Biotech CEOs, investors support Ukraine

More than 150 industry leaders vow to disengage with Russia until it stops war, respects Ukraine’s sovereignty 

More than 150 leaders of biotech companies and life sciences investors have signed a letter committing to “complete economic disengagement” with Russia to pressure Moscow to stop its war against Ukraine and respect Ukraine’s sovereignty.

The pledge may have more symbolic than practical effect, as economic sanctions and the rapid economic deterioration they will create are likely to sharply limit the ability of Russian companies or individuals to conduct business with U.S. or European biopharma companies.

Symbolism can, however, be important.

Authors of the letter told BioCentury they hope it will inspire Ukrainians who are resisting Russia, embolden Russians who are expressing opposition to the war, and show their own employees that they are taking a public stand on a conflict that is redefining their futures.

The letter’s impact could be amplified if its authors succeed in persuading leaders of other industries to write and sign similar pledges.

“We, leaders in the life sciences industry,” the letter states, “are appalled by the unprovoked war started by Russia against its neighbor Ukraine. This barbaric act will lead to substantial loss of life, trauma to millions of people, and the dislocation of civil society in a nation that has repeatedly expressed its peaceful intentions. In short, this is a criminal act deliberately committed by Russia. Its ramifications are far-reaching and touch the entire globe.”

The letter points a finger at the “captains of Russia’s industries” who support Russian President Vladimir Putin and urges them to “collectively steer Russia towards peace.”

The pledge includes commitments to “cease investment in Russian companies and new investment within the borders of Russia,” to reject investment from Russian funds, and to halt collaboration with or service agreements with Russian companies.

With the exception of food and medicines, the business leaders commit their companies to “halt trade in goods with Russian companies.”

The letter was written by Meg Alexander, chief corporate affairs officer of Ovid Therapeutics Inc. (NASDAQ:OVID); Paul Hastings, president and CEO of Nkarta Inc. (NASDAQ:NKTX); Peter Kolchinsky, managing partner of RA Capital Management; Jeremy Levin, Ovid chairman and CEO; Ted Love, president and CEO of Global Blood Therapeutics Inc. (NASDAQ:GBT); and John Maraganore, founding CEO of Alnylam Pharmaceuticals Inc. (NASDAQ:ALNY).

In addition to posting the letter online and soliciting support from their peers, the authors have posted translations into eight languages and have reached out to leaders of other industries.

“We recognize that, like most investors, most of Russia’s billionaires have only a small percentage of their money in biotech funds or companies,” Kolchinsky told BioCentury. “But the question is whether our call to action will spread to other industries. We are attempting to catalyze change across industry groups.”

The goal, Levin told BioCentury, is to persuade Russian business leaders that it is in their economic interest to exert pressure on Russian President Vladimir Putin to change course in Ukraine.  

“The target is wealthy Russians who all have Western ties and have been investing heavily in biotech,” Levin said. “Part of the strategic plan for Russia is biotech, and our goal here is very specific. It’s really full economic disengagement by American businesses, except for food and medicines.”

The “vast majority” of life sciences companies in Russia “are owned or operated by people who have close ties to the Kremlin,” Levin said. The commitment to disengage from Russia is intended to “make the point to those who are close to the Kremlin that this war is damaging not just to Ukraine, it is desperately damaging to the interests of the people who are trying to build Russia, and it’s up to them to turn around and to endeavor to change the minds of the Kremlin.”

Levin predicted that opposition to the war in Ukraine will cause companies to “change the venue of CRO testing of their specific molecules, and this will affect the very extensive Russian CRO service industry.”

Levin and Hastings told BioCentury that they have spoken with the CEOs of large pharma companies that are sympathetic to the goals of their letter.

The calculations involved in making pledges regarding their engagement with Russia are more complex for multinational pharmaceutical companies, Hastings said. For example, unlike smaller companies that interact with Russia from a distance, they must take into consideration the effects of their actions on employees who live in Russia. “They’re assessing how the’re going to handle this going forward. It’s clearly easier for small companies and investors,” Hastings said.

While the disengagement pledge is intended to inflict pain on Russian companies, it could also create some pain for U.S. companies and investors who will eschew Russian investments.

In some cases, honoring a pledge to disengage with Russian companies could violate contractual agreements. Companies will have to determine their legal commitments, Kolchinsky said. “Where there’s discretion, we are urging them to use that discretion.”

Editor’s note: BioCentury Chairman Karen Bernstein and CEO David Flores are signatories on the letter. Neither were involved in any way in the publishing of this article. 

As of Friday morning the total number of signatories had grown to 741, 61% from life sciences companies, 26% from the finance sector, and the remainder from services companies, academic institutions, non-profits and a handful of other organizations.