A Billionaire’s Story
Net Worth: $2.1 Billion
Wealth Origin: Pharmaceuticals
Hometown: San Jose, CA
Education: University of California, Santa Barbara; University of California, Los Angeles
Crisis in the C-Suite
Pharmacyclics, as a company, was in the fight of its life while trying to develop what they thought would be a cancer-fighting drug called Xcytrin. Founder and C.E.O. Richard Miller had already experienced success in the industry, he helped lay the foundation for San Diego-based IDEC Pharmaceuticals, maker of the billion-dollar drug Rituxan for treating non-Hodgkin’s lymphoma.
The hope was that Xcytrin could disrupt cancer cells by keeping them from spreading to the brain while also making them more sensitive to radiation. Time after time, however, the drug continued getting rejected by the FDA.
Not until 2007 did the company finally come to grips with their drug’s failure. “We worked it up as completely and thoroughly as you possibly could, but bottom line, it didn’t work well enough,” Miller said. “I knew that dog wouldn’t hunt.” The research team then moved on to developing some molecules that had been purchased from Celera Genomics a year earlier.
Tensions began rising in the board room. Considerably frustrated stakeholder, Bob Duggan, felt that Miller and his team hadn’t gone about getting Xcytrin’s FDA approval in the correct fashion, he even sought to use all available means to encourage and to urge Pharmacyclics to pursue another trial.
Added pressure came from Wall-Street as investors scared off – plummeting the companies stock price to just $2 a share. As fate would have it, 2008 came along with the worst economic recession faced by the United States since the Great Depression.
On vacation in Tampa Bay, Florida, Duggan received an unexpected call from another Pharmacyclics board member. His associate informed him that a mass exodus from the companies top leadership was occurring; more specifically, a sizeable portion of the board, along with Miller, was calling it quits.
“I didn’t want to stay in that environment,” Miller told the Seattle Times when discussing his 2008 departure.
Duggan, slated to become Pharmacyclics new C.E.O., was not a scientist, researcher, or expert in any of the drugs his company so relied on developing. Although, he did have a certain spirit about defeating cancer. He lost a son to the disease, which ultimately led to his self-education in the field of medicine.
He admits to Forbes, “I knew more about brain tumors than the average guy walking down the street, because we had to look for support in handling his condition.” After his boy passed away, he always thought to himself, “If there’s ever something I can do in that area that would make a difference …”
Rather than abandoning post like everybody else, Duggan reinforced his position, injecting another $6 million into the company – giving scientists the financial life-support needed to hone in on their development of revolutionary cancer treatment.
So how exactly did a man who had no experience in pharmaceuticals manage to become one of the industry’s billionaire darlings? Some might say he’s a genius, he’d rebuttal that with, “well, we’re all geniuses.” The truth is, he is just like us, or at least his life certainly started that way.
Robert was born in Berkely, CA during the mid-1940s. Both parents in the Duggan household worked hard, Dad was an industrial engineer who immigrated to the United States from Ireland while Mom worked and taught as a nurse. They eventually moved across the bay to San Jose, where Robert did the majority of his growing up.
Bob recounts his family’s early financial hardships to Investopedia, telling them, “We [our family] made about $800 a month…The last couple days of every month we scrambled around the house looking for lost quarters, dimes, and nickels [to pay the bills].”
Being the third of five children made Robert’s transition to St. Francis High School a bit easier – he had some protection around campus in the form of brothers and sisters. Only ever-increasing his stature, he was both captain and quarterback of the school’s football team!
He reminisces on that experience, saying, “I captained my football team, I’d get in a huddle, and I’d go: ‘Guys – sacrifice your body. We’re behind in this game. We are not losing this game. Get out there. Sacrifice your body. Win the game guys. There’s nothing more important in life right now than winning this game.'”
Championing a “whatever it takes” attitude is only one of the courageous themes that run the distance of Mr. Duggan’s life. Later, he’d sum it up with the following quote, “Losing is quitting. If you don’t quit you’re going to win.”
Robert began taking courses at the University of California, Santa Barbara in 1966 – immediately after high school.
