David Arkowitz, Executive Vice President and CFO of AMAG Pharmaceuticals, has over 18 years of pharmaceutical and biotechnology industry experience with companies such as Idenix and Merck & Co. Since 2007, Arkowitz has been responsible for AMAG’s finance and business development.
Are you excited about the future of the biopharma industry? What can Massachusetts look forward to?
If you could identify two or three incentives that would help Massachusetts compete more effectively for out-of-state and international Pharma and Biotech business that are not available now, what would they be? -Are theses incentives available elsewhere?
There are several incentives that would help attract life sciences companies to Massachusetts. In two general buckets, these are: (1) additional tax credits to incent companies to manufacture products locally and for R&D activities, and (2) modifications to the NOL provisions to extend NOL carry forward from 5 to 15 years and to enable companies to cash out state NOLs.
Is the growing biopharma hub in Massachusetts beneficial to AMAG? If so, how?
The growing industry and the growing talent pool in Massachusetts is beneficial, I believe, to all biopharmaceutical companies. As the Massachusetts area becomes an increasingly recognized hub of innovation, growth and development, the entire region will prosper and we will all benefit from that positive effect.
What were the driving factors behind AMAG’s move from Cambridge to Lexington? Why was Lexington selected over other locations?
We had outgrown our space in Cambridge. Lexington provided us with the opportunity for our office-based employees to be located in the same facility while maintaining good proximity to our manufacturing facility in Cambridge. Additionally, the town of Lexington treats its commercial residents very favorably.
Compare the benefits of AMAG’s Cambridge location to its Lexington location.
Given its proximity to route 2 and 95, our Lexington location is highly accessible from a vast majority of greater Boston and suburban communities.
What are the 5 most important ingredients in a site location for a biopharma company?
Proximity to Boston; close to major commuting corridors/public transportation; amenities at the facility or nearby; favorable local business climate; ability to customize the space.
In what ways does AMAG utilize the colleges and universities in Massachusetts?
How important is it for biopharma companies to be close to elite research institutions, such as MIT? Is it more important for some departments within biopharma companies than others?
I feel it is very essential for discovery and development stage companies to align themselves with the major institutions in the area with respect to scientific advisors and cutting edge innovation. Every company is different and the company’s stage of development determines how it aligns itself with research institutions. For example, discovery stage companies may benefit from interactions and alignment with the biology or chemistry departments at research institutions; whereas commercial stage companies may focus on interfacing with teaching hospitals associated with academic institutions. Regardless of the stage of the company, insights from these institutions are very important in better understanding the practice of medical care and where a particular product fits in the medical / scientific landscape.
Congratulations on your recent licensing deal with Takeda Pharmaceuticals. Do you see the success of life science companies directly linked with global deals such as this?
Every situation is somewhat different and must be evaluated in a complete, disciplined and objective manner. For any biopharma company, this includes assessing the level of expertise, capabilities and resources required today and in the future to successfully develop and commercialize its product worldwide, determining the future capital requirements, and analyzing the relevant business risks. For AMAG, we feel that Takeda is an ideal partner given their expertise, capabilities, infrastructure and commitment to make the most of Feraheme in the licensed territories.
What advice would you give a CFO who is in the life sciences industry today?
Ensure that you understand your operating and capital needs over the next 24 months under a variety of different scenarios, carefully manage your spending, and raise money appropriately. Focus on the operations – manufacturing, research, development, regulatory and commercial – that comprise your organization and help make decisions that maximize the long-term value of your company while effectively managing the risks.
How has the recession affected your business, and how do you think it has affected the biopharma industry? Have you noticed any recent improvement?
Over the past two years we have prepared for the approval and launch of our first pharmaceutical product and we are now in the midst of its launch, and we are in the process of starting a number of new clinical trials this year. As a result, during the past two years we expanded our company and added many new employees. We have been fortunate, the recession has only had a minimal impact on our business. Other biopharma companies have not been so fortunate and have had to slow their growth as they wait for the recovery. When recovery occurs and the capital markets stabilize, I would expect to see more companies raise money, which should drive increased growth and success.
What factors contribute to and or could drive more in-state biopharma manufacturing?
As a small biopharmaceutical company, I believe that there is a benefit to having your manufacturing location in reasonable proximity to your headquarters. Providing additional tax credits to local companies that manufacture within the state and offering additional training assistance to potential employees would result in more biopharmaceutical manufacturing in the state.
What kind of occupational skills and educational background are you looking for when hiring manufacturing employees?
When hiring manufacturing employees, we look for good technical skills (process and equipment) and good analytical and reasoning skills (deductive reasoning.) We strongly prefer people with science backgrounds such as chemistry, biology, microbiology and engineering.
Where does the manufacturing of AMAG’s products occur? Does AMAG outsource or partner with anyone?
We manufacture our products in our Cambridge, MA manufacturing facility. We are currently partnering with many organizations to ensure that we have the necessary second-source capacity.