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Chris Martin, Verona Pharma 🇬🇧 | Ohtuvayre, COPD, Execution | E34

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We’re online with Chris Martin, COO of the 6th most valuable biotech in Europe, Verona Pharma. Their amazing story sees them bring a fully-owned respiratory drug to market and multiply its valuation by 120x within the last 5 years (from $50M to $6B today) 💸

We talk about the commercial rollout of Ohtuvayre, Verona’s drug. We also discuss the British roots of the company and why execution is the most important in biotech.

⭐️ ABOUT THE SPEAKER

Chris Martin joined Verona Pharma as their COO in 2020. He’s at the helm of Verona’s commercial strategy, driving the company’s progress in respiratory medicine. Before Verona, Chris played a key role as Executive Director of Marketing at SK Life Science, where he helped launch the CNS treatment XCOPRI® (cenobamate tablets). He also led the marketing efforts at Cempra, guiding the launch of their first product, and spent a decade at Salix Pharmaceuticals, where he led the Xifaxan® marketing team through its acquisition by Valeant Pharmaceuticals.

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Transcript

[00:00:00] Intro

Chris Martin: It is going phenomenally well, but it’s really been the best respiratory launch in the recent history. If not ever, I know if I missed something, I can up. You got it all. I think because the path to market was very clear there. The focus of the company really shifted in 2020 to be not necessary. Not European based, but US-centric, but we also became a little bit more US-centric with our investor base.

Yeah, execution is the key. I mean Verona’s the perfect example of execution. We didn’t create new science, we just executed on science that had been there, and then we created value from that. But execution’s hard, it requires discipline. It requires focus. It requires a lot of commitment because it’s, it’s very easy.

Sometimes to see the new shiny object or the new thing over here and you lose sight of what the main path is. New 

Philip Hemme: episode. I’m your host, Philip, and on this show I’m interviewing the best Europeans in biotech. To help you grow. One of the best stories in biotech at the moment is Verona Pharma. This UK headquartered biotech was able to bring its fully owned drug on the market in respiratory disease, COPD, and it grew its valuation 120 times in the last five years, went from $50 million valuation to now 6 billion.

It is now the seven’s most valuable biotech in Europe. So I talked to Chris while he was in raid North Carolina. I didn’t know him personally, but I know one of his colleagues very well, and I’ve been following Verona for the last 10 years. We talked about the commercial rollout of their drug out there.

We also talked about the British roots of the company and why execution in biotech is everything. So here’s my conversation with Chris and please hit the like and follow button if you’re enjoying it. Alright, welcome to the show, Chris. Thanks Philip for having me look forward to the conversation today.

Yeah, very exciting. 

[00:02:04] Commercial rollout of Ohtuvayre

Philip Hemme: I wanna start with the, the commercial.

I mean, it seems like it’s going very well, so can you like, tell me a bit more about it? 

Chris Martin: Yeah, it’s, it’s going phenomenally well. You know, if we think about it, it’s really been the best respiratory launch in, you know, recent history, if not ever. I. If we fundamentally go back to why O JVA is launching so well, it goes back to a lot of the early work that we did, which identified a tremendous unmet need within COPD.

You know, many of these patients who are dealing with a chronic progressive disease are continuing to have persistent symptoms, and those symptoms manifest as dyspnea or trouble breathing, and that leads to them not being able to participate in life. So a drug like O2 Air that provides. The bronchodilation and long-term nonsteroidal anti-inflammatory effects has been very appealing from a physician standpoint and a patient perspective, especially since you’re adding novel pharmacology to the space, which they haven’t seen in a long time.

So, you know, I think that’s been the driver of the launch as you guys have seen, you know, we just announced our Q1 earnings with over 71 million in that revenue, 25,000 dispense scripts. Over 5,300 riders and again, in a very short period of time. So, 

Philip Hemme: and then big, and then there’s strong growth compared to Q4 last year as well.

Chris Martin: Totally. If you look at Q4, we were, it’s about almost a hundred percent growth from a revenue perspective. You know, our dispenses grew significantly. We, our, our new patient starts are 25, over 25% higher than what they were in Q4. You know, we added over 50%, approximately 50% more writers. So. Every metric that we have is growing at a very high rate.

And I would argue that, again, going back to the initial commentary, the, the unmet need and a profile of a drug that looks like O2 VOR are driving it. 

Philip Hemme: Yeah. That’s great. And I’ve seen also that the, the peak or the sales estimate and the peak sales is, is really high as well. I. I mean, it’s obviously always a bit hard to forecast Exactly, but I’ve seen it.

It’s in the, in the billions. I’ve seen even one, one analyst was predicting like in the 3 billion peak sales, which is seems like, 

Chris Martin: yeah, I think from perspective we have a variety of different peaks. You know, or from three, I think Consensus Peak is somewhere around 3 billion now. And you know, we have higher than that, I think.

If we just look at the market today based on our pricing, based on the gross to net that we have, you know, 1% patient share of these 8.6 million patients in the US are treated is about a billion dollars in revenue. So, and from our side, it’s very hard for us to understand why O2 Air can’t penetrate the market based on what we’re seeing early.

Four, five, 10%. There are other products that have done that. Trelegy is over 12% market share, Symbicort 22, and the pharmacology is not unique. So from a, from a long-term setup, I think we’re, we’re in a very good position to continue to create value. That’s really exciting 

Philip Hemme: actually. That’s, that’s, and one thing that is, is really amazing and there’s very few biotechs who manage it, especially, let’s say biotechs was a European dagon, is that’s managed to bring it on the market.

