By Patricia Nicholson
Francesco Bellini, PhD has already left an imposing legacy in Canadian life science. He was co-founder, chairman and CEO of one of Canada’s most successful biotech companies, BioChem Pharma Inc. He was a driving force behind the commercialization of BioChem’s AIDS drug, 3TC, which remains one of the cornerstones of AIDS treatment. And he sold BioChem Pharma to Shire Pharmaceuticals Group plc (Basingstoke, U.K.) in 2001 for almost $6 billion.
Now, Bellini has put his considerable energy and resources into his role as chairman and CEO of Neurochem Pharma Inc. (Montreal, QC), a biotech company that develops oral therapeutics for neurological disorders. Bellini became chairman of Neurochem’s board of directors in June 2002, and took the reins as CEO six months later.
Neurochem was founded in 1993 based on discoveries made by Queen’s University (Kingston, ON) researchers. Over the past two years, Bellini’s holding company, Picchio Pharma Inc. (Montreal, QC), has purchased 33 per cent of Neurochem’s common shares. Neurochem has been listed on the TSX since June 2000, and did its first U.S. public offering in September 2003. In November, it was added to the Nasdaq Biotechnology Index.
“That was fast, eh?” Bellini laughs. His speech is animated, and laced with an Italian accent. “You couldn’t expect more. Usually it takes half a year before you are listed, and we were listed in a month or so. I’m very pleased. Things are going very fast, and in the right direction, in this company.”
For Bellini, it was “the simplicity of the technology, and the late-stage technology” that attracted him to Neurochem.
The company’s GAG mimetics technology — a class of novel small organic molecules that inhibit the formation, deposit and toxicity of amyloid fibrils — is the basis for all three of Neurochem’s late-stage drugs: Alzhemed™, an Alzheimer’s disease treatment scheduled to begin a Phase III clinical trial this spring; Cerebril™, which targets hemorrhagic stroke due to cerebral amyloid angiopathy, and which is currently in a Phase II clinical trial; and Fibrillex™, an orphan drug for the treatment of AA amyloidosis that is now in a pivotal Phase II/III clinical trial.
The GAG (sulfated glycosaminoglycan) molecule interacts with amyloidogenic amyloid proteins, promoting the formation of amyloid fibrils associated with some neurological disorders.
“This technology, what it does, it mimics the receptors which are on the GAG protein,” Bellini says. “The mechanism is very simple.”
By giving the GAGs some competition, the mimetics inhibit fibril formation by preventing GAGs from binding to amyloid proteins. Neurochem’s compounds also enable removal of existing fibrils by macrophages, meaning that Alzhemed is intended to do more than slow down Alzheimer’s disease.
“It halts the progress of the disease,” Bellini says. Of all the products he has had a hand in creating, Bellini says his current projects are among the most exciting. “We are working with drugs that have huge potential.”
The next few months, he says, will be a critical time for Neurochem, with Alzhemed moving into Phase III and Cerebril expected to follow soon after, pending results from its current Phase II clinical trial. Neurochem will also be looking for a commercial partner to help market Alzhemed.
More D, Less R
Bellini says Neurochem’s R&D; focus is centred on the D — a priority that he says might benefit the industry as a whole.
“I strongly believe in Canadian companies, in Canadian intellectual (property), in Canadian technology,” he says. “What is done here, I think is fabulous — what it is in universities. My message is we need more money to be put in the development program, more money to be put in companies (that) do these things. Because you can do as good research as you want, but if you do not know how to take it to market, to take it through the approval process, you waste your time and your money.”
He says the model on which Neurochem is operating could help address those issues.
“Our research usually supports development. We don’t do basic research. We let basic research be done by third parties,” Bellini explains. “We take these compounds, we make them better and we move them ahead in development.”
Bellini says he is not interested in building a fully integrated biotech company. The model he is pursuing not only omits basic research, but also production and manufacturing. He credits that model with the company’s recent success south of the border.
“We want to be different. That’s why, when we went to the States and we did this share issue, when they heard about our model and they heard what we were doing, our shares, they were oversubscribed by 10 times,” he says, adding that Neurochem is one of the few biotechs with a stock price that is heading up. “We are trading at 60 per cent higher than what we traded when we did the IPO in the States . . . Really, this model, I think it’s now catching the imagination of investors.”
Attracting investors’ attention is a skill Bellini appears to have mastered.
“I’ll tell you what makes a difference in companies,” Bellini says. “It’s management. The reputation of the management is the big thing that investors are looking for.”
The best biotech managers, he adds, combine scientific and business expertise.
“A scientist . . . can be a little bit extravagant, like an artist,” Bellini says. “And the CEO has to be a little bit like that. Because he cannot be only numbers. If he’s only numbers, he’s an accountant, and he will run a company like numbers, and he’s not going to be good. Because a biotech company has to see the future. You have to see where a company is going.”
But Bellini says he has learned plenty since his early days as an entrepreneur.
“When I started, I was just a poor scientist, and everybody was trying to take advantage of me,” Bellini says. “Now, they don’t dare,” he adds.
“But when I founded BioChem Pharma, sure I made mistakes,” he says. “The way you raise money, the way you do your agreements — you make all sorts of mistakes. Because what happens, as soon as you get money, you have sharks gathering around you from everywhere, wanting your money . . . You have to know how to handle these things.”