He describes his earliest entrepreneurial venture in a self-penned article:
As a teenager, my first business was mowing lawns. My goal as a teenager was not to make the Forbes 400 list but to simply make enough money to get myself through college. When I was mowing lawns I realized when I went that extra mile to make a difference for the better, the property owner wanted to tip me or give me more work. It wasn’t even very difficult. Sometimes it was a simple smile, extra care to make sure a hedge was edged perfectly, or taking the time when I was done to have the owner walk the property with me admiring my work.
After four years at the University, Mr. Duggan chose to leave UCSB in order to begin taking classes at the University of California, Los Angeles. Two years later, he’d part ways from UCLA as well. A particular person of interest concerning why he may have left college without obtaining a degree is former UCSB professor, Herbert C. Kay.
Kay, a Wharton fellow and esteemed Stanford graduate, lectured in the UCSB Department of Economics throughout the 1960s. He then moved on from the college in order to focus on his career as a private investor down in Los Angeles.
According to Duggan’s investment website, “while continuing his economic and business education at UCLA, Bob was personally mentored in the Art and Science of company-specific stock market related investment analysis. Bob quite successfully served a full-time three-year apprentice under the guidance of Herbert C. Kay.”
Based on this information, it is very possible that Bob originally encountered Mr. Kay while he was a student at UCSB. This relationship only blossomed when both men found themselves living in Los Angeles around the same time. With Duggan leaving UCLA in 1968 and striking his first major investment in 1975, it’s not difficult for one to come to the conclusion that whatever Kay was teaching Bob made him confident enough to begin his career as a venture capitalist without having received a degree from either of the prestigious universities he attended.
“I’m not a guy that’s got degrees, as you know, but I’m educated. I’m educated because I looked at life and what was going on around me. I was able to pick the sweet spots and observe what other people were doing. To me study is every day 24/7, you’re looking, you’re learning, you’re listening,” says Duggan.
The Venture Capitalist
Bob was an early investor in Sunset Designs, who produced children’s embroidery sets by the name of Jiffy Stitchery. In 1975 he invested $100,000 or 50% of the company’s venture capital for 50% of the equity and a seat on the board. In his new role, Duggan provided sound financial and strategic marketing advice for this venture.
Sunset Designs’ Jiffy Stitchery kits were the first of their kind. They stood out from other embroidery sets due to the simple, well-written instructions included with every set. Bob Duggan’s vision for Jiffy Stitchery was to sell sets with great colors and aesthetic designs. This strategy proved to be hugely successful. More than 7,000 retail stores sold Jiffy Stitchery sets.
Sunset Designs dominated the market with over 80% market share. The company was sold in the mid-1980s to Reckitt and Benckiser at a return rate of 150 times the initial investment.
Brothers Danny and Mark Patterson, Carter Holmes, and Duggan launched Paradise Bakery out of Long Beach, CA in 1976. Bob played a very hands-on role in day to day operations of the business, even creating the recipe for the “Chocolate Chip Chipper” because he wanted the cookie to stay soft and gooey.
Together, they secured partnerships with McDonald’s, Kentucky Fried Chicken, and Disney World. In doing so, Paradise Bakery became one of the first premium distributors of fresh-baked cookies to the U.S. market. As their success grew, they expanded their menu selection to include brownies, croissants, quiches, breads, soups, salads, and sandwiches.
In 2007, Panera Bread purchased a majority stake in Paradise Bakery, the concept had grown to over 70 locations in 10 states (predominantly in the west and southwest) by that point. Two years later, Panera acquired the entire company.
One Last Location
In 1981 Duggan’s partners, the Patterson brothers and Carter Holmes, opened a Paradise Bakery location in Aspen, Co. The sale of the brand did not include the Aspen, store and it is still known as the Paradise Bakery. If in the area, be sure to visit soon, an Aspen Times article reveals that the landlord is transforming the original location into a retail store by 2021.
“We told them how we felt and how we felt we have made a positive contribution to the town, and why would you pick that over this,” Mark Patterson said, adding that “we went through this with bewilderment and disbelief.”