Without any partner. You, you, you fully own it. I mean, you have signed in China, but at least in the US and Europe, you fully own everything and you make the conversation conversation yourself, which I think that’s amazing opportunity. Basically. 

Chris Martin: It’s been a great opportunity. The company from, I joined in 2020 with Mark Hahn and Dave Elli and a little bit after they joined, and I think from the beginning we, we always were preparing to do this ourselves and I think fundamentally.

You know, I, I believe that biotech, small biotech, mid biotech can compete with large pharma. If you have the right resourcing, you have the right funding, you have the right product. And from the beginning we were always well financed and I. Well ahead of what I would say the normal commercial cadence is now.

We did a discipline, but that allowed us a lot of flexibility and I think has played an integral role into launching the way that we’re launching right now. 

Philip Hemme: Yeah. That’s amazing. Yeah. 

[00:06:42] Fierce competition in COPD

Philip Hemme: And one, one thing, I’m, you, you mentioned a bit the competition, but at least that’s, that’s one thing I saw that seems like the competition is pretty strong.

I mean, the. We are talking about like, I mean I saw Trilogy, it saw Symbi court. It’s like billion dollar drugs as well. Launched by Astra, by by GSK. I guess they’re also like also, and it’s quite fierce competition in, in established. Like how do you, like, how do you look at it? 

Chris Martin: I don’t look at, you know, O2 VIR is different.

Like I don’t look at any of those as competition because the way O2 vir, or the way we’ve gone to the market is these doctors are looking for things to add or help their patient today. And so like if I was Trelegy or Brez three, which launched in the last five years, in order for them to gain market share, they have to take away from something else.

Now our scenario, we, we, we understand what the doctor’s dealing with, which is, and, and everybody does too, but they’re dealing with a chronic progressive disease and they’re used to adding therapies. At some point, they run out novel pharmacology to help these patients. And we don’t have to displace a Trelegy or a brez treat.

We can be added to those, or we can be added to a lab, an Advair, or just a steel a lama, and it allows for those drugs to exist while us being added to them to help these patients long-term. From a physician perspective, that’s a really nice approach because it allows them to kind of keep the patient and maintain them while trying to improve them a little bit further.

I do think long term that the profile of O2 AIR is, is very compelling for physicians because it allows them to think about using ICS less or steroids less. And, you know, because you’re getting bronchodilation, nonsteroidal anti-inflammatory effects on this molecule long term. I believe that what we’ve seen in research and heard from physicians is they like the idea of inserting O2 V earlier because it allows them to delay ICS inhaled corticosteroid use and potentially limit patients’ exposure to that while maintaining an anti-inflammatory effect.

Philip Hemme: Okay, that makes sense. And I, but, and I guess from a commercial strategy, I mean, add-on I guess is already enough to drive the prescriptions, but I guess if you go into that then in the second stage and you’re already the main monotherapy or first more first line monotherapy, I guess, then it’s even more interesting from a commercial point of view.

Chris Martin: Very much so. I think as you see the evolution, we want to be first add-on, right? Like regardless of what, background therapy they’re on, if they’re experiencing persistent symptoms. Think about O2 Air as the first add-on. Then in the future, what you can see us doing or being into is how do we get into that first, how do you provide like a, the first use of the first drug for these patients that that is providing?

And that’s where our lifecycle planning comes into play as well, where we’re bringing out, I. Or we’re developing a, a Lama plus O2 there, or NC Fran. And that essentially is giving the doctors a dual bronchodilator, non-steroidal anti-inflammatory in one asset and they never have seen that before. So that.

Pipeline allows that, that expansion into, as you described, maybe more moderate, mild patients in a single compound, a single asset versus a, a multiple drugs that these patients may have to take. 

Philip Hemme: That’s it sounds like it. Yeah. You have. You have the opportunity now, opportunity or down the line as well, over the next next steps.

That’s good. 

[00:10:34] UK origins of Verona Pharma

Philip Hemme: And I, I wanna go back also a bit. You mentioned about the, the, let’s say UK slash European origins. I mean, you joined a bit later, but curious if you can talk a bit about the, also the history of the company, because I think they started 2005. In London. 

Chris Martin: That, that’s correct. It was, it was London based and really it was the brainchild of a few respiratory pioneers.

So Sir David Jack who had, had invented many respiratory drugs and his kind of is his final thing. He wanted to find a drug that could provide, bro, he thought that you could do, create a drug that could provide bronchodilation and nonsteroidal anti-inflammatories with one molecule. And so he went about researching and trying to find this co a compound like this.

And one of the main compounds out of this research was NC Fran. And as you stated it, we started in 2005. And over those years it was looked at in a variety of different respiratory conditions like cystic fibrosis, chronic cough, asthma, and COPD. And then as we moved into the late. Near 2020, you started to get more data around COPD, and that led to the first indication really being in COPD in the nebulized form.

But the molecule had been studied extensively throughout those years, and what was always consistent was how the molecule performed. Regardless of where you are looking at it always perform from a efficacy and a tolerability standpoint across the indications. And I think one. When we looked at this asset, we saw an opportunity to really, you know, actually accelerate, highlight a molecule that has tremendous potential because of the, the mechanism that it provides in respiratory disease.

