Stanford stem cell pioneer nets $194M from Gilead-Forty Seven buyout
Gilead’s $4.9 billion buyout of Forty Seven, their largest in three years, brought with it a substantial windfall for the biotech’s founder, CEO and earliest investor.
Chief among those winners was Irv Weissman, a well-known stem cell pioneer at Stanford. Weissman and colleague Ravindra Majeti founded the company out of Stanford in 2016, after their early studies showed that some cancer cells use CD47 — healthy cells’ “don’t eat me” signal to the immune system — to evade attack and that you could treat those cancers by blocking the signal.
Weissman, who occasionally talks about how his first job in science paid $25 a month, will earn $194 million with the deal. Majeti fell a little short of that, but should be fine with $123 million.
Weissman’s remarkably close relationship with the California Institute for Regenerative Medicine made the early research behind Forty Seven possible. In 2009, CIRM — a government-subsidized group dedicated to turning stem cell research into therapies — gave Weissman a $20 million grant for his CD47 work on AML. Another $12.7 million came in 2013. Although there was little apparent overlap between regenerative medicine and CD47, then-CIRM president Alan Trounson called the grant “the sharp end of the CIRM program,” adding that “we need to get therapies into clinical trials.”
Trounson left CIRM in 2013 and then served alongside Weissman on the board of StemCells, a biotech also founded by the professor, where his elevated compensation caused a minor scandal. That company failed, but CIRM’s commitment to Forty Seven continued.
Even after Forty Seven’s $75 million Series A in 2016, CIRM gave it a $10.2 million grant. It was part of a new slate of investments the organization gave out in the wake of criticism that it had failed to turn billions in taxpayer money into actionable findings.
Those grants now look like a good bet: It’s still early, but the company’s latest data showed a complete response rate of 50% and 55% from its lead drug magrolimab in myelodysplastic syndrome and acute myeloid leukemia.
Before the Gilead merger, Forty Seven said they could file as soon as the end of next year. An approval could be a big win for new Gilead CEO Daniel O’Day. It would also give the regenerative medicine institute and the stem cell pioneer one of their biggest accomplishments – in a field that has little to do with regenerative medicine or stem cells.
Financially, the biggest winner behind the scientific co-founders is Sutter Hill Ventures managing director Jeffrey Bird, who will earn $100 million after the firm co-led the biotech’s Series A, among other investments. And CEO Mark McCamish will earn a $105 million payout, a price that should more than justify his decision to leave his top-level executive role at Sandoz to lead the young biotech.
CFO Ann Rhodes will earn $26 million and CBO Craig Gibbs takes $37 million.