Danny and Mark aren’t throwing in the towel though, they’re looking forward to finding an upgraded location with more space, as well as improved amenities. “We would still like to have something old-school, with a nice look and comfortable, nothing pretentious,” Mark said. “We’d love to be able to preserve that.”
A Shift in Philosophy
Having already made a modest fortune through the aforementioned ventures, Bob found himself seeking more fulfillment from his work. “One of my very first real entrepreneurial endeavors was cookies. We made great cookies, and they really made people happy. We sold billions of cookies. The issue for me personally was I didn’t feel like I was making a difference for the better and because that part was missing, I moved on,” says Duggan.
He continues, “Making a difference for the better is different than making a difference. Lot’s of people can make a difference but can you make a difference for the better? The mission to make a difference for the better has been a game changer for me and my companies.”
It is the common thing to do for persons of great accomplishment in our world to give way to the yearnings of their heart – even when it may be to the detriment of their profession. Tim Cook left a thriving computer hardware business to join ranks with Steve Jobs and an unrecognizable Apple company that was on the brink of collapse. Henry Samueli, the Billionaire inventor of TV and WiFi modem chip technology, ditched his well-paying job to begin teaching at UCLA for much less money – he had always dreamed of becoming a professor. Then there are multi-millionaire Wall-Street moguls like Chris Gardner who risked it all and lost it all, but the flame which burns in man’s heart is eternal; Will Smith later portrayed his life story in the international blockbuster movie, The Pursuit of Happyness.
Government Technology Services
In 1986, Bob helped establish Government Technology Services (GTSI), to provide the U.S. Government Services Administration with its first access to microcomputer hardware and software. During a downturn in the company, he invested millions of dollars, helping GTSI grow from an $8 million to $600 million company.
Doing his part in curbing the crippling abomination of an ideology that is communism, he helped secure inalienable freedoms for peoples across Eastern Europe. Duggan dives into further detail, “I formed Metropolis Media to assist former communist countries to transition to capitalism. By marketing their products through outdoor media, ten thousand outdoor media billboards were established in key locations throughout Croatia, Slovenia, Serbia, Bosnia, and Macedonia.”
He adds, “I also served as Chairman of the Board and invested 100% of the financial capital needs which totaled $3 million. This family run enterprise was sold to Capital Research for over $45 million. It is now owned by J.C. Decaux.”
Computer Machinery Corporation
Computer Machinery Corporation was the third company in the world to create and then successfully market Ethernet Node-Processors which is a computer networking technology essential for establishing local area networks, which in turn also serve as a gateway to the Internet.
CMC was later sold to Rockwell International. Bob played an active role in negotiating the final terms of the $45 million stock transaction.
From 1990 to 2003, he was the Chairman of the Board of Computer Motion whose mission was to introduce patient and physician-friendly robotic surgery to the world of healthcare.
“When I was running Computer Motion, which later merged with Intuitive Surgical, the goal was to use robots to make surgery less invasive, create less scar damage, reduce recovery time and make surgery easier for the doctor and the patient by providing more precision operations. Simply put, I was making a difference for the better by using robotics that have perfect memories, eight arms, never tire… well, you get the point. It was the concept of making a difference for the better that allowed me to see the opportunity,” Duggan says.
Returning to the “Crisis in the C-Suite” genesis of our story, it is now 2008 and Bob is at the helm of yet another sinking company. One can begin to see how certain human characteristics manage to transcend industries – somebody who knew Bob’s history may not have been so worried at this point. You could even ask the guys who circled around him in huddles beneath the Friday night lights of St. Francis High School football games – this man’s got guts.
His comeback strategy went on to prioritize and develop Imbruvica, which was fortunate to receive three of the first five “Breakthrough Therapy Designations” emanating from the U.S. FDA. The drug is a treatment for chronic lymphocytic leukemia. As a result of Imbruvica’s life-changing success and Duggan’s unyielding investments in the company, Pharmacyclics shares soared in value, in turn producing a Billion dollar net-worth for Bob Duggan.
“Ideas that truly make a difference for the better, reinforced by the right actions (confidence), and proper resources can create a powerful unseen wavelength that cuts through previously believed barriers and old, stuck ideas,” he says.