Philip Hemme: That’s, that’s true. And the, and the also, what, what’s, I mean also what’s pretty cool on, on the story is that, I mean, you had. Like very significant, I mean, significant investors, especially on the, the V side, VC side. We just talked before the thing, the recall button, I mean, I think was invested. All Bmad invested, no lower holdings invested as well.

And then rapid, I mean we listed in, in the UK rapidly, but also dual listed on Nasdaq. And, and then, and what what was also really interesting to me was that you also shifted more. More towards also having like a US team with, with David joining, and you and a lot of the executives joining as well. And, and really I think also really focusing on, on the FDA and the US markets.

Yeah. Can you like, I if I missed something or can you 

Chris Martin: No, you you got it all. I think, I mean, I think the focus there was because the path to market was, was, very clear there. The, the focus of the company really shifted in 2020 to be not, not necessarily not European based, but US centric, which allowed for the focus on, you know, we understood a pathway to get the product to market through our regulatory channels.

We also became a little bit more US-centric with our investor base. And I mean that all tied together with NASDAQ listing and all the stuff that you’re talking about there. And I think, you know, from there it became an execution story. The team did an amazing job. Let’s, let’s, let’s put in context of what 2020 looked like when we covid was happening.

So the, the medical and clinical team was able to execute a respiratory clinical trial during a global respiratory pandemic. And produce results that are transformational with, with O2 Air. And then from there, our regulatory team took and went to the FDA and got approval. So I, I mean, it’s such an amazing team effort, but also highlights, you know, I.

How execution, when you focus on execution across an organization, how that execution can quickly translate to results and more importantly for the investors, translate to value creation. Think about Verona in 2020 was a $50 million market cap and they needed, we needed to raise $200 million to do the phase three study.

That was not an easy ask, but the team and the, the management did a very good job of getting all that in place so that we had resources to run that trial. And, you know, you fast forward today close to a six or $6 billion market cap, the value creation during that time by focusing on execution, that they’ve been tre tremendous.

Philip Hemme: That’s, that’s, that’s amazing. Yeah. That’s. I mean, yeah. I mean I’ve seen that also on, on the show, quite a, I mean, it, it, it is something also that came back quite a few times. I. One, once you advance in clinical trials, you need having mean deeper pocket investors. And then that’s on the US almost exclusively.

I mean, at least today. And then also what I heard also often is like that the market opportunity is just way bigger in the us, especially for innovative drugs, just from a reimbursement appetite for or for reimbursement and for everything. And that’s basically you. 

Chris Martin: It’s definitely true. Like you, you talk about reimbursement landscapes.

If we just take COPD, you know, the pricing dynamics are so different between Europe and the us. The US market within COPD is about a 2 billion, that, excuse me, a 10 and a half billion dollars market. Same drugs in Europe are about a $2 billion market. So like it’s five x the opportunity from that standpoint and you know, we really.

You know, you know, by focusing on the US you can create value that allows you to go in other regions as well. Like it allows the access for medicines in other regions, but you know, the driver of, you know, probably revenues across, it’s not just respiratory, it’s across a variety of different conditions.

Tends to be the United States as well. 

Philip Hemme: Yeah. Yeah, I mean, what, what, I mean it’s always a bit the, also the. I mean, it’s a bit sad for, for other regions, for patients, you cannot access the drug as well, but Yeah. And that’s as it is a reality. 

Chris Martin: Yeah, I mean, I think it’s a reality, but that’s where there’s things that, you know, companies, I mean, again, everybody explores of, are there early access programs, are there ways to work with the EMA or other regulatory agencies to provide access to drugs that are truly innovative to patients?

I mean, this is not a respiratory or it’s O2 specific issue. It is a. It is a macro issue across all all organizations today. So, you know, it’s just something that I think, you know, from our side, we try to create the evidence to support value. And we did that tremendously during launch with the trial, but also looking at some other things post long post approve, post approval.

And I think you have to be able to tell that value story across different regions. Not only the US but across Europe, China, other regions. And how 

Philip Hemme: is it going in w was Europe now is I think you have, you have 

Chris Martin: also for that. We’re in a, from a European standpoint, you know, from a Verona standpoint, we are, you know, actively engaging with the EMA you know, looking at how that approval pathway is.

Our, our, our ultimate strategy though within Europe is to partner. We, as you mentioned, we’ve become US-centric and there are certain partners that have more expertise commercially, regulatory, clinically in the regions that we feel is beneficial for making sure that O2 A reaches its potential in an area.

It’s why we, we partnered in China, we felt like nuance. Provided those expertise to allow us to best serve the patients in that area. So I, you know, while we’re engaging, we are also, while we’re engaging with the EMA, we’re also actively, you know, kind of exploring partnership opportunities that, that can bring this, this novel pharmacology to the different regions.

Yeah, that makes 

Philip Hemme: sense. Makes sense. And yeah. And one thing that I, I, I was wondering as well, from what I heard, at least from the EMA, that they, they love the head-to-head trials as well. And I’ve seen that you didn’t do a head-to-head trial, so is. I 

Chris Martin: think that’s, that’s something we’ll discuss with the EMA.

I think, you know, from our stance, we didn’t, I mean, to be fair, we didn’t ask for EMA guidance when we went into a phase three trial. We, we went in and we felt a better approach would be come to the EMA with the data and then talk about. How that data supports an approval. And that’s the, the approach that we took.

