Fred Sancilio

Fred Sancilio has spent over 45 years in the pharmaceutical industry as a scientist and entrepreneur.

Fred earned a Ph.D. at Rutgers University in New Jersey and in the last couple of years in that program he also worked full time in the research center at Hoffmann-La Roche, a major drug company. At that time, it was the largest drug company in the world and Fred Sancilio began assisting world class scientists in their research on new drugs. He worked with people that are extremely well known in the industry. The inventor of Valium was one of his coworkers at the time. He subsequently worked for what is now known as Glaxo, but used to be called Burroughs Wellcome Company. Mr. Sancilio was able to become an assistant director there and had 120 to 130 people that reported to him.

In 1979, when drug companies conducted all their own research and lab work, Fred Sancilio decided to start his own drug development company, Applied Analytical Industries (AAI), to provide contract research and lab work and handle work that the pharmaceutical companies did not particularly like to do and could not be able to scale up because they were only doing their own work, making it very expensive for them. Fred created a business plan that set up labs that could contract with the pharmaceutical companies to do some of the development work surrounding new products. AAI was the first company of its kind to provide this type of service to pharmaceutical companies. AAI grew and employed about 1,500 employees and contractors and supported drug development for about 95% of the American major drug companies. The company went public in 1996 with Goldman Sachs leading the IPO and changed its name to aaiPharma, Inc. Fred served as CEO from 1979 to 2002.

Fred Sancilio stepped away from aaiPharma, Inc. after being given a life-changing diagnosis that resulted in a quick decline in his vision. Within eight months of his diagnosis, his vision got so poor that all he could see were shadows. His world was silver with black shadows moving across it. Through the Mayo Clinic, Fred found an organization in Florida that was treating patients with the particular issue that he had. He enrolled at that clinic and his treatment included surgery, but two years later, his eyesight was fully recovered. He still feels it was a miracle.

Once Fred was well again and had his vision back, he got busy with life again. He started another company and grew it to a couple hundred people until it was taken over by investors. With his valuable experience of getting so many drug approvals over the prior 25 years, he decided to get involved in mentoring new drug entrepreneurs again. Fred continues to be involved in due diligence for investment banks and works with drug companies to design programs to get approvals from the global regulators.

Today, Fred Sancilio works with a several companies: a company that is nearing completion of an Alzheimer’s medication that looks very promising, a second company which is working on a potential therapeutic for COVID-19, and third, a company that focuses on inflammatory diseases that can be alleviated by omega-3 fatty acids.

Where did the idea for your career come from?

During the period of time that I was incapacitated due to illness and immediately after I got back my eyesight, I had nothing to do but read. I was excited about the fact that I was able to read. I loved to read before I lost my sight. I began reading and got very interested in the role of fat in the body because everybody looks at fats and thinks they are bad, but in fact, without fat we would not be alive or have a brain. Our cells would be rigid and would fall apart. We simply couldn’t live. Not having the right fats in your body could be responsible for many diseases. I began looking at the relationship between certain diseases and certain fats. If you had these fats, you didn’t seem to be susceptible to certain disease. If you didn’t have these fats, you got the disease.

Then I built a laboratory again and started a company, Sancilio & Company, Inc. (SCI) to conduct research on different kinds of fats, omega-3s, omega-6s, saturated fats, polyunsaturated fats, medium chain triglycerides, and noticed that each one had a different role to play in the body. Some could be used to carry drugs into the body. Some were used to make certain parts of your body more flexible. Others were used to keep disease out. That’s what I focused on for about 10 years. That led to what I believe will be a breakthrough treatment for sickle cell disease and hypertriglyceridemia. There are drugs currently on the market which I worked on and are fatty acids, which are used to treat those two diseases but this new generation will be far better. I subsequently created Clearway Global and have continued my consulting with various projects of my choosing.

What does your typical day look like and how do you make it productive?

My wife and I had decided to buy a home where the downstairs could be converted into an office suite. The upstairs is our regular living quarters and very modern. We are on the water. My office faces the boats in the water and it’s very pretty outside right now. I get up in the morning. I make believe I go to work. I say goodbye to my wife and go downstairs to the office. It looks like a very nice conference area with a very good view.

Usually my calendar has three or four Zoom calls or Microsoft Teams calls with teams all over the world. The day starts typically with communicating with a team in Asia or specifically Taiwan of about eight people who are working on the synthesis of a new drug that will be used for Alzheimer’s disease. Then I’ll switch to calls in North Carolina or Prince Edward Island, Canada. Then I’ll switch off to the West Coast. My day is scattered all over the planet. We work in clinics in India, Germany, and Holland. Its incredibly productive using video conferences as opposed to taking days and weeks to fly for similarly productive sessions.

How do you bring ideas to life?

There are thousands and thousands of drugs that never come to market simply because there is not enough money to bring them through the development cycle. One of the things that I try to do is simplify the development program for these companies to try to move their drugs further along than they would have otherwise. That’s the reason why I’m able to be successful in a consulting business is that I’m not trying to make anything complex. I’m trying to simplify. The world is full of very smart people. I don’t see any boundaries. If I know I have a great group of chemists in Taiwan or in China or in India, I’ll get on the phone and call them up and say, “Let’s work on this program together and let’s get this thing done.” There are great formulators, but most of them aren’t in the same company. I try and bring teams together, no matter where they are, and get the job done!

What’s one trend that excites you?

