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I'm Martin Reeves,
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Chairman of the BCG Henderson Institute
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and I'm very pleased today
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for our Leaders on Imagination series
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to be joined by Kristin Peck
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who is CEO of Zoetis
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which is the world's largest animal health company.
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Thanks for joining us Kristin.
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It's great to be here Martin,
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thanks for having me.
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So what do you make of imagination in business?
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How would you define that?
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For me imagination is bringing to life
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a whole new world of possibilities
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and the imagination is the beginning of innovation
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and it starts with listening, watching, processing
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the world around you in new ways.
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I really think if you look at innovation
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it's really the lifeblood of business.
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And why is that particularly important now?
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I hear a lot of CEOs stressing imagination.
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Why is it important right now?
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Well, I think it's always been important
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but I think while you probably hear a lot of CEOs say
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is it more important now
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is because the pace of change is accelerating
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and the cost of standing still is increasing.
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I think the expectations of our customers just
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for what their experience with this can be
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for the innovation we need to bring, keep increasing
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And we've seen
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as you look at what happened in 2020 and 2021 with COVID,
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the types of disruptions that we're seeing across industries
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are just accelerating and therefore companies, CEOs,
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leaders at all levels
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need to really think about imagination and innovation
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in whole new ways.
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So our research on Fortune 500 companies suggests that
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it's essential, regarded as essential by CEOs
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but 90% say it's very important.
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And also about the same number say
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that it's actually quite hard
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especially for large and established companies.
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What are some of the things that get in the way of
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taking an imaginative fresh look at your business.
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It's sort of ironic Martin, the point that you make
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because you'd think the larger you get
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the more resources you have, the more risks you can take.
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But I have found the same thing
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that you've seen in your research
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which is the larger a company gets, the harder it is.
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And I think there's two main reasons why that's the case.
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The first is the cost of disrupting yourself
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just seems too great to take anymore.
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So if you've become incredibly successful
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at doing something in a certain way
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or being attached to a certain product,
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the thought of losing that,
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of disrupting that and destroying that
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just seems incredibly too high for many organizations
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and therefore they think what got us here
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will continue to get us there.
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But I also think as organizations get larger
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there's often more layers
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and bureaucracy often sets in and it's much easier to say no
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than to take a risk and say yes.
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And as new disruptive ideas,
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because they require imagination,
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there's the counterfactuals you talk about in your book.
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So there's no facts to prove they're gonna work
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and therefore as you have to get through
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lots of stage gates,
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there's lots of reasons that someone can say,
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"I'm not so sure that's gonna work."
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And shut it down.
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When you have a flatter organization,
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and smaller,
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the risks seem less and the cost of trying it seems less
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and so counterintuitively,
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it's actually easier for smaller organizations
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with less resources to be more imaginative sometimes
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than it is for large organizations
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that really need to ensure
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you ironically put process in place
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to make sure that you can unleash the imagination
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of the organization.
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Well, Zoetis of course is a very big organization
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but I know that the imagination is something
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you talk about in your leadership team
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and think about a lot and thought about a lot
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especially during COVID.
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What are some of the strategies and techniques
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and leadership moves that you deploy
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to keep imagination alive?
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It is critical to a company like Zoetis.
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We make medicines, vaccines, diagnostics and devices.
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So we constantly need to be disrupting ourselves.
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And I think it starts
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with something you talk about in your book
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which is being curious, being a frustrated optimist,
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always asking questions.
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Why did this work?
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Why did this not work?
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What could have worked differently?
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And I think the second thing we really focus on
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both in how we think,
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what we read about and who we hire
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is looking at diversity,
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diversity of perspective.
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So people who come from different functions
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and even within the company
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so as you put a team together
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let's not have all the people
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who are biologists or chemists,
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let's have some manufacturing colleagues,
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some commercial colleagues.
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Really looking at a problem from different perspectives
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but not just different perspectives within our industry
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really looking at models of other industries
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and how have they faced similar challenges
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or what are they doing that maybe
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we can learn something from.
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So I think it's really looking at diversity of perspective.
