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Gunilla Osswald, BioArctic 🇸🇪 | Leqembi, Alzheimer’s disease | E26

We’re at BIO-Europe in Stockholm 🇸🇪 with Gunilla Osswalld, the CEO of BioArctic, the inventor of one of the only drugs that have worked for Alzheimer’s.

We talked about the science and business behind Leqembi. We also talked about the Alzheimer’s field at large and transitioning from big pharma to biotech.

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⭐️ ABOUT THE SPEAKER

Gunilla joined BioArctic in 2013 after many successful years in executive positions at Astra/AstraZeneca, including Vice President for the product portfolio of neurodegenerative diseases. Since joining BioArctic, the largest Swedish biotech, Leqembi, one of the only successful drugs for Alzheimer’s was approved. This was an invention of BioArctic that Eisai and Biogen have commercialized. This is a particularly impressive feat considering 98% of Alzheimer’s drugs fail.

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Transcript

[00:00:00] Intro

Gunilla Osswald: We are pioneering with a completely new kind of treatment. It’s an earlier patient population. So we are building a new patient segment, if you will, with the earlier stages of the disease before you have the normal dementia diagnosis. How 

Philip Hemme: did you manage to make it work with basically everyone else?

There 

Gunilla Osswald: has been many failures. I think what the beauty of what BioArctic is doing is the Swedish mutation and then the Arctic mutation of 

Philip Hemme: Alzheimer’s disease. That’s where the name comes from. 

Gunilla Osswald: That’s where the BioArctic name comes from. I’m really grateful for all the time I was trained and raised by Astra and AstraZeneca, but I really enjoy working in the small farm.

It’s so agile, you can focus on the right things and not a lot of bureaucracy. You can really focus on the projects.

Philip Hemme: Bienvenue to a new episode. I’m your host Philippe and on this show I’m interviewing the best Europeans in biotech to help you grow. 98 percent of all new Alzheimer’s drugs failed. One of the only drugs that worked recently is Lekembi, which was approved last year in 2023. What most people don’t know is that the Kenbee was developed and invented by the largest Swedish biotech company, Bioarctic, and is commercialized with Azai and Biogen.

So while I was in Stockholm at BioEurope, I met with the CEO, Gunilla Oswald. I didn’t know Gunilla personally, but she was highly recommended by one of my listeners, Bertrand. We talked about the science and business behind Le Camby. We also talked about Alzheimer’s field at large and transitioning from big pharma to biotech.

So here’s my conversation with Gunilla and if you’re enjoying it please hit the like and follow button.

Today’s episode is sponsored by Turbine who is organizing an event at JPM 25 and is inviting you to join. You can join for a night of tech bio and hunger and wine at the end of the JPM week. I’ve known Turbine for years and I can highly recommend to join the event. It will be at Trellis Mission Street on January 15th at 9 p.

m. So click the link below to RSVP and secure one of the limited spots.

Welcome to the show, Gunilla. 

Gunilla Osswald: Thank you so much. 

Philip Hemme: It’s great to be here, super excited with the discussion.

[00:02:24] Leqembi and BioArctic

Philip Hemme: And I want to start with Bioarctic and Lake Wembley. Actually I just, I just met someone who knew more the Biogen and the Isar part, knew less about Bioarctic. I knew less that the technology came from basically from Sweden, from Uppsala.

And that you brought the first disease modifying drug for Alzheimer’s on the market last year. So maybe just, if you can tell, like, yeah, how do you feel about it, like, in general? 

Gunilla Osswald: Yeah. No, I think it’s amazing to be a part of the company who has where the originator of Lecanumab or Lecambi, it’s sold under that name.

And I mean, I really want to help patients and we knew Innovative Treatments, so And then Lekembe is the first disease modifying treatment for Alzheimer’s disease. And that is fully approved in the US, Japan, and many other parts of the world. Not yet Europe though. Really hope that it also will be coming to Europe, but so far US, Japan, China, and so far.

Philip Hemme: And the UK as well. 

Gunilla Osswald: And UK. Great. 

Philip Hemme: That’s great. And I’ve seen that, yeah, you, as I mentioned, the partnership, I’m curious if you can elaborate a bit more on the commercial structure or the deal structure. I think Asai came very early on. Very 

Gunilla Osswald: early on. Yeah. Already 2005 started to collaborate with BioArctic and then led to a license deal 2007.

And then A Sci has really been driving Lecanumab in the clinical stages and so forth and into the regulation now in the commercial part. And Biogen came on board as A Sci’s collaborator for sharing development costs and also commercialization. By Arctic, we have arrived to milestones and royalties. So we have 9 percent royalties on global sales.

And we have the right to the Nordic region where we are preparing, hopefully, to sell together with, with ASI. And we also still own other indications outside of Alzheimer’s disease. But it’s a great collaboration. 

Philip Hemme: It’s amazing that you managed to retain I mean, 9 percent is, is good, but it’s very good, especially for something signed so early.

Yeah. Yeah. I was wondering if it was disclosed the exact percentage, because I saw also from the commercial that the global drug sales, I think for Q2 was around 40 million in dollars, at least. And I think your revenues were 5 million. So it’s basically translate to the around, around the 9 percent plus some revenues.

Yeah. And then I saw the forecast is, is really like this. A lot of potential as well. Can you talk more about the We can just say, I 

Gunilla Osswald: mean, it has, of course, huge potential, and we are targeting mild Alzheimer’s disease and the stage before, which is called mild cognitive impairment due to Alzheimer’s pathology.

And no one really knows exactly how big that patient population is because there are no such drugs previously. So we are building a new population and building a new market. And then pioneering helping this kind of patients. And what we see is that if we start to treat early, it seems like we can have an even better effect for the patients.

So it’s really important to be able to diagnose patients at an early stage and to initiate treatment at an early stage. 

Philip Hemme: And how do you diagnose at such early stage like that’s, 

Gunilla Osswald: yeah. So the good news is not blood based biomarkers are also being evolving now and a lot of progress is happening there as well today.

I mean, it’s really, I mean, of course a clinical diagnosis, but also with either, CSF, like a lumbar puncture and CSF sample where you can see the protein structure. It tells you that you can has Alzheimer’s disease or doing a PET scan to visualize and seeing that you have amyloid deposits and plaques in your brain.

But the blood based biomarkers, which is really progressing well now, and it was last week a big Alzheimer’s Congress in Madrid, in Spain. And there we could really learn how much, the blood based biomarkers has evolved. So I think in a, in a year’s time or so, it will be more broadly used. Now it could be used more on the pilot scale and, and people are trying at different places, but I think in not long time we will see it being utilized broader, but it should be when you start to have symptoms.

Philip Hemme: And then you already, I guess you have a clinical trial as well on the, on these patient population Combined with the biomarker, I guess. 

Gunilla Osswald: Yes. So, I mean, when the Kempe is approved then in Japan, for example, in U. S. and, and China and, and Great Britain, that is then for when you have symptoms and you have the Alzheimer’s pathology.

There is also another big phase three study ongoing, which is on individuals before you have symptoms, but you have Alzheimer’s pathology. And since the pathology comes 10, 20 years before you have the symptoms, that is an idea then to think about what if we start to treat patients at that early stage, maybe then we can help to postpone the time to when you get symptoms considerably further.

Philip Hemme: Yeah, and especially what’s the onset for the like mild, not for the mild, for the, for the real symptoms, I guess it’s 60 plus, I guess, or what’s the? Yeah, 

Gunilla Osswald: it’s, it’s normally it’s, it’s more than 60 years unless you have some kind of, of more, there are different genetic circumstances why you can have it earlier.

So it could be much earlier if you have some genetic mutations. And the most, I mean, important risk factor is age. The older you get, the higher risk it 

Philip Hemme: is. It’s similar to oncology, I guess. 

Gunilla Osswald: But here it’s very clear that in older age you, you get much higher risk, but there is also some clear genetic risk factors as well.

So if you have one common gene which we talk about is called APOE4. And if you have two alleles of ApoE4, you can get Alzheimer’s disease maybe about 10 years earlier. And if you have one of them, maybe five years earlier than, than otherwise. So it’s so it’s but, but age is definitely the, the older we get, the higher is the risk.

Philip Hemme: And to stay on the commercial, I also heard just as a conversation with the As a previous CBO for BioNTech anyway, he said, said that Biogen, there was some pretty high expectation on the commercialization and that’s maybe didn’t go or they, they have some challenges to on the commercialization plan, but like, are you personally true?

What do you have to say to it? Yeah, no, but I 

Gunilla Osswald: think what we have to realize is that we are pioneering with a completely new kind of treatment. As I said, it’s an earlier patient population. So we’re building a new patient segment, if you will, with the earlier stages of the Before you have the normal dementia diagnosis also with the mild cognitive impairment.

And also it’s a new kind of treatment. It’s disease modifying treatment. It’s not, I mean, it’s affecting the underlying disease. So that’s also a new thing. And it comes with some infrastructure requirements. It’s an ID infusion. 

Philip Hemme: Yeah. And twice once a year, bi weekly. 

Gunilla Osswald: To start with, and we’re trying to see if we can give it a bit more seldom during maintenance phase, for example, and in the future, also subcutaneous injection that will make it so much more convenient.

So I think that part, and also in order to make sure there are some side effects that we need to be careful about, especially for six months. And that requires some MRI measurements. So, so there are some infrastructure that needs to be built up. And that has taken a bit more time in the U. S. and we, we’re hoping to see initially, but it goes also very well in, in Japan and in China as well to start it off in a really good way.

So. I think, but it’s, it’s, we are helping more and more patients. 

Philip Hemme: Yeah, fingers crossed more and more patients can access it. 

[00:10:40] Side effects of Leqembi for Alzheimer’s treatment

Philip Hemme: On the, I saw actually talking about the also MRI, I guess also one of the main side effects is, is a potential strokes. So it’s 

Gunilla Osswald: really some kind of brain edema. 

Philip Hemme: Okay. 

Gunilla Osswald: So, so like about 12, 13 percent get something called area E, which is that you can have some.

Some edema in the brain, less than 3 percent seem to have any symptoms. So it’s mainly something you see on MRI during the first six months. It’s transient for the most patients and comes quite early and, and goes away. So, and when it’s gone away, then you can start treatment again. And if you have a very mild, then you can treat all the time.

But if you have a bit more, then you do an interruption until it has result. 

Philip Hemme: Okay. 

Gunilla Osswald: So, but, but less than 3 percent seem to have any symptoms and then it’s like headache or dizziness mainly. It’s 

Philip Hemme: pretty low. It’s, it’s pretty low. Yeah. Because I saw the news I read over the weekend was from the Alzheimer’s week, I think it was WASH, the clinical trial.

was also an amyloid, if I’m correct, and then there was, I think one patient died from a stroke. So I was wondering also if it’s connected or if it’s, or what do you think about it? Yeah, I 

Gunilla Osswald: mean, there are some, some things you should be careful about when you look at the patient, if they are eligible for this kind of treatment.

And we have learned that there are some risk factors when, then it’s better than those patients should not have this. And I think that Josh presented last week what they had found one of those risk factors for those patients. They should not have it. So they changed the protocol. 

Philip Hemme: I guess that’s, 

Gunilla Osswald: it’s important to find the right patients.

Those that can have the most benefit from it with, with a reasonable risk profile. I mean, all drugs comes with some risk, but it’s important to have a good benefit risk balance. 

Philip Hemme: Yeah, that’s good. And I guess if, because I remember, I mean, covering. Alzheimer’s for the last whatever decade, or I’ve been in the media and I remember it was like a lot of setbacks.

I think it was, didn’t work. So like, so I mean, little better what, what hypothesis will work. So I guess for you guys, how, basically, how did you manage to make it work West? Yeah. And , everyone else didn’t make it. 

Gunilla Osswald: I’ve been working in this area for a long, long time. I mean, I devoted my career to, to brain disorders.

And I’ve been working with Alzheimer’s disease for many, many years. And there has been many failures. I think what, but the beauty of what BioArctic is doing is that it’s based on Professor Lars Landfelt and his research and his discoveries first with the Swedish mutation and then the Arctic mutation of Alzheimer’s disease.

And what he saw That’s where the name comes from. That’s where a bioarctic name comes from. When he saw that in this Arctic mutation family, they had increased level of soluble aggregated forms of amyloid beta that he calls protofibrils. And they are very neurotoxic. So his idea was, what if we make an antibody that selectively binds to those toxic species?

While we spare the monomers, which we have in, in the all cells in the body, which have physiological meaning. So we should not bind to those. We should wind to the aggregates, the soluble aggregated forms, which is neurotoxic. So that’s what’s his idea. And then he started at Uppsala University. Then he, he and pa force founded biotic and biotic generated band 24 1 or Embi Kinumab.

And that does exactly that. It binds and eliminates those soluble, aggregated forms of amyloid beta while it spares the monomers, the physiological form. So that’s, that’s the, and, but I, the way I’m trained from my 28 years at AstroNASTA Seneca is that, I mean, if you have a clear genetic link, then you have a a higher chance of success.

And that’s exactly what we have at BioArctic. It’s very clearly linked to genetics and it’s very solid science that it’s built on. 

Philip Hemme: We’ll talk about your career at AstroSeneca a bit after, But now it also makes sense. I watched the interview you did on Biotech TV to prepare a bit as well and when you talked about the science you were saying we are very good at being selective.

On the misfolded protein and being able to target. So I guess now it, I mean it makes sense you’re Yeah. Able to target the, the aggregate, but not the monome Exactly. Very selectively. Yeah. 

Gunilla Osswald: So I think, I mean, biotic we have two very strong pillars. One is to do very selective antibodies towards those misfolded aggregating forms.

A beta for Alzheimer’s disease, alpha synuclein for Parkinson’s disease, TDP 43 for ALS, for example. The other part where we also are among world leaders is a brain transporter technology that can help antibodies, for example, and biological drugs to come better into the brain to go through the blood brain barrier.

So that’s another part where I’m really excited. 

Philip Hemme: We will talk about this as well. And the, I’m curious, how do you make it so selective? I, because It’s still antibodies. I mean, how, yeah, how do you make it? No, 

Gunilla Osswald: I mean, it’s part of, of how we generate the, the antibodies is to do then the trick is to do very, selective and specific antigens when you then produce your antibodies.

And then to be, be clear to select antibodies that are very selective and specific and that spares the monomers. So that’s the whole idea between several of our, our projects. 

Philip Hemme: Okay. But there’s no, okay. But there’s no like completely different way of. generating antibodies or like, it’s, it’s a combination of antigen database.

But 

Gunilla Osswald: also engineering, of course. I mean, we have really skilled scientists working at, at Bioarctic. 

Philip Hemme: Yeah. Sounds very good. 

[00:17:03] Passing the blood-brain barrier for better Alzheimer’s treatments

Philip Hemme: And maybe on the blood brain barrier on the technology you have, I saw you signed another deal with Asia again. I guess you know them really well. Yeah. How, like, how do you What I was wondering, I saw there was also Abdi that bought another company, Aliada, how do you pronounce it?

1. 4 billion dollars, and I think that’s one of the main players in the field. So how do you differentiate on these technologies? And I think a lot of you will promise, oh, we are crossing the world over, but how, like. 

Gunilla Osswald: So I think that’s what I think the next generation for, for the biological treatment is to have different ways to come better into the brain.

So I think there is a lot of enthusiasm and energy in the whole field of seeing how can we do this. And there are some different ways you can do it. What we do and, some others do is to utilize transferrin receptor, which is one of the body’s own active transport systems to, to in that case get iron better into, into the brain and so forth.

And, and then we utilize that technology to help us to get the antibodies better into the brain, but we also have also combine it with enzymes, for example, to see enzyme replacement therapy, to see, so it could be utilized for, for different kinds of biological treatments. And when 

Philip Hemme: you say better, what’s, Quantitatively, like how much better is it?

I 

Gunilla Osswald: mean, you can I mean, what we see now, for example Roche had some really nice presentations of Trump Tinderman now in, in Madrid last week. And what we see is that they can have. Doses, which is two to four milligrams per kilogram, which is considerably lower. So, I mean, we see that we get several folds, much more into the brain.

So, so, I mean, we can talk about 20, 60, 80 fold, but what does it mean really when it comes, if we can have 10 times lower, if we can have 20 times lower, we, we don’t know yet. We’ll, we’ll see, but considerably. And it’s not only that we have a lower. What we see is that we get a very rapid distribution, or perhaps quickly into the brain, broadly and deeply.

So we also trust to, yeah, so it really goes in and distributes in, in the brain in another way than the naked antibodies. So when we see this, my thinking is that it could potentially have even better effect. We can have less side effects because it goes in another way into the brain and a considerably lower dose.

And a lower dose. 

Philip Hemme: the lower dose, I guess, as well. And 

Gunilla Osswald: then less side effects also from that perspective. And then that we want to give it subcutaneously also. So we’re in lower doses. So I think that’s really, I think the next generation now I’m really happy for Leucandamab and that generation of treatments.

I think the next one will be the brain transporter linked antibodies. 

Philip Hemme: And how, but I saw on the programs, I mean, Like Rambi was really advanced and then secure one in Parkinson’s, but then the rest is in preclinical. 

Gunilla Osswald: Yeah. So we are in preclinical stage, but, the, and the, the whole platform, and then we have several projects and we have two in Alzheimer’s disease, one together with ASIA and one which has generated a lot of interest.

Where we also will be meeting different companies here at this Congress, also for that and for the brain transporter technology platform, but also from our Parkinson’s program and so forth. So this is, has generated a lot of interest. So I think that’s, that’s really what’s evolving. And I’ve been excited about this for several years, but now we have data that we can present and show, and then it’s much more tangible.

It’s 

Philip Hemme: always better with data. Absolutely. 

Gunilla Osswald: Absolutely. 

[00:21:00] Market access for Leqembi in Europe

Philip Hemme: And maybe a quick word on the, on the, on your, on the conversation in Europe and the negative opinion from the CHNP, I think you’re appealing it, but can you tell a bit how you, how you feel about it? I mean, I guess, possibly, yeah. 

Gunilla Osswald: No one knows.

And we think it will be at CHMP next week. And then of course we, we hope that it will be a positive opinion. 

Philip Hemme: Yeah. 

So next week they are disclosing. 

Gunilla Osswald: So we think it will be, we don’t know yet. We think it will be on the agenda next week. So maybe at the end of next week we know what the, the re examination, what kind of decision they came up with.

And I really hope for the sake of, of patients and some of the patients in Europe that they should be able to have access. to this treatment, because I mean, we have shown everything that was expected to show. We have shown that we have a good efficacy, 27 percent slowing of decline for the whole population.

Philip Hemme: It’s pretty significant. 

Gunilla Osswald: That is significant. I mean, you save a bit more than five months out of 18 months for when the patients stay in the early stages when they are functioning quite well. And if you look at how many patients that comes to the next stage of the disease. More than 30 percent of the patients do not come into the next stage of the disease during those 18 months.

And that could mean going from being. independent to being dependent on different aspects. And that is definitely clinically meaningful. And then of course, as I said, it comes with some risks for side effects as, as all treatments does. And I’m convinced that for me, that the risk benefit is definitely the positive side with, with more benefits.

But that’s what they will be discussing next week. And, and I really, really hope that European patients also have access just as they do in, in the U S Japan, China and Great Britain. 

Philip Hemme: That’s a crazy thing. I mean, if it’s approved, basically everywhere else and every main market. That’s a surprise. So Great 

Gunilla Osswald: Britain, they selected then a slightly different patient population.

They took out the. a segment of patients where there is a little bit higher risk for, for the side effects. So that’s could be an alternative approach. We don’t know yet. So it remains to be seen. I just hope that patients will have access. I want each patient together with their physician to have a, an informed discussion to see if it’s good for them or not.

Philip Hemme: When the recording will be out, the decision will be out then. We’ll see. That’s, that’s, let’s say maybe on the, on, on that, on that topic as well. I mean, I feel like, and we had some guests on the show already mentioned that, that just the access to innovative drug in Europe is, let’s say, not optimal slash not on par to for sure the US, but even some other, some other countries, like what’s your take on the, maybe on the more global, global view 

Gunilla Osswald: No, but I think, I mean, different regions, they have their own processes and, and I’ve been thinking that in the U S they really want a good efficacy.

Japan, they really want to have safe treatments and Europe wants a bit of both. And I think us has approved and Japan has approved. So it should be also, but in Europe as well, I think we’ll see. 

Philip Hemme: But maybe if you can expand on, not just on bioarctic, maybe on your view on drug reimbursements. at large of whatever oncology drugs or other, other drugs.

How do you feel about it? Like, yeah, 

Gunilla Osswald: I mean, it’s also different. I mean, each payer has their own part and this very different also us, Japan, China, different parts of Europe. Europe is not one. It’s so many different countries and each and every one. So when you have an approval in Europe, I mean, you can start to, to sell in, for example, Germany and Austria.

Awesome. But no, but I think Germany and Austria, you can start very early on, then some other countries, you need to go into more reimbursement discussions before you can start to sell. So it’s different in, in different parts. So we just have, and we hope to be able to sell in the Nordic region. Then there will be of course, reimbursement and pricing discussions that our part race, I will do with, with the, the different, each Nordic country per region.