His Own Boss
Born in Italy in 1947, Bellini moved to Canada in 1967. Five years later, he graduated from Loyola College, which later became part of Concordia University (Montreal, QC), and then completed his PhD in organic chemistry at the University of New Brunswick (Fredericton, NB) in 1977. Bellini worked as a researcher for a pharmaceutical company, and then established the biochemicals division of the Université du Québec’s Institut Armand-Frappier (Laval, QC) in 1984. He founded BioChem Pharma in 1986.
Bellini says he became an entrepreneur because he wanted to work for himself.
“I used to work for a company which was called American Home Products. Here in Montreal it was called Ayerst McKenna. We were about 400 people,” Bellini explains. “One Friday they called us and they said, except for — I don’t know — 40 or 45 people who would eventually be relocated in two years in Princeton (New Jersey), everybody else had lost their jobs. They were closed,” Bellini says. He was part of the group that was to be relocated. “I had a young family and I loved Montreal. And I said to myself, this is the last time that I work for somebody else. And that’s what I did . . . Two years later I started to set up BioChem Pharma.”
Under Bellini’s leadership, BioChem Pharma developed the potential to become an important drug company that was truly Canadian.
“For Canadian standards, BioChem Pharma was a big success. No question about it,” Bellini says. “Nobody has ever discovered a product as big as 3TC here in Canada. Even today, it’s growing at 10, 20 per cent a year.”
Bellini says 3TC has given him a lot of satisfaction. “It’s still the best AIDS drug that there is on the market,” he says. “I saw people (who) were dying, and today they are still alive. This is big. It’s great.”
The providence of 3TC is a bit convoluted. Bellini describes its discovery as both in-house and licensed-in.
“We had a chair — an industrial chair with NSERC — which was sponsored by BioChem Pharma. And the professor was coming from McGill, but actually the chair was with Institut Armand-Frappier — it’s a mix of everything. That’s what I meant: we discovered, we did not discover, license, discover — it’s a mix of everything. But the important thing was, the rights belonged to BioChem Pharma.”
Bellini sold BioChem Pharma to Shire Pharmaceuticals — resulting in Shire’s Canadian unit Shire BioChem Inc. (Laval, QC) — shortly before the bottom fell out of the biotech market.
“That was good timing for my shareholders,” he says. Bellini’s response to criticism about selling a Canadian success story to a foreign company is simple.
“Too bad,” he says flatly. “Shareholders can do what they want, first. And second, I think we have to learn here how to respect our own companies. If we don’t do that, and if you’re always critical of what is going to happen here, and then things go, you don’t cry.”
There were several factors that he says convinced him to sell the company.
“One was management. And the other one, I thought that the growth of BioChem Pharma was slowing down to about 10 per cent,” he says. “That’s because we had one of our drugs which did not work for toxicity — one of our backup drugs, which was supposed to start the growth again. And long-term toxicity in animals just did not work.”
Bellini also cites one of Canadian biotech’s classic stumbling blocks.
“It was very difficult to replace top people here. Now I train people myself. That’s what Picchio Pharma does, too — Picchio, my holding company. We train people. We train them, and then we transfer them to our subsidiaries,” he says. Bellini established Picchio International Inc. (Montreal, QC), which controls Picchio Pharma, in 2001 as a joint venture with Power Technology Investment Corp., a subsidiary of Power Corp. of Canada (Montreal, QC). “We have discovered another way to make managers,” he says.
Despite any problems he may see in the Canadian biotech sector, Bellini is a fiercely loyal Canadian, and a diehard fan of Montreal.
“I love this place. Canada, not only Montreal,” he says. “The mentality of the people. The way we respect the multiculturalism of this nation. It’s really a beautiful place to be. In Montreal, you have a city, and in one hour you are in the wild. You cannot have that in other places in the world.”
Bellini has become a fixture of the city he has so whole-heartedly made his home, and will soon be part of the Montreal landscape in a more tangible way. The new scientific and medical research facility at McGill University (Montreal, QC) will be called the Francesco Bellini Life Sciences Building, in honour of Bellini’s $10-million donation to its construction.
“Society has been so good to me, to give back a little bit of what’s been given to me is the least that I can do,” Bellini says of his many philanthropic projects.
Although Bellini is considered one of the founders of the Canadian biotech sector, he says he did not start out with a vision of building an industry.
“My vision was that I did not want to work for anybody else except for myself. And my vision was there was a lot of research being done in Canada (that) was not exploited,” he says. “Even today, I think the same thing. And we should exploit it because I think Canada has some of the best scientists that there are in the world.”
Developing that research, and putting money into companies that commercialize it, is where Canada needs to concentrate, Bellini says.
“I mean private money — venture capital money,” he says. “Instead of going for a fast buck, which is to take some professor out of a university, make him get a few patents and make him public — you get 10 times what you put in. That’s what was happening. That’s what was wrong. That’s what collapsed.”
Bellini may not have had a strong vision for his future when he started out, but he has one now.
“For sure, now. Now it’s a different story. If I had not a vision, if I had not a plan, I would not be here,” Bellini says. “Now I know where I’m going. I want to build a Canadian biopharmaceutical company. And I am going to do it.”