In totality, between 2009 and 2015, Pharmacyclics went from $0.67 a share to $261.25 a share. By late spring of 2015, it was announced that AbbVie would purchase the company for $21 billion in cash and stock – grossing Bob $3.4 billion from the sale.
Abbvie CEO Richard Gonzalez celebrated the deal in a conference call, “it [Imbruvica] is the only pharmaceutical asset to have secured three breakthrough therapy designations from the FDA, which underscores the transformative nature of this important drug.”
Thankfully, for the rest of us, Bob seems to have developed a fierce passion for saving lives. Since the sale of Pharmacyclics, he has ramped up funding for companies throughout the medical industry via his investment vehicle, Duggan Investments.
A statement from the organization reads:
Duggan Investments’ current projects are focused on cutting-edge biosciences. These include groundbreaking developments in cancer treatment, anti-microbial advancements, anti-aging technologies, and stem cell research. Selective. Results-driven. Successful. Dedicated to making a difference for the betterment of all involved. That’s Duggan Investments.
Intuitive Surgical develops Robotic-Assisted Surgery (RAS) devices that enable surgeons to use computers and installed software to control and move surgical instruments through one or more tiny incisions in a patient’s body for a variety of surgical procedures.
The company merged with another Duggan project, Computer Motion, in 2003. “Both of our companies have made tremendous contributions to medicine by delivering less-invasive surgery with surgical robotics,” said Intuitive Surgical President and CEO Lonnie Smith. “By combining our highly complementary technology and talents, we believe we will be able to provide surgeons and hospitals with the best possible products and support to serve their patients’ needs in minimally invasive surgery. We believe both the da Vinci(TM) and ZEUS(R) surgical system platforms will play an important and complementary role in the future of our new company with each delivering unique benefits to our customers.”
Mr. Duggan added, “This is an important merger for Computer Motion. Eliminating intellectual property litigation and initiating technology sharing should have a positive impact on market value. In addition, this merger strengthens our organization’s financial and operational capabilities.”
A Growing Industry
Computer Motion and Intuitive Surgical were both pioneers in a field that is beginning to blossom into its own respective industry. Massive corporate goliaths such as Johnson & Johnson and Medtronics have recently announced their own projects coming down the pipeline in the robotic surgery space.
The Motley Fool suggests that the presence of bigger players will actually help drive growth in the market. “Intuitive continues to innovate today as much and arguably even more than it has in the past,” says healthcare contributor, Keith Speights. “The company’s new products should push the boundaries on the types of procedures that can be performed using robotic assistance. This will drive procedure volume growth, which, in turn, will push Intuitive’s recurring revenue even higher in the coming years.”
At the time of the merger, in March of 2003, Intuitive Surgical was trading at $2.79 per share. As of July 10th, 2020, shares have roared to an otherworldly value of $575.25 each! The company reported revenue totaling $1.4 billion with earnings of $382 million in 2010. Last year, revenue was up to nearly $4.5 billion with profits of $1.4 billion.
Its procedure volume in 2010 totaled 278,000, with 110,000 hysterectomies and 98,000 prostatectomies. Fast-forward to 2019, and Intuitive’s Da Vinci system was used in 1,229,000 procedures with just over half of those being hysterectomies and prostatectomies. The companies website exclaims that thus far, in totality, over 7.2 million Da Vinci procedures have been completed on a canvas that features 67 countries spread throughout the globe.
Finding himself at the spearhead of yet another burgeoning industry, Duggan is happy to proclaim, “surgical robotics has delivered on its promise of making surgery less invasive, shortening recovery times, and lessening the trauma for patients while providing economic value for our hospital customers.”
OxStem is developing new approaches to age-related regenerative medicine, focusing on drugs that can treat cancer, neurodegenerative diseases, ocular diseases, diabetes, heart disease, macular degeneration, chronic inflammation, wound healing, and other major age-related conditions.
The companies origins can be found rooted in the laboratories of one of the world’s most decorated educational institutions, the University of Oxford. “Our expanded strategic alliance with Oxford University will further augment the translation of OxStem’s breakthrough science towards development of innovative medicines addressing serious unmet medical needs,” explains Dr. Michael Stein, Chief Executive at Oxstem.