Philip Hemme: Okay. But even in the Nordics, you don’t, you, you’re not planning to commercialize yourself. It’s 

Gunilla Osswald: yes. Yes. Together with ASI. Yeah. But, but ASI is responsible for setting the price. So price negotiations, it’s ASI, but then commercializing, it will be Biotic and ASI in the Nordics and Biotic and, will then rely on, on ASI and Biogen for other parts of the world.

Philip Hemme: Okay. Yeah. I mean, it’s crazy when you think that the drug is invented, basically, let’s say between Uppsala and Stockholm and that patients in the country cannot access it. That’s 

Gunilla Osswald: really, really, I really, really 

Philip Hemme: feel so. 

Gunilla Osswald: Yeah. 

Philip Hemme: Yeah. At least that they can, they could access it. 

Gunilla Osswald: Yeah. It’s not because they should at least the patients have the possibility to make their own decision.

Philip Hemme: And 

Gunilla Osswald: we know several patients. Who are on the treatment. 

Philip Hemme: And they were on the trials. 

Gunilla Osswald: Yeah. Who were on the trials. And if you were on the trial, you are still on, on open-label extension treatment. Yeah. And we hear several of those patients who are so satisfied with the treatment and really worried if they’re not allowed to have it in the long run.

So I’m crossing my fingers. We’ll see. 

Philip Hemme: Fingers crossed there. 

[00:27:03] Gunilla Osswald’s commitment to patients

Philip Hemme: Maybe that’s, that’s a good good segue also and a bit more personal, like the personal side of, and more your personal career like. You sound very, very committed to patients, like truly deep down, like, can you talk about that of where or when you developed or had this?

Yeah. 

Gunilla Osswald: No, my background, I’m a pharmacist and I’m committed to, I want to help patients. And then I’ve devoted my career to brain disorders and I have a PhD in clinical pharmacology, helping to set the right doses and so forth for the patients. And then I I’ve been trained and raised by Astra and AstraZeneca where I spent 28 years and 20 years in clinical drug development.

And the last eight years I was responsible for Alzheimer’s and Parkinson’s treatments. On a global level, small and large molecules. And then 12 years ago then I came to Biotic. Wow. And I’ve been the CEO of Biotic now for about 11 years. And, and I think Biotic is such a fantastic company. I mean, we’re about 120 peoples and we are among the world leaders in two different areas.

One is then, as I said, doing the, the very selective antibodies, targeting those neurotoxic species while sparing the physiological forms and the other part, the brain transporter technology. So it’s, it’s so cool what we can do in a small company, but we need to work together with the CROs, for example, and academia, of course, but also with big pharma.

And I’ve been there, so I know what they need. And well, how they can contribute. And I know now what a small company can do and contribute with. So it’s really about finding the 

Philip Hemme: partners. But they cannot do that. They don’t want you. 

Gunilla Osswald: Yeah, but we are so, I mean, a small company, we can be very agile. We can be very, I mean, focused on the things that we, we are good at.

And then we, we need to find good partners. So that’s why I’m here today. the thinking about the rest of our portfolio. And we have a huge interest, which I’m really grateful for. Big pharma that needs us and we need them. So, I mean, it’s really to find the right collaboration. 

Philip Hemme: I mean, it’s, it’s amazing in biotech how collaborative, I mean, that’s why Partnering events like this exist as well, but it’s collaboration is so, so, so important, but yeah, 

Gunilla Osswald: it’s needed from, from all ends.

Philip Hemme: Can you give another example? Maybe, I mean, except Azae maybe, I mean, you, you talk, we talk about that, another example you have of like 

Gunilla Osswald: yeah, I mean, we had a collaboration with Abvi for several years, which also was a very good collaboration and they said that we were their best collaborators. So that was, we wrote different articles and things about that.

So that was a very good collaboration. Eventually they decided that that program did not fit their strategy anymore. So we got it back and we’re happy for that because we are driving it forward ourselves now. 

Philip Hemme: And that’s the Parkinson’s. It’s 

Gunilla Osswald: a Parkinson’s program. It looks really good as well.

And we’re now progressing into phase two and starting in the phase two trial in Parkinson’s disease later this year. So, and that’s the most selective antibody, which we know about for, for those, for those toxic forms of alpha synuclein. So that program looks really, really good. Nice. And we got 130 million US dollars from, from AbbVie.

So we are grateful for those. That’s good. Yeah. 

Philip Hemme: I like that. I mean, I, I, I like the, how you look at it as all of the, cause I always feel that when the farmer Vagner walks away, it’s always like looked at the very, as a very negative. 

Gunilla Osswald: But you know, I’ve been, I’ve been there as well. I’ve been in their pharma when I was responsible for some programs.

And then there was a change in strategy at that big pharma as well. So it doesn’t have to be any flaws with the program. If you get it back, it can be, but it doesn’t have to. So in our case. It’s no flaws at all. I mean, phase one data looks really good as well, which, which I’ve regenerated. And now we got it back when grateful for the, all the money.

I’m grateful for the program. It looks really good. And then we have also initiated ourselves after that. And alpha synuclein antibody combined with our brain transporter technology, which I also think as a, a lot of opportunities for the future. 

Philip Hemme: Reminds me with the drug coming back of, We talked about Ono and Galapagos and how on one of the episodes was, was Edwin Moses from Ablinks.

And he said it was, he was impressed by how, like, I think they got the back, the drug back three times. The same drug on three Pharma partners. At the end, they brought it to the market and made it with it. So we’ll see, we’ll see, we’ll see. But it looks very good. 

[00:31:55] Leaving AstraZeneca, transitioning to biotech

Philip Hemme: Can you, can you talk about the, the decision to leave the company?

I mean, When you was the same company, 27, 8 or 28 years, I mean, they must have a tremendous amount of attachment. The last part 

Gunilla Osswald: was actually not my decision because the whole r and d site was closed. 

Philip Hemme: Okay. So RD site was around at 

Gunilla Osswald: AstraZeneca. It was in , outside of stock coms. So the last thing I had to do for them was I was asked to, to what you say dismantle, I mean, to close the site.

To close the site. So I took on that. So I, I helped to close the site with 1,351. employees and 80 drug projects that should be going to different places. So I did that for about a year. And then after that, I came to Biotic and so much more fun to build than to close. Yeah. 

Philip Hemme: And imagine, because I was wondering what, what was behind the decision?

And can you tell the story of how you, how you got in touch with Biotic? 

Gunilla Osswald: I mean, of course I’ve, I have been following Biotic for quite some time because I was working at. AstraZeneca with the Alzheimer’s, but yeah, so of course I was, but ASI was faster at that time point when they, they took the license very early on.

Philip Hemme: I took all risk in a way. 

Gunilla Osswald: Yeah, yeah. Exactly. So I, I followed the program and what that was there were actually two different programs that I was looking at when I was at AstraZeneca that I was really interested in and, both of those targets are doing well. So we’ll see. We’ll see. 

Philip Hemme: And how did, then how, how did it happen?

The CEO position? I mean, it’s also. 

Gunilla Osswald: No, I was, I was hired started as a deputy CEO with the intention of becoming the, the CEO for, for the company. So within a year I was then the CEO for, for Baywatch. 

Philip Hemme: And how was it for you to be CEO of a smaller organization? Like, I guess you had some lessons or so.

I 

Gunilla Osswald: mean, there are, of course, a lot of new things for me. I mean, coming from a big pharma. Yeah. And and that was a very small company. We were about 20 people at that time. Today we’re about 120 at that time. We also, I mean, we’re thinking about how can we afford different things. So it was, when I started, it was only scientists.

And, and myself and the, and the former CEO and the two founders. But then now we have built, now we have a really, really strong company with very good scientists. The majority of the people working for Biotic are still, I mean, highly skilled scientists, mainly PhD level. And then we have a small but, development drug development organization with vast experience.

Many from Big Pharma. And then we are building a commercial organization now, stepwise for, for the Nordic. Hopefully then commercialization on Lakembi. And then we have a small, but very, very experienced corporate support organization also. 

Philip Hemme: Okay. And what were some of the personal lessons you learned?

Because, I mean, I think the, quite a lot of people in the audience as well are in Big Pharma and are thinking about going into biotech. You hear a lot of good stories as well, and it looks maybe a bit more fun and more nimble, but I think there are also some 

Gunilla Osswald: Yes! 

Philip Hemme: Some 

Gunilla Osswald: people, I think they belong better in a big organization and some people belong better in a small organization.

I can really see pros and cons with both. And I am really grateful for all the time I was trained and raised by Astronauts for Seneca, got a fantastic education, but I really enjoy working in the small farm. It’s so agile. You can focus on the right things. And not a lot of bureaucracy and things like that.

You can really focus on the projects because I mean, and the, the leadership, we can build it the way we want. I mean, it’s so much easier to have a small organization and, and to drive things and focus on the projects in order to help patients, but we need to work with big pharma. So I think that’s a really good benefit of, of seeing Both sides.

Philip Hemme: Yeah. And how did you manage to adapt? I mean, if you fitted well in, in a big organization and you fit well in a smaller one, I mean, yeah. What did you need to change? Like 

Gunilla Osswald: I can see I was the worst role I had at Biotic was, that’s what you say, switchboard telephone. I had kids get too many phone calls out of them.

Because I was not so good at that, but for the rest, I have been able to manage quite well. But if you, if you should like it in a small company, you need to be able to pick up all different kinds of, of roles. I mean, some roles that you know, and some roles that you don’t know, and you learn and train and ask and make sure that you take in help when you really need help.

So I think sometimes you feel that the, the, The jacket is very big and sometimes it’s your size, but I think it’s a beauty in that that you race to the challenge and race to the the possibilities. I really enjoy it. 

Philip Hemme: That’s cool. Yeah. I think that’s also, I mean, I’ve seen it’s quite a trend as well in for.

It’s I think quite recent in a few, in the few last years, especially in the US, especially with funds, let’s say flagship, but the first that comes to mind where they, they love to take high level executives from pharma. And to transition more towards biotech, at least that seems to be quite a trend. But it seems to work.

Gunilla Osswald: Yeah. I mean, I enjoy it a lot. And then also I’ve had the, the luxury situation of being able to build a really good organization with a fantastic management structure and, and really, I think one of my best skills is to bring in great people. 

Philip Hemme: Yeah. So we 

Gunilla Osswald: have a fantastic group of people working at Biotic.

Philip Hemme: Yeah. Nice. That reminds me of, yeah, reminds me of, well, first of all, I mean, biotech, I mean, there’s science, but it’s about people, people, people. It’s 

Gunilla Osswald: people. I mean, what I think, I mean, great science, great projects, great people. It’s all being done by the great people. So that’s why I also think leadership is so important.

I really want, when you are at work, You should be able to, to have a great working place. So you focus on the right things. And so I, we focus quite a lot on leadership and on, on company values and to really help to make sure that we, we have a good working climate and so forth. 

[00:38:42] Unique culture at BioArctic

Philip Hemme: Can you expand on it, on the culture at Bioarctic and how.

What, what makes it unique? 

Gunilla Osswald: Yeah, no, I mean, we talk a lot about three different leadership styles where the most important one is self leadership. I mean, everyone is a leader for themselves and that’s the most important one. 

Philip Hemme: Manage yourself. 

Gunilla Osswald: Yes. And then it’s, I mean, project leadership. Of course, we are there for the projects to help to come to patients and then the line management or the individual based leadership.

And then we, we have four very strong values at the company that we really work according to, and that’s in Swedish, we call it resa. So if I try to translate that, that would be then respect, engagement or commitment, collaboration, and responsibility. So, so that’s, and, and then we really work according to that.

And, and then we have realized that we are great at collaborating. So then we have also described what kind of collaboration principles are we working according to. So these are things that, I mean, I’m grateful that we have them. It doesn’t come by itself. It doesn’t stay by itself. So you need to continue to work with it.

And we do that. And I’m convinced that that helps to, to deliver more, better things to, to patients. 

Philip Hemme: I like that. I like, can you, can you talk a bit on the, I like the, usually the, the Nordic say Nordic and especially Swedish way of working is. Has some like uniqueness and can you talk on how far you think your culture is at the Swedish versus you took the best from the best of Europe, the best of us, the best of global like.

Gunilla Osswald: I think, I mean, of course you, you need to realize that there are some cultural differences. And that I think the more you, you’re open and try to understand, we have more than 20 different cultures or people coming from different cultures working on bioethics. So, so I think it’s important to understand where we have different strengths and to help each other.

And, and also, I mean, diversity and the most important in diversity, I think is diversity in mind that you help to think in different ways. in order to get a better outcome. 

Philip Hemme: I like that. I like that. Yeah. And how does it come through when it comes to gender diversity or ethnic diversity? How? 

Gunilla Osswald: I mean, all of it is important, of course.

So and, and there’s a lot of focus on, on the gender differences and, and I mean, it’s, to me, it’s important that you have the right competency and that you think about things in different ways. 

So, yeah, Bioarctic is a really great company in many ways. 

Philip Hemme: Nice. And, I think, I mean, you’ve been, yeah, as you said, 12 years, what’s, what’s your, Okay, so what’s your plan for the next 12, plan for the next 12 years?

Gunilla Osswald: Well, I really hope that we can help for Alzheimer’s patients to start with, and then other patients with different kind of neurodegenerative disorders, because there is such a huge unmet medical need in this arena. And I also think the brain transporter link programs will really help to get more of the biological treatments into the brain.

So I think that it’s fun to be in this area now because science is breaking. So I think we will see a lot of progress in the coming years. So I’m happy to be part of this. Yeah, 

Philip Hemme: that’s cool. 

[00:42:26] Alzheimer’s field in Europe and at large

Philip Hemme: And can we talk a bit about especially the European biotech companies active in the space? I mean, the two that comes to my mind was AC Immune and Torarex and I think AC Immune in Switzerland, Torarex in, in the UK, I guess you know them also.

Well how do you, like, I don’t know, like, how do you see them? How do you interact with them? Like yeah. 

Gunilla Osswald: No, of course. I mean, we meet each other at different Congresses of course, we met, in, in Madrid last week. So and I think, I mean, I’m, I’m really happy for when there is progress for, for any company because it helps the patients.

And I think it’s great if there are more companies that can, can help in different ways. I like that. 

Philip Hemme: Okay. I think Climatics, they had a positive phase two results, I think, if I’m correct. Recently, or not too recently, but that’s also good news. Like, Oh, just, and what did you think about the, I mean, I guess you were in Madrid, what did you think about the conference?

Some of the like, 

Gunilla Osswald: No, no, you was a very good Alzheimer’s Congress again. There are three bigger ones every year and CTAD or clinical trials in Alzheimer’s disease is one of them. So next one we’re looking forward to now is Alzheimer’s and Parkinson’s Congress in beginning of April next year in, in Vienna, I think it is next time.

So it’s great to see the progress in the field and there was a lot of discussions about Leukanoma, 

Philip Hemme: BLEKENBI. Yeah. 

Gunilla Osswald: And what we see is that the theme there was a couple of things. The earlier we start to treat, the more benefit patients seem to have, and also continued treatment that you should continue to take away those toxic soluble aggregates.

Even when you’re taking away the plaques from the brain, it’s important to take away the toxic species, even though you can probably give it less frequent, maybe once a month or so after that. And then long term data to see that, the, the benefit stays. And also I think it to me was very reassuring to hear the real world evidence data that was presented to see that when it’s being utilized in a broader setting than in other clinical trials, for example, both from the U.

S. and from Japan the side effect profile were potentially better. Okay. So because normally when you give it wider into a broader patient segment, there is a risk that you have more new side effects and more side effects. And that was, not the case. So it was a very reassuring, I think, to hear both Japan and, and the US with their experience from now when they have, have used LeCamby.

For their patients for quite some time. So I think that was really good. 

Philip Hemme: That’s good. And how does it look like the long term data? Because I mean, let’s say on a five year plan. So 

Gunilla Osswald: there were three year data now being presented and we saw that the continued benefit for those who had been in the trial for a longer time.

they had even more benefit for those who had placebo during the, the core study. Then they got the candomab after their 18 months treatment, and then they could also get some benefit. They will never catch up, like if they have got it from the beginning, but they also could then when they call it delayed start, which also is of benefit for patients.

So I think that was also reassuring to see. 

Philip Hemme: That’s good. It’s good. It’s really good to see good news in the, in the field, I think. Yeah. So must be super satisfying. 

Gunilla Osswald: And also we see that there are some other companies who also are coming with new, very interesting things. And there was also a lot of discussion about combination therapies, where you start with the Lakembi or, or that kind of treatment, and then you can add on something.

So it’s, there is a need for, for more treatments in different ways. And then the brain transporter linked antibodies. I think that’s also what, what would be very, very interesting for the future. 

Philip Hemme: That’s amazing. I’m reading one thing I was curious also is on the on the finance side from, from bioarctic like you.

You are listed in, on the NASDAQ, Stockholm NASDAQ, but you never double listed in the U S didn’t want to. 

Gunilla Osswald: No, I think, I mean, biotic we have a solid financial situation. We 

Philip Hemme: like a bit under a hundred million for end of Q2 or 

Gunilla Osswald: something like that. So we have the IPO back in 2017. And that’s the only time where we have been.

Doing some equity race from the market. So that’s quite unusual in how BioArctic has been built as it’s really been built on collaboration research collaborations and, and licensed deals. And also some soft money grants from Swedish Vinnova and from European Horizon 2020, where we have got at least five different grants shows also the high quality science that is being done by BioArctic.

And, and now. When we are selling, we are getting royalties. So we’re getting into a bit more stable financially revenues coming into the company together with hopeful future milestones and hopefully new deals in the future. We’ll see. 

Philip Hemme: So I guess you don’t need to raise more money. So double listing doesn’t make much sense.

Okay. Yeah. So you’re, you’re planning to be profitable, I think from next year or next year,

we’ll see how the sales go, I guess. Great. 

[00:48:20] Quickfire

Philip Hemme: And. But to finish with, usually I finish with a quick fire, which is like just simple question. If you can answer like one sentence or, or, or sometimes yes, no some, some are more like light questions, some are different questions. One is what’s on the top of your mind at the moment?

Gunilla Osswald: I’m really looking forward to the partnering events. Oh, we have a lot of great meetings. So I’m really looking forward to the coming days now. 

Philip Hemme: So you have one in 14 minutes. 

Gunilla Osswald: Reunite. 

Philip Hemme: But he will be there. It 

Gunilla Osswald: went really back to back, so I’m really looking forward. It’s great to see, I mean, the, the, the big enthusiasm in the neuroscience field now again.

I’m really happy for that and for the brain transporter technology. 

Philip Hemme: What’s the most impressive drug on the market at the moment? Except,

except, another one? 

Gunilla Osswald: There is a lot of very important treatments for many patients. Salmonella is a specific one, but there are many. 

Philip Hemme: Okay. Your favorite biotech book? I 

Gunilla Osswald: don’t actually 

Philip Hemme: know 

Gunilla Osswald: it off the top of my head. 

Philip Hemme: Maybe there will be one about biotech.

One mistake you made in the past 12 months. 

Gunilla Osswald: Oops, that’s a tough one. Oh, it’s completely blank. But of course I make mistakes every day. Everyone does mistakes. But at the moment it’s completely blank. 

Philip Hemme: It’s okay. You can skip also. Blank is good. What’s the best biotech hub in biotech cluster in Europe? 

Gunilla Osswald: There are many good clusters, of course, I have to say the Nordic, but of course there are many good clusters. 

Philip Hemme: What do you, what’s your take on the Stockholm cluster like? 

Gunilla Osswald: No, I think it’s really, I mean, I think I’m happy to see that there are many companies coming out of, of of Sweden.

And if you think about I think Denmark is. A country which I’ve been watching for quite some time because they have a really good way how they have built the Danish companies. Sometimes I wish that Sweden had had that kind of thinking coming from one of those big companies where big parts has been sold out.

AstraZeneca still have important parts in Sweden, but it’s not the same as it were. Pharmacia isn’t there anymore as it used to be. But the beauty is that there is a lot of small startups and a lot of really good new companies that are evolving. And there is, so many people working in life science in Sweden at the moment.

So I saw some numbers, which is, is, I think it was more than 50, 000 people working in, in life science in Sweden, which I think is amazing. And 

Philip Hemme: Especially for 8 million people. 

Gunilla Osswald: Oh, yes. 9, 10, or wherever we are. But I think, I mean, and the beauty, I think what I really like also with, with Biotic and the founders of Biotic and the board, they have the ambition of building a new Swedish successful biotech company or bioforma company.

And I think that really resonates well with me that we really want to build a new successful company, for the long run. 

Philip Hemme: Sounds like you’re set up like, so good, good luck with that. The, How much do you sleep per night? 

Gunilla Osswald: I wish sometimes I could sleep a bit more, but sleep is important. So I really try to get my sleep.

Philip Hemme: That’s good. And last one, one of your biotech heroes, if they were European. 

Gunilla Osswald: Oh, there are many heroes, many who have, I think is inspiring to watch. And I think, I mean, the way I’ve been looking at role models is that I don’t think there is one. I think that you look at different and you try to take something from different people and then build your own.

