With over 75 scientific ventures to its name, Flagship’s startup network has now generated 16 IPOs and $19 billion in aggregate value over 17 years.
Things were going well, but Flagship Pioneering (formerly Flagship Ventures) still felt the need for a name change in December of last year.
“The word pioneering for us is not an adjective, it’s not a compliment, it’s basically a verb,” said Noubar Afeyan, Flagship’s CEO and senior managing partner. “It is a process, it is kind of consciously looking for value in unexplored places, without regard to the adjacencies, to what is already known to work, which is where everybody else is innovating.”
In a phone interview, Afeyan said the firm’s name is simply catching up with the approach it has taken for many years. Flagship helps capitalize its startups, but it is also part of the discovery and the build. Its 55-person team has conceived of and created around 80 percent of the firm’s portfolio, Afeyan said, often retaining 100 percent ownership several years into the startup journey.
Flagship is opposed to conventional, iterative science. But therein lies the challenge of pioneering: it’s full of uncertainty and risk. There’s a reason countless biopharma companies pursue slight modifications of existing drugs (see here for an ADHD example).
To de-risk its “first-of-its-kind” portfolio, Flagship follows several key principles.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
“One of the things you never want to do in a pioneering activity is to bet on individual assets,” Afeyan explained. “If we did what we do and ended up taking one asset forward in one disease area, the chances of us succeeding would be close to zero.”
In practice, Flagship looks for discoveries that fall into one of two categories.
The first is science that represents a fundamentally new and untapped biological area. These have the potential to generate many drug opportunities, not just one. As an example, Flagship helped found Editas Medicine, the first company founded on what some have called the biotech discovery of the century — CRISPR. Editas went public in February 2016, raising $94 million.
The second focus is on new platforms. Instead of chasing a specific target, Flagship likes to invest in a new modality of drugs that can be applied to countless therapies and targets. Moderna Therapeutics fits this profile, an mRNA company that Flagship created and that has now raised over $1 billion in private equity investments.
This first-of-its-kind science could serve the company well as politicians, payers and more begin to push back against unjustified drug prices. By embracing what is different and unique, Flagship Pioneering can bring something fundamentally new and valuable to science and society.
On that note, Afeyan has some thoughts on why pioneering innovation and immigration naturally go hand-in-hand.
Flagship Pioneering’s Noubar Afeyan
“I kind of think about innovation in general as intellectual immigration. In other words, you leave your comfort zone, you go into an unchartered territory with none of the safety that you feel in your home country. You don’t know the language, you don’t know the rules, you don’t know anything. And as an immigrant, you persist and survive and you eventually technically change the place because you have to put up a struggle.
Well to me, innovation is that in whatever field you’re innovating in. And pioneering innovation is like extreme immigration where you go into a place where there are barely any inhabitants.
The reason I say that is, full circle back, it’s no surprise that you find a lot of immigrants and people that are comfortable with that — or forcibly comfortable — with that risk profile end up working in these innovation fields. It’s not the only place they work, but they work in these innovation fields because generally, they’ve gone through that journey already.”
Photo: fzant, Getty Images