And I think our, our team has been successful in the past with those type of approaches. If you look at the enhanced trial, we have cohorts that represent comparison cohorts. There are patients on lama, there are patients on laba, there are patients on lumbar ICS. So you can, while, while, you know, maybe not the direct way that the EMA wants, there are ways to show difference between cohorts within the enhanced program, and I think what we’ve shown consistently is regardless of background therapy, O2 A provides a significant benefit to these patients across all metrics. It doesn’t really matter the background therapy, the, when you start inhibiting PD three, PD four in a patient that pharmacology doesn’t doesn’t discriminate to what the background is.

Philip Hemme: Makes sense. Yeah. Yeah, and, and I guess also that it’s not just for the, I mean, I guess the approval in. I mean, easier to, to get, but then it’s the reimbursements 

Chris Martin: we were just there. Yeah. Because each region’s a little bit different and how they look at the trial and the cohorts and the value is different as well.

And, and as we talked about earlier, the way they’ve looked at COPD is probably incremental. It’s interesting to see how they’ll look at biologics from a pricing standpoint there, because, you know, the biologics started in more small diseases and now moving to. To respiratory with Dupixent. It’ll be interesting to see how that pricing dynamic is affected with nar, novel pharmacology as well.

Philip Hemme: Yeah. Yeah. We, we’ll see how, we’ll see how it plays out. Yeah. Okay. 

Chris Martin: Exactly. 

[00:21:24] Strong Clinical data for Chronic Disease Patients

Philip Hemme: And can, can you go a bit more on the I, I mean on the clinical data I’ve seen that you will, you will release or present quite a few. Posters soon. Yeah. But I’ve also seen that the phase three results were actually really like clear and really, really strong data.

Could you be a bit like 

Chris Martin: Yeah, from a phase three perspective, if you look enhanced one enhanced two trials. You know, our primary endpoint was FEV one zero to 12 hours. You know that that endpoint was met in a highly statistical fashion across both trials. I think the other things that we saw were consistent improvements up across all lung function measures, peak, trough and then we also saw improvements in symptoms and quality of life.

You know, I think the other thing that was really important outta that trial was, you know, while not powered to be an exacerbation trial, not enriched to be an exacerbation trial, you nominally saw 40% reduction in exacerbations across these trials in a patient population that is probably more like the real world than an enriched population.

So, you know, with a combination of those results, I think. Really we’re the foundation of the excitement of this launch, right? Like those result, like we can’t launch a drug that is, it’s hard to launch a drug that doesn’t clinically provide a lot of benefits. And you know, the, the profile of O2 air between the lung function, the symptoms and of the exacerbation data is very compelling.

And I think the other thing that’s probably mis, we probably don’t talk about it as much, is. The safety profile. Sometimes you get novel pharmacology and there’s some trade-offs from a safety profile standpoint, you know, when we look across all the phase three program and, and even early phase two work, the, the safety profiles consistent with placebo.

So you get this novel pharmacology with very limited risk for these patients. And so if we go back to like the positioning is add-on, like it’s not far to add something on that doesn’t. Inherently potentially give you much wrist on the other side so that al especially compared to, especially compared to co corticosteroids where you have very much so like the pneumonia risk.

And you know, the interesting thing with steroids, I think, well, physicians understand those, some of those risks thrush, other things that may happen. You know what’s interesting is when you talk to patients like, you know, patients, we, we forget sometimes how they look at stuff in a. A singular box. So inhaled cortico steroids are very different from oral steroids and their side effect profiles.

They both have risk, but a patient has a very hard time delineating between the two. So they lump all steroids together and they think of all those risks associated with them. So the, the idea of O2 Air being able to provide this non-steroidal anti-inflammatory really is appealing from a patient perspective because it eliminates some of those worries that they have on a day-to-day basis of the drugs that they take.

They may be rational or irrational worries because sometimes, like we we’re not always rational human beings. So. Like, like so, so, but by eliminating that, it also helps with compliance. It helps with people taking drugs. It helps with a variety of things that are all problematic when you deal with chronic diseases.

Chronic diseases, patients have trouble staying on therapy. Well, if you can provide drugs that have lower RI, a high benefit to risk profile, it potentially can encourage that long-term adherence as well. 

Philip Hemme: Yeah, I mean, especially any drug, I mean any chronic drug as well. If you have mid longer term side effects, which I guess, I mean, especially in CNS, so it can, can happen.

It’s, it’s very problematic. 

Chris Martin: Like it’s very much so. Yeah. And you know, you’re dealing with E-N-C-O-P-D-A patient population that. There’s a lot of comorbidities. Like they’re not just COPD patients. They have cardiovascular disease, they potentially have diabetes. They potentially have like mental health issues.

Like this is a complex patient population that isn’t just taking COPD meds. So, so that, that is an important aspect, not only for the physician when they’re looking at drugs, but also the patient. 

Philip Hemme: That’s good. 

[00:26:01] Reaching Profitability for Verona Pharma

Philip Hemme: Switching a bit to, to finance. I mean, you mentioned the, the market cap 6 billion, which is, which is amazing.

I’ve seen even an analyst said that one of the best stories in biotech, which I’ve not seen too many analyst saying that, which I, I think must be very flattering as well. 

Chris Martin: Yeah. It’s been, it’s been a little bit of fun time with that, but I mean, it, it goes back to execution. You, you create value by executing on, on a vision and giving a product that has.

A great benefit for patients out there. So it’s been fun. 

Philip Hemme: And and one thing I saw as well was that I think in Q1 you were basically profitable or just, just just profitable, which which I think is also really a, I guess, a big milestone compared to 20 years of, of burning cash or almost 20 years like 

Chris Martin: Yeah.