Yeah. So that’s the way I’m trying to do. I like 

Philip Hemme: that. Can you name a few? I 

Gunilla Osswald: better not.

Philip Hemme: Yeah. And maybe just finish on the, on the next. I mean, we talked a bit, but some, maybe some you on, yeah, on the next steps for, for Bionic Tech, something you haven’t mentioned. Yeah. 

Gunilla Osswald: No, but I think, I mean, we’re really, looking forward now to seeing Lakembi and how this is being commercialized more and more.

In different parts of the world, of course, we hope for the European approval as well. So we can start to sell in the Nordics, but then also in Parkinson’s disease now to come into phase two, we are driving the phase two program that can help the health patients. And then the brain transporter link programs where we have Alzheimer’s, Parkinson’s, ALS, angiosperm disease.

With the brain transporter. And we are looking forward interacting with other companies who want to utilize this technology for their own assets as well. So I think we have some busy days here when we’re really looking forward to discussing our programs and potential collaborations. 

Philip Hemme: Very exciting.

[00:53:42] Thanks for listening

Philip Hemme: Great. Thank you for coming on the show again. Thank you so 

Gunilla Osswald: much.

Philip Hemme: I’m impressed by the achievements of Grunilla and her team at Bioarctic. I’m also impressed by Grunilla’s excitement for what’s coming next, balanced with her Swedish humility. If you’ve also enjoyed this episode, please hit the like, follow, review button. Any of these actions would help a lot to get more people to the show.

If you want to see similar videos, please subscribe. Check our channel where we have many more. I would also be curious to hear what you think. So if you could leave a comment wherever you are or shoot me an email at philip at float. bio. All right, thanks for watching to the end and catch you in the next episode.

Sean Marett 🇩🇪 | BioNTech, Art of Dealmaking | E25

We’re in Hamburg with Sean Marett, who has been instrumental to the success of BioNTech for 12 years

We talked about the secrets behind BioNTech’s success. We also talked about the art of dealmaking and working with China.

⭐️ ABOUT THE SPEAKER

Sean joined BioNTech in 2012 as part of the Management Board. He was instrumental in the growth of the company and global expansion through business development and product commercialization. Prior to BioNTech Sean worked in top companies such as GlaxoSmithKline, Pfizer, Evotec, and Lorantis.

I first met Sean in 2015 in Berlin, when BioNTech had no website, but was already the largest private biotech in Europe. Now Sean has retired from BioNTech after 12 years but still aids the company as a specialist consultant.

🔗 LINKS MENTIONED

Transcript

[00:00:00] Intro

Sean Marett: In 2011, Dirk invited me to Mainz and suggested I go and talk to Ugo. I went to see him and he presented individualized cancer therapy. His vision, I thought, that’s the future of cancer treatment. 

Philip Hemme: Was it MRNA already? 

Sean Marett: It was. 

Philip Hemme: It was 

Sean Marett: then? It was. When you negotiate a deal, you really need to understand all of the elements.

Otherwise, how can you be effective? at negotiating. The reason why BioNTech didn’t license those programs was good science. China does have good biotechnology companies, really outstanding. It’s a global business and we saw assets there that we wanted to license.

Philip Hemme: Welcome to a new episode. I’m your host Philippe and on this show I’m interviewing the best Europeans in biotech to help you grow. BioNTech has helped defeat the COVID pandemic. One of the person’s instrumental behind biotech success is its CVO and CCO Sean Merritt. I first met Sean in 2015 in Berlin when BioNTech didn’t have a website but was already the largest private biotech in Europe.

Now Sean has retired after 12 years at BioNTech so I went to Hamburg to catch up with him. We talked about the secrets of BioNTech. success. We also talked about the art of deal making and working with China. So here’s my conversation with Sean and please hit the like follow button if you’re enjoying it.

Welcome to the show Sean. Thank you very much. 

Philip Hemme: Lovely. Yeah. Sunny day. Sunny day. Lovely place. Great day worked out. I’m super excited to do that conversation. That’s great. 

[00:01:45] Sean Marett stepping down as CBO of BioNTech

Philip Hemme: I want to, and I want to start with You are, let’s say, post BioNTech days, you just retired, was 12 years as CBO, Chief Commercial Officer.

And you told me, there is no dog walking. No, that’s right. How is it, how is it working? How is it going? 

Sean Marett: Yeah, it’s been quite busy, actually, the last few months. The nice thing is I can, I can work on things I really, really want to work on, really like working on which reminds me a bit of Beyond Tech, actually, because that, in the early days, that was very much how we played.

The company focusing on what we, we liked and, and what we were good at. 

Philip Hemme: That’s good. And so I saw you, you’re already on the board of ias. That’s right. Also, I guess looking for maybe also board memberships or some consulting 

Sean Marett: that That’s right. I mean, I, I I’ve been on board of IAS for since 2021. And I’ve done a number of board positions over the years.

I mean, this, I curious, is my third one. And yeah, I, I’m interested in, in, in doing more board positions. That’s good. There’s 

Philip Hemme: some, some investors or some, some people listening can reach out to you. What I, what I loved is how you transitioned out. I, I really love, I mean, I saw the press release was very positive.

I saw the, like the whole, like there was, The post, everything, the tone was like, it was like a very nice, positive, planned, transitional. I think I’m correct about this now, like, can you? 

Sean Marett: That’s right. Yeah. I mean, we’ve been planning this for two years, Grant. It’s important. I mean, one of the things you learn is every so often you need to, you need to refresh and refresh a board, and I’m of the firm belief that there are people who can do what I did.

Better than I can. Therefore, I thought this would be my last few years. And agreed that with the supervisory board, agreed that with the management board, and so we, we, we we put a plan in place to To, to replace me must 

Philip Hemme: have been a very tough decision, like also emotional decision. It 

Sean Marett: is, it is.

But you know, um, one thing I’ve learned, you look at politicians, you look at footballers and sometimes they stay too long and they become less productive. I know. Yeah. And I didn’t, I didn’t want to, I didn’t want to get into that position where you get too comfortable because success for me was always, you always have to be slightly unsure about the future and slightly nervous the whole time.

And I’d lost that a little bit, I felt, and I, I wanted to get that. And I think the company benefits from, from when you. When you really are a little bit nervous about things. 

Philip Hemme: That sounds, sounds very good. 

[00:05:10] From Pfizer to BioNTech

Philip Hemme: Maybe to, to jump to a bit. I’m curious to hear the really the beginnings, maybe BioNTech, maybe even before, like what I read in your post was that you actually started at Pfizer, the first, the first job.

Sean Marett: Yeah. I left the lab and went, went into selling for Pfizer. I went to see physicians. 

Philip Hemme: And then you ended up basically partnering with Pfizer and solving the pandemic together, which 

is crazy. Yeah. Yeah. It was full circle. It really was. It was so cool. Yeah. And look. 

Sean Marett: What was interesting for me about that was the commercial processes that I learned when I started at Pfizer.

I haven’t changed that much since since my very first job. And so I really, really liked the commercial element of working with Pfizer and the commercial team. It was just like the old days, actually. Very old 

Philip Hemme: days. It’s amazing. And I guess When at BioNTech, it helped a lot. Also, I mean, it must be very difficult in this time pressure at that scale, also to negotiate and to get the commercial rights, which I think BioNTech did very well must have helped a lot, I guess.

Sean Marett: Yeah. Yeah. So, yeah, I mean you need to under, when you negotiate a deal, you really need to understand all of the, all of the elements, otherwise, how can you, be effective at negotiating and if I didn’t understand something, I would certainly learn it. For me, the commercial part was easy in that I, I knew it.

I was advisor. I was a GSK in the United States in commercial roles. So I, I kind of, that wasn’t so difficult. And the manufacturing was also relatively straightforward for me because I had run plants before in my career. So I, I understood GMP. And clinical development also because my time at GSK in, in, in, in global marketing where you of course interact with the clinical, global clinical and global regulatory group.

And so you really have to understand all 

Philip Hemme: of this. Oh, it’s amazing how every pieces fit together. 

Sean Marett: They really is, you know, and. And you need to fit them together. It’s a jigsaw puzzle. And do you need to understand that when you, when you’re, when you’re negotiating, because you, there’s you and perhaps one or two colleagues, and then you have opposite you a whole organization with all of the specialization and that all asking for very specific things of their business development group.

So you have to be able to really argue if you want to be successful. It’s a biotech technology company. 

Philip Hemme: I think I will, I will come back to that. I remember we, we had a discussion once said by Europe, I think about the Genentech deal, you just signed it. Oh gosh, yes. That was a lot. That was eight years ago.

But I remember still remember it. You mentioned something like eight or 10 hour calls straight or something, but I want to jump after that to that. And maybe before, where we stay on kind of career, I’m curious to hear. What had, how did you meet Ugor and how did it come to be, this work at, at Biontech? 

Sean Marett: I met Ugor in 2003 when I was at Evotech, and he just together with Özlem had founded Ganymed, and there was also a COO there, Dirk Sebastian, and I remained in contact with Dirk and Özlem over the years.

And in 2011, I, dick invited me to mines and suggested I go and talk to Ko, who was in the university at the time. And I went to see him and he presented individualized cancer therapy to me, his vision. And I thought that’s the future of cancer treatment. 

Philip Hemme: Was it mRNA already, you know? It was. It was, yeah? 

Sean Marett: It was.

It was, it was, it was sequencing, uh, algorithmic selection of neoantigens and manufacturing with mRNA just in time, just for the patient. 2011. 

Philip Hemme: But I can imagine 2011 also was not, you know, It’s still a pretty small organization for you, I guess. I mean, can you go through the decision making process of, was it really clear or was it easy?

Sean Marett: Only clear 

for me. Okay. 

Sean Marett: Completely clear. You need good science. You need a executionable plan and Google had it. He had it. And, and I just, I just like Hugo, right Tim? 

Philip Hemme: It’s a personal self address. I think from the 20 plus episodes and like, it came up a lot that the personal fit is 

Sean Marett: very crucial. It is really crucial because As everyone knows in the biotech, I mean, it’s, it is a brutal business.

It’s not, I mean, it’s, it’s tough and you go through ups and downs and you need to support each other. You as a board, you need to support each other in the difficult times and celebrating the good times. And therefore, fit is, is one of the critical success factors in my view. As well as, of course, just taking risk of being entrepreneurial.

Philip Hemme: It makes me think about Stefan Borsell from, from Modena. And he said, I met him in Boston once, but he said, biotech is for people, people, people. Like real estate is for location, location, location. And I think. That’s what you just it’s just, I think that was correct. 

Sean Marett: I mean, you need good, you need good science as well.

You need really, really good science. 

Philip Hemme: That’s it. And yeah, I mean, I don’t know if you remember when the first time we met, I think was in, was in Berlin at the mRNA conference. So it’s pretty nice, Kovac, Moderna, BioNTech. And I remember, because I had never heard of biotech at that time, I think it was 2015, 2016, something.

2015. 

Philip Hemme: And then we met and he told, yeah, you know, it’s the largest private biotech in Europe. I’m like, okay, well, never heard of it. I think your website was not existing or like very, very minimal. 

Sean Marett: Yeah, but it’s existed until 2014. For six years after we, we founded the company, after the company was founded.

Philip Hemme: Can you talk a bit about these, like, early days of you joined Zouguo to, to that moment? Like, what’s, yeah, why, why you didn’t have a website before? Why, like, what’s? 

Sean Marett: Well, I think I think we felt that it was important to focus on building the platforms. And fortunately through Thomas and Andrea Strongman, we had the investment that allowed us to do that.

And it takes years to really develop platforms and, and so we were able to, to focus on doing that. And, you know, when we were getting closer to clinical stage, we, we, we felt that you know, if we want to be a global biotech, and we always said from the very, very beginning, that’s what we want. That’s what we want the company to be.

You need you need reach, and in order to get reach, you need The website. Well, no, you need Palmer, you need farmer partners. And so we switched on the website and started looking for partners. That’s 

Philip Hemme: what we did. That’s amazing. And I’m wondering also from the, but even from HR for hiring, I mean, a website and whatever is pretty useful as well, right?

Sean Marett: Well one Business development person who the company will remain nameless said to me when I said over 240 people and based in minds and he said,

can’t be a serious biotech. You don’t have a website. Actually we had a lot of publications, scientific publications supporting what what the company was doing and the correct answer would probably be but I do recognize you have a lot of scientific papers. 

Philip Hemme: It’s amazing. I think it’s over there.

It’s quite extreme sign of prioritization and focus, but I guess it worked out at the end. Like, 

Sean Marett: I mean, we, when we decided upon because of the quality of the science we were able to do five. Deals in 18 months on different platforms, 

Philip Hemme: including 

Sean Marett: the Genentech. 

Philip Hemme: Which was like, was it 300 million up front 

Sean Marett: or something?

Yeah, 325. Yeah, so we raised, I mean we raised then just under 500 million dollars in financing from up front. Which, which was useful for us, plus of course, we got some partners, some good partners who, who had clinical operations globally, which of course is one of the things we were, we were searching for in order to funnel our inventions.

Yeah. 

Philip Hemme: That’s 

Sean Marett: meant. 

[00:15:28] Building a biotech in Mainz

Philip Hemme: And one still on, on the similar topic, what, one thing that is amazing that you build the company in, in Mainz. Which is, there is a lot of pharma around, but it’s not the biggest biotech hub in Germany or in, or in Europe. 

Sean Marett: Well, so people in mines tell me it’s, it’s quite biotech because there’s a lot of wine in part, it’s a, which is a biotech process.

Philip Hemme: Fermentation, yeah, that’s right. But how, how was it, I mean, can you talk a bit about it? How was it to build the business there? What are some of the challenges, maybe some opportunities as well, sometimes when you’re big fish in a small pond, it’s, it’s better. 

Sean Marett: Oh, I think we, I think we had we had advantage that Ugal being a professor had good connections with the university and so we were able to hire scientists, but also partner with in particular TRON Translational Research Institute which is a Rheinland Pfalz owned, partly owned.

Institute and they did a lot. They did a lot with us together. And in that way, although we were 240 people at the time, we were much more than that because we were able to work with the Institute on And they provided a further 70 80 scientists. It 

Philip Hemme: reminds me a bit of also I had a Harpreet from Ematics on the show and Ingmar from CureVac and also this very local tubing and connection with the university, was using the offices there.

Very, very Heavy support, but maybe you get less if you’re in a bigger biotech hub or like, and, 

Sean Marett: and even with more competition for the, for the facilities. I mean mine’s in the early days when, when we were sequencing patients tumors, we were accessing Mines computing system, because it was one of the, the most powerful systems in Europe.

Yeah. And that’s, I mean, in the early days, of course, there’s a lot, it’s an awful lot of data to, to churn through and you need strong computing power, which didn’t really exist in Europe. Mines was an exception. 

Philip Hemme: Wow. Okay. Hmm. But I guess this connected. backward, not forward, you didn’t, or it was not planned forward by Ugo or someone, like, how intentional 

was 

Philip Hemme: it, like?

What what do you mean for that? 

Philip Hemme: No, I mean, like, did Ugo already kind of had that plan and knew that there was this infrastructure and access to it, or was it more that he was professor there? And then when you were going forward, you, you found the right opportunities and the right infrastructure and everything connected.

I think that both. 

As it was, but both.

Philip Hemme: And maybe the last on the history as well, one thing that always like fascinated me was, was that you seem to add a very clear Delegation and clear set of responsibilities and focus within Biontech, where you were really in charge, at least, at least how I perceived it of the biotech business, you would take care of all the bio partnering conferences and the partnering in general, and I guess a big part of investor meetings as well, versus Ugo could then focus on the Western.

I’ve never seen Ugo, I think at the conference or something. And I found it always like, first of it’s surprising. Usually CEOs will attend some of these meetings as well. But in your case, like, seemed like, but it seemed to also work. And probably, yeah, I don’t know. Can you talk about, is it correct, my assumption or like, 

Sean Marett: It’s correct.

Yeah. I mean, that’s how we worked. And I think in order for that to work, there has to be a, a good understanding of each other’s capabilities and and trust and, And it’s something,

we talked about fit at the beginning and, and I think it’s, in some, in some ways it’s a little bit unspoken you just go and do, do stuff because it needs being done. And that’s how we divided up the, the work. Igor was always focused on the science there, always. And it was important because well, People sometimes forget is that we’re never alone in the world and there’s always competition and you need to be quick.

You need to be quick in biotech. 

Philip Hemme: Yeah, yeah, but and how was it when you negotiated deals and they didn’t see Ugo or something? Was it surprising to them or like, was it? 

I got used to everyone, but I used to be. Investors got you to use it, right? 

Sean Marett: Yeah. But at the end of the day everyone is interested in output and in this way we could focus on output.

I mean, we, when we went to do the IPO, we had a number of nature papers supporting the platforms. These help. If I see such as Ugal is spending time at Bio Europe, he can’t be writing those nature papers. And at the end of the day, it is, you know, we are selling science. 

Philip Hemme: Huh. Science and the, I guess, commercialization of science and having a slim as all must help.

Sean Marett: Yes, again, later on, Shannon, that helped too, that, that, that, that that really helped too. 

Philip Hemme: It’s pretty nice also how, I mean, how they, how the credit, yeah, I mean, how they shared the credit as well. Islam and Uighur. I mean, obviously. And 

Sean Marett: Islam. Yeah, no, it’s correct. I 

Philip Hemme: think it’s correct. I think it’s correct.

Like nice to see you know maybe one, one more controversy, I mean, more controversial question about buying tech and I don’t know how much you can, you can talk about this, but one thing that puzzles me a bit doing, I mean, from this dynamic first, I mean, it’s amazing. Like what you achieved is like, no question about it, this is insane.

But one thing that puzzled me a bit was the, the amount charge slash the margin. And I want to come, I mean, Modena did basically the same as you guys, I think at least. And then, but then when I saw AstraZeneca, they did more the approach, maybe they were forced by the university as well or by public money.

And they basically sold almost at cost of it was a pretty low margin. And when it’s kind of public needs I found it. I mean, I just was two different approaches, but I’m wondering, because I mean, I saw like everyone, we want to solve that. And even I remember Ugo was having like a deal with Moderna for like fair development or something.

And then, but then when you see the prices and now the profit, I mean, it’s amazing for Biointech and for Moderna to have so much cash to be developing. But I’m wondering from a public perception or from whatever, whatever thing, how, how the decision was made, how, like what was behind, I don’t know how much you can talk about this and how much it’s true.

Just, yeah. I don’t know. 

Sean Marett: Well, I think, you know, if you’re a big pharma company that you’re, you’re in the different position than a biotech such as us who’d just done an IPO in terms of the capital you have and the risk you can take. With respect to beyond Tech, we took a risk, quite a, we took a large risk in that we focused the company four months after our IPO, which was a IPO focused on cancer, especially.

You 

Philip Hemme: were a 

cancer company, correct? 

Sean Marett: On 

covid 

Sean Marett: and. We use the proceeds of of COVID for the original vision of the cancer research. So, the money flows back into, into further research. I think that had we been Unsuccessful it would not have been terminal for Biontech, but it would have been a difficult, more difficult time for sure. And you know, we just didn’t know.

We had, when we got the results as the clinical phase three, which was on a late on a Sunday night in November, we had two press releases ready. One worked, two, it did not work. And you just didn’t know and I think you have to recognize that all biotechs in this business and take risk. You do have to, you do have to cover that risk.

Yeah, 

Philip Hemme: that’s always what’s, yeah, yeah, makes sense. But you think AstraZeneca took less risk? 

Sean Marett: No, I don’t think so. I think they just had more cushion. I mean, it wasn’t, They have many, many programs, they have a cash flow positive. If it didn’t work, it wouldn’t have been kept as, difficult as for a company that generates no cash, burns cash, and has a limited supply of cash.

Philip Hemme: No, I mean, it’s fair. And I think at the end of the day, also, I think from a margin, you didn’t charge more than, let’s say, industry standards for a successful CIP, whatever a rare disease or what Argenix is charging or whatever. I think it’s, was in a similar ballpark. 

Sean Marett: I think that I mean, the price is our market prices and that’s what we, that’s what we agreed.

And I think there, as with all negotiations, there are certain checks and balances including on the price. That’s good. 

[00:29:02] The art of biotech dealmaking

Philip Hemme: So going to the what we discussed let’s say the art of deal making and what you, what we talked about Genentech, to go back to that, the deal we had with Genentech, I want to spend a bit more time on there and also, I mean, I think in Europe, I think you’re one of the best.

Dealmakers in Europe, at least for the biotech side, not for the pharma side. At least I cannot think about too many other that are at your level. So I want to spend a bit of time on there on like, what are some of the lessons, maybe for some people listening who are maybe a bit more junior or senior or more senior.

And I don’t know, I mean, we can start on many levels, but maybe the. I was impressed this, this, this, what you told about this, our Genentech that you were like, I don’t remember how much, like nine or 10 hours on a call and you had whatever, like 20 people in front in on the other side of the line with all the experts.

How did, I mean, how do you manage this kind of like 

discussions? And like, you 

Sean Marett: have to, you, you, you have to I think you have to be extremely well prepared. And I think for any. Any negotiation, anywhere, you, you need to prepare, you need to really consider all of the potential scenarios and the way negotiation can go beforehand.

