Blue Chip Club – Simon Best, CEO Roslin Bio-Med
Simon Best, who was headhunted last summer as chief executive officer of Roslin Bio-Med, the latest commercial spin-off from the Roslin Institute near Edinburgh, is a rare breed among Scottish business people.
Perhaps being a non-scientist and his experience of a more flaky business sector made it easier to communicate the medical potential of biotechnology to a generally sceptical public. Last month, Best, 43, was selected by the World Economic Forum as one of 100 “global leaders of tomorrow”.
It’s a big step from the somewhat less rarified world of pop where Best cut his business teeth. After graduating with a music degree from York University, he teamed up with music entrepreneur Bob Last, who had been his best friend at school.
Despite a working relationship with Dolly the sheep and a passion for the business of biotechnology, Best started his career in pop music.
Together, they were behind the release of the first single by Sheffield electro-pop band The Human League. Put out on the Fast Products label in 1978 the record, Being Boiled, sold 80,000 copies, which is not bad for an unknown band on an indie label.
When The Human League switched to a more established label, Last’s company continued to manage the band and handle their tours. Best even stood in on the synthesisers at a couple of gigs.
Best believes that helping manage the band made him realise he was “reasonably good at business”. He left the music industry to study for a two-year MBA at London Business School. “A seat-of-the-pants entrepreneur who wants to develop a proper skills base needs to do that sort of thing,” says Best.
He has his work cut out winning over public opinion for the more controversial work carried out by Roslin Bio-Med. The company was formed in April 1998 with £6 million in backing from the venture capital firm 3i — the largest ever start-up funding for a Scottish bio-tech business.
It has nearly finalised negotiations with the Roslin Institute to secure licences to all remaining rights to use the nuclear transfusion technology that was used to create Dolly.
Now it is racing to develop medical applications for this cloning technology ahead of rivals in the US and Japan.
Best’s experience of gaining public confidence for genetically-engineered tomatoes while he was working at the drugs company Zeneca was critical to securing him his latest job. Without public support, Roslin Bio-Med will not realise its ultimate goal of producing transplant organs, human blood for transfusion, and immuno and cell therapy using the cloning technology behind Dolly.
“The biggest obstacle to creating an animal-based medicine business is building public confidence and putting in place a regulatory system that people trust,” says Best.
The first products that Roslin Bio-Med expects to launch will be derived from genetically-altered pigs, whose vital organs, particularly their hearts and kidneys, are less likely to be rejected when transplanted into human patients.
Four years ago, Roslin Bio-Med filed a patent application for the process by which a particular protein is eliminated from the surface of the pigs’ cells. Although this has yet to be granted, Best believes Roslin Bio-Med will obtain broad patents on cloning methods for all species and that commercial applications will start before 2006. Best believes the total market for transplant organs could be around $10 billion.
“In America and Europe, around 5,000 people die a year because of the lack of available organs. And many more will have to put up with very low quality of life alternatives, such as by using dialysis machines and heart drug regimes.”
The second main main thrust of Roslin Bio-Med’s work is the development of blood supplies which would be derived from transgenic animals to avoid the dangers of contamination with HIV, Aids and Hepatitis C.
Best believes that, within the next six months, the company will be in a position to announce some technological developments and some partnership deals. “We’re looking at cattle which have much bigger volumes of blood already and are already used for antibodies, so we know it is possible to withdraw blood on a regular basis without harming the animals. This is a market with a total potential of $6 billion to $10 billion.”
Roslin Bio-Med is also exploring the possibility of using ‘immuno- mice’ to produce very small quantities of specialist human antibodies, which is the most technically challenging opportunity facing the firm. “All you need to produce is the first animal with a human immune system, then you could use cloning to produce small sub-herds. You would then expose them to the antigen that you want to produce antibodies to, and you have your production system,” says Best.
Since a breakthrough in the US last November, Roslin Bio-Med has also been looking into human cell therapy. Using this technology, a cell could be removed from an individual’s skin and used as the nucleus for a reconstructed egg – the basis of the cloning technology – to create an ‘early stage embryo’ of that person.
