Innovating via constraints: An interview with CSL’s Bill Mezzanotte

Bill Mezzanotte joined CSL in April 2017 as head of clinical development before taking the reins of R&D a year later. He added chief medical officer to his responsibilities in 2020. Before CSL, Mezzanotte led Boehringer Ingelheim’s respiratory unit, and prior to that, he spent 16 years on AstraZeneca’s R&D team.

Mezzanotte is board certified in internal medicine, pulmonary medicine, critical care medicine, and sleep medicine. He has been involved in dozens of successful global product approvals using various platforms in ten therapeutic disease areas.

McKinsey’s Jan Ascher and Rachel Moss interviewed Mezzanotte about leading R&D in turbulent times, staying efficient, making portfolio choices, the field’s future, and keeping everyone motivated. An edited transcript of their conversation follows.

McKinsey: CSL recently licensed Hemgenix, the first gene therapy for adults with hemophilia B, even though it had already developed and delivered Idelvion, a factor IX therapy, for the same rare disease. Why?

Bill Mezzanotte: There is a subset of patients with hemophilia B who have bleeding episodes despite existing therapies and others looking for alternatives to weekly infusions. So when we saw the early results from Hemgenix, we knew it would give patients another great choice. We focus on patients’ needs, so we’re not afraid to disrupt ourselves when it serves those needs.

There are other examples of CSL disrupting itself to bring more patient-friendly therapies to market. We’re doing it with garadacimab, a factor XIIa–inhibitory monoclonal antibody that treats hereditary angioedema, even though we have the market leader in Haegarda. And although we have effective egg-based, cell-based, adjuvanted flu vaccines, we’re looking at bringing two of those together with our adjuvanted, higher-dose cell-based vaccine aQIVc. We’re very excited about this technology. Also, we’ve signed a deal with Arcturus Therapeutics to apply the flexibility of self-amplifying mRNA vaccines to combat influenza and other viral respiratory pathogens.

McKinsey: CSL spends less on R&D than other top biotechs, in absolute terms and as a percentage of sales. How do financial constraints affect your productivity?

Bill Mezzanotte: Some might call us frugal, but I’d say we’re scrappy. And I do believe constraints can be liberating. Companies that can write a blank check sometimes get lazy or sloppy in their decision making or spending, but we can’t afford to do that. We have to be creative every day.

I try to adhere to a few purposeful principles. First, it helps that, unlike most biotechs, we have a manufacturing heritage, so operational efficiency is in our blood. Second, we don’t spend frivolously. We focus our efforts where we have competitive advantages. We’ve learned to say no to certain therapeutic areas, including oncology, which is an arms race we don’t want to join. Third, we look to build synergies with research projects that explore pathways with applications across multiple therapeutic areas.

And, when we diversify, we prefer to make an adjacent move. We might apply a new platform to a disease we already know, as we did with Hemgenix. Or we might apply a platform we know, such as plasma protein technology, to a new therapeutic area, as we’re doing with CSL112 in cardiovascular disease. By avoiding big jumps that involve new therapeutic areas and new platforms, we improve our productivity and our probability of success.

McKinsey: With a platform-based approach, how do you avoid getting too stretched from a financial or capability perspective?

Bill Mezzanotte: We’ve picked a few platforms to have core expertise in, such as plasma, recombinant technologies, vaccines, and cell and gene therapy. By core expertise I mean we possess the internal proficiency and capability to produce a quality medicine from the research phase all the way through to manufacturing, if we choose to go that route. Then, by focusing on certain therapeutic areas where we can concentrate the clinical, regulatory, and commercial expertise, we can develop that medicine to be most helpful to patients.

For platforms we can’t fully service ourselves, we can bring our clinical, regulatory, and commercial experience to working with a partner to develop a similarly high-impact medicine for patients. This is how we partnered with uniQure for the adeno-associated virus-5 vector on which Hemgenix is based, in a disease area where we have a lot of expertise.

For our core platforms, we continually develop our people and bring in new talent, especially in research. We’re always careful about adding new platforms because of the commitment required to get it right. Our latest addition has been cell and gene therapy, because for CSL to continue to focus on rare and serious diseases, I believe we will need gene-therapy expertise. Our cell and gene-therapy capabilities in ex-vivo lentiviral technology are still nascent. We’re treating that almost like an incubator, so we don’t have the same expectations as in plasma, for instance. We’re building capabilities and upskilling in that platform while we refine our more developed internal platforms.

We’re always careful about adding new platforms because of the commitment required to get it right.

McKinsey: How do you view building a portfolio of medicines that will benefit patients and deliver value?

Bill Mezzanotte: One of my ten commandments in development is that something can’t make sense commercially unless it makes sense scientifically and medically. But the corollary is that making sense medically and scientifically doesn’t guarantee that it will make sense commercially.

You also have to be humble in what you ask of your medicine. I believe in the power of medicine, but I also believe in the power of the body to heal itself through homeostasis. When we suffer a mechanical injury, rest is one of the most important ingredients to recovery. So my therapy doesn’t have to do everything to be impactful; it just has to give the body a head start. With this mindset, we can create a rational product profile that fits into the continuum of medicine and treatment. That lets us be more adaptable and successful with the programs we bring forward. Historically, one of the biggest causes of Phase III failure was that the study population expanded too far from Phase II. That’s another place where constraint has been liberating for CSL. Our natural constraint on the amount of plasma protein we had available to apply medically meant we developed a habit of really sharpening our focus on treating the right patients, and thus we’ve enjoyed a high degree of Phase III success.

McKinsey: How do you incentivize your scientists?