You can’t predict it all, there’s no way, but being prepared gives you confidence. And the other thing I think You have to know the detail. You really have to know the detail. 

Philip Hemme: How much of that is, is what you mentioned, experience of commercial, like different set of experience to get there? How much of it is in your control where you can, let’s say, put in more hours to be prepared?

Sean Marett: I mean, it really it really helps if you can understand the complete discovery through commercialization process because you can You can, you, you should just, and, and, and you know what, you, you understand a little bit about the, the market as well, um, I think that helps. I think too always, I’ve always regarded deal making as a fair balance between two parties.

I’ve seen deal making in companies, which, where people try and get as much as to their advantage as they can. I find that for, for, for me, I don’t. Do it like that, because I always regard these deals as the beginning of a long term relationship, and in any long term relationship, it’s always give and take.

And, at the end of the day, you’re trying to get through a fair and reasonable deal. And sometimes people forget that. And I try and remember that. 

Philip Hemme: You have some examples maybe that you can talk about? 

Sean Marett: Um, like I do have some examples like this, but I will not be talking about them. 

Philip Hemme: Yeah, or maybe anonymous, I mean like, nothing else.

I mean, what, and is it, is it like this also for a fair deal? I think when you’re on the biotech side and you don’t have too much leverage. 

But you got to create your leverage. Let’s talk about that after. 

Sean Marett: Yeah, you can’t, yeah, yeah, yeah, you can’t, you can’t negotiate with two hands tied behind your back or, as Winston Churchill said, with your head.

In the mouth of a tiger,

Philip Hemme: you go on. How do you create your leverage? How did you do it? That by intake? 

Good science. Yes. 

Sean Marett: Good science. Knowing and being prepared to say no. And creating a competitive environment. There’s always more than one.

Yeah, in fact I negotiated with three parties in parallel before. And it’s useful to do that. 

Philip Hemme: Yeah. 

Sean Marett: Because that strengthens your Yeah. 

Philip Hemme: It’s funny because in pharma and biotech, I always feel like competition is a bit, it’s not taboo, but it’s like, Oh no, we all like, let’s be competitive. Like also the VCs, we’re all friends.

We know each other. But at the end, when I hear about really how the deal works or the deal making works versus I mean, deal making or fundraising, so competition and the fear of missing out is very strong actually. Right. And I don’t know as strong as in other industries, but it’s very strong. I mean, I guess.

Sean Marett: It’s very strong, it’s strong depending on the science, of course. And some of it’s fashion, you know, there’s waves of, uh, waves of interest normally sparked by a publication in a renowned scientific journal, but yes. 

Philip Hemme: But going back to your fair deal, I mean, I remember, I don’t remember the name of the company.

I think it was IL2 company in doing IL2 targeting IL2 and in Boston, and they were acquired by American Merck. And then when it was released, all the SEC statements, you saw that they made an offer for like three times less than the final offer just because two other pharma partners came in. And then the bid went back three X, which if you, I mean, if you count the value, then it’s I mean, the first offer was clearly not fair or clearly not recognizing the value.

And then the value of the competition is.

Sean Marett: Well, you’ve got to ask the first, whether the first offer, I don’t know the basis of the offers, but

clearly the price was somewhere higher than the initial offer.

It’s the fair price, the fair 

Philip Hemme: price and how was the deal with Pfizer? I’m also curious. And I don’t know how much you can, I mean, not sure the specific, but must be also. And especially with that, like time pressure, I guess the time pressure was on both sides gave you leverage, but also removed leverage.

Sean Marett: Yeah, we, we did in five weeks from, from, from letter of intent. Yeah. So. We did the letter of intent and then we did the contract and it was all done in four or five weeks. 

Philip Hemme: That’s pretty fast. 

Sean Marett: Yeah, yeah, there was a lot of, yeah, there was a lot of late nights. You have to do it quickly. I mean, it doesn’t matter which deal you do, deal making, part of the success of deal making is speed.

Philip Hemme: Speed and momentum, I guess. 

Sean Marett: Speed and momentum and you really, you know, the longer a deal takes, the less likely it’ll occur, in 

Philip Hemme: my view. 100 percent all the time. And 

Sean Marett: it’s the less likely, I mean, you may get there in the end, but certainly the conditions will be different. 

Philip Hemme: Yeah, I like that. I think also my experience with fundraising, I think it’s similar to fundraising as well, where your momentum matters.

It 

Sean Marett: does. It does. 

Philip Hemme: It’s 

Sean Marett: the same. It’s the same thing. And it’s competition. Yeah. Also in, in financing. I 

Philip Hemme: like that. I think what’s, what’s tricky is when you as we discussed a bit also before starting the recording, like when you’re a biotech that is not that well financed or that doesn’t have that strong science or you have less, less optionality.

And how do you like to create this momentum and create, have this leverage, I think, and I think quite a few biotechs in Europe are in that position, especially right now, where the cash is thought to be to dry up. Dries harder. Yeah, 

Sean Marett: I guess there’s no magic trick. And 

Philip Hemme: he says bringing you in as a consultant, maybe.

Yeah, there’s 

Sean Marett: It depends, I mean

I think it depends on the individual, individual cases and I don’t think you can. Necessarily draw any conclusions because some, some may, some may need some, some marketing, others may need to do additional studies and then they’re there, you know, it depends. 

Philip Hemme: Same as with fundraising, I guess it’s, yeah, society depends a lot on, on the stage and everything.

Do you have maybe not talking this much? Is there a deal outside BioNTech that you, that you particularly enjoy or particularly liked how it was done or how? 

Sean Marett: Well, I did, I did supply deals for the COVID and I kind of liked that. Yeah. Cause that was different. I was dealing with governments and they’re, they’re different.

Philip Hemme: Also, 

Sean Marett: So governments, um, governments, no, they tend to, they tend to have, of course, pharma has too many, many stakeholders. The government has politicians who may not really fully understand some of the technical aspects of what they’re buying, whereas a CEO of a pharma company does. And I think that managing that and explaining that to politicians does, does take time.

And You do have to, you do have to communicate a lot, and because again, it’s not always their particular area, and you, you, you need to educate them. 

Philip Hemme: And how, you said, it takes time, but when you didn’t have the time? 

Sean Marett: Well, you just make it at the later night. Okay. It’s where have we been with the German government?

I mean, we were on the phone late at night, quite, quite regularly. 

Philip Hemme: Yeah. 

Sean Marett: Oh, that’s crazy. 

Philip Hemme: We met Reminds me, I think I saw one interview from and maybe she was together with, we were saying 12 months basically from starting the, the vaccine, I guess, whatever, January, was it? January 

Sean Marett: on February of the pandemic.

End of January. Yeah. Yeah. We were in the clinic in April 

Philip Hemme: to, and then to injecting the first part, make market access, market approval, and injecting first patient was a, she said was a crazy ride from like. a series of sprints of sprints. And I think she said, like, she couldn’t believe they would be able to do it even from a human capacity.

Like and that was like, and sounds like exactly what I mean. That’s like a crazy ride. Yeah, 

Sean Marett: it was. Yeah, it was. And of course you don’t really you don’t really realize at the time because you’re so, you know, You’re so focused on execution.

Philip Hemme: I was thinking about a deal, maybe also a deal that you haven’t done necessarily, a deal that you, you’ve seen in the industry, observed, maybe if there’s one that particularly stood out, especially you from a, with a European angle, I don’t know, European pharma or European biotech. 

Sean Marett: That’s a curd, you mean, a deal that’s a curd?

Philip Hemme: Yeah.

Sean Marett: I can’t think of any, all deals are unique. They’re all, that’s the nice thing about biotech, they’re all, they’re all different. I think with being on tech, if I think about all of the deals that I’ve done, I found them all fascinating, every single one of them, whether it’s fundraising or CRSA, CRSB, and doing the, the IPO, whether 

Philip Hemme: it’s, well, that was 

Sean Marett: a lifelong ambition for me.

Philip Hemme: You 

look 

Sean Marett: very 

happy on the 

picture. I was. There was a, it was, I wanted, I told Google that day. I said that, I’ve achieved my lifetime ambition. And let you stick mostly. No, yeah. No. Doing IP on the NASDAQ. I always wanted to do it. It was it was really, it was really cool. Whether it’s that or even, you know, the, the, This, the COVID supply agreements and the government or doing the, we did a deal when I was at Biontech with the UK with the health system there, which was also unique or, or just the deals we did with pharma.

They’re, they’re all they all have their challenges. They’re all absolutely intellectually fascinating. And so I, I don’t think you can. I don’t think you can ever say, oh, I wish I’d done that deal. I think, I think I think yes. I think they’re, they’re just very individual. 

Philip Hemme: It sounds like you really enjoy deal making it all like, 

Sean Marett: Hey, I do.

Philip Hemme: I think that’s a crucial, I mean, you didn’t mention this, but I think it’s also a crucial, 

Sean Marett: of course, you have to look, you have to love what you do. You have to love what you do. And it’s, it’s, it’s, you know, over the, over the course of Beyond Tech I don’t think with the commitments that we all made, you could commit like that if you didn’t love it, you can’t do it.

I mean, I, I, I was working Christmas, New Year didn’t really take a holiday for many years. Because we were, there was always something, always.

[00:45:29] Mistakes in dealmaking

Philip Hemme: Maybe we talked about what, what was important to have, or what’s the positive, but can you talk a bit about mistakes you see people doing in, in deal making, or the common, let’s say, common mistakes. Underpricing. Underpricing. 

Sean Marett: I think I learned that from my time living in the United States. You have to value good science, and I think that’s one thing.

But then, on the other hand, if the science isn’t Good then that statement is of course not correct, and again, it’s very, depends on, on the particular situation and I think realism.

I think you have to be practical. Sometimes you have to sometimes you have to do things in the short term for the long, long term. And I, the IPO was a good example of that. The, um, we iPod when the NBI, the NASDAQ Biotech Index was, as I say, falling off a cliff. It was just. Declining. I think returns for the year at the point we went on the roadshow were 0.

5%. And then in October when we IPO’d, fund managers were losing money. And, and it was a, it was a tough IPO. One year. It 

Philip Hemme: was not, I mean, it was, it was done, but it was, yeah, not the most successful. 

Sean Marett: And, and actually, when we were debating it I remember the advice of one of the bankers who didn’t say very much, but he said one thing that I shall never forget.

It’s just remember, you know, this is, this will set your company up for the long term. And that’s how you have to look at it. That’s correct. Absolutely correct. Absolutely correct. And, you know, that. Very simple statement, real clarity, and yes, we, we did it not as we wanted it, but we still, it was still a good result.

Philip Hemme: Going back to underpricing, undervaluing, how do you, Let’s see if you’ve got science. How do you, I mean, how do you find the, the right balance? 

Because I guess that’s, well, you know, I mean, yeah, I mean, it’s 

Especially as a European, you always, we always say we under, undersell ourselves. Versus American tend to, Maybe oversell themselves as a, like, very general cultural traits.

Sean Marett: Yeah, yeah, yeah. I think Europeans do. I think I think generally we, we, we, we do. It’s a global market. I think that’s what you have to remember. And, you know, the, the, then if you, if you, if you recognize that, then you, you, you do look at global comms I mean, everyone looks at, so there’s three ways of doing that.

There’s an, a net present value calculation on the assets there’s the comparable deals, which are only as good as what has been done before. Use that a bit, but I don’t think I would have done some of the deals had I, you know, Always done that. And then there’s feel, just pure feel. And I think it’s a combination of analytics and feel you have to, you have to feel the market.

And and sometimes that’s not that’s not so easy, but it does come to you because it, it’s it’s it’s a consequence of ensuring that as a deal maker. You are talking constantly at, to a lot of companies at some of these powering events and then you get a feel. 

Philip Hemme: Mm hmm. Yeah. Makes, makes sense.

I like that. I think it’s, I guess, I mean, that’s the art of dealmaking as well. It’s, there’s so much, that’s why, I mean, that’s why it can be called kind of an art because there’s so much feeling and 

Sean Marett: It’s intangible. The thing is, it’s early. It’s early, so there’s a lot, in a lot of directions it can go in and I think you have to You have to look at the science that you are doing a deal on, and thinking about, always, at least I always do, when it goes to the market, because if you understand that and the opportunity offers, you can get a good sense of value.

Sometimes net present value will tell you that, but net present value on preclinical assets, if it’s preclinical, it’s quite hard. But it’s useful to, I still did it. I did do NPVs in my early days to, I did them myself to, just to, just to give you another data point. It’s data points at the end of the day.

Philip Hemme: And how, how do you, if, I mean, some people is listening is. Because, I mean, that’s also the hard part about BD, you, you want to be strong in science, whatever, PhD or whatever, like science understanding, you want to have experience in deal making, you want to have a commercial background, like, that’s a lot of, like, skills.

And I guess it’s hard to also have all of them. I guess most people in BD will have one aspect where they’re stronger, or I think a lot of BD, especially in biotech, they don’t necessarily have a commercial. experience. So how, what would you, I mean advice is a bit of a word, but what’s, what would be your thoughts there I can, and like have.

I guess the ideal profile. I don’t 

Sean Marett: I think it’s what I said earlier. You need to talk to people. You need you need to gather information and you can do that nowadays, even if even if you haven’t done, let’s say, a commercial job, you can, you can still get a sense for the market. You can still, you can still read what is the standard of care for a particular program.

And you think about how your medicine. If that’s what you have in a clinical development, might change that standard of care. You don’t need to be, don’t need to have commercial experience to do that. And I come back to probably the most important element of any deal making, which is preparation. I used to write my own term sheets, I still, I still do.

But term sheets. Very detailed term sheets. Because by writing your own term sheets, you 

Philip Hemme: understand the details. 

Sean Marett: You understand the details, but you also get an understanding of much more than that of the, of the whole strategic negotiations approach. And it helps you, it helps you in your negotiation strategy.

Some people ask lawyers to do it. I, I, I don’t understand why, because. It’s a Heads of Terms, non binding Heads of Terms, and but that’s just me. So 

Philip Hemme: the lawyer is helping you, I guess, to make sure it’s 

Sean Marett: I know, 

Philip Hemme: not 

Sean Marett: with the term sheet. Contract, yes. Contract. But not, not term sheet. Why? Unless it’s a binding term sheet, and of course you need a lawyer, but if it’s non binding, it’s just a list of terms you’re going to discuss.

It’s more 

Philip Hemme: But you agree on them. 

Sean Marett: Yeah, but you need to For the audience, 

Philip Hemme: maybe someone not too familiar with term sheets, but it’s basically a, whatever, one, two pager, with what has a name. Agreements for losing or for deal making, at least from what I can talk for my fundraising was one pager of like, okay, that’s probably like the equity of kind of equity is evaluation of the company.

Like the big the big pictures is basically drawn. And then as a second step, you go to Contracting. Once everyone is signed, then you go to contract just to people are not too familiar, but that’s okay. So the term sheet, you would do it yourself. 

Sean Marett: Yeah. I think, I think it’s essential in order to be able to negotiate 

it.

Philip Hemme: I’m curious on some of the big ideas you made. How long was the term sheet or how, 

Sean Marett: So, so, so some, normally I’m trying to keep term sheet three pages, but one went to one went to seven or eight. And you got to be a bit careful because you’re not negotiating a contract, you’re negotiating a set of key terms, which is how much, how much does this cost and what do I get for it?

It’s as simple as that. 

Philip Hemme: And what does the other person get like that? Well, no, well, yeah, for both parties. 

Sean Marett: Yeah. I mean, it’s, you got, you know, you have to consider it from both the seller and the buyer end of view. 

Philip Hemme: I liked, I liked that. I like the advice on the commercial aspect as well. Like, I think it’s something I’ve seen my, my wife has more works in, in biopharma as well and has more commercial back on the market access.

Sean Marett: Oh yeah. 

Philip Hemme: And It’s super interesting for me to see all that angle. It helps me to understand biotech also way more. And now I start reading what the agency is saying about the products to really know, okay, what’s the standard of care and what’s the added value at least perceived from a reimbursement point of view.

And that’s, It’s quite key as well and that’s something I wouldn’t necessarily do or do less before. And at the same time, I do also more on the science, but I think for even for people listening, even if you don’t have a PhD or, I mean, if you have enough understanding. of the science to allow you to deep.

I mean, you don’t have PhD. No, I don’t, no. You dig deeper and you can do your work on your own and dig deeper. You can learn a lot, but you have to spend the time and focus and prioritize it. I guess that’s also what if you’re kind of, it goes into what you said. Preparation means also focus, I mean, focusing and prioritizing doing the work and doing the research and exploring what’s, what’s needed.

Sean Marett: That’s correct. 

Philip Hemme: I liked it. 

[00:57:45] Biotech dealmaking in China

Philip Hemme: Maybe the last spot on the, on the deal making as well. One thing that was quite surprising in recently from, from BioNTech is that you in licensed a lot of assets from China comparatively, I would say, I mean, for BioNTech, you were one of the only ones really doing that, but for you from a big pharma, I think you did more than, let’s say, than the average.

Can you talk about, yeah, what was let’s say the rationales behind, and then the second time we can talk more about what’s your experience was, let’s say, negotiating with a Chinese culture, which. My wife being also Chinese, I’m curious, personally curious about that as well. And I know the country is very different.

The business country is very different as well, but maybe first, like business rationale of licensing there versus Europe or the U. S. I 

Sean Marett: think the

reason I’d be able to get licensed those programs, which I was of course, deeply involved with, was good science. And China does have. good biotechnology companies, really outstanding biotech it’s a global business. And we saw assets there that we wanted to license. So I think that’s, that’s, that’s why as to negotiating with Chinese partners it depends again if they have worked in Europe or the U.

S. That, that, that helps, but clearly there’s a cultural difference in, in negotiation. I recognize that, I think you have to, I, I was quite worried about that and so I made sure that, um, at least with me, wherever I could, I would have people at Beyond Tech who were Chinese who could help me translate.

Philip Hemme: Just the language, the, 

Sean Marett: yeah, yeah, not just the language and, and China, of course, China is is really fascinating. And the one thing I really love about China is it’s it’s still a very, very, very strong relationship business like everything. And and And that’s fun, building relationships.

It’s, it’s, 

Philip Hemme: it’s, it’s great. I like the aspect you said of, I think a lot of Chinese biotechs have some history, at least, if I think about Beijing or about what was it, what was acquired by Genmab. something ADC biotech, they were Seattle and Chinese based. And it’s like quite a lot of China. I mean, there’s a huge Chinese or Chinese origin population in the U.

S. working in biotech or pharma. And a lot of them went back and started with companies in China as well. So I think I can imagine this helps like it does. Yeah, it does. I think that’s, that’s great about deal making. I’m curious. One, one thing that also industry wise was the, I don’t know how much you can really talk about this or comment, but the whole, the whole IP situation on mRNA, I found it like a bit saddening.

Oh, I don’t know if it’s not like a bit sad, but it went to that point, especially knowing again, when we first met the conference where you were. It was always surprising your competitors, but quite friendly competition, organizing conferences together, helping each other out. Like, I don’t know, what do you, yeah, what do you think about it?

Like, 

Sean Marett: I think it’s it’s an unfortunate side effect of

making money

and in certain jurisdictions, it’s ordinary course of business. I, you know, you get, you get used to it. I remember years ago, I met European who I knew quite well. On a flight, and I hadn’t seen him for a while, he’s a non, he was a non executive director of a U. S. company, and the first thing he said to me was, I’m being sued again.

This is a non executive director 

of this public company. He said, and the second sentence is you get used to it. And it is, it’s just it’s just 

part of the, part of the, part of the business. As a European, I don’t like it. But I don’t like it at all as as a business person, I have to recognize that, you know, in certain jurisdictions, this is just the way it is and you just have to deal with it.

Philip Hemme: I guess, especially in the U. S. It’s very legal for, I mean, there’s the law is very, I don’t know the law, but the lawsuits are much more, there’s much more lawsuits than in 

Sean Marett: ordinary course of business. 

Philip Hemme: It’s ordinary. Yeah. It’s crazy. Even you change job you sue your, your, your employer and stuff like, I’m like, what a friend of mine was just, Oh, I don’t think it’s that bad, but you know, basically changing job, a lawsuit, a lawsuit with his neighbor, I was like, So it’s not normal, okay I guess, yeah, I mean, makes sense also for you as a, from a business point of view, I think it’s, you said it’s a global business and you have to adapt.

Sean Marett: You have 

to adapt. 

Sean Marett: You have to adapt. But one thing that I think, um, it’s important is, you know, and this is where you, you, you For me, when all of this happened, I mean, you’ve really got to believe in your own science and your own patents, and if you do that, you’ll, you’ll react accordingly.

Philip Hemme: Let’s, let’s see how it how it plays out, I didn’t think.

[01:04:25] Managing energy

Philip Hemme: The maybe last last topic on last topic? And also from the, from the discussion we had is on, you are traveling so much and how you manage, I don’t know, fatigue and effort. You mentioned passion, that helps, but I think, yeah, what, what else was there, like, that you, that helped you a lot?