OxStem raised a record-breaking £15.6M in 2016 – the largest seed fundraise for a UK University spin-out.
The valuation of Human Longevity, founded in 2014, soared to $1.6 billion in 2017 with hopes it could capitalize on the declining cost of DNA sequencing to power new medical advances. According to the Wall Street Journal, “key facets of its business didn’t develop as planned,” leading to an estimated $310 million valuation amidst a 2018 funding round.
“The ultimate goal is to give everyone access to the power of data-driven health intelligence. The program combines state-of-the-art DNA sequencing and expert analysis with machine learning to help change medicine to more data-driven science,” says Duggan Investments.
Adding, “With a multidisciplinary team of research scientists, computing experts, and physicians, it is empowering every part of the healthcare system to work more efficiently.”
Pulse Biosciences is a bioelectric medicine company, developing innovations that improve and extend patients’ lives. Pulse’s groundbreaking Nano-Pulse Stimulation (NPS) technology is used to treat a variety of conditions that currently have no established optimal solution. The first planned commercial product, the CellFX System, uses NPS technology to address a range of dermatologic conditions.
“The technology being developed at Pulse has the potential to quickly, safely, painlessly and effectively remove skin lesions, including cancers, for both clinical and cosmetic purposes. It is tremendously exciting. We will be hugely proud to bring it to the public,” says Mr. Duggan.
A Summit Therapeutics press release dated February 26, 2020, announced the appointment of Robert Duggan as Executive Chairman of the Board of Directors effective immediately. Trading at $14 per share in May of 2018, the stock took a plunge that same month and today hovers at a value of $3.29 a share.
“Mr. Duggan has a track record of building successful commercial organizations aimed at bettering people’s lives,” said Mr. Glyn Edwards, Chief Executive Officer of Summit. “We believe his guidance will help us ensure our targeted antibiotic product candidate ridinilazole has the best opportunity to reach patients with C. difficile infection who desperately need novel treatment options.”
Per Forbes, Duggan has spent $75 million building up a 65% stake in Summit Therapeutics and his investment partner, Maky Zanganeh, the former chief operating officer of Pharmacyclics, has also purchased about 10% of the company. Bob reveals to the magazine, “I have lost some money in anti-infectives, but I learned my lesson,” adding, “I believe it is a game that we can win and a game that should be played by somebody.”
New Challenge, Same Man
Ridinilazole, the drug Summit is tirelessly developing, is hoped to become a treatment for Clostridium difficile infection, bacteria that most often develops when people are taking antibiotics and is contagious, resulting in terrible diarrhea that can be life-threatening. According to the Centers For Disease Control and Prevention, It causes 223,900 infections and 12,800 deaths annually in the United States.
On April 14th, 2020, following Edward’s resignation, Summit put out a press release announcing Robert Duggan as the companies new Chief Executive Officer. In his mid-70s, Bob is once again at the helm of a down-trodden company that with the proper leadership can improve the lives of endless humans to come.
“Summit Therapeutics is engaged in very significant work. Infectious disease patients are in need of durable cures. Caregivers are in search of and in need of durable cures. Payers are in need of cost-effective medicinal drugs that substantially reduce the heavy financial burden of early disease recurrence post anti-infective drug treatment,” says Duggan.
Being supported by an award worth up to $63.7 million from the US government’s Biomedical Advanced Research and Development Authority (BARDA). Ridinilazole is now progressing in Phase 3 trials.
You Are A Genius
These days, when Bob isn’t CEO of a bioscience company or aiding efforts to preserve mankind’s physical health with investments worth tens of millions of dollars, he is tirelessly preaching a message to the human spirit on the existence of genius within every person.
Realizing that the origin of the word, genius, is in fact a person’s innate ability, of inborn nature and a guardian spirit. From this, he derives that all people are born harboring the seed of genius within them. Via observation, study and practice, attention and intention, genius will manifest itself.
“By striving to achieve great things, not just for yourself, but for the betterment of mankind, some will accuse you of being idealistic. Surely, there are worse things to be accused of.” – Robert Duggan