And it’s, you know, we’re only. Nominally two quarters in, I think you, the way Mark Hahn phrased it we’re, we, you know, operating run rate, our cash flow run rate is at an operate, operate, if you take non-cash charges out of there is, is positive from a run rate standpoint. And that’s, that’s a really, you know, for the long-term health of the business is a, is a great place to be as we move through the rest of the year.

Philip Hemme: Yeah, and especially what we just discussed as well, I guess, I mean from, from the commercial rollout, but also all the discussion you have with, with partners, you have way more leverage I can imagine. Very well, so yeah. 

Chris Martin: Yeah. From the beginning we wanted a, from a, if you think about the financing strategy, early on it was, and even the, you know, the preparation strategy was we have to prepare, like we have to, we have to finance, prepare, execute.

As a single company going to launch a product no matter what. And that gives us, as you discuss more leverage regardless of whatever conversation comes out. Because if you’re financed properly, you know that people have an understanding of you can execute, you can go do whatever you need to do on your own.

You, it’s not a necessary, you have to have a partnership to be able to execute. You know, I think Mark Hahn has done a tremendous job in, you know, making sure we’ve had financial flexibility through these five years, but also doing it in a way that has maintained the value for the shareholders, the non-dilutive financings that we’ve done through either debt or royalty, which I think you’ve seen recently where we paid back the royalty, the rips ahead of time.

Ahead of time, so that we could, we could. Take that burden away, but also put us in a position where we’ve, we’ve still have the financing in other avenues to be very supportive and, you know. How do I say it? Very supportive, but also forward looking in our, in our launch approach. 

Philip Hemme: Yeah. No, that’s the, I mean, I think for also from, we listen a lot on the, I mean, on the show of people and what I’ve seen as well.

I mean, that’s, that’s the ideal scenario. I mean, if you can be. As you said, also, if you can line up the finance, the data, everything, and if you can launch on your own without the partner and, and capturing most of the value, and that’s where basically almost all the big home runs in biotech happens. I mean, yeah.

At least, yeah. I mean, there’s some exceptions as well, but it’s, 

Chris Martin: yeah, they start with, I mean, for me as a commercial guy, like I, I’m a science guy on the side I guess, but like the commercial guy, we need, we need three things like for. A good launch. We need, we need a, we need an unmet need. Like it’s more like you can have the best product in the world, but if there’s not really an unmet need in a marketplace, it’s a little hard.

And actually not a little, it’s a lot hard. It, you need a great product and so like it, you can launch. But to be transformational in a disease category, you need a great product. Then the last thing, which I think you’ve mentioned on the Europe side, but even in the US you need a pathway to access and reimbursement.

You need a pathway to be able to get a product that has an, that meets an unmet need to patients as quickly as possible so that that access and reimbursement side is, is valuable across and so. With Verona, I think we have all three. We have unmet need, great product, and, and the way that we’re reimbursed in the United States under medical benefit allows access.

So though when I looked at this four years, five years ago, it was like, you don’t us usually there’s some gaps in that. And there was so much continuity across all three of those things that it makes for a very, it, it allows for a lot of a momentum on the, on the story as we move forward. 

Philip Hemme: Some. Yeah.

Yeah. That’s that’s good actually. 

[00:30:58] Chris Martin Joining Verona Pharma

Philip Hemme: It’s, it’s a good, though, it’s a good pivot as well to more your personal background. I mean, I wanted to ask also like on, on the why and, and how it happened that you, that you joined, that you joined Verona. 

Chris Martin: Yeah. I, I mean, the biggest why for me, as I’ve gotten later in my career, I’m not that old, but as we’ve got, I’ve grown in my career, the importance of the people you work with is critical.

And I had had a relationship and worked with mark Hah and Dave Zach in the past. And so the initial interest in Verona was around the people. I knew kind of what, who they were, what they were about, and their leadership philosophies and also their, their story and their success. And so, you know, that was an important aspect of why Verona, but.

The other, the, just as importantly, was the product and the opportunity. And you know, when I, when I did my diligence on looking at what the product was, how it was, how it was different, how the pharmacology could apply to a variety of different respiratory spaces, and then I looked at how the pathway to reimbursement was slightly different than typical respiratory products.

That became very appealing to me because. It, it mitigated some of the risks that we have as we go to launch. It doesn’t eliminate it, but it mitigates some of the risks. So I think that was the foundation for me. It started with the people and then the product was was a really nice close one A one B.

But for, for me, as we were, you know, and I talk to my team about this all the time, we spend. Fortunately, or unfortunately, we spend as much or more time with the people that we work with on a day-to-day basis that sum up our family. And you know, being able to work with people that you trust, that you respect, and that you can have frank conversations with good, bad, or indifferent, I think is so critical to driving the business forward.

Because when you can have those framed conversations, you can get to underlying root causes of issues, and then you can adjust and find solutions much quicker. And you can only do that if, if the core conversations are truthful and honest. And that the, it’s a, there’s, there’s safety in having those conversations.

And when you do it with people you trust and respect, it’s, it’s a very, it’s a, it can be very special. 

Philip Hemme: I, I like that. I, I, I like, like, especially how, I mean it’s not underestimated, but it’s in biotech we have so much the data and the product and the science that we. Sometimes some people look less at the people aspect, but I think at the end of the day it’s still people are people, people.