Like, it’s, it didn’t burn out or whatever. I mean, 12 years of this rhythm is pretty, 

Sean Marett: I mean, it goes back to what we discussed earlier. I mean, why do you do this, this job? And it’s a love of the job. And I think that that, that brings you a long, a long way together with the feeling that you’re part of a small family and biotechs are small families yeah, they may, most of them are, and And of course, you know, and, and, and belief, I really, I really strongly believe that as you’ve called it passion, passion, of course the belief cause as I said, when I started fundraising, I always tell this story, but it just, I, I never forget it.

I, I went to New York And it was December, and it was one of the banks had a banking conference there. And you know, when you go to these banking conferences, you, you get appointments with investors. I had one appointment and, yeah, and that was with the IR agency who wanted to sell their services and I, I met at the lunchtime, I met One of the big pharma heads of research and development who I’d got to know really well.

And he’s, he, he said, and he, he built companies before and he said to me, you guys be fine. I’ll never forget that. And I thought, oh, okay. And then the next four days I spent in New York actually going around from fund to fund. I’d made some appointments 

Philip Hemme: with the, was it gross funds, I guess for those, 

Sean Marett: some of the big bigger funds.

Big funds, yeah, the big funds. And, you know, it was very much, I like to introduce BioNTech, a German immunotherapy cancer company. And there’s a who in that? What is. 

That was always just every single meeting, every single one. Oh, but then, you know, 

Philip Hemme: we did second time, then we thought, well. 

Sean Marett: Well, I mean, you know when I think about it 12 months later, we did the sixth largest series A ever.

In biotech at the time we raised 270 million. So I think it’s it’s belief because it keeps going and perseverance. 

Philip Hemme: Hmm. Perseverance. Yeah. I think, yeah, you can hear that from a lot of entrepreneurs, not just in biotech and perseverance is a key. 

Sean Marett: Yeah. You have to. Yeah. 

Philip Hemme: That’s good.

[01:08:17] Quickfire

Philip Hemme: To finish, I know I finished with a quick fire, quick questions where you can just answer yes, no, or one sentence and so what, what’s on the top of your mind at the moment?

My holiday. That’s a

Philip Hemme: good one. What’s your favorite biotech book? 

Sean Marett: Oh the building of Genentech. Hmm. 

Philip Hemme: The Beginnings of Gen. 

Sean Marett: Yeah, yeah, yeah. With the, with the Recombinant protein. 

That’s amazing. Yeah. I just reread it. Yeah. Skype two weeks ago. Yeah. It’s fantastic, bro. Love it. 

Philip Hemme: What’s the, what’s the drug on the market that impresses you the most at the moment, except biotech drugs?

Sean Marett: I think Hemera was one that really impressed me because that came from behind and became a market leader with, um, in excess of 20 billion of annual revenues. That’s delusional. Yeah, I mean, it’s remarkable. It’s really good. And the other one was Kay Truder, and that was equally impressive.

Philip Hemme: Yeah. How much do you sleep per night? 

Sean Marett: I sleep seven hours and I cannot function without good sleep. That’s good. 

Philip Hemme: What’s the best biotech hub in Europe?

Sean Marett: Oh, I don’t know. I think, yeah, I can’t, I begin to say, no, I think

each have their specialities. 

Philip Hemme: Yeah. I think Europe as a hub is also good. Not, not fighting different hubs, but it’s actually compared to Boston, which it’s clearly concentrated in Europe. It’s more spread out. 

Sean Marett: It’s more spread out. 

Philip Hemme: Even, I mean, we didn’t mention, but you, I never, I didn’t realize that you were.

not based in Mainz. You stayed in Hamburg for 12 years and you’re commuting, which is also an example of how, when you think about the hub, you think Mainz, but actually in Germany, and I interviewed a few others, and it’s very common where people commute a lot. I mean, my wife goes to work to Munich from Berlin and goes there once a month and it works perfectly fine.

And you can even do more and especially Germany, it’s so like like spread out as also federal and you have cities a bit everywhere and it’s pretty well connected by train. The train don’t run always on time, but it’s today they did. But you, I mean, people move quite a lot and it’s not so well. 

Sean Marett: I think the infrastructure in Germany, 

Philip Hemme: yeah.

Sean Marett: allows you to do that. 

Philip Hemme: Like if you live in whatever, Philadelphia and you go to Boston, it’s a bit further, a bit more complicated. 

Sean Marett: Yeah, it’s more, it’s more, it’s, it’s, it’s more difficult. I mean, when I was in Philly working for GSK, I used to go to Carolina every, every week and North Carolina. And it is, yeah, it’s, it’s, it’s more painful.

So, 

Philip Hemme: One mistake you made in the past 12 months. 

Sean Marett: One mistake that I have to think about, I’ll come back to you on that one. I, I, honestly, I have to think about that, you can skip this one. I don’t know. I make a lot, I make a lot of mistakes, so I, and, and, and, but I can’t think of one in the last 12 months other than not being quick enough to buy a car. Because

we don’t have a car at 

Philip Hemme: the moment.

What’s one of your favorite European biotechs, again, except biointelligence? 

Sean Marett: Oh, I don’t have one. I mean, I think, I think they’re all Not favorite, but one that you 

Philip Hemme: particularly like, or maybe one that was remarkable in the last five months that impressed you. 

Sean Marett: Again, I don’t really, I don’t really have them.

And a particular preference or favorite. 

Philip Hemme: One of your European biotech heroes will be the last question. One of the what? European biotech heroes of yours. 

Sean Marett: Heroes? It has to be. I mean. It Not European, but it would have to be Art Lemonson who who built Genentech. Because, I mean, he, he was faced with similar challenges with the technology that Biontech faced at the beginning with MRNA.

Philip Hemme: Yeah. And in the book, and for those who haven’t read the book, I think it’s, yeah, I highly recommend it. And they talk about Levinson as well. And it’s oh, there’s a lot of talks about him as well. A lot of public talks he gave. It’s amazing resource. 

[01:13:57] Thanks for listening

Philip Hemme: Amazing. Thanks a lot. 

Amazing discussion. Thank you for that.

Yeah. Yeah. Thank you too. Thanks for coming all this way. You’re welcome. Ah, really. With the weather and everything. It’s amazing. Yeah. It’s ugly weather. Lovely autumn day.

I’m impressed by what Sean and the Biontech team were able to achieve and how they achieved it. I’m also impressed by Sean’s experience in dealmaking and how he remains calm while having this British hero. If you’ve also enjoyed this episode, please hit the like, follow, review button. Any of these actions will help a lot to give more people access to the show.

If you want to see similar videos, please feel free to check out our channel where I will also be curious to hear what you think. So please leave a comment wherever you are or shoot me an email at Alright, thanks for watching to the end and see you in the next episode.

Lovisa Afzelius, Flagship Pioneering 🇸🇪 | Company building, AI | E24

In our first episode recorded live in front of an audience, we’re with Lovisa Afzelius, the General Partner of the European branch of Flagship Pioneering 🇸🇪

We talk about Flagship, including its European activities. We also talk about company-building at large and Lovisa’s personal journey to be one of the leading Swedish leaders in biotech.

⭐️ ABOUT THE SPEAKER

Lovisa has been an icon in the EU biotech and pharma world for many years having been a CEO, co-founder, president, board chairman, and executive director in many emerging companies. Joining Flagship in 2020, she quickly became the founding CEO of Alltrna, and co-founded and was the CEO of Apriori Bio, Metaphore Biotechnologies, and Prologue Medicines. Lovisa has received many accolades, too many to list here. A few examples include being listed on Inc. Magazine’s Female Founders 250 List in 2024, 2023 saw her featured in the PharmaVoice 100 list of life science industry leaders, and in 2022 she was named one of the Top Women in Biopharma by Endpoints.

🔗 LINKS MENTIONED

Transcript

[00:00:00] Intro

Philip Hemme: And one thing that’s impressive about flagship is the money you raised. And as you said, it’s expensive to build 106 companies. The last fund you raised was in July. I think it was one of the largest funds ever raised was 2. 6 billion. It is 

Lovisa Afzelius: a lot. We have now 14 billion dollars under committed capital.

We have the fund eight of the 2. 6 you mentioned. Special fun together with that on a billion as well. Another billion, you start counting 

Philip Hemme: in billions. 

Lovisa Afzelius: I truly think that machine learning and AI is now in the place where you can revolutionize how we think about right development already from the very beginning, being in an environment with a lot of support and a lot of very talented people, as many, I would say, female as male role models.

Philip Hemme: Bienvenue to a new episode. As Michel said, this episode is a bit special. It’s the first time we do it on stage, live. Thanks for the partnership with BioEurope. So I’m your host, Philippe, and on the Flood Bioshow, I’m interviewing the best Europeans in biotech to help you grow. One of the best. VCs in the world, and I think many will agree, is flagship pioneering.

They are based in Boston, but they recently expanded geographically and opened a European office. So it’s a pleasure to have Loviza today on the, on the, on the show and on stage. And for today, we will talk about flagship, but especially on the European operation. We will also talk about company building at large and Lovisa’s journey into becoming one of the best Swedish leaders in, in biopharma.

Just a quick practical thing. I will try to open to questions. I want to do it like interactive. We are live here so we can, we can enjoy that. Or someone who will have a mic and I will open it throughout the discussion. So please don’t be shy. It’s a close community. So please give a round of applause to Lovisa.

Hi. 

Lovisa Afzelius: Hi. 

Philip Hemme: Welcome to the show and welcome to the stage, Lovisa. 

Lovisa Afzelius: Thank you so much for having me here. 

Philip Hemme: So cool. 

Lovisa Afzelius: Yeah. Looks right. 

[00:02:08] Flagship Pioneering and their European biotech initiatives

Philip Hemme: So let’s, let’s start with the, the European initiatives of Flagships reopen and technically you’re in Cambridge, US Cambridge, Massachusetts, and you’re opening Cambridge, UK. Can you just start with like how things are going?

Lovisa Afzelius: Yeah, absolutely. Happy to. So as you, mentioned in your intro, Flagship is a venture creation company, right? And it is different from most other venture caps in that, yes, we do raise funds, but we really build our companies and originate them ourselves. And that’s a very creative process. It is really about tapping into ecosystems around the world.

How do we find the best collaborators? How do we stay abreast of the science that we want to work with? And I think that’s the core reason for why we have now started two different offices, both in UK as well in Singapore, so that we can tap into that ecosystem and be much closer to the science because really, you know, science has no borders and it’s really about finding collaborations and, and finding the right people to work with.

Philip Hemme: And, and why the, why the UK versus another part, another part of Europe? 

Lovisa Afzelius: Well, I think it could be in many different places and we could potentially expand to many others. It’s a, it’s Cambridge to Cambridge. It’s easy, right? And it also is easy for us to then also collaborate with a broader European scene as well.

In, in the case of, for example, Cambridge and UK. We had one of our launching events in the context of one of the companies, Apriori Bio. And we found a lot of good ways of interacting. That’s a company very interested in vaccines and we, you know, we found very good ways of interacting with local. Agencies, the SEPIs, the governments of, of UK, but also with local startups.

So it’s about finding areas where you have very strong sort of local presence. 

Philip Hemme: And I guess as, as we discussed with someone yesterday, I mean, in Europe, when you’re in the UK, you’re very close to the rest of Europe. I guess it’s the same for you guys also in Singapore. You’re very 

Lovisa Afzelius: close. There is the 

Philip Hemme: region for sure.

That’s good. And I think you started one company, a quotient, I think, out of the, out of the UK. Exactly. Can you talk a bit about, about that one as well? 

Lovisa Afzelius: I think that was a quite unique situation where we also, there were some academic co founders that were working on very similar types of biology and it made a lot of sense to bring those together into the company quotient.

And actually, I think that’s something that we sometimes do also in the context of a prior bio, we’ve also sort of work very closely with key opinion leaders in the field. And sometimes just, it makes more sense to do it together as co founders than others. 

Philip Hemme: Nice. And can you, yeah. And what is pretty impressive was you, since you joined flagship, which I think was four, four years ago, you launched four different biotechs which.

It’s pretty, it’s a lot. One is, yeah, and maybe can you talk quickly about them, like about the different falls and. 

Lovisa Afzelius: Yeah, absolutely happy to. So so the companies that we founded over these last couple of years includes Alterna, which is the world’s first tRNA company Aprior Bio, which is in variant resilient vaccines.

Metaphor biotechnologies, which is really about generative molecular design, and Prolog, which is tapping into the viral proteome. And I would say they are all in very different areas of biology, needless to say, and can, they’re all platform companies. And they’re all, I would say, in that interface between AI machine learning and different types of biology.

So how can we build platforms that allows us to parameterize the space that we’re looking to understand and then apply machine learning to infer those learnings so that we can drive insights more quickly and, and, and get towards the best medicines for patients as soon as possible. Right. Yeah. 

Philip Hemme: I think that’s, that’s one thing that is quite special about flagship as well.

[00:06:18] Being creative in many biotech spheres

Philip Hemme: Yeah, you are quite agnostic, quite agnostic or so on, like on what’s the application or what’s the, you’re looking at amazing science and then apply it. I mean, you’re going to therapeutics. You have also industrial biotech, biosolutions, all within the same funds. They’re like. I guess there must be also some challenges attached to it.

Lovisa Afzelius: I think it’s, so science is super creative and we need to be abreast of all the different sort of areas that we could consider going into and really, but it’s also, it’s a lot about thinking about what are the big problems where we want to create solutions to. What if. Yeah. What if. Exactly. What if we could.

Deliver this and that, what if we could use tRNA to edit proteins? I mean, these big, what if questions to speak a little bit about the process we, I mean, we apply a very sort of strong process for innovation and that’s how we can be sort of parallel entrepreneurs because we apply that same process independent of what science it is that we’re going after.

And I think that’s why we can go after such orthogonal. Topics, because we still always keep ourselves to the same standards when it comes to how we actually go after it. It’s like we always want to go after the non adjacencies. We want to go out in the white space. We want to be where others are not necessarily going because it creates space for us to explore and invent and create IP early on, et cetera.

And I think traditionally that’s where, you know, people say that’s a lot of risk to go into those spaces, right? But we, we often think about it different. It’s like a lot of uncertainty because no one has really been there, so you can’t really know what the risk is if you haven’t been there. 

Philip Hemme: But it’s an opportunity to be the first, first in class.

The first, 

Lovisa Afzelius: exactly. And it’s also an opportunity to rapidly create the data points that are needed to bring down that uncertainty so that you actually understand the space better than anyone else. And then you can start assigning the risk and make a cognizant decision as to, is this worth going after?

Or do I not have the, the insights that I need in order to feel confident that there is actually a path forward in what’s otherwise pretty much white space? 

[00:08:37] Why invest 50 million in first seed Series A every time?

Philip Hemme: And one thing that you, about the process as well. Is you’re always investing almost the same amount, 50 million first, first check fully from the flagship fund.

Like why, why this amount? I mean, a lot of people here in the audience, I think if a biotech CEO in Europe, they would dream about raising, raising 50 million as a first seed Series A. Can you talk about why, why that amount? How you like, 

Lovisa Afzelius: Yeah. I mean, we start off with explorations. So every year we maybe run a hundred different explorations where we ask these big what if questions.

What if we could build very inter resilient vaccines? What if in the context of Moderna, you could use mRNA to produce protein therapeutics? And many of them won’t go anywhere because you realize that it was a great idea. We just, the time may not be right yet, or the technology is just not there yet to actually make it happen.

But then sometimes you find these ideas where it’s almost like maybe two different technologies coming together for the first time and you see some synergies that you just had never thought about before. And that’s when you start to form what we call a protocol. But it’s a huge. opportunity cost for us to actually move forward at set stage to your point before.

So we don’t take that easily. Instead we Very explicitly decide on a couple of killer questions that we need to answer to move on to the next stage. And then we put a couple of million dollars first into what we call a protocol. And during this time, we recruit a couple of people to help us build the science.

And at the end of that nine to 12 months or so we hopefully have answered those questions explicitly so that we can say that we see that even though we don’t know any, we don’t know that much yet. We at least know that some of those core competent core pieces that we need to put in place for the puzzle to come together seems viable.

And that’s when we start making that bigger investment to actually build out the platform And harden the platform, but then also start thinking about what are all the different potential areas of biology that we could point that platform towards and create prototypes from the platform so that we can see the value creation and we can sort of see what value pools we can unlock.

And really focus it towards what is the biggest unmet need and where do we want to go with it? 

Philip Hemme: So I guess the 50 million is more is the total amount of this the whole process plus Once you are going out of stealth mode. 

Lovisa Afzelius: Yeah. And that’s something that comes completely from flagship, right? And then when we get to basically series B, that’s when we start bringing in, first of all, an external CEO, I stay on a CEO until that stage.

And together we raise the series B and then the CEO brings the company sort of to the next stage of development. Yeah. 

[00:11:42] The Flagship Pioneering business model: invest in biotechs early

Philip Hemme: That’s nice. And I mean, I think I forgot to mention it in the intro, but I’ve, I followed flagships since basically 2014. We talked about, I finished my studies in Boston. I met David Berry, Stefan from Moderna and that’s when Moderna was really taking off and was really originated the flagship and taking off.

And now, I mean, now we We all know the story. And we also know, I mean, the return you made on Moderna is insane. I don’t know. I heard it was like a hundred fold or something. I’m not, I don’t know how you can disclose. But can you talk about the return as well on, on investing so early and I guess having quite some equity as well and What does it mean from the whole like business model of flagship?

What does it allow you? 

Lovisa Afzelius: I mean, the business model of flagship is really, as you will say, it’s like really building it from the beginning ourselves. And I mean, that it’s not the easiest way of doing things for sure, because you kind of literally have to stay with it and, and sort of have that vision from the very beginning and work it ways backward.

As in comparison to, if you bring in science from the outside or you invest in another company, we will always know what it is that we have in our hands because we built every single piece of it ourselves. And I think that, that is very, very useful as you’re continuing to build the company. And the way the process is set up, we also have many of the same people following the companies throughout its lifetime.

So even if it is a, it’s a quite hard model as such, I think that is why we can also create the value because of, you know being in it for the long run, because we are truly in it for the long run. We stay through the series B, we stay through IPO and we, you know, these are our babies. So we really stay with them for a very long time.

Philip Hemme: I like that. Yeah. And maybe continue zooming out on the company building model. I think what’s, what’s really interesting in this model, I mean, in Boston, there was you guys were, were, were one of the few who did that very well and quite early. I think third work was another one. Atlas was another one.

And it seems like the model also coming. More and more also European VCs start to do that. I mean, Fabio and Kyoma did a startup studio, Fabio had one. I think Sophie Nova start companies from scratch as well. Like, can you talk a bit on on the model itself? Well, I mean, I’m curious, I’m like, yeah, why are all the VCs, I don’t know, copying you or inspired from you and like, yeah, why so much?

Lovisa Afzelius: I mean, it’s a, so oftentimes, for example, when you join a company, you have looked at it from the outside and you’ve been really impressed with what it is that you see. That’s why you decide to join the company. I must say that when I joined Flagship back in 2020, it was so much more than I had ever thought of.

So it is, we’re now at, I think the last company. I found it was Flagship 107. So it’s like, there are a lot of companies that come in this way. So I think what, what Flagship has really managed to do is to. Build a ecosystem of very, I mean, parallel entrepreneurs. We know how to build companies and we have now so many scientists that come from very different walks of lives within the context of flagship.

And we know how to build platforms and we do it repeatedly, repeatedly and in parallel and in parallel. And those are learnings that. I think a lot of people also look at as inspiration. It takes some time to build up that. That knowledge base, if I may say, but it is great to be in such an environment because if you see everyone else sort of being able to build new companies and create new companies, all of a sudden it lowers the threshold for you yourself to actually come up and create your new companies.

Because you see, it’s possible with the support of the teams that you have there.

[00:15:57] VC-created vs founder-led biotechs

Philip Hemme: And what do you think about the especially in Boston, there is CurieBio and kind of the whole like founder led movement of like, okay, now Pharma, Therapeutics and Life Sciences, VCs create the companies and there’s no really like true biotech founder.

to bring more like scientist founders or founders from outside who get financed and we get like incubated. What do you think about that movement or that, that critique? I feel like it’s a bit of critique of the, yes, the origination model. Like, 

Lovisa Afzelius: I mean, I find it hard to tell because it’s very different from the flagship modeling that we are both, you know, the founders, the scientific founders and the company founders.

And that is very different. So it’s hard for me to sort of, Relate too much to the other types of models when you don’t know them so well. Right. But I do see the benefits of, and the, the joy and of actually being both. So you were founder yourself. Yeah. You, you stand at that whiteboard and you come up with the ideas together with your team as to what you really feel passionate about, where you think that you can actually make an impact.

And then you have all that support from the ecosystem to actually push that forward and build companies out of it. 

Philip Hemme: So, I mean, yeah, I mean, I think at the end, the two models are great models and it fits for different people as well in different science and different cases. 

Lovisa Afzelius: And all we want is to have as much innovation as possible to create the best medicines because that is just an there’s so much unmet need.

So we should just try many different ways of getting to it and, and take inspiration for what you see works, right? 

Philip Hemme: Yeah. Yeah. That’s and I think in one thing also that’s impressive, our flagship is the money you raised in the funds. I mean, and as you said, it’s expensive to run and to build 106 company.

