A CEO with a Mission
October 11 2012 by Jennifer Pellet
You’re perfectly happy in your role as SVP of sales at a large, thriving biotech, when along comes a company with a noble cause—curing cancer, or to be more exact, dramatically improving the outcome rate of cancer therapies. Management wants you to abandon a 15-year tenure at your well-established current company to take the helm of a relative startup.
The first time Randy Scott, founder and CEO of the $206 million cancer diagnostics company Genomic Health, called Kimberly Popovits to offer her a job, she turned him down flat and suggested someone else. But when that candidate didn’t work out and Scott called again, she succumbed. Why the change of heart? “It was a missionary move more than a career move for me,” recounts Popovits, who left leading biotech company Genentech to join Genomics in 2001, just two years after the latter company was formed. “I knew that if what they were trying to do could be done, it would be huge and very important in the treatment of cancer. I wanted to help.”
Frustrated by a close friend’s experience with the one-size-fits-all approach to treating cancer, Scott had embarked on an ambitious effort to access and analyze biopsied tissues collected from cancer patients over decades and the data on those patients’ outcomes. The goal? To develop genomic-based lab services that analyze the underlying biology of cancer to help doctors and patients to make more effective treatment decisions—that is, to choose the treatment most suitable for that individual patient’s specific cancer.
“When someone gets diagnosed, we say ‘cancer’ as if it’s one disease, but it’s not—no two cancers are the same,” explains Popovits. “What we’re saying is, ‘Now that we can sequence genomes and develop targeted therapeutics, we have to do a better job at diagnosing disease at the individual level so that we can treat it more effectively.’”
Eight years after Popovits joined the company to handle the operational and commercial side of the business, Scott transitioned her into the CEO role—a move he had planned all along. Acknowledging that stepping down unasked is an unusual move for a founding CEO, Popovits notes, “I actually pushed back on that, but Randy said, ‘This is not what I do well, and it’s not what I like to do. We’re going to need somebody to take the reins.’”
With the CEO seat, Popovits took on the triple challenge of commercializing the company’s research, advancing its R&D and leading it to profitability.
Beyond saving cancer patients the ordeal of going through toxic treatment regimens that would ultimately not be beneficial, Genomic Health was founded on a sound economic premise—the U.S. healthcare system spends $80 billion a year on cancer therapies that work only about 25 percent of the time, suggesting the potential for significant savings. Yet, the company struggled mightily to sell its first effort—the OncotypeDX breast cancer test—to both investors and the insurance companies that would ultimately pay for it. At issue was the cost of the test—a hefty $4,290—and the concern that the results would have little to no impact on treatment decisions. “Payers acknowledged that chemotherapy is overused,’ says Popovits. “But they said, ‘Convince us that we’re not going to spend $3,000 to $4,000 on this assay and still be treating 100 women when only four will benefit.’”
Popovits persevered, eventually overcoming the pushback through a series of studies showing the test’s efficacy. In 2006, Genomic achieved a key goal when Medicare established reimbursement for the diagnostic test. In 2010, Popovits led the company to profitability. To date, more than 275,000 women have had the test, which provides individual patients with a score of the likelihood that their cancer is liable to be aggressive and whether they are apt to benefit from a round of preventative chemo. “Prior to our test, almost all women diagnosed with early-stage breast cancer would be recommended for chemotherapy, when only four out of every 100 of those women would actually benefit from it,” explains Popovits. “What our test does is identify 50 percent of those women who will get minimal to no benefit from chemo so that we can spare them the toxicities of chemo and the cost to the healthcare system.”
Fueled by its success with OncotypeDX, the company funneled its earnings into R&D, unveiling a similar test for colon cancer in 2010. Today it is working toward releasing similar tests for kidney cancer, prostate cancer and other cancers where radiation and chemo treatments are often overused, says Popovits. “Most men will die of something else before they die of prostate cancer,” she explains. “The problem is that 90 percent or so go on and get aggressive radiation. Forgetting the costs, which you can imagine are significant, the lifelong side effects—things like incontinence and impotence—of that treatment are very significant.”
Popovits, who joined Genomic in 2002 as president and COO and took on the CEO post in 2009 (Randy Scott remains the company’s founder and director), found her first tenure as CEO illuminating. “One of the things that was a bit of an epiphany for me was that the decision-making piece is so huge,” she says. “And that my job as a CEO is not necessarily to know every single detail about the business—because, in fact, you can’t. It’s to keep the organization healthy and to make good decisions. There’s a little bit of fear factor in having to make decisions when you don’t necessarily have all of the information you might want to have.”
Her takeaway? “You have to own the accountability,” she says. “When things aren’t going the way they should be going, it’s me. An expression we often use at Genomic is, ‘When things are going well, look out the window and congratulate people and when they’re not going well, look in the mirror.’ As a CEO that’s what you have to do.” —Jennifer Pellet