Chris Martin: There’s always the people aspect of this is, I think even more because the data and the science will always be there. But the thing that we always forget about is there’s always something that we don’t know or believe, or could be a problem that we haven’t seen. And if you have the right people in the right room AP asking the right questions and challenging the process.

You, you can, you can solve anything. I think the sometimes is, sometimes we struggle with, we create, in marketing, we call it a little bit of developer’s curse. We create this beautiful asset and we believe it’s, it’s, it’s so much better than everything else. I. We sometimes have blinders on to what the world and operationally, how that’ll adapt or integrate into something.

And if you can have honest conversations with people, you can, you can attack it from both sides. You create great science that can be operationally integrated into the workflow and into the medical community. And I think that’s, that’s sometimes we. We miss that sometimes. Yeah. 

Philip Hemme: Yeah. 

[00:34:51] Execution is Key to Success in Biotech

Philip Hemme: And I, and also what you mentioned, ex at the end of the day, it’s a lot about execution and when you have the, the right people problem solving together, working well together, I mean, that, that leads to great execution.

Chris Martin: Yeah. Execution is the key. I mean Verona is the perfect example of execution. Like, it, it, we didn’t create new science, we just executed on science that had been there, and then we created value from that. But execution’s hard, it required disciplined it requires focus. It requires a lot of commitment because it’s, it’s very easy sometimes to see the new shiny object or the new thing over here, and you lose sight of what the, the main path is.

And so having a leaders that can keep everybody focused on that kind of beacon is, is a critical aspect to make sure that you execute correctly. 

Philip Hemme: What, how did, how did you, you and, and the rest of the field and the executive team, how, what, like what were some of your lessons or some of the things that helped you keep the focus?

Chris Martin: I mean, I think, I mean, Dave does an amazing job for us at like, you know, keep, I call it a beacon or whatever the, the, the, the north star that we’re trying to go to. He, he. He does a very good job of canceling out the, some of the noise that can occur. And I think that’s translated for me and my team of like, what is our ul, what’s the ultimate solution that we’re going trying to get to?

And you know, we have a path to get there. But if you think that path is always gonna be a straight line, it’s not. There’s gonna be bumps along the way. If we can keep that north star, that, that ultimate goal in our, in our sites, let’s talk about how we still get there. Even if there’s a little bit of a left turn or a right turn along the way.

You know, you do that by keeping a aligning on, I think it’s alignment first. Like you, everybody has to believe what that goal is and then how you align on that. And then you keep it alive over the course of your conversations, your follow through to make sure that. People still understand this is ultimately our goal and how is your, how are your activities actually helping drive to reach that goal sooner than what we expected?

Because I think that’s the other thing that helps with value is executing at a quicker pace than, than what the world expects. And you do that by being focused as well. 

Philip Hemme: Yeah, that’s actually, I mean, yeah, it’s, I’m curious also even on the, on the organization. Like, how did you structure it? Because I, I, I was working in, in the biotech in, in Switzerland Molecular partners.

And one thing they, that I quite struggled was to, I mean, they had the top strategy, but then to align it and to cascade it down throughout the organization and to align everyone was actually like, not that easy. 

Chris Martin: It’s very hard. I, you know, and from a Verona standpoint, for the most part, for the first couple years there was only like 25 of us here.

So when it’s, I think to your point, when it’s smaller, much easier to align between a yeah. Hundred 

Philip Hemme: of people. And since there were 150, so it starts to be where it’s, yeah, about a hundred. It starts to be tough. 

Chris Martin: Yeah. When you start to add more people, that complexity gets in, but you, the key is making sure that you’re, you know, fruit.

For my team. I think we, it starts with my leaders being aligned to what we, I believe and we believe as an organization is the right thing to do, and then them translating it to their team. I think, you know, there are simple things that as a team we do across the organization to keep people kind of focused on what our goals are.

You know, I mean, they sound maybe trivial, but I think they make a big difference of alignment with. Company meetings that we’re updating people across the organization of all things going on so that they know how their contributions are ultimately achieving the, the big goal. You know, and sometimes that’s hard to do because it, it’s a time out of someone’s day.

But those things I think are really important to keep everybody focused kind of. Take away some of the distraction. Also highlight how their contributions are contributing to the ultimate goal. On the commercial side, we do this monthly too. Like just getting commercial updates on how we’re going from a organization standpoint.

It allows the people to be bought in, it allows them to ask questions. I think it also dispels chatter. So like by having those conversations, you actually can quell any noise that’s happening out there because we need, and we integrate on what we’re hearing and we address it proactively. You know, that’s, those things are easy, but sometimes, again, sometimes hard because you have to be disciplined to do them all the time.

It’s, it sounds, 

Philip Hemme: yeah, simple, but 

Chris Martin: not easy, but it, it requires effort, it requires consistency. I, I remember as a, my, my background goes all the way back to being, I was a rep, I was a sales rep, a sales manager, and you know, I used to, as a manager, tell all my reps. You don’t have to be the best clinical person.

You don’t have to be the best salesperson. You just have to be consistent. And consistency wins the day a lot of times because it’s hard to be consistent. It’s hard to do everything the same and be consistent over time. I. And you have to obviously hack 

Philip Hemme: consistent and persistent, I guess. 

Chris Martin: Yes. That’s a great, yeah.

Consistent and persistent. Like you’re gonna get hit with some things that are negative. You’re gonna have positives. You can’t get too high and too low during that time, and you have to continue to kind of push through. I like that 

Philip Hemme: actually. It’s I have also a background, I have a kind of half, half of me.