[00:17:46] Raising one of the largest biotech funds

Philip Hemme: And the last fund you raised was in July, I think was one of the largest funds ever raised was 2. 6 billion. For one single venture fund. Like that’s, that’s huge. I mean, it is 

Lovisa Afzelius: a lot. We have now 14 billion under committed capital and or assets under, under management. And we have the fund eight of the 2.

6 you mentioned and the special fund together with that on a billion as well, another billion that comes with partners such as 

Philip Hemme: you started bouncing in zillions. It’s. 

Lovisa Afzelius: It costs a lot of money, but it’s, it’s it’s, it’s, it’s also in this environment, it is a phenomenal sort of foundation to continue to innovate in this space.

Philip Hemme: What do you think about, maybe you saw the Forbjorn fund that they just raised a bit over a billion dollars for, which for European funders is huge and starts to be in the seminar ballgame with. What was your what do you think about them? 

Lovisa Afzelius: I mean, the more sort of capital we can get into life science, I think it’s just very positive and adjacent areas of innovation.

I think that is just, that’s just positive because that’s what fuels, I think, our economy and that just creates ourselves to be better, better humans as to what we can do differently and how we can. Build new ways of attacking problems, whether it’s in medicine or it’s in sustainability or it’s anywhere.

There’s enough problems to solve. There’s enough, there’s enough problems for everyone. Let’s put it that way. For sure. That’s good. 

[00:19:19] Flagship Pioneering’s biggest returns

Philip Hemme: And on the, I had a question yesterday from a London VC. I was telling him that we were on stage and he asked a bit for a catalyst question. I said, okay, but ask, ask your visa.

What were some some other big returns except Moderna? 

Lovisa Afzelius: I would say that there are many different ones and we also have, I mean, some count it only as returns. It’s also what is medicines to patients. It’s also partnerships. We do a lot of partnerships now, the Novo Nordisk, we have the Pfizer, we have the JSK.

These are different ways where we’re almost creating what we call an innovation supply chain. Yeah. So that companies that in big pharma, it’s hard to do innovation as such, but this possibility of actually coming to us and looking at that breadth of different platforms that we have, and sort of almost do the matchmaking between these are the target product profiles that the company is truly after, and then being able to look into many of the different platform technologies and see which ones actually works the best for that problem.

And then creating a collaboration around that. I think that’s how you can really fast forward drug development. And, and what’s good about that as well is that, you know, each of these companies spend a lot of time refining their platforms and building the best platform possible through these collaborations.

Everyone in the company learns more about how to do drug development with a pharma company, for example, and you can tap into their depth of, for example, biology expertise in the particular area you’re going after, which is otherwise hard to build in each of these different areas. Companies, which is why we formed this unit within flagship, which is called pioneering medicines, which is basically a drug development unit within the flagship ecosystem that allows all these different platform companies to have access to real world class drug development expertise as well as being almost like the adapter towards the big pharma.

Well, 

Philip Hemme: you centralize BD as well in a way, it’s very much more efficient, I guess. 

Lovisa Afzelius: Yes, and instead it’s the same thing that Instead of every single platform company building their own BD function, their finance function, their legal function, we have those as central capabilities. So we can have very, very skilled folks in each of those groups.

And then you have the possibility, even as a very small company to work with very experienced people. And, and that’s super helpful, people that have done it before. So it’s, it’s a lot of, that’s sort of part of the ecosystem process. We, for each of the companies, we recruit those scientists that are critical.

Philip Hemme: And on the returns, you didn’t know, you didn’t know your ends. Some examples except, except Moderna. What was the, the homework? I 

Lovisa Afzelius: mean, I think we have, what is it now? Six, or, or, I, I don’t even I, I don’t wanna quote numbers because I don’t wanna get the numbers wrong. But I think we have multiple different public companies that are out there right now and the full sort of ecosystem of earlier companies that are coming through.

Some that have been acquired within big companies and a lot of partnerships as well. 

[00:22:36] AI and biotech

Philip Hemme: Okay. I will have one more question and then I will open up to any of you. So don’t be shy. Prepare. You have time to prepare your question. One thing you mentioned was machine learning as well. And I think, I mean, you guys, and I read Nubar’s post about the conversion of AI and biotech and you’re really going like, yeah, I mean, not full in, but like very actively while I feel like what I see in biotech, I mean, people are starting to understand, okay, what is it about and starting to use it a bit, but at least let’s say even in European biotech, why, like, why are you guys so bullish on it?

So using it so much so early on it, like what’s like, yeah. 

Lovisa Afzelius: I truly think that machine learning and AI is now in the place where you can revolutionize how we think about drug development. And I mean, my background is in computational chemistry. So really, I feel like back in the late 90s, scientists, no, we coded algorithms.

We use neural networks. We use quantum chemistry. We, I literally coded the algorithms to, to build those biological. I mean, the algorithms to describe biological scenarios. So we used all those different tools. And that’s when there was no infrastructure to do so. You had to partition your hard drive to get the Linux running.

There were no clusters. You had to build those clusters. It’s like you had to do everything yourself. And we also, I had to generate my own data to build my models and parameterize my algorithms. So it’s like Was not a time where you could have massive impact yet. Some of the softwares we developed are still in the market 20 years later.

So that’s good. But now I think with, if you think about some of the pre chain models, the GPTs of the worlds, you think about some of the reasoning layers that are starting to come out, strawberry one, et cetera. And then. I think now is the time where we can really start with subject matter expertise, build cognitive applications, and, and literally using the combination of our deep knowledge in biology and drug development and leverage the advances.

In machine learning and artificial intelligence, building knowledge graphs, using large language models to compile the totality of data, using molecular modeling to rapidly get to novel therapeutics. It’s, now is a time where I think we both have the data, we have the algorithm, we have the compute, we can bring it all together to, you I mean, drag development can easily be quite subjective.

You, you figure out this is what I want to do, and then you do everything to prove that you’re right. As opposed to being much more holistic using these tools and being able to reduce it down to from a almost like probabilistic perspective. perspective. If there is a solution, we should have the highest probability of actually finding it.

And I think that’s 

Philip Hemme: what’s exciting. Also the blind spots when you’re on the subject of thinking. 

Lovisa Afzelius: Exactly. Exactly. And I think that’s super exciting. I think that’s, that’s where we want to be. And then you have to make the investments to learn more about it and really try out it in multiple different settings so that you understand.

the powers and, you know, how to interact so that you get towards, I would say, augmented intelligence, where you get the best out of the human intelligence and the best out of the machine intelligence, and you bring it together into something that is so much better than each of the individual parts. Yeah, I like 

Philip Hemme: that.

I like that a lot. Maybe if some of you have a question, I think there’s a mic somewhere here. Yeah, there. Don’t be shy. You had a question. No. Hi there. Perfect.

[00:26:31] What does success mean to Flagship Pioneering

Audience question: So I wanted to ask, you know, we talk a lot about, you know, returns. I think one question I have Luvisa is beyond returns, financial returns. What do you define? What is success to flagship with the startups you have and what do you think is, you know, a good return, a good success rate outside of returns.

Lovisa Afzelius: I mean, for me, what’s most important is that and for flagship, I would say is to make a stent, make a difference, make, you know, create a value to patients. I think that is where you truly generate returns. And you can do that in many different ways. Let me give you one example, which is for example, Altona, which is the tRNA company we created, which is about how can we create universal solutions to rare genetic diseases?

I mean, rare genetic diseases, ultra rare diseases has just been No one is really going there, or they’re going to very few specific diseases. And if we would actually develop drugs towards all of the 10, 000 different of diseases, it would take hundreds of years before we would get them through to marketed products.

So I think one example of what’s meaningful is where we say what if we could find universal solutions. to rare genetic diseases. What if we could pull together and bundle many different rare or ultra rare genetic diseases that share the same genetic mutation? Then we could use a single medicine to start treating thousands of different rare and ultra rare genetic diseases.

I think that’s a vision that is truly creating value for humanity because No one will otherwise be focusing on each of those different diseases. So that’s just one example of how the tRNA, which is a very unique modality, transfer RNA, which is literally, it’s a tRNA that reads the code on the mRNA to understand what amino acid to put on the growing polypeptide chain.

So it’s literally the physical link between the mRNA and the protein. So if there is no tRNA, it would just never be a protein. Protein. And then we came up with this, you know, you have a genetic code. If you do a single mutation, you go from coding for an amino acid to coding for a stop. We don’t have to think about at what gene it is or flanking regions.

Independent of what gene, you can use that same tRNA. Towards a, for example, premature stop codon to get towards that edited protein so that you restore the full length protein. And that’s then a solution that is unique in its ability to go after diseases that otherwise will be completely ignored.

So I think that’s just an example of what I, what’s value to me truly. 

[00:29:20] How to help biotech spinoffs grow and advice for women on how to be a biotech leader

Audience question: So firstly, I thank you for the discussion. And well, I have two questions. The first one is so I come from an institute in Paris and we try to build startups with, you know, the knowledge developed by academia and by researchers.

So what is your opinion on those spin offs of from the academia? How can we help them grow? What would be your advice as a person who also helps, you know, building projects and bringing them? Further, that’s my first question. And then the second one is more not personal, but as a woman, how do you see being such as the head of such an, you know, an organization and what advices would you give to somebody, a woman, for example, a young woman, for example wanting to be in something like this.

So yeah, I have two questions. Yep. 

Lovisa Afzelius: So let’s start with the one with regards to the startup in the academic settings and how to think about that. And I think that You know, what I would say is like, really try to surround yourselves with people that have done it before and have a lot of knowledge in the space and really trying to get as much as advice as ever possible, because it’s not going to be easy, right?

And you probably know that as, as well. And it takes a lot of tenacity to sort of push it forward and, and continue to Believe in it when sometimes it goes up and sometimes it go down. And, but it’s really by bringing the best people around you that I think that I think, and getting yourself into a environment where you have also access to capital and you really.

You work with people you want to work with because it’s, it’s a long journey from the very start to something. But let me spend a little bit more time on the diversity question because I think that that is a really important one. How can we bring diversity to every aspect of life, but also in the value creation or in the company creation setting and to the senior positions more generally.

And I think it’s, it’s you have for me, it’s a lot about now just not accept that it is in a certain way and it’s hard to recruit women or so. For one company like Altona, we, we just made a thing out of, we’re not going to have a recruitment firm that won’t bring a 50 50 when it comes to candidates.

And there were many we had to say no to because they said they couldn’t bring 50 50 when it comes to diversity. And it’s like, then you just have to say no, because that’s not good enough. If you put a little bit more effort into it, you will find, because there’s a ton of talent out there. The benefit then is that if you, when you start to bring in more diversity, you’re opening up massive talent pools and everyone.

They know someone else and they know someone else and that’s how you can then start to build those much more diverse systems. And it’s the same thing as with science. We say we want collaboration because we want different sort of mindsets. That’s how we drive innovation. And it’s the same when you’re driving a company because it’s just how people can bring different views to the table.

It’s the same mechanism. It just makes it better because everyone is more challenged. And then you have to find your right environments, and I would say Flagstaff’s always been super supportive in, you know, really trying to find as diverse and as, as environment as possible so that you get the best ideas out of it.

So it’s, it’s, it, you, we need to put work towards it. And then I think that’s when you can talk about return actually being, you know, very, very, very important. instrumental. 

Philip Hemme: You think as a, as an individual, as a, as a young woman in biotech, a bit, if I hear what you’re saying is also like, go find supportive environment or supportive company or supportive people will support diversity.

Lovisa Afzelius: Yeah. And then pay it forward. So that, for example, now So when I recruit CEOs for my companies, I always keep diversity as one of my highest criteria because we also know that they probably needed to work harder than most others to get to the positions where they are. And that’s the kind of grit you also need to build and lead a company.

So I think it sort of just brings it all together. 

Philip Hemme: I remember I saw the press release and I saw you were three women. Yes. The founding team. Yeah. Which is pretty. I think I’ve never seen that in the biotech. 

Lovisa Afzelius: Then you’ll see more of that. That’s 

Philip Hemme: good. Great question. Maybe one, one more question. It’s great.

You have so many questions. That’s, I think it’s, makes it more interactive.

[00:34:03] How to move from computational to translation sciences and bring drugs to market faster

Audience question: Hello. Very interesting to hear that you have a computational chemistry background. Just curious, what’s your opinion on the, some of the barriers or, blockers that are sort of preventing the translation of in silico modeling to wet lab execution and then into the clinic.

Lovisa Afzelius: So, so the question is how going from the computational to the translation sciences and actually bringing the medicines that we design all the way into the clinic and how we can make that faster, I assume is in part of that as well. I think that’s a great question. And so first of all, I think it’s a lot about creating less barriers between each of the different disciplines.

I think we’ve started to become good at designing molecules from the more computational chemistry perspective. And what we now need to, and it comes back a little bit to, to what we discussed before Subject matter expertise and cognitive applications to lie on top of some of these new tools that are there.

How can we start to simulate every step of that process from the actual target identification all the way through to basically the PK PD simulations and then creating frameworks that also regulatory agencies will start to become comfortable with. And I’ll give you an example, for example, in UpYourBio, which is in variant resilient vaccines, that is a lot about how do we design vaccines that elicit an antibody repertoire that is protective both today, but also to, towards future variants.

We built the Octavia and AI biology platform that allows us to identify what are the different mutations that, if they would occur. They would, we would not be protected towards them anymore. And then we design vaccines or antigens that allows us with those mutations that allows us then to elicit an antibody repertoire that is protected to end with the future.

But that comes with a challenge as to, you don’t know what’s actually going to happen. And how do you then early on build models and proof point them with real world data so that you can showcase that over, as we’ve done there, 18 months our vaccine was able to better protect towards emerging variants than standard of care.

And by constantly sort of building models and proving using real world data that it’s actually working. I think that’s how we can start to also create more of a confidence with the world that machine learning and model making is actually, and predictive design more generally, is something that will fast forward track development in a very effective way.

Philip Hemme: Good question. Maybe one more if someone has one.

[00:37:14] What can the EU learn from the US to create biotechs

Audience question: Hi, Louisa, Lene Geller from Women in Life Science, Denmark, and I can completely relate to what you say regarding diversity in top management on boards. But my question is a bit different. So what can How can we learn, what can we in Europe learn from the way that you in U. S. generate these viable biotech companies?

Of course, there’s much more capital available in the U. S., but the way that you, you know, you’re having great success with forming all these successful biotech companies and there’s capital there. There is a translational gap in, in Europe, you know, translating scientific innovations into medicines for patients.

So what are your, you know, top three things that we can learn from, from U. S. A.? It’s a 

Lovisa Afzelius: very good question. And I think, I mean, going back to where we started with regards to collaboration, how do we bring the two ecosystems closer to each other? I think that’s one way of also sort of starting to establish an infrastructure or an ecosystem that allows us to tap into maybe capital from one side of the pond to innovation on the other side, et cetera, and bring that together.

Same thing with talent exchange, because I think that in the U S system that has been more of building your dream, building the companies and how can we, by also exchanging talent, bringing more of that also maybe to. other ecosystems around the world as well. And I think finally it’s a finding partners that truly have also capital available and showcasing good examples where additional capital actually creates better final solutions.

I think there is something about creating broader ecosystems from a capital race perspective, because capital will be important in order to bring these companies forward. And I think the best I can offer at that, because it’s a hard task in that many aspects, but I think it’s more about how we can actually collaborate and make it sort of a global scene as opposed to making it the European scene or the U.

S. scene or the Asia scene. And instead thinking about it, global problems needs global solutions. Let’s work on them together. 

Philip Hemme: Great question. I think also like, as, as you said, I mean, crossing the ecosystem, I think as a European spending some time in Boston or in the, in the, in the valley, learning from what they, I mean, what, what the lessons were there.

And I think also, I remember on, on the show, we had Otello from Omega and he was, he has a European background as well. You were saying every time you invest in a European company, one of the requirements is the CEO needs to spend time in Boston very early on and have a presence, I think. 

Lovisa Afzelius: Yeah. No, I mean, it’s like being around those have already done it.

I mean, I think that is another piece to it as well, because then it just makes it easier to see okay, they were able to have overcome that. If they could do it, then I can do that too. Right. Yeah. 

[00:40:36] How do you bridge the gap between the amount of biotech company creation in the US vs the EU

Philip Hemme: And actually I had a question on, on LinkedIn. There was a question similar to, to, to, to your question as well to the last question was how do you.

bridge the gap between company creation or the amount of company creation in the US versus Europe? 

Lovisa Afzelius: Yeah. It’s a big question. And I think it comes back to what we talked about. How do we bring them together? How do we bring, how do we make it easier to exchange ideas, capital, talent, and finding places where we can unite around certain types of science that we’re all passionate about.

And, and use that to the, 

Philip Hemme: and I guess there’s things that are beyond biotech. I mean, the U S for, for when I was studying and learn a lot from that, it’s just so entrepreneurial culture, which is deep from hundreds of years ago, which is much stronger than let’s say in Europe where. Yeah. Yeah. We had some entrepreneurs and we still have, and it’s growing actually pretty fast, but there’s a, there’s a delta.

Lovisa Afzelius: Yes. And I think that the, also the universities, they are good in actually teaching entrepreneurship and they are good in actually sort of bringing the different, the competences together into an ecosystem. When I did the MBA over at MIT, we had a lot of. Just entrepreneurship. How do you interact with the ecosystem?

How do you build bridges? How do you bring things together? How do you create your own startup? That was part of the curriculum. And I think that also helps and bringing people from the outside. That’s how I met Nubar Afeyan for the first time, our founder of Flagship, because he came and talked about entrepreneurship and how he had sort of built that process at Flagship.

And that’s actually what made me leave. The 85, 000 people, big pharma to go to four people, small biotech and, and try that out because it was just exciting to hear someone who’s thought so deeply about how to actually create companies in a way that I had not heard before articulate. It 

Philip Hemme: makes me laugh because I remember when I was in Boston, I, I chose to not do a PhD and then I met so many PhDs who were like, so entrepreneurial and they were like, take a one, two year break to try to start up, go back to the PhD.

And I was like, it’s like, it 

Lovisa Afzelius: is a good, it’s a very good growing ground for, for that. It’s so many different startups around there, 

Philip Hemme: which makes it, yeah, Kendall Square, I think for anyone in the room, if you haven’t visited, I think it’s, yeah, it’s worth, it’s worth the trip. Maybe just Switching a bit topic to what your personal journey, as I said, I wanted to cover this as well.

[00:43:07] Lessons from Lovisa Afzelius for an early-stage biotech career

Philip Hemme: I mean, we, we, we mentioned it here and there you, I mean, you grew up in Sweden, you studied here, master’s PhD, you started your career here. And then you moved to the U. S. Yeah. Can you talk a bit on, yeah, some, some of your lessons there in the, in the earlier stage of your, of your career? 

Lovisa Afzelius: Yeah, I mean, I started off doing what was an industrial PhD and looking back, it was actually quite innovative and very forward thinking in how can we use the silico methodologies to actually bridge between.

biology and chemistry. And this is like late 1990s. It’s like five years after we probably sent our first emails. That’s how we, you know, we said that we’re actually going to do this conversationally. And I think that is already from the very beginning being in an environment with a lot of support and a lot of very talented people, as well as coming back to the question on equality.

I mean, every, it is a very diverse, it was a. It was a, as men, it was a female as male. Role models that I had throughout many of these first years, which I think is, is a great foundation for then always wanting to build diverse teams, but also a lot of teamwork, which I mean, innovation is a team sport.

I think that’s how we call it. a flagship because it’s really you need everyone to chime in in order to make it constantly better and and that’s I would say the Swedish upbringing was very strong on it’s all a team sport and I think that’s one of those what’s the word 

Philip Hemme: again the collective of individual that you have a swedish word for that yeah the concept the 

Lovisa Afzelius: the Well, we like the log on word, but it’s, that’s not what you’re thinking about.

No, I can’t think of the word that you’re thinking about right now, but it’s definitely that you bring it all together. I’m looking at some sweets here to get some help, but what, how we bring it all together and, and sort of that team spirit and consensus is one. I think that’s the consensus word, which is very strong sort of also in the Swedish.

And it doesn’t mean that you don’t challenge each other. It’s more about that you listen to all the different opinions around the table and then you sort of bring that next 

Philip Hemme: Nice. And and you spent, as you said, you spent quite some time in big pharma USCA at Pfizer. And then how, how was that transition out of big pharma to, 

Lovisa Afzelius: to the small biotech, biotech, 85,000 to the four

It was quite different, I would say. I mean. What you do learn is that you have to, and that I think is something that I learned also during my PhD and all of that, you need to be able to. Tap in and, and contribute to many, many different areas. In big pharma, you easily get quite sort of, this is my area of expertise.

This is where I primarily are contributing. Going into the, for people, it’s like, if you don’t do it yourself, no one else is going to do it either. So it’s like, it’s more about really sort of digging into each of the different problems and also be very focused on what you choose to put your time on, because.

There are so many, you need to know in drug development, the difference, yeah, you need to know all the different things you could do. And that’s why 15 years in big pharma was a very good training for how you need to do drug development. But you can’t do everything in the small startup, but you need to think very, very, very cognizantly about what are the few things that are really, that really matters and that you should put A lot of effort making it as good as ever, ever possible.

