Opinion | The Weekend Interview
What Would You Risk for a Faster Cure?
Michael Milken, the billionaire former financier, is boosting Covid treatments. No one knows which will work, but saving lives and the economy will require a mighty gamble.
Try to remember when you first heard of the new virus sickening thousands in Wuhan, China. After that, how soon did you know that it would be a global pandemic?
If the virus spread faster than you guessed, you’re in some impressive company. Barbara Humpton, CEO of Siemens USA, says she first grasped the situation in mid-February, at the Munich Security Conference, but adds, “None of us thought twice about going into the grand ballroom.” Peggy Hamburg, a former commissioner of the Food and Drug Administration: “I always said it was a question of when, not if. . . . But I actually have to admit I never really thought I’d be watching it play out in real time.”
Since Covid-19’s world-wide scale became critical in February, the U.S. pharmaceutical industry has ramped up at a pace to outmatch it. “I’d say to you that everyone has heeded this call to action—every single person,” says Michael Milken, referring to Ms. Humpton, Ms. Hamburg and countless others he’s working with. The financier turned full-time philanthropist is impatient in the search for treatments, and he’s committed to speed up the leads.
“It was really in the first part of February that I felt that this was not going to be an isolated case, such as SARS,” says Mr. Milken. “I was in South Africa at one of our medical conferences”—a summit hosted by the think tank he founded, the Milken Institute. After an 18-hour flight home, “I reached out to Jim Allison,” director of immunotherapy at the University of Texas cancer center. “We began working together in the ’90s, and what we had done in cancer research and immunology had to deal in many cases with this cytokine storm”—an overreaction of the immune system that is a fatal complication in many Covid-19 cases.
Among the many pharmaceutical startups the Milken Institute helps accelerate, one came to mind as having a potential solution. “I was intrigued with an early-stage biotech company working on non-small-cell lung cancer,” Mr. Milken says. To make its treatment effective, Durham, N.C.-based BioMarck “also had to deal with a cytokine storm in the lungs.” Mr. Milken began “pushing the funding of this company and accelerating it going into patients.” On March 23 BioMarck announced a successful trial of its drug for use against acute respiratory distress, and it soon contacted Mr. Milken to help it gain approval to enter the next phase—a wider trial that would make the drug available to gravely ill Covid-19 patients.
The story exemplifies the approach Mr. Milken, 73, takes to public health: “There’s no venture idea, anywhere in the world, that I’m not willing to have one of our teams look at.” Founded in 1991, the Milken Institute encompasses seven centers that research public health with a bias toward action: securing donors and regulatory support for overlooked or underfunded projects.
“What we’re doing now is pushing the funding,” Mr. Milken says. “Philanthropy is about 3% to 5% of all medical research, but it’s often what gets it going.” An example is the Melanoma Research Alliance, which Mr. Milken helped form in 2007 with a group of donors and physicians. Within a decade the alliance had helped fund the development of 12 treatments now approved by the FDA.
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The most active Milken Institute center is FasterCures, which has created a public tracker for Covid-19 treatment and vaccine proposals. Mr. Milken charged the team to “update it daily, and monitor more details. Every time there was a venture idea that we heard of, we wanted people to know was it happening, was it being moved along, etc.”
Today all hands are directed toward the pandemic. But the center is highly animated even in more peaceful times, serving as a clearinghouse for treatments that otherwise might not make it to market. “Many drug programs are suspended or not pursued at all—not because of flaws in the science but because of commercial and strategic reasons,” Mr. Milken says. Researchers screen those programs, and he calls in his partners either to fund the ideas or promote their development at other companies if the inventors make them available.
It’s a niche in the pharmaceutical world that public funding can’t fill. Mr. Milken sustains a model “where a person could just give me a five-page summary and get a meeting. Government isn’t going to fund that, but philanthropy does.” “These little companies,” he adds—“they’re not Johnson & Johnson, they’re not Novartis, they’re not Amgen. They need financial capital.”
Mr. Milken also works with Big Pharma and medium-size companies. “We reached out to Moderna,” the Cambridge, Mass.-based company that on March 16 became the first in the world to administer a trial-phase Covid-19 vaccine to a human subject. “They launched an RNA vaccine in eight to nine weeks. Unheard of.”
For Moderna and every other company developing a vaccine, the most difficult work begins after the design phase. “If it’s a relay race,” Mr. Milken says, referring to the many stages of the vaccine approval process, “one of the keys is to start all the runners simultaneously.” That means beginning to mass-produce the vaccine now, in quantities large enough to meet global demand.