I mean, I have a foot in tech or like a software tech and a foot in biotech. And when I was running in first company we, we kind of optimized a lot the operations more with like a tech model. I dunno if, if you’re using like OKRs or like, lot of like project management tools and like tools to, to align everyone and what.

And I mean, I think in they, they did, I mean, some companies like it came from Intel or Google and did pretty good job to, to even scale it at tens of thousands of people and, and to align everyone. But what I was surprised that coming in biotech then I was like, okay, people were not using any tool. They were running everything on like basically an emails and PowerPoints.

Yeah. Like who, whose objective is which and what results and who could, can take which decision. Yeah. So it 

Chris Martin: was, and I, yeah, I was surprised and that, and that gets harder as the organization gets bigger because you have more and more layers to kind of figure things out. I, you know, one of our early philosophies from a hiring standpoint, because we were lean, was finding people that could do a variety of different things.

So, you know, my, my head of sales, marketing and training had. Done a whole bunch of stuff. Like he could do all those things. Like he, he has the ability to run all those functions. So as an organization, it gave us flexibility to be lean, but also give, and it was attractive for people because it gave them opportunities to be very broad early on.

And again, as you get bigger, some of that broadness gets contracted, but. You know, I think one of our early hiring for philosophies across the organization was hire people that have a broad skillset and, you know, for lack of a better word, or a jack of all trades than an expert of, of none. But they have enough experience across all these different disciplines to be able to drive the right decisions, right questions to move forward.

Philip Hemme: Yeah, that’s good.

[00:42:48] How to get to the top in Biotech without a background in science

Philip Hemme: I’m curious, one thing you said about. That you, you’re doing, you the science or science thing on the side. How was it for you to not, to not have a background in, in science? 

Chris Martin: Yeah. I mean, I, I, I, you know, my, my background as a, in from college was marketing and finance and, you know, my first job in pharma was at Eli Lilly.

And at the time before, you know, back in the day, Eli Lilly used to only hire pharmacists. So we, you know. I think you learn through your career of how to learn different science components and. As, as I think all of us on the sales side, do we probably become dangerous on the science side because we know enough to, to really get a, get, get the answers.

But for me, the science is interesting because the science to me, helps me understand commercially where a product can go. You know, my past experience, I worked on a product called Rifaximin or Xifaxan in the US that was, ugh. A non-systemic antibiotic that was initially treated for hepatic encephalopathy, but because we understood the science, we understood that there were other avenues that an, a drug like this or a molecule like this could go into.

So the science to me is appealing because when I can partner with a, a, a clin, a Chief clinical development officer, or a chief medical officer to understand how that science could be applicable in other. Markets, it allows us to really push the potential of a drug. And, and, and again, if we go back to O2 air, one of the appeals is we know PD three, PD four expression or inhibition can, can affect many respiratory diseases.

And so how do you use that? How do you use that knowledge to find the best ways to bring it to patients in need is? I think that’s, for me, the science side. That’s fun because you have to understand the science to understand where applicable it could be in other places. 

Philip Hemme: Yeah. Like it, it’s a good example also how you can learn the science.

Kind of 

Chris Martin: on the job and over time. Yeah. And, and the easiest way for me over time has been interactions with KOLs. Like, you know, the KOL community in respiratory, in every disease category I’ve been, has probably been integral in me getting up to speed. And, you know, I. You, they love to teach. They love to tell people and, and teach people.

So having an inquisitive mindset where you ask questions, I think has always been valuable for me or people on my team to get up to speed on the science. And sounds like you’re a very curious person as well. Well, we, I think we have to be all of us that, I mean, at some point questions are good because it helps you get to better answers.

Philip Hemme: We, you know, in French we say curiosity is a, is a, it can be a, a bad default, but because there’s kind of two sides of a coin. But in general, at least in business, I think it’s, it’s 

Chris Martin: very, I mean, I think you have to not be too curious where you don’t do anything like you, like I, that’s the, so like, like sometimes you ask questions to ask questions, but if you’re asking questions.

Being curious to understand the state of a business to be able to get better. That’s a different scenario. And you know, we’ve all been faced or seen people that ask questions to ask questions and like, you’re not, the, the goal of a question is to drive a process or a behavior to be better. I, and also to help under help for me understand either a challenge or a hurdle that we’re facing organizationally.

Philip Hemme: I like that. 

[00:46:33] Royalty model in Biotech

Philip Hemme: A last last question before, before like a quick fire, quick question. One thing you mentioned about royalty. I’m, I’m curious if you could expand, maybe not just the, I mean with the Verona example, but expand a bit on the royalty model because something that, it’s not that recent, but seem to have worked very well, but more recently, I mean, I’m thinking about royalty pharma and, and a few others where there seem to have been extremely successful and especially in the last, in the last few years.

Yeah. Can you just like how, how you see it, what, what you have seen. 

Chris Martin: Yeah, I think that that royalty model, and again, mark our CFOs much more attuned to describing and kind of getting into the weeds on these, but for me it’s a way to provide additional financing that is non-dilutive on an asset that people find, see potential.

And so you’re right, royalty pharma, there’s a bunch of other ones that have had really good success and there’s been success in respiratory using these royalty streams for companies. But you know, in, in this situation or in Verona’s situation, you know, we felt at the time, a, a, a small royalty deal. Plus the, the debt that we had would provide an avenue for cash that was non-dilutive to our shareholders.