It is the confirmation that most of our diseases have origins in inflammatory mechanisms and the inflammatory mechanism is directly related to the fats that we eat and the fats that we have in our body. I’m not only 100% positive, but it’s been proven clinically in the work that I’ve done that if you control those fat ratios you can actually mitigate inflammation which tends to eliminate certain diseases. That excites me. That’s something that very few people are working on. It is very complex chemistry and people tend to go to the simple answers. This is not a simple answer, but it is very much mechanistically correct in that some fats convert to prostaglandins, that can either generate pain; inflammatory pain or healing. There is a direct link between the two that we have proven.

What is one habit of yours that makes you more productive as an entrepreneur?

I do not see weekends. I stop working when I am tired and work when I’m not. If I get tired, I stop. It doesn’t matter if it’s Saturday or Sunday. You can be productive any day of the week, but you can also be unproductive on the same days. I don’t organize my week to rest on the weekends. I’d rather just stop when I am tired. I see many people who are very tired and they are very unproductive. If you are tired after only three days, take a break.

I also like working with teams. If you work by yourself, you get biased results. But when you are working with smart people who are willing to speak their minds, you get more done.

What advice would you give your younger self?

Be careful who you marry. Having the right partner is what makes you successful.

Tell us something that’s true that almost nobody agrees with you on.

That fats are important. That has been the surprise after 40 years of doing drug development. Only in the last eight or nine years have I really figured that most drug companies work on water-soluble materials. Virtually no one has been working on insoluble materials, like fats. It turns out your body has many of them and they’re all very important to the way your body functions, but nobody has really focused in that area.

One gentleman who won the Nobel Prize many years ago, who was my boss’ boss when I was with the Wellcome Foundation, discovered the link between certain fats and pain, but then it just dropped for the next 20 years. The work I am doing now is directly related to the work that was done at the Wellcome Foundation way back when I was in my 20s.

As an entrepreneur, what is the one thing you do over and over and recommend everyone else do?

Be careful choosing your partners. When people are very anxious to go out and borrow money or sell equity, that’s something that you need to be very careful with because you have to have alignment between you and the people who put money in your company. I’ve had very good experiences and very bad experiences where the person that was investing represented a company whose motivations were different than mine. When you are not aligned, it’s only going to lead to trouble. Before you go out and get an investor, remember it’s just as important as getting a wife. You’re going to live with that investor and that investor’s alignment is critical to your success.

What is one strategy that has helped you grow your business?

The one thing that is hardest to do for an entrepreneur is to stay focused. Most entrepreneurs, including myself, like to chase the next shiny object and that’s usually not going to be very productive. It’s fun, but it’s not productive. What’s productive is if you have a thought and you have a direction that you believe you should go, just do it. One of the biggest motivators that I’ve had is when people say that something is not possible. That’s like red meat in front of me. I’ll show you I can do it. But stay focused. If you try to do too many things, you’ll do nothing.

What is one failure you had as an entrepreneur, and how did you overcome it?

My biggest failure was when I was the CEO of a big public company I told people that I was sick. I confided in my board of directors because I had to have surgery and I was going blind. What you don’t realize is that your second or third in line wants your job and from that point forward, you’re basically immaterial. A lot of decisions are made the minute you announce that you’re going to be leaving and you are now a lame duck. By relaying that I would likely need to leave my position, it weakened my position and people made decisions which I believe caused the failure of that company about five years later. The company changed direction after I left and it would have failed but for a major investment group acquiring it. Now it is a healthy and growing company again.

In retrospect, I should have taken medical leave. I didn’t even consider it because I did not think at the time there would be a way of getting my eyesight back. I had wanted to prepare the board to hire the right people because I did not think I would be able to come back. I was fortunate that I did. Not everybody does. The company employed over a thousand people and I wanted them to have a succession plan and time to hire the right people to keep the company stable.

What is one business idea that you’re willing to give away to our readers?

A good business idea would be focusing on a better communications platform that works with narrow bandwidths that most homes have. With the current algorithms, the internet that comes into homes could be improved upon since it is usually overpowered by the Zoom, Microsoft Team, or Webex meetings. If there were better algorithms to utilize the bandwidth that comes into your home, you could communicate better on these platforms. I think it is going to be a big business over the next year. I think we will see better modems and much better use of the bandwidth.

What is the best $100 you recently spent? What and why?

I would say it was the money I spent on a meal I had with my wife where we were able to quietly spend time together without talking about business or work.

What is one piece of software or a web service that helps you be productive?

Microsoft Teams is the best communication software available right now. Zoom is nowhere near as good. Microsoft Teams is more versatile with sharing documents. Using Teams, I can share a screen and modify documents with people all over the world and communicate instantaneously with people.

What is the one book that you recommend our community should read and why?

I really enjoy the Tom Clancy novels. You learn a lot by reading them. They are very well written. They are interesting, but they also talk about technology that you don’t even know exists. There is a complexity in the interactions between people. When you read his novels, you find the world is not what it seems to be. In reality, people always have an image they portray which is not necessarily who they really are. So, these books have taught me that you may not truly know people around you and stay aware of this in your dealings.

What is your favorite quote?

“You can’t control everything.”

Key Learnings:

• I created the first contract research organization in the United States that serviced pharmaceutical company’s development programs. That has become a multi-billion industry today.
• Sometimes it’s better not to be too detailed in your communication with people. If people misunderstand, then they will do the wrong things. Be very short, brief, and clear so you know the other person hears you. I think that is a secret to being very successful.
• Pay attention to your health. No matter how good you build a company, no matter how good you do your job, no matter how good of a relationship you have, if you get sick, it’s gone. Everything in my life fell apart because I did not pay attention to the signs that I was getting sick.