And there will be other things that are not as critical to get you from A to C that you may have to take a lighter touch at because you’re only four people. But also you can compliment them afterwards. So it’s much, I would say it’s a, it takes a lot of strategic thinking as to what really matters when and be very sort of efficient with the resources.

So.

[00:47:18] How to attract the best biotech talent

Philip Hemme: I like that. That’s actually one a bit segway, but one topic I wanted to, to touch base on was I think a flagship, you’re also especially good from a talent perspective to attract some top, top level, top executives, some farmer, bring them in as entrepreneur residents or venture partner. And then they’re running some companies.

Can you talk about that? I guess it’s similar. 

Lovisa Afzelius: That has made Flagship such a more mature organization as well because I think in, in we are making medicines to patients and you need to have a strong expertise and you need to sort of connect that platform knowledge, platform building. with the drug development process to similarly set the compasses right from the first place.

Where do you have the greatest unmet need? What are the target product profiles you actually want to go after? And then by working together with those that have done it over and over and over across modalities, across disease areas, across companies, across all those different interfaces and work very, very closely with them to triage down.

Where should you focus a particular platform towards? What are the different value pools that you should unlock with that platform? Because that’s where that platform will bring the greatest value.

[00:48:38] Moving to Boston

Philip Hemme: I like that. I would have one more question and then I would open up again if, if some of you have more questions.

One thing I think that we talked about, you mentioned your MBA at, at MIT, how, how did you come to the decision to, to move to Boston actually and like, I think it must be a difficult decision. 

Lovisa Afzelius: Yeah. So sometimes it’s these, you know, when things happen that you hadn’t planned for, then it can be a pretty good decision driver.

So I was working with AstraZeneca in Södertälje and, and the site closed down. And I couldn’t have the possibility to continue maybe at AstraZeneca in, in Möndal, where I had So, like, we didn’t have photovoltaic. Exactly. Oh, okay. So, then that gave me a chance to sort of reflect over what I wanted to do next.

If I wanted to continue what I was doing, I started off as CEO for a small biotech in Sweden, in the Karolinska development environment. And then I got recruited to, to Pfizer in the U S and it was just one of those, it was an opportunity, had a very young family and we’re like, okay, let’s give it a try.

Let’s see. Let’s, let’s do it. And if that wouldn’t have happened before, I would probably, you know, very likely, maybe I would still be in Sweden and still working with the same company. Because it wasn’t so that I’ve always enjoyed each of those different phases that I’ve been in. So it’s never, so it’s just the desire to actually do something different that drives you to take on this and not being afraid of trying.

Something new. And I think that goes along all the different things that we do, just not being afraid of trying. 

Philip Hemme: Yeah. And open to 

Lovisa Afzelius: opportunities. Open to opportunities. Just know that, you know, you won’t be best at it from the very beginning, but you can truly learn it if you, if you want to. 

Philip Hemme: And can you talk about the MBA a bit?

Like, why the decision to make an MBA? I think you made it while you were at Pfizer. 

Audience question: I did. 

Philip Hemme: And I think it’s also doing MBA in the U. S. as a European is a quite good way of learning, of being exposed to the ecosystem, as you said, meeting great people at Nubar who lecture at MIT. 

Lovisa Afzelius: So actually, the decision to make, to take an MBA came actually when I was CEO of a small biotech in Sweden, because that’s when I realized that I come from a complete sort of scientific background.

You’re welcome. PhD, master of science, it was all sort of drug development. It was, and now here I was as a CEO, I needed to take many other decisions that were much more strategic, much more business oriented than when you’re a pure scientist and such. And when I then joined Pfizer, I asked if I could just continue to do that development while there.

And I think it, it, it did open up a lot new perspectives because first of all, you learned the theory behind how you think about value creation and value capture, which are both very important aspects of company creation, right? Being able to do that in a innovation system such as MIT really is just gave me exposure much more to that external biotech world.

And I’ve always been interested in the totality. I like the systems thinking about company, company creation. So it was a natural step in that. Okay. 

Philip Hemme: Nice. Nice. We’ll open up for, I think, one or two more questions.

[00:52:13] Quickfire

Philip Hemme: All right. Then I have some, so then I’ll finish with some, some quick questions or quick fire. Wow. Just a yes, no, or one sentence, one sentence answer. What’s on the top of your mind at the moment?

Lovisa Afzelius: What’s going to be the next big innovation in biotech? I think that’s something I can always think about. And it’s good when you’re traveling, because it gives you time. That was not the one sentence, but it does, it’s a new type of thing. Yes. 

Philip Hemme: What’s your favorite biotech book?

Lovisa Afzelius: My favorite biotech book, you know what I like, which is not a biotech book Born to Run, which is not about biotech at all, but it’s about how, born to run, how just by you find yourself, you grow up in a certain environment, just make something natural. And I think that’s a lot around also company creation, find yourself in the right environment, because if you can do so, then you automatically just don’t see the barriers, but you see that it’s a natural thing to do.

Philip Hemme: What’s your favorite biotech hub in Europe? 

Lovisa Afzelius: In Europe? I’m born in Gothenburg, so I think I have to, I should say Gothenburg. 

Philip Hemme: Even with the AstraZeneca, so a site who closed? 

Lovisa Afzelius: Absolutely. It was a fantastic time of my life. 

Philip Hemme: What mistake you made over the past 12 months? 

Lovisa Afzelius: Over the past 12 months, probably very many very many.

It’s a tough one. I probably should have spent more time thinking on big problems and oftentimes it’s easy to get, you know operational because you have to do it, but you have to sort of manage your time. So that you always save time for thinking. Save 

Philip Hemme: time for thinking. I like that. 

Lovisa Afzelius: Save time for 

Philip Hemme: thinking.

Your favorite European biotech? 

Lovisa Afzelius: European biotech? Yeah. 

Philip Hemme: Or one of the one that struck 

Lovisa Afzelius: you? One of the, well, I’ll say, as we discussed before, bioarctic, because it’s a lot of my own colleagues that are working there and I think they’ve done a really good job. 

Philip Hemme: Nice. We recorded the episode yesterday with, with Gunilla, so we’ll come out as well.

How much do you sleep the night? Six hours. Wow. 

Lovisa Afzelius: But I do it every night. Yeah. I try to be very sort of stringent on that. 

Philip Hemme: What’s the most impressive drug on the markets at the moment? 

Lovisa Afzelius: I think that the vaccines during COVID were impressive drugs under what circumstances they were developed and leveraging a completely new technology to meet an unprecedented, unmet need.

I think that’s impressive. Yeah. At the crazy speed. At the crazy speed, at the crazy speed, under crazy circumstances. Yeah. 

Philip Hemme: Awesome. And last question one of your biotech heroes, if possible, a European. 

Lovisa Afzelius: Possible European. I mean, I would say, I think Neuborough Fain, who is the founder of, of Flagship, he’s been at this for 25 years and it’s very inspirational to work in such an environment because you always learn something.

I think there are a lot of fantastic founders and, and entrepreneurs in Europe as well. It’s harder for me to choose a single one, but I have a lot of role models in Europe Nice, nice. 

[00:55:41] Thanks for listening

Philip Hemme: Great. Thanks a lot for the conversation, Larissa. Please, take a round of applause for her.

I really enjoyed this experiment on stage, and we’ll be curious to hear what you think. So please leave me a comment below, or anywhere you are, or shoot me an email at

I’m impressed by how good Flagship is at company building. I’m also impressed by Lovisa’s clarity on machine learning and AI, as well as her Swedish humility combined with a Bostonian drive and ambition. If you’ve also enjoyed this episode, please hit the like, follow, subscribe. review button. Any of these actions would help a lot to give more people access to the show.

If you want to see similar videos, please feel free to check out our channel where we have many more. All right, that’s it for now. Thanks for listening to the end and see you in the next episode.

Szabolcs Nagy, Turbine 🇭🇺 | Ai in Biotech, Simulation | E23 [Sponsored]

We’re in Budapest with Szabolcs Nagy, the founder of Turbine, one of the leading companies for AI in biotech in the world.

We talked about AI in biotech at large. We also cover the differences between opening a platform versus doing proprietary drug development and building the company from central Europe.

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This episode is sponsored by Turbine, which can improve your drug development. Learn more at https://turbine.ai/reengineered?utm_source=flotbio&utm_medium=podcast&utm_id=ba

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⭐️ ABOUT THE SPEAKER

I’ve known Szabolcs since 2017 when he joined Bayer’s accelerator in Berlin. I found him incredibly inspiring back then and still to this day. Szabi began his serial entrepreneurship with the creation of a cybersecurity startup. Once that was acquired, he launched himself into the biotech scene with the founding of Turbine in 2015.

🔗 LINKS MENTIONED

Transcript

[00:00:00] Intro

Szabolcs Nagy: AI in biopharma has been a thing for like seven to eight years. It was called bioinformatics. Yeah, of course, fair point, like 20, 30 years ago, AI was a thing, but it was called bioinformatics and then data science and then AI. What we are currently showing in the current partnerships and what our focus for the next 18 months is to demonstrate simulations in a variety of different use cases and show that the same underlying technology, the same underlying model of cellular biology can be applied across all of these different problems.

I 

Philip Hemme: mean, you’re living here in Budapest and I see that you’re traveling a lot to European hubs, either Boston. How do you prioritize all of this traveling? 

Szabolcs Nagy: I don’t think we’ve proven that it can work like this, that you don’t have to move to the UK or to Boston to build a successful AI and biotech company.

I think we’re putting it a good case.

Philip Hemme: I’m your host, Philippe, and on this show, I’m interviewing the best Europeans in biotech to help you grow. AI is changing the world, including the biotech world, but it’s hard to know what’s hype and what’s real. One of the best startups in Europe in this space is Turbine. So I went to Budapest to meet with its founder, Tzabi, who I’ve known actually since 2017 when they joined the Bayer Accelerator here in Berlin.

We talked about AI and biotech together. We also talked about opening up the platform versus keeping it closed for proprietary drug development, as well as building the company in Central Europe. For transparency, this episode has been sponsored by Turbine. So, here’s my conversation with Xabi, and please hit the like follow button if you’re enjoying it.

Welcome Xabi. Thanks for having me on, Philippe, great to be here. Yeah, it’s great to be here. 

[00:01:47] AI in Biotech

Philip Hemme: I’m very excited to do this discussion and I want to start with, say, the hype around AI for drug development. And as you are really active in the space, I’m wondering what’s, what’s your take on it? 

Szabolcs Nagy: Yeah. Who better to criticize the field than somebody that actually is part of the field.

I’ll go ahead and do that. Well definitely, you know, I think I’m not saying anything new when I say that AI is for sure overhyped. And it has been overhyped for years, right? I think actually we’re getting to. Like the moment of truth for a lot of the leaders of the space who are, of course many of them are in clinical trials with drugs that they use the AI to help develop and design.

And of course, we’re learning more about, you know, some claims that were bogus when somebody said, yeah, sure, we’ll, you know, just markedly improve the success rates of clinical trials by designing better molecules using AI. Clearly, that’s not necessarily going to happen. Using AI for some use cases has been impactful and is already standard practice across biopharma.

But but it hasn’t, you know, changed medicine yet. I mean, these technologies haven’t changed medicine. And likely we didn’t do ourselves a service in the field by over hyping the whole thing. However, I do think that you know, below the hype, the standard of practices, I said, like the day to day life of drug discovery scientists has been shifting and have been shifting.

So I think that’s cool to see actually. 

Philip Hemme: And how much do you think the hype comes from the AI drug? discovery company, drug development companies versus the whole AI in general, I mean, the whole GPT and everything that there, there was a moment and 

Szabolcs Nagy: the attraction surely feed off each other. Yeah. Because if you think about it, I mean, of course, AI in, in biopharma has been a thing for like, Maybe eight, you know, seven to eight years really when companies like, yeah, of course, Fairpoint, like 20, 30 years ago, AI was a thing, but it was called bioinformatics and then data science and then AI.

But I think like mid 2010s, of course, companies like, recursion, Accenture, you know, Atomvise, these guys have started raising their first major rounds. And so. You know, people started paying attention, you know, even Y Combinator started paying attention to you know, Y Combinator, of course, the epitome of you know, technology and you know, sort of West Coast bully bullies of course, bullishness rather bullishness.

Yeah. On technology, even they started paying attention. And so the hype started growing around AI and biotech around then, but but now with ChaiGPT around, suddenly everybody, of course, is a generative AI company, even the companies that have been around for 10 years and had nothing to do with the technology.

So, you know, clearly there’s a sort of a back and forth cycling of ideas, which is, it’s fine because clearly we’re one of the areas as in, you know, AI and biopharm is one of the areas of error really were largely. Reusing technological progress in other application areas of AI to our own use cases.

And we’re learning how to deal with the specialty nature of the data that we train to and the problems that we’re trying to predict on which of course is, is, you know, very difficult. So there’s plenty of. novel AI being done in biopharma, but really we’re, we’re learning from other fields. And of course, they have an impact on the hype cycle.

Philip Hemme: Yeah, that’s fair. And maybe just to stay on the hype cycle as well. I mean, you mentioned recursion, Excentia, they, they did a merger, but I think at the market cap for Excentia, that was lower than everything they raised, which At least if I look at it from an observer point of view, it’s a sign that the valuation that it comprised before, or they were higher before, I think benevolent AI also didn’t work.

What do you, like, like, what’s your take on those recent setback? Was it just a correction? Yeah. Was it set too thin? 

Szabolcs Nagy: If you think about it, two things compounded in the valuations of a lot of the fraud runners of our field. One was the general. like crazy overheating of the biotech stocks. And of course, many of these companies really are ultimately biotech companies.

And that’s also how they want to position themselves. They, they develop, you know, pipelines of drug drugs and and they hope to be valued as, as a biotech company. So there was that sort of boost as we know, you know, sort of around until the end of 21, of course, everybody was inflated or everybody’s price was inflated, but that was, I think, further compounded by the fact that, you know, Of course, many of us were also looked at, I think almost everybody was looked at as also like a tech company.

And so a lot of us front runners got investments from tech investors, which priced us very differently than, than more traditional biotech investors usually do the platforms that they invest into. And so those two in fact combine and really drove the valuation, you know, recursion was 8 billion plus at one point after the IPO.

And so, of course that has been. Most likely corrected to a good extent and of course it’s also being depressed just because of the general macro cycling on the market, which is, which is fine. 

Philip Hemme: Yeah. 

Szabolcs Nagy: We’ll have some of that, but definitely the, the actual, I think what really matters is not the, the valuations, but more the, the results of the companies, especially in clinical trials.

And also in discovery and generally the progress of the pipelines of these companies. And, and those of course have. seen some, some, you know, promising results, some good face to face fun stuff. And there is to be results now, I think. First efficacy data is coming out. Yeah, some efficacy data. Of course, I think, especially within Silicon Recursion, they do have the, they have reported recent efficacy data.

And sort of, you can, you know, you can read into that, whatever you wish, because do you want to put a silver lining on that, but it’s not yet sort of compelling enough. But of course, also we have to keep in mind that, that the drug discovery programs that are in the clinical trials of these companies now really came from almost their very first sets of ideas, right?

And all those years ago, when they started out. They made some bets, they chose some programs, I believe the, the front running program of recursion is the one that actually Chris Gibson’s PhD was about just to a great extent. Yeah. So it was a repurposing opportunity identified during his PhD work as far as I know.

And so, you know, clearly, you know, Chris is a wonderful scientist and a brilliant entrepreneur, but. Like the idea that PhD may not be the ultimate output of recursion. So even though there is, there are some setbacks, clearly there’s more promising stuff earlier in their pipelines and we’ll have to wait for that.

But I think also the setbacks do sort of like are a warning sign or like a cautionary sign that we have to, you know, be mindful of what will come down the pipe 

Philip Hemme: later. I like that also of like, what’s coming from a platform, I think. It’s very similar in biotech, you know, it was a biological platform where usually your first product idea 

Szabolcs Nagy: is usually not the best.

It’s more like a POC usually, right? You want to show that this thing even makes sense and you can get a drug, you know, out of it or a drug candidate or a drug like molecule out of it. And then of course you spend more time developing something that is really, really meaningful. That’s good. 

[00:09:03] Open platform vs proprietary drug development

Philip Hemme: And transition, a very connected topic as well is, and I think for, I mean, what’s interesting with you guys is that.

You are, you have your own platform, the R& D platform, but you are more open than let’s say recursion, which has their own platform, but it’s only for their own internal pipelines. So can you talk a bit about this, of like the difference of models, why you went to that? 

Szabolcs Nagy: Yeah, sure. I think it’s, it’s been a debate and it’s still an ongoing debate very much so in the field.

So yeah, again, when we, I think when the field started out again, 2010s, late 2010s, initially, I mean, most everybody came in, in almost like from a tech angle. Everybody said to investors, okay, you know, I’ll scale drug discovery to sort of the heavens in a way. I mean, I’ll, I’ll run a hundred programs for every program that pharma can run.

I’ll do something in days that they can do in a year. So those claims were very much. It’s tough. Like, Oh, it’s 2 billion to develop a drug. So we would cut it down by X percent. And exactly, exactly. We’ll do it for a hundred million or like 10 million or whatever. So there definitely, there were very aggressive claims about scalability.

And and those also led to again, the valuations, the tech angles, et cetera. And, and, and in a way, I think also because tech investors invested in the space, they kind of thought, okay, how are we going to make these companies extremely scalable? Like you know, B2B, You know, tech startup and the business model for that, of course, is to service, you know, companies and large enterprises, which are big pharma in our space.

And so most everybody started working with buggy big pharma. We’d hope that, okay, they’ll just pay me well for my cool AI technology. And what everybody found in the early years was that pharma itself was just very much warming up to the idea that that AI could be a thing that applies more widely across its, its processes.

And so almost nobody in biopharma was really willing to pay significant amounts to access technology early on. And also, of course, a lot of the technologies out there in the AI field in the late 2010s were not really validated. I mean, maybe you had some in vitro data to back up your claims, but nobody had more advanced programs, let alone clinical trial data.

And so that was like a catch 22 of, okay, I need to sell to biopharma, but I don’t have validation that shows that my cool AI gizmo will give them something really meaningful that translates better to patients than, than what they already have. And so they’re not really going to pay me and now my business model doesn’t work.

So that was definitely the the thing that happened early on. And so these learnings actually led to. almost everybody essentially questioning, okay, what is the right business model? Do I really want to sell to these guys that are not really willing to pay me enough for my technology? And then that turned into the, the massive shift of the AI field towards mostly developing pharmaceutical products essentially, because clearly everybody understood, okay, value accrues to the assets.

And so if my technology, my platform gets you, you know, essentially new assets or I develop new assets myself. Then then of course Farmer will pay me whatever they pay for the others in the field because they will not be buying unvalidated technology. They’ll be why, you know, buying certain stage assets.

And that looked like a, like a cool shift that made a perfect sense to everybody at the time. But of course. I’m pretty sure that a lot a lot of us actually, like ourselves included, really definitely underestimated the complexity of the actual drug discovery and development process and the insane number of things that can go wrong or delay you.

And so if you really look at the front runners, really the most successful companies today the recursions, Accenture’s. You know, benevolence and I’m, I’m, I’m saying success, not in the sense that they’ve, you know, delivered on their promises, but in the sense that’s how, how, how much do you raise?

For example, like you could take that it’s a super bad proxy, but it’s a good proxy of how excited everybody was about the technology. And so if you look at the most, the companies that raised the most they really Mostly went into the drug discovery direction and then ended up not really being able to deliver on those massive, massive promises of you know, massive pipelines, you know, hundreds of programs or dozens of programs.

And however, It’s clear that some of them were smarter, slash also potentially to some extent luckier, but definitely, you know, overall, I think smarter as well in, in how they played it. Because the ones that, Raised a lot, but didn’t really put enough of it towards actual drug discovery and development to have a wide enough pipeline and enough shots on goal to kind of get a chance to really get some successes in the clinic.

Those are the ones that are really struggling now. Like Benevolent, of course you know, it was, you know a super, super, super cool company. And they’re really, you know, front running pioneering company in the, in the, you are in the UK, of course, but but the, they sort of did a whole bunch of development or like discovery.

They tried to figure out what they wanted to do. They likely went too broad at one point, had to cut back significantly, and that ended up with a very, very few advanced stage assets. And then what happens to any biotech platform, it happened to them as well. They essentially became slaves to the the most advanced assets they have.

And as soon as they had a setback in the clinic, you know, now everything is falling apart to some extent where everything is, is, is, you know, a bit wonky over there. And so, you know, clearly looking back 2020 hindsight allows me to say this stuff. Of course, when you were there. the decisions they made made much more sense.

But but if you look at recursion, I think as really the best example here, they were able to raise so much over the years and they committed enough of it to drug discovery to an actual pipeline build that You know, now, especially after the Accenture merger, they’ll have so many shots on goal, so many stuff in the clinic, so many readouts, I think over like 10 or even 20 readouts coming in the next sort of 18 months, I think is what Chris mentioned recently.