And what in, in the long run, when what we set up was a way. You know, I think when you do these type of deals, and Mark, mark is phenomenal at doing these, you wanna limit the company’s exposure risk to the. Our deal had fixed returns in it. Like where there was a cap on the return for the, for them it was not in perpetuity.

You know, there are certain models that you could apply here that would, would allow you to kind of be beneficial for both parties. But you know, I look at ’em as when you, if you have an asset that has flexibility on the margin to be able to get money in that funds operations, royalty agreements a royalty.

Debt deals are a way that a company can kind of source or, or fund activities without having to raise any more capital on the, on the backend. 

Philip Hemme: Yeah, that’s, that’s interesting. And that makes yeah, makes total sense. Yeah. No, I like it. It’s a, it’s a good it’s, it’s a good good way to wrap. 

[00:49:02] Quickfire

Philip Hemme: So I, the la the last part is just some, some quick fire, some quick questions you can answer, like, yes, no.

One, one sentence. And just, just a few minutes. One is like, basically what’s, what’s on top of your mind at the moment? 

Chris Martin: From my, my top of my mind is like, we’re going through an expansion, so we’re adding people. We’re, I don’t, I think you probably saw in our earnings we’re adding more reps. For me, it’s how do we keep the culture on top of my mind today?

How do we bring the right people in that can continue to keep the culture and the momentum of launch and like that’s an important aspect. You talked about growth, culture and keeping cultures important, and since we’re going through a growth phase right now and adding people, I wanna make sure that we maintain the culture that we’ve, we’ve, we’ve created.

Philip Hemme: Yeah, that’s a good one. One advice to young life science professionals that, that maybe want to go into your path. 

Chris Martin: I would never that’s a good one. Never say no to opportunities to try things differently or do do different things like don’t, don’t be, don’t be scared to do something a little bit different.

Because even if it doesn’t work out, you’re gonna have a learning from those, those activities. And so I would, I would push yourself to try to do things differently or think about things differently and embrace the risk or the uncertainty of it. 

Philip Hemme: I like that. I guess e especially when you have a bit more experience, it’s, I think harder.

Chris Martin: Easy do. But I do. But like, and I’ve always, I mean, from my side, I’ve always enjoyed, like, I’ve always felt like I could. You can bet on. I believed in my abilities and confidence and my abilities that it was easy to bet on yourself. But you know, when you’re younger in your career, I probably, when I was way younger, I probably didn’t feel that way.

But I think if I could go back and tell myself in my younger days, I’d say like, always push yourself to get outta your comfort zone a little bit more than you probably. Thank you, Kat. 

Philip Hemme: I like that. What’s one of your biotech or science books? Oh 

Chris Martin: God. Oh, you just stumped me on this one because I’m not a big reader.

I got none. I got none. 

Philip Hemme: No, no. One, one mistake you made in the past 12 months mistake in the last 12 

Chris Martin: months, I.

Mistake in the last 12 months. Another good one. Oh man. I wasn’t expecting this one. It’s not necessarily a mistake, but I think, you know, we, it an underestimation for me is, you know. I, I am not gonna say it’s not a mistake, it’s an underestimation in my mind of, I, I always underestimate, or I, I tend to underestimate how hard it is or how, how hard habits are to change.

Philip Hemme: Hmm. 

Chris Martin: And you know, I think, you know, we talk about a great product, we talk about an unmet need, but we also, you know, we always forget that doctors have done the same thing for 20 years. So I think it’s, it’s not a mistake, it’s an underestimation of like habit change is, is hard. And it requires repetition.

It requires a lot of consistency. As we, if we go back conversation. So I, I think I always underestimate that I, and then I, I relate it back to the stuff I do with my kids. And if I ask my son to make his bed every day, which he doesn’t do it would be very hard for him to consistently do that because for the last 13 years he gets up and goes to school.

So like, it’s, it’s, it would be a habit change for him that would require a lot of. Extra attention. So I always forget how humans in general it, you have to habitually remind people to change, change them what they’ve done. 

Philip Hemme: Yeah. It’s a perfect to the last, last question, which is one new habit that you adopted recently.

Chris Martin: One thing you changed. One thing that I’ve changed, I’ve gotten very, this is personal, but I’ve gotten much better at taking time to like work out and do other things, which I think, you know, if we think about from a work perspective, I undervalued what those 45 minutes or 30 minutes of I. Doing, riding a bike or lifting some weights actually provide from a mental state.

And it’s funny, I talk to my team all about it. Like, I’ll not do it for three days. And then you do it and you realize, you become clear. You, you like just, and it’s a habit. As you work and you get travel, it’s hard to do. So I think over the last six months I’ve tried to make a commitment to try to at least be active.

A little bit more than I have. And when you’re busy doing work, it’s hard. But I’ve also seen the benefit of how your mind clears when you actually do it. So 

Philip Hemme: I see you. Oh ring truck. 

Chris Martin: Yeah, yeah, yeah. It’s, yeah. This, this is a new thing, so I wanted to see how bad I sleep and I don’t like it. 

Philip Hemme: This you can work on it then.

Yeah. It’s 

Chris Martin: a, it’s something I can 

Philip Hemme: improve.

Thanks a lot. It’s a great it was a great conversation. Yeah. Thanks Chris. 

Chris Martin: Yeah, I appreciate and, and wish you 

Philip Hemme: the best and appreciate the time. Thank you. I’m impressed by how Chris and his team were able to execute so successfully. I’m also impressed by his. Deep knowledge of commercialization and its focus on execution.

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