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And I think then the last thing we've really tried to do
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and it's arguably never been more important
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than it has been over the last year and a half
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is taking time to reflect.
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It's been such a stressful time where
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you constantly had to be adjusting your operations,
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in new ways constantly
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which might've been a little bit of imagination
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but it was tiring.
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And taking a step back to look at your business,
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to look at your product or your service in a different way
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is something we've really had to remind ourselves for
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certainly at Zoetis over the last year.
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Take time to not just take a vacation
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but to step back from the work you're doing
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so you can look with a fresh perspective.
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I think that's incredibly hard
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for many leaders to do
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when they feel like this is sort of 'always on' lifestyle
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but as you talk about in the book,
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I really think the ability to reflect
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is absolutely critical.
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Do you have a story for us
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about a particular imaginative move,
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a counterintuitive move that Zoetis took
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and what is the story of how that happened?
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I would actually argue
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one of the greatest parts of imagination
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that Zoetis has done
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is the creation of our entire group of products
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called monoclonal antibodies for animals.
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This was really a cutting-edge technology
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in the human space
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and many people believed
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it could never be brought to animal health
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for a host of reasons.
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I think the first of which really was that
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it was gonna be a way too difficult
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and expensive R&D process.
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Then it was well manufacturing
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you'll never get it at a cost that
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a vet or a pet owner could really ever use.
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And then even if you could
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getting a vet to be comfortable
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with an injectable monoclonal antibody meant
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you'll be a very small market
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so not terribly profitable
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'cause really it would be specialists.
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And I think what we did at Zoetis
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was prove the industry wrong on every dimension.
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And it was a significant risk for us to take,
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to believe that A, we could develop products -
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that when we did, those markets would be big enough.
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In other words if it was just specialist
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you can never have justified it.
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And then we could produce it at a cost
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that a pet owner without insurance
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would be willing to pay for
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and today that story we've proven with
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a product called Cytopoint for atopic dermatitis
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itchy sort of dogs.
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We've also just launched two new ones
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in pain for cats and pain for dogs
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and Librela and Solensia
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and created markets that nobody knew even existed.
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Dermatology as a market didn't even really exist.
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It emerged six or seven years ago
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in the animal health space.
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So I think it's sort of believing and taking a risk,
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believing a market would be there
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if we could come up with a product.
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So I'm incredibly proud of that legacy.
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Those two examples they'll probably both become
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the new norm, the new ordinary,
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was there a point where you took this apparently flaky idea
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and said, "Why not?"
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What was the turning point that said
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"Maybe monoclonal antibodies could work
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as a commercial business in animals?"
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Well, I think it started with our scientists to be honest,
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to believe that they could easily discover these
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and that they could bring it
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and that they have unique characteristics
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and it was worth taking the risk.
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So they believed from a safety and efficacy perspective
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this new class of drugs would be a game changer.
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And I think sometimes you're inspired
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by someone willing to take a risk
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so manufacturing decided they could figure it out
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and get it at a cost that might make sense.
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And then the last one which was really interesting
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was the challenge of commercializing it.
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Even if you could discover it, which we did
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and manufacture it at a cost,
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could you convince a general practitioner vet
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who has to practice across specialties
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to be able to prescribe
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and actually utilize monoclonal antibodies.
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Even if you look at human health,
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this is generally not done by your primary care physician,
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if you're getting a monoclonal antibody.
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So it was really to believe
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that something existed in animal health
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that at the time really didn't exist in human health.
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It was mostly in the purview of specialists.
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And this was really sitting side by side with our customers,
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getting a conditional license as we did on Cytopoint
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and teaching them that the efficacy and the safety profile
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was exciting enough for them to try it
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and then holding their hand through the process.
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And now they've been some of the biggest proponents
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and accelerators of the space of monoclonal antibodies.
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But I think it took each different group
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being willing to take the risk and watching someone else
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and realizing if they could do it
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then they'd figure out a new way in each of them.
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So it was I think probably a number of steps
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that got us there.
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That's a great story,
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a great example of imagination, Kristin.
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Thanks so much for sharing time with us
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and your views on imagination today, much appreciated.
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Thanks so much for having me Martin.