. Why is that?
I always had the ambition from day one to really build a large biotech company. I said years and years ago to the team and later also to the outside world that our ambition was to be the largest European biotech. We’re on the brink of achieving that. We had to raise our bar again. At one of the last conferences, I said that our ambition now is to be one of the top 10 worldwide biotech companies. I think that’s also an achievable goal.
I like to put the bar high for the ambition level. I never understood all these CEOs that say, ‘I want to reach a certain valuation or inflection point and then sell the company.’ What’s that good for other than your resume? Build a real company and harbor the innovation and growth long term.
The job changes constantly when you’re doing this. We started off as a group of biological scientists trying to find new targets and then we added chemistry, we added a service division, we sold the service division, we had major strategic alliances, brought our first product into the clinic. Now, we’re building a commercial organization. Every time, it’s a new challenge that you get confronted with, that you’ve got to deal with and learn things to handle it.
It’s actually a lot of fun to build a company. I’ve never had the desire to move on to bigger or other things. Let’s make the thing you’re doing the biggest thing you could work on. That’s worked out pretty well with Galapagos.
You could argue that you’re on the verge of becoming a pharma company. Do you plan to stay on through that transition?
At some point, it should come to an end. This is my 21st year, but I want to see the introduction of filgotinib on the market. What I would like to accomplish before taking a step back is to harbor the independence of Galapagos for the long term. At the moment we’re doing very well – great tests, great products, great pipeline – but there’s always the threat of being acquired. That’s not the right answer.
We are at the valuation range where we can easily be acquired; we have products coming to the market that are attractive to biotech and pharma companies. That is a danger that I need to handle because I believe Galapagos should remain independent and grow independently into a large biopharma company. That’s something I want to accomplish before I would consider taking a step back. I hope to achieve that in the next two years.
We’ve seen big acquisitions of European biotechs recently, such as Tigenix and Ablynx. Why don’t you want to go the same way?
You’re naming two where there’s hardly anything left from these companies. One of them has completely vanished and the other one will be vanishing in one or two years. This is not the solution for biotech companies – to be acquired by a pharma company where they take the products. The innovation is killed very rapidly. It’s really the worst outcome of a fantastic company like Ablynx that they’re now part of a pharma company like Sanofi. They cannot handle that innovation. It’s killed almost immediately.
If you read interviews with people that work or worked there, it’s clear that the process is completely changing already. It’s happening time after time. Which European company is thriving under the parent of a big pharma? None are. I think it’s important to build a European biotech infrastructure by having biotech companies that can rival the Gileads of this world. That’s what we should achieve.
Do you think partnering is generally a good way to finance development? If so, what do you think makes a good partner?
It’s an interesting question. I think it’s inevitable that companies partner in the early years for two reasons. One, of course, the financial part. It’s difficult to get other sources of capital in the early days when your technology or your company or your management is not that well validated. Partnerships can help to get money into the company and show the outside world that you have something that somebody else wants to pay for, somebody well-known in the industry like a big pharma company.
On the other hand, looking back, if I had had enough capital to move programs forward on our own without partnerships, we would have been much further along with a number of these programs that have been delayed substantially due to the partnerships that we had. Filgotinib would have been on the market for at least two years if we had not had different partnerships around filgotinib that always delayed the progression.
There are good and bad points of partnering, but I think for early stage companies, they definitely need to partner to show that they’re relevant in the sector.
What was your worst partnering experience?
I have to refer to AbbVie in that respect. I think the way AbbVie approached the partnership around filgotinib was not very smart. They paid us a lot of money and so, we did what they asked and that was the largest phase II study for rheumatology in history with 900 patients and half a year of treatment. That caused a massive delay in the program.
In hindsight, we should have done as we proposed – a 3-month study in 500 patients and then go to phase III. In the end, AbbVie didn’t take the option and handed back the product, which was very good for the product, but for filgotinib the partnership with AbbVie has been quite disastrous.
What are your biggest management lessons from being a CEO?
I think my biggest management lesson is that you need to get the right team of people around you and also give them the responsibility that they need to function properly. When you start a company, in the beginning, you are in charge of everything in the company and you have to let go along the way more and more of what you’re doing. You can only do that if you have people around you that you trust, that can handle that responsibility of the area of the company that you let go.
Building the right team is crucial to the success of what you are working on. You cannot invest enough in hiring the right people around you. I think that’s the biggest lesson I learnt.
How do you keep learning every day and how do you decide what to learn?
I’m not very big on management courses or books or visions or strategies. What I had to learn along the way were all the aspects of drug discovery and development that I didn’t know anything about. I was in molecular biology, so I could cut and assemble genes and make proteins, but that’s about it. Making a drug is a completely different process.
Now, we are building a commercial group for filgotinib and our next products. I am learning about rebates and how the rebate system works in the US and about pricing strategies and approvals and reimbursements. It’s something I’ve never taken any interest in because it was too far from what we were doing. It didn’t make much sense 20 years ago to start looking at pricing strategies when we didn’t have a drug in the clinic yet.
What are you reading at the moment?
I don’t read that much. I’m rereading Ayn Rand’s The Fountainhead – one of my all-time favorites. I went to the play. It’s somewhat extreme in its view of the human mind as the base of all your decisions, but it’s an interesting book on how to look at societies and how to make decisions that you stand behind. If you haven’t read it, it’s definitely worth reading it.
What big ideas have you changed your mind on in the last few years?
I’m not one for big ideas to start with. I think what has changed somewhat compared to three years ago is that with my personal financial situation, with all the stock of Galapagos going so high that you become wealthy, you’ve got to start thinking about other things than just building a company in your day-to-day activity.
I started looking into sharing my wealth for good causes and I started sponsoring an organization called African Parks. It’s a Dutch-South African organization that manages national parks in Africa to make sure that they are there for generations to come. That is, of course, a whole different activity than building a company in healthcare, but it’s fantastic to be able to give something back to society.
Have you thought about investing in biotech? Is that something you’re interested in doing?
I might do that in the future at some point. If you really want to understand what’s happening under the hood in a biotech company, it takes an awful lot of time, which is not only what that company is doing; it is what the competition is doing, what the academics are doing.
That is not time that I have at the moment to invest, so I’m not doing that. I am mentoring some CEOs that are interested in talking to me, that I challenge sometimes – nothing formal, but I have this informal number of people that I have interactions with on a regular basis, just to help them out on certain issues. That’s what I like.
I think it’s also important that you provide what you have learnt over these years to young people that start new activities in this new industry, that you help them along the way. I also do some presentations for the university, for groups of students that are interested in business and biotech.
What advice would you give yourself if you could go back in time to when you started in biotech?
The thing I would advise myself going back 20 years is, ‘stick to your own beliefs and don’t let your views be changed by older people around you that have different views’. The most noticeable would be venture capitalists. When they were part of the board running the company, they always wanted to change my strategy of building out Galapagos in a broad way, with multiple programs and multiple diseases. They wanted it to be focused and to not grow so fast and I wanted to do it all big and ambitious.
In the end, my way has worked. ‘Stick to your beliefs and don’t let others take over,’ is the biggest advice that I would give myself if I could go back in time.