Within seven to 14 days, scientists would have around a hundred cells of a very early embryo, from which they could derive embryonic stem cells. These could be used to provide supplies of an individual’s failing brain cells (for the treatment of Parkinson’s disease), failing cartilage cells (for the treatment of arthritis) or failing liver cells (for sclerosis).
“We have the patents on the technique required to make those cells and we are in discussions with several companies around the world, although we are not yet close to a deal,” says Best. “But we are close to finalising a licence for the Institute to working in human applications as well as animal ones.”
Although there are currently no plans to float Roslin Bio-Med, Best says the company is being run and managed and prepared in such a way that, if the IPO market for bio-tech companies begins to look healthier, it would be able to take advantage.
Roslin Bio-Med is also open to other ways of returning capital to investors, including trade sales, spin offs and joint ventures.
“If we needed to raise more private money, there’s no shortage of interest. At this stage the next money we bring in will be from a corporate deal with a pharmaceutical company or large bio-tech company rather than from a private equity deal,” says Best, who spends much of his time flying across the Atlantic to meet prospective partners on the east and west coasts of America.
Best’s ‘open door’ approach to discussing bio-medical research is refreshing.
“My policy is to push openness to the limits, without scuppering patent protection or confidential commercial arrangements,” he says. “Where security is concerned, we want it to be perceived that we are protecting something precious rather than hiding something unpleasant.
“What we will do is to ensure that animals are extraordinarily well looked after and protected because they are valuable. If we get approvals to go commercial with this, they will be sacrificed, but sacrificed to save lives and to improve the quality of lives. They will meet a number of medical needs that currently require much higher tech medical interventions or drugs with complex side effects. Personally I am comfortable with this welfare equation.”
Best’s exerience in the field of genetically modified vegetables was gained largely at ICI, which he joined after dabbling with several small business propositions in agricultural biotechnology and winning a prize from the venture capital firm Apax Partners. He went against his indie instincts when he accepted the ICI job.
“They didn’t expect me to stay, nor did I expect to stay for long. But I ended up staying 12 years.” At the time, ICI’s white-coated boffins were working on genetically modified tomatoes, for which they were trying to find commercial applications.
The company’s initial view was that the seeds should be sold direct to farmers, to whom it already sold fertilisers and other products. But Best saw greater potential in working alongside food manufacturers to develop and exploit benefits that could be recognised by the general public.
“I realised the work ICI was doing in the laboratory had the potential to add value to the consumer at the retail end,” says Best. “Tomato seeds is only a $100m market worldwide. But tomatoes are a $10-20 billion food business worldwide.”
The boards of ICI, and after its 1993 demerger, of Zeneca supported Best’s approach and undertook to establish an internal bio-tech company so long as he could prove that the food companies would be genuinely interested.
Having developed strains of tomato that were of interest to food giants including Heinz, Nestle and Unilever, Best was dispatched to the US and given a £6m budget over three years to establish a plant bio-tech business. From his base in Wilmington, Delaware, he set about warming the relevant authorities to the prospect that genetically modified foods would be hitting US supermarket shelves.
“I knew that the public would be concerned and that we had a lot of communication to do in advance of the launch. Two years before the first tomato hit the shelves, the public knew it was coming.” Best acknowledges that European consumers are more sceptical about genetically modified crops than their peers across the Atlantic, partly as a result of BSE.
Despite the latest furore of genetically modified goods, he is proud of the fact that 1.3m cans containing Zeneca’s GM tomato products have been sold in Safeway and Sainsbury’s in the past three years. “This illustrates that, if you handle things right in Europe, you can launch these things successfully.”
However, there is something vaguely disturbing about the passion with which Best describes the prospect of producing fields of cloned animals in order to remove their vital organs, blood and milk to develop medical treatments for humans.
Although it is easy to get excited by the commercial and medical applications of Roslin Institute’s world-beating cloning technology, observers are justified in asking the question ‘where will this end?’
Bob Last, Best’s former boss in the music business, and the man who made it all possibly for the Human League in 1978 when signing them to his newly formed Fast Product, is exasperated that his ex colleague has gone into commercial biotechnology, an area he deeply mistrusts. “If his time in the music business was what inspired him to become an entrepreneur, then I deeply regret ever having encouraged him, given the area of endeavour in which he is now engaged,” he says.
This article was published in the Sunday Herald on 21 February 1999