Bill Mezzanotte: I don’t count the targets they’ve discovered, but I do look at the quality of work they bring forward. We have a target within our group for how many products we want in the later stages of development every year. And we incentivize our lab scientists to stay involved with a product after it enters clinical development because, generally, it will still require a fair amount of scientific characterization. We have a combined R&D organization, which allows me to incentivize all my senior R&D leaders across the value chain, no matter their specific functional role. That helps assure joint accountability for the entire portfolio.

McKinsey: How do you balance being at the cutting edge with cell and gene therapies while excelling in an established category such as plasma-derived therapies?

Bill Mezzanotte: In 2019, we created a new strategy based on our identity as a plasma-based biotech. It embraces our heritage and lets us add gene therapies to plasma replacement rather than displace them.

Other pharma companies sometimes have to make panicked, hasty decisions because of looming patent cliffs, but our strong base of plasma sales and development gives us a revenue safety net. This solid core allows us to diversify carefully and strategically. We try to leverage our strengths in plasma and flu without resting on our laurels. As my mother would say, “You shouldn’t bite the hand that feeds you, but you shouldn’t hold it too tightly, either.”

McKinsey: What is your perspective on data-driven decision making?

Bill Mezzanotte: We talk a lot about risk management in pharma but not enough about assumption management. I’ve focused some of our energy on using data analysis to interrogate our assumptions and improve our probabilities of success.

McKinsey: In research, will data science provide more facts about which targets to pursue, or will it introduce complexity by identifying a plethora of targets?

Bill Mezzanotte: It will do both. The question is whether AI can identify evidence that helps us prioritize targets so we don’t go down so many blind pathways or rely on inaccurate and unpredictive animal models.

I hope data science will also help us to choose the population most likely to benefit from our treatments. We started as a plasma company, and today we are the biggest collector of plasma in the world, but it’s still a precious resource. That helps us frame our decision making. We can’t afford to be greedy or push the boundaries of inclusion, so we try to closely define the patient population that will benefit most from our therapies. Data-driven decision making imposes discipline and helps us focus our clinical trials.

As a rare-disease company, we’re excited about using data science to create historical controls from real-world evidence. If we can use data analytics models to serve as the comparator arm for our trials, that would have huge benefits. In particular, it would make it easier to recruit patients who want to try a new treatment but are wary of ending up in the control group.

McKinsey: What capabilities do you want CSL to strengthen as the industry rapidly evolves?

Bill Mezzanotte: We believe that in the future, our bench scientists will spend half their time on data analytics. So strong programming skills may be just as essential as being able to mix reagents and interpret results. What won’t change is the importance of asking the right question.

Also, we continue to build our molecular-biology capabilities, because everything is heading in that direction. It’s clear that the wet lab is going to change dramatically, too. There are now virtual wet labs where the scientist sits at home, programming and running the experiment remotely. And despite all these advances, there are still too many targets and platforms for any company to explore on its own, so I think strong alliance-management skills will become increasingly important as partnering becomes more prevalent.

McKinsey: Do you foresee mixed teams of traditional scientists plus data scientists? If so, how do you make sure these groups act together to produce one output?

Bill Mezzanotte:I do. The skills will increasingly go together. Some people who have contributed successfully working one way may be uncomfortable working differently. We have more than 2,000 scientists, and they are very earnest people who want to do the right thing every day. They have a strong sense of responsibility, but overexpression of responsibility can lead to a siloed mentality. That can be interpreted as not wanting to share, but it’s more about not wanting to let go or ask for help because you assume you are expected to solve your problems yourself. So, we’re introducing people in our production and data-sciences teams to each other earlier in the research and development process to get more cross-functional collaboration. It comes down to fundamental human behaviors; teams have to trust one another to work together and share risks.

As drug development changes, we invest continuously in upskilling our people. That helps scientists feel safer with change because they understand they will be part of how the company evolves.

McKinsey: How do you foster trust among teams?

Bill Mezzanotte: My trust equation comprises credibility, reliability, relatability, and vulnerability, divided by self-interest. People lead with credibility, but relatability, reliability, and vulnerability are more important to building trust. The hardest of these seems to be vulnerability; people are too often reluctant to ask for help.

I believe the way to create an innovative ecosystem is to encourage people to ask for and offer help. When you offer help, you get respect, and when you ask for help, you get love and loyalty. These are not very scientific terms, but people forget that scientists are human first. I can’t directly oversee the work of 2,000 people in ten countries, so we try to encourage a culture where we all offer and ask for help.

McKinsey: And how do you build trust with external partners?

Bill Mezzanotte: We don’t get into bidding wars because we can’t offer as much as some larger pharma firms. So we try to add value for our partners. If it’s early in the research phase, we try to partner with companies that are reasonably close to our research centers so that they and we can stay involved. Small companies hate it when you grab something and say, “We’ll take it from here”; their biggest fear is that you’ll shelve the product.

Also, when challenges arise, it’s important to solve the problem rather than pointing fingers.

And finally, if the partner benefits more structurally and organizationally from a deal, I’m OK with that. I want every partner to say they had a good partnership with CSL so that people will come to me first with a potential partnership deal, even if I don’t have the biggest bankroll.

McKinsey: What behaviors and mindsets do you encourage in your scientists?

Bill Mezzanotte: We have five Rs in our organization. First, respect everyone and fear no one. That’s fundamental. Number two is to be ready. Chance favors the prepared mind. Number three is we are relentless. I like to say that anybody can succeed on days they feel 100 percent; it’s the days when you feel 50 percent that make the difference. Number four is to be resourceful. I promise everyone in my organization that they will not get all the resources or money they want or need. The last one is resilience. You can’t take risks in an organization unless you believe you are resilient enough to withstand the inevitable failures that happen in R&D.

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