“We have the governor of California telling people that maybe 60% of people are going to get the virus. We could argue about whether that’s true. But we cannot wait until we have data to start the runners.” In mid-April, Moderna secured a federal grant of up to $483 million to produce millions of doses a month by year end. On April 24, CEO Stéphane Bancel told Mr. Milken he is seeking additional grants to reach a capacity of one billion doses.
For a sense of the odds around that public-private investment, consider that only about 16% of vaccines that reach clinical trials are eventually approved. Having helped create the market for high-yield corporate bonds in the mid-1970s, Mr. Milken discusses high stakes without understating risk. “We don’t know whether it will work or not,” he says. Regarding treatments, he adds, “There isn’t a day when I don’t get an email from someone saying ‘I have the solution.’ ” He measures the potential return in dollars as well as lives. Of the pandemic crisis, he says: “My view is that this costs the United States at least $1 trillion a month. If you shorten this by a month, you will save at least $1 trillion.”
Two days after Mr. Milken returned from South Africa to his home in Los Angeles, President Trump called saying he would soon expunge the 1990 conviction for securities fraud and other crimes that marked the end of his career as a financier. Mr. Milken’s deals not tinged by controversy, such as his 1983 issuance of bonds to finance telecom company MCI’s long-distance network, show the same preference that shapes his philanthropy: high risk for a high reward. He formed his family foundation to sponsor public health in 1982, but personal encounters with cancer—his father’s death in 1979 from melanoma, and his own diagnosis with prostate cancer in 1993—helped build his tolerance for risk in the search for faster cures.
A perennial struggle for Mr. Milken has been to convince regulators to share that urgency. He says drug trials generally are too rigid: “We send 19-year-olds into war zones knowing that no matter what we do, some number—greater than zero—will lose their lives or their limbs. But we tell a patient who is going to die not to try something because it could be dangerous.” The Milken Institute has four former FDA commissioners on the boards of its centers, including Ms. Hamburg. Their involvement bolsters the institute’s standing to advocate on behalf of companies advancing potentially viable treatments.
Yet Mr. Milken believes the coronavirus crisis has nudged public-health bureaucrats into action: “I would say to you that the CDC, the FDA, HHS, CMS, NIH, the VA—you name it, they are working. Sometimes it takes a while to get them focused, but they are focused.” He declines to criticize the FDA for its initial decision to block state and private labs from developing tests. “To say that you should have done something on Jan. 12 that you didn’t do—so what? I don’t have any time for that—zero. I have no energy, except to understand where we are every day.”
Within a year, treatments and vaccines currently incubating may alleviate the virus’s danger enough to enable a full economic recovery. Meanwhile, Mr. Milken praises the federal government’s economic response as a bitter but necessary tonic. “Once again, we are dependent on the government,” he says, but only because the lockdowns have made necessary “the taking and confiscation, in a sense, of business for the well-being of everyone.” Forgivable federal loans and the Federal Reserve’s lending facilities buy businesses time while the economy is closed. “My view right now is, financial markets are working. They’re providing liquidity.”
He doesn’t worry that easy money will be a moral hazard for borrowers: “This crisis is not at all related to ’08 or ’09. At that time, the financial institutions were overleveraged. You had some things leveraged 60 to 1.” He hopes relief in this case can be directed more narrowly toward smaller businesses. “Jesús, who built a little business in South Central L.A.,” he says, to pick a name, “he didn’t overleverage. It’s not his fault.”
Mr. Milken grants that U.S. industry and governance in recent decades have fallen from their most productive heights, which he attributes in part to his generation’s increasing risk-aversion. “Look at this baby boomer group,” he says—a group he points out includes him along with three presidents also born in 1946: Bill Clinton, George W. Bush and Mr. Trump. In their youth, Mr. Milken says, his cohort was dynamic. “They were risk takers. They tried new things, because their parents told them that they could do things.”
He credits the free-speech movement he experienced at Berkeley in the mid-1960s with helping inspire his own brash approach to finance. Yet he says aging turned much of his generation away from investment, and demographic change pushes the nation in the same direction: “As the number of people over 60 increases and younger people decrease, money is spent on an aging population.”
Nonetheless, the partners he’s made in his search for cures prove that imagination and activity are still scattered through the country. Discussing the coronavirus with biotech founders and Nobel Prize winners, Mr. Milken says he’s been “thrust back into the 1970s and early ’80s, where any time someone had a new idea—a new company, a passion for something—I had set aside time every day to listen.” On the day a vaccine or effective cure for Covid-19 is finally announced, Americans will owe thanks to such risk takers, who Mr. Milken says “invest in where the world is going, not where it is.”
Mr. Ukueberuwa is an assistant editorial features editor at the Journal.
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