A Winning Pitcher On The Biotech Field

EX-DRUG SALESMAN Ed Fritzky has led Immunex to the top of the risky industry's standings, but what about the future?

When Immunex Chief Executive Edward Fritzky got cut from the Duquesne University Dukes baseball team some 30 years ago, that didn't keep him off the pitcher's mound.

He talked his way back, arguing that his well-controlled curve ball would keep batters off balance and compensate for a weak fast ball. He became the team's ace, ending his senior year 7-1 with a 2.25 ERA.

"He just fought and fought and fought," said Rich Spear, coach at the Pittsburgh university. "He never quit."

Fritzky, 49, now wins similar accolades from investors. They cheered as Immunex's shares rose 15-fold in five years, buoyed by the rheumatoid-arthritis drug Enbrel's prospects for success.

Over the past year, Immunex has been the top performer among 15 stocks on the Amex biotechnology index.

Some fans question whether Fritzky can maintain that record as the head of a company with a market value of $10 billion. Even bearish investors, though, have high regard for the soft-spoken CEO.

"He's done a great job running the company," said Stuart Weisbrod, a fund manager with Merlin Biomedical Asset Management.

Fritzky traces his interest in the drug industry to his childhood. His father, a Pittsburgh barber, died suddenly at 45 from unexplained heart problems. At Duquesne, Fritzky studied biology to help understand the death.

He started his career in the early 1970s as a drug salesman at Searle Pharmaceuticals. He eventually became president of Searle's Canadian unit, then moved to American Cyanamid in 1989, where he headed its drug business.

The CEO spot at Immunex opened up after Cyanamid bought 54 percent of the company. Fritzky wasn't involved in the deal, but he convinced the board he was the best candidate.

"The idea of having your enterprise to be accountable for was tremendously exciting," Fritzky said. "I thought I could really make a major contribution."

Still the salesman, Fritzky seems more comfortable in a business suit than the jeans and sweat shirt worn by many biotech CEOs. He works crowds at medical conferences and investor meetings like a politician, greeting people by name, looking them straight in the eye and setting a tone of intimacy.

"Ed's a good listener," said Steven Gillis, one of Immunex's scientist founders.

At Immunex's Seattle headquarters, Fritzky said he tries to stay close to the staff.

"People are really the fundamental drivers of the business. If you're not approachable. you'll never know what the issues are," he said.

He walks the labs, eats in the cafeteria and encourages employees to have lunch with him.

"He's one of the team," said Arnold Oronsky, a former Cyanamid executive and architect of the Immunex acquisition. "He's got exactly the right personality to extract major value from the people."

Success didn't come easily for Immunex.

In 1995, the company suffered setbacks that caused some investors to lose faith. The cancer drug Pixykine failed a major trial, and a Food and Drug Administration panel refused to back another Immunex cancer drug, Leukine.

Fritzky focused on developing Enbrel, then in clinical trials.

About that time, Immunex got an unexpected offer to sell the rest of itself to American Home, which had acquired Cyanamid. Fritzky rejected the $14.50-a-share offer.

Nowadays, Fritzky says Immunex has a good relationship with American Home, which Immunex employees refer to as "Home."

"He's able to draw us through the Home politics," said Immunex Senior Vice President Peggy Phillips. "He knows when you draw a line in the sand."

Executives at American Home declined to be interviewed. A spokesman said the drug maker has an excellent relationship with Immunex and Fritzky.

Three years ago, American Home executives told Phillips that her goal of getting Enbrel on the market by 1999 was too optimistic. Fritzky backed her up, persuading his bosses in Madison, N.J., to help her meet that target.

The effort paid off. Enbrel won approval in November, posting $160 million in sales in eight months.

Fritzky, who stays fit by jogging 25 miles a week, is putting in 12-hour days to keep Enbrel ahead.

The drug will likely face a competing product soon from Johnson & Johnson. And the FDA in May ordered Immunex to conduct additional safety studies after six people taking Enbrel died of infections.

He's also making bets on other potential products.

Fritzky sped development of compounds already in clinical trials, such as Nuvance, an inhaled drug that analysts say could be a breakthrough for asthma.

And he plans to boost manufacturing capacity to allow Immunex to begin trials on a slew of new compounds.

To keep investors happy, Fritzky has challenged employees to double Immunex's stock price by the end of next year.

Immunex shares were down $3.625 to $123.125 at today's close.

Back in 1995, when Immunex shares were trading for about $15, he set another target for the stock - $98 in 1998.

Company officers scoffed. When shares hit $98 in December, they bought a cake to celebrate. It was decorated to look like a crow.