So with all of those shots on goal, they’re likely going to get a few of them right, right? Even if they just hit the industry standard success rate, and then of course they’ll have some validation. They’ll, they’ll be able to. you know, sort of pull through. And I think ultimately what that means is that the business model of becoming a biotech is viable, but you either have to raise it off to really make it a portfolio play and have a reasonable chance of success, or you need to do insanely good drug discovery just as any other biotech platform to be able to succeed.

And that is a viable route. But essentially it really makes your company again, sort of completely subject to a lot of risks that your core platform has nothing to do with, right? It cannot help you really control all the risks. Maybe it helps you be faster in drug discovery, come up with a new molecule.

Maybe in our case, for example, it helps you predict biology a bit better, find something out that others couldn’t. But but none of these platforms can fully de risk the drug discovery process. And so ultimately, if you go the biotech route. you have to manage risks that are far outside of your platform.

And ultimately, as the field was learning about this we just felt so strongly that this really means that if our mission or our vision as founders is to build the best simulation of biology, which is, you know, harsh tech, then then we have to fully commit to that and we have to find a way to make a business model.

That, that focuses on making that technology available to the industry versus becoming a biotech that again, has all the risks that I mentioned already. 

Philip Hemme: Yeah. Makes sense. And that’s, I remember when we talked, when was it, 2018, 2019, I think. I made an intro to you for you to biotech VC and you were more on the like developing assets.

Absolutely. And now much more on the 

Szabolcs Nagy: open platform. Yeah. We’ve definitely done our share. So I will say this, right just to be completely transparent that it’s not like we always knew, like when we started, you know, spinning out of our Hungarian university, we kind of were, we started with the vision that we have today, but that vision was let’s build the best computational simulation of biology, because if you have a simulation of biology.

Surely that will help you run better experiments at certain stages of the process. That was the initial vision. That’s still a vision today, but in terms of what the business model is early on, we also thought, okay, we’re going to sell this to biopharma. Why not? That’s going to be the right play. And then we also found, well, the simulations are not really validated enough at their initial stage to really command enough of a price from the pharma world.

And so then we said, okay, well, this biotech business model sounds better and better. And so we tried to. Go for that. And we actually did, I think, in a way, we made the right bet because we said, we’ll, we’ll develop a very targeted pipeline to demonstrate the simulations capabilities in finding novel targets in high MFD patient populations underrepresented patients.

When you look at how well represented a certain patient population is in the available biological models. We said, well, let’s show the simulations are not just a point solution. So you can not just find the target in a, in a simulation, but you can also use it every time you run an experiment to sort of increase the chance that you run the right experiment.

to, to guide your program. And we did these two major things in our own pipeline build. And that generated plenty of in vitro and in vivo proof points, lots of good benchmarks that we today can use to actually convince biopharma much better than if we haven’t done it. But but we, we did, as you say, Definitely sort of court that biotech business model at the time, but luckily then the, the stock markets collapsed end of 21.

And just when I was ready to kick off my series, a, we had to completely rethink everything, which I think ultimately likely benefited the company. But Yeah. It was a learning journey, as you say. 

[00:19:10] Turbine’s platform and offering

Philip Hemme: And can you talk about that, about, about today, about the platform, about the offering, about, yeah, who, who is the main benefits, benefactors, like?

Szabolcs Nagy: Sure. So as I said, really, the, the idea is that we’ve developed a computational simulation of human cells and tissue. And we use machine learning to, to learn certain parameters about how human cells function. molecules that act on proteins interact and how all of these interactions, molecular interactions sort of overall drive cellular decision making.

And that’s what we essentially use machine learning to do. And that allows us to predict an experiment we have never run yet. Essentially that’s the core idea that a simulation can predict something that is outside of the training set. So there’s no clear data point in the training set that we use that actually allows us to that allow us to predict something, but we can still do it because of the, the way we’ve architected the system.

Because of that, the, the simulations allow us to predict experiments at the earliest stages of discovery. So when you’re looking at. You know, finding novel targets, but even just trying to assess which is the right target to select and invest in. 

Philip Hemme: Yeah. 

Szabolcs Nagy: We can, we use simulations to then help select the right indication for a therapy program.

We can use simulations to identify potential biomarkers, design the right combinations, and even select the right molecule out of a potentially super large, you know, millions set of molecules. And at each of these stages, really, really ultimately. What the simulations do are essentially just provide a means for scientists to test ideas before they have to actually commit to the experiment.

And if you think about it, in any engineering discipline, that’s actually what people do, right? Clearly an engineer or designer doesn’t actually do that. build a small version of a car or a jet engine or whatever before they actually pick the right design and tinker with it. They do a lot of the iteration in computational simulations and that’s what we believed back in 2015 when we spun out of university that we, we had a way to build.

And we were also quite convinced that eventually the field has to, has to develop this because of course today we don’t have such simulations because we do not understand the underlying systems of our, you know, guiding our biological behavior and decision making on the cellular level, let alone on the tissue or the organ or the body.

level. But if we had such a simulation, of course, it would allow us to just come up with better ideas, hopefully, and get through the process faster and in a more informed fashion. So ideally, ultimately your chance of success also grows. 

Philip Hemme: Yeah. Okay. And then now you’re on a partnering model or you have, I’ve seen you have a lot of partners.

So, and across different stages. So can you talk a bit on, I’ve seen you recently. Maybe can you 

Szabolcs Nagy: start talking about this one? Sure. Absolutely. Absolutely. So what we are currently showing in the current partnerships and what, what’s sort of our focus for the next 18 months really is to demonstrate simulations in a variety of different use cases and show that the same underlying technology, the same underlying model of cellular biology can be applied across all of these different problems.

As you mentioned, we have an ongoing collaboration with Ono Pharmaceutical on essentially identifying targets in a very complex biological mechanism, which, which has all the hallmarks of like being a perfect fit to simulations, because it’s a very complex mechanism with potentially any human gene or any human protein being a target for patients with this specific sort of subtype of cancer.

But but you’re, there’s no way for you to actually run all of the experiments to really test all the targets in all the various subtypes of of patients where this particular mechanism plays a role. And you can do this in simulations and that’s what we’ve done about 350 million simulated experiments to actually test almost fully.

the combination of patient subtypes or cells representing patient subtypes and and the potential targets. And we were able to then not just provide a, you know, a ridiculously long list of ideas to the partner, because of course that’s not helpful from their discovery perspective. Coming up with even more ideas doesn’t really help scientists, right, who often have enough as they are.

It’s more about once you run the simulations and test all the potential outcomes. Hypotheses that you want to look into. You can actually in the simulations or using the simulation data, you can really try to understand what went on in each of those experiments and the ones that you found the most interesting can be, can be really deconvoluted and analyzed almost as if you had run a real experiment and actually to an even greater degree because a simulation is of course perfectly known in the computational, in the clouds and you know, sort of set up that we have.

So you know everything about the cell that you simulate. And of course you can never know everything about even a cell that you experiment on. And so we know what happens to each and every protein in our simulation. We know how each and every protein and their interactions and other molecules that act on them respond to a treatment by a drug or the knockout of a certain target or the modulation of a certain sort of interaction between two proteins.

And so a biologists who uses our digital lab can, once they run the simulations, look at every one of the interesting experiments and really try to understand what went on in there. And that mechanistic understanding is extremely key if you are a biologist, a translational scientist or anybody that, that draws work in, in drug discovery, because of course, lots of things can go wrong.

You know, look interesting in a cell. Like lots of things kill a cell, lots of things help mice with a xenograft. But but most of these things of course in the end do not really help the actual human patients that we try to help. And oftentimes the reason for that is because Let’s say a drug killed the cell through a mechanism that actually doesn’t occur in a patient.

Yeah. But because you only saw that the cell’s viability decreased, 

Philip Hemme: reminds you Exactly. 

Szabolcs Nagy: You can, you can cure cancer in a Petri dish. Exactly. And so the problem is that if you don’t know why something occurred, especially in a simulation, which is of course not even a real biological experiment, is just a simulation, just a model.

And even greater abstraction than even an in vitro Petri dish, like a, you know, in vitro model Petri dish. Because of that, you really need to understand why something occurs so that you can take that information and then design the right experiment to confirm it. And that’s something we’ve spent an insane amount of time working on to make the model interpretable.

To a trained biologist so they can glean new mechanistic insights or glean new ideas about biology and biological mechanisms from these simulations and then they can take that to an experiment and confirm it directly. So essentially they know everything they need to know about the essay that they need to run, the experiment, the perturbation, the model that they need to pick in a in vitro or in vivo or potentially even in a patient setting.

And that information helps them to lots of ideas that come out of a simulation or ideas that they may have already had and actually prioritize and select a feasible number to then experiment on much better than if they didn’t or if they haven’t run simulations. And so that’s actually one of the key benefits.

It’s not just finding new stuff, like in the auto collaboration, new targets. It’s more about, it’s, it’s just as importantly, the fact that we can provide an interpretable hypothesis that can be derived from the simulations and observing them. 

Philip Hemme: And at the end of the day, if you’re improving or like pointing down or reducing the number of experiments or the number of ideas, you’re also improving.

making the whole thing discover faster, I guess, for, for the partner. 

Szabolcs Nagy: Yeah. You would assume that, that really three things happen ultimately. One is that you You do reduce a number of experiments and that has a time, a time component or a time benefit, right? Hopefully you run fewer experiments, maybe fewer iterations of the experiment, and that can cut down on the time.

Of course, you always have to keep in mind that adding any technology to a process means that you’re adding a new step and that does take time, right? Even though we’ve optimized our simulation to be really fast, so you can be sort of up and running in like as little as three months, essentially you can get a specific insight into your problem, you can do that.

But even though that’s initial three months, that has to be kept in mind. But I think over like a couple of steps of the discovery process, you’re likely going to cut down time as well. You’re clearly cutting costs because fewer iterations, especially with certain experiments, it can be very costly. And we do hope that ultimately it does benefit the probability of success.

Not for any magical reasons of the but I think more because With the simulations, actually, we’ve routinely found in our own drug discovery work and also in partners that if you have this level of insight into the biology, or at least predictions on it, that actually sometimes reveals or opens up new questions or new lines of inquiry.

It tells you more about really what is the right type of patient. You are really more thoughtful about how you pick the models that you test your drugs on, what that means for the patient selection. The clinical trial design combination potential. And so this kind of insight we’ve seen, it actually helps you better prepare essentially your data package for that IND and hopefully better prepare your discovery effort for, for the trials.

And I think that ultimately does have a real impact on the likelihood of success. 

Philip Hemme: That’s good. 

[00:29:09] Pricing and value of AI technology in biotech

Philip Hemme: And you mentioned before on the, on the pricing that. was one of the challenge was to price the technology. Yeah. How does it look like now, now that you have more information, more partnerships and you have a bit sounds like your old platform is a bit more proven as well.

Szabolcs Nagy: Oh yeah. It was in 2018. I would hope so. Yes. But for sure, for sure. We have, you know, many more like novel targets, biomarkers, combinations have been identified and have been validated in various stages of discovery. So for surely more validated, the validation definitely helps. I mean, what we’ve shown, for example, in the collaboration with Ohno and in some of the other work that we’ve announced, for example, with AstraZeneca is that the simulations are seen as a much more likely source of new IP.

Then before, so there is you know, the more standard components of pricing like milestones, for example, for success. But really what we’re working on now and the new collaborations that we’re spinning up are following this format is that we, we actually don’t want to make simulations and partnering with us.

Such a pricey thing for pharma. that, you know, only the biggest companies can afford it, where we’re one of the very few bets that a large pharmaceutical makes on AI for a very simple reason, because we think that we’re the best used, not as a particular partner to solve one specific problem. So, you know, find me targets in this difficult area, or, you know, take my drug and give me one specific biomarker for the drug.

We think we’re much more of a capability to a biopharma. And we were best used like all the time, essentially. So if you say, okay, here’s my program is per clinical I really want to know which indication to go for, which patient subtype, you know, which trucks to combine with potentially what’s my likely combination effect with standard of care, et cetera, we can provide simulations essentially for us to answer all of those questions, help you run the actual experiments to confirm them.

And then once you’ve done that. You’re going to enter the next phase of your discovery or development effort and you’ll have even more questions as always, right? You’ll learn more stuff. You’ll see responses that you didn’t expect, especially in the trials. And those questions should be plugged back into a simulation.

New simulations should be launched to answer those questions. You know, why are certain patients responding? Why are the others not? What could be the differentiating biomarkers pattern between those two? For example, how do I expand beyond my initial indication where I’ve shown efficacy? These questions can also be answered and have been actually by various pharma companies using simulations.

And we really want to become essentially, I mean, I, I don’t like to use this word, but you could say like a co pilot for the programs, right? Different steps, essentially the simulations can be there. And this is also held by the simple fact that simulations do get better every time you predict and then validate a simulation result because the data that’s generated in the ensuing validation experiment can be fed back into the simulations training set.

And we’ve shown this with our own lab where we’ve sort of closed this loop, labbing the loop, quote unquote around the simulations that You predict, you validate, and then the data, if you run the right assay, and we’ve learned a lot about what is the right assay of the years, then that data can be fed back to improve specifically the simulation’s ability to predict around that target or that mechanism that’s of interest, or in that indication, for example, or in that model that you’re using.

And that improvement compounds over time. And of course, should benefit you more and more as you, with your drug discovery program, go from in visro to in vivo to patient. 

Philip Hemme: Okay. And picking on what you just said, also, you want to be accessible to, let’s say, a lot of partners versus trying to optimize the biggest upfront possible, I guess.

So like, I guess what’s coming down also, and that’s the power of AI or digital simulations that you could scale it. Yeah. More than a biology. 

Szabolcs Nagy: It’s essentially, absolutely. I mean, ultimately the simulations, the digital lab is, you know, it runs on the cloud, right? I mean, running on Microsoft’s Azure and also to some extent, like now on Amazon’s AWS and what essentially you, you get when you or what happens when you run a simulated experiment partner one or partner two is essentially just more essentially more cloud capacity being spun up to help answer that question.

So ultimately, it’s infinitely more scalable than any vet lab, as you said. That’s one of the key benefits as well, if you think about it. Again, I mentioned 350 million experiments for Ohno and that experiment actually took us, let’s say a week essentially to run, less than a week. And I’m training the model getting the right data in, et cetera.

That was actually almost the biggest amount of time to make sure that we’re predictive on, on what matters. So once our, as our models, predictivity improves over time and it becomes more and more predictive on more and more biological mechanisms, and then hopefully also beyond cancer cells. In other disease areas and more and more complex sort of tissue level effects.

Our plan is to have essentially a single model serving all of the various partnerships and that should allow us to make it very, very quick to get started and to get an answer. No sort of weeks or months needed to set up. You’re essentially using the best version of the simulated cells, simulated tissue that we can provide today.

Yeah. And we’re just a start, you know, a standard part of your practice as you sort of think about the right experiment to run, the right way to take a program. You’re always sort of running a few simulations, playing around with ideas, and then you know which experiment to actually invest months and hundreds of thousands into.

Philip Hemme: Yeah. Okay. That sounds good. And yeah. 

[00:35:05] ADCs

Philip Hemme: I’ve seen you’re also active in the you have a models for ADCs, which is a super hot field at the moment. Yes. Especially in biotech. How, how, how specifically do you, like, how do you specifically, are you active in this field or 

Szabolcs Nagy: like? Good question. What do you bring here?

Good question. When, when the immune oncology wave sort of hit us all those years ago, we were very, very early on. And so we could not really build. Simulations that were predictable, such a complex mechanism, and that was sort of a huge opportunity missed in a way. But now with, of course, the ADC wave, you know, rolling everybody over, we’re actually with this much more mature platform.

We’ve shown that we can predict a number of things that, that are sort of thorns in the side of a lot of the pharma companies developing ADC platforms or ADC programs. Because obviously, ultimately ADCs again are a really good fit for simulations for a simple reason. There’s all of these moving pieces, you know, what is your payload?

What is your linker? What is your antibody? What target do you hit? In what tissue? Are you looking for a biomarker? Etcetera. All of these together make up a too complex problem to try to experimentally really deconvolute. And so of course, without the simulation, you do end up cutting corners, you do have to make assumptions, sort of lean on the best.

information that’s available publicly, et cetera. Whereas in the simulations, what you can do is sort of test all the potential targets in all the potential biological contexts test all the various payloads that you’re thinking about in all of these contexts, and then run that whole search screen, the full grid, essentially.

And the benefit of that is that in a word, we don’t want to help you design a better linker. For example, we don’t think that that’s the simulations value at here. But what we can tell you is what is the right payload, for example, in what patient type to go for, how do you maybe want to cycle payloads at one after the other.

How do you overcome resistance that’s being observed in the clinic for the more, you know, front running crop two, et cetera, ADCs. How do you build the next generation of the ADCs and how do you expand the more advanced ADC programs beyond those initial sort of beachheads where they’ve been successful?

What could be a good biomarker, for example, to, to use to select patients if you, you, you’re not succeeding with more like an all comer approach or not all comer, but of course you are more going for some target expression. It’s like, what’s the biomarker beyond the target expression? These are all clearly questions that the ADC field needs to struggle, struggle with or grapple with because they’re leading to.

Sort of patient benefit being left on the table and trial failures. And this is something that we’ve now really put a lot of effort into generating. Targeted data sets to help train our simulated cells to better predict ADC effects and payload effects and and helping them essentially find the right payload subtype to target combinations essentially.

Yeah. 

Philip Hemme: And I mean, ADCs, there’s some big pharma, I mean, there’s definitely some, some big pharma active in the field, but you have also a lot of biotechs or smaller companies. Yes. 

[00:38:19] Working with the average biotech

Philip Hemme: So how do you work with. Let’s say ADCs are even beyond ADCs. How do you work with smaller biotech that has raised typically, let’s say the average European biotech has raised 50 million has maybe a program or early stage program in, in their, in ADCs.

How do you work with them? 

Szabolcs Nagy: This comes back to the question about pricing that you mentioned. And I mentioned that. What we really want to do is find a way to work with any company, because again, if we, if we want to go for a business model that focuses on partnering and then making this technology available essentially to others and being valued for the utilization and revenue drive from this technology, then we have to find a way to go beyond the biggest 10, 20 pharma companies.

because that is not a scalable business model. And for that reason, we’re working a lot on developing a generally predictive model of cancer types and certain cell types and certain tissues, because we believe that if we have well performing model that doesn’t have to be fine tuned, we don’t have to generate more training data, for example, for it, then we can make that accessible for somebody that’s as much a company that’s much smaller.

to run simulations on without them having to actually pay us to generate even more training data and fine tune the model, which is actually the costliest part. It’s not the simulations, it’s more the, the data generation in a very targeted fashion and also the training of the models that takes up most of our compute resources.

And then of course, interpretation. When our trained biologists and translational scientists work with the other team on the pharma side to help them understand simulations and help them derive hypotheses. And if we can develop in a way that sort of strips out a lot of these resources from a, an interaction with a small biotech that really wants an answer to a very specific question or wants to just support simulate simulations, a single program, then, then we can make it available.

At a price that’s sort of feasible to pay because it’s a technology and a capability and you’re getting your money back because you’re cutting time iteration and failure out of your process. 

Philip Hemme: Yeah. 

Szabolcs Nagy: That’s good. 

Philip Hemme: And that’s, 

Szabolcs Nagy: you’re already at that stage now where you have a general model. We’re talking to, we’re talking.

Yes, yes, yes. That’s it. Something that I didn’t mention, but just as a sort of an interesting data point, really, when we started, we, we sort of set some foundational rules for how we develop our technology. And one of those rules was If we want to predict cells in the more complex biology we need to build a model that is a singular model underlying every, every different cell model that we have, for example.

There’s a simple reason for that. Ultimately, if you think about it, human biology has a set of foundational rules that really guides how it behaves and how it makes decisions and how it reacts to outside stimuli. A healthy lung cell is very different from a colorectal cancer cell of a certain patient.

But we believe that there is foundational set of sort of rules and guideposts that you can figure out that help you then create from a singular representation of biology, a model that predicts on the cancer cell and also a model that predicts on the healthy cell. And we think that that has to do with, again, how proteins interact and how other molecules act on proteins.

And essentially learning that foundational wiring diagram is what we call it, allows us already actually to take one basic trained model and add specific data coming from a certain cancer cell type coming from a certain cell line or coming from a patient’s tumor and then have differential behavior and accurate behavior when, when simulating the effects of drugs or knockouts on, on these different models.

So we already have that and of course it’s a, it’s a working progress. Current model has about 8, 500 proteins and their various interactions and various effects acting on them in it. And we’ve shown that it’s predictive on the cancer cell level and we’re going to go beyond cancer cells. Now we’ve shown some productivity in immune cells as well, but it’s very much sort of a long, a long, long, long road map that we have to continue to travel on.

So it’s not done for sure. 

Philip Hemme: That’s good. That’s really good. 

[00:42:42] History of Turbine and Szabolcs Nagy

Philip Hemme: And maybe now stepping down to back to the history of the company, I mean, you mentioned a bit, you’re a spell from the university, which I think I’ve seen the building like on the right around the corner, really cool building. Can you talk a bit on the history from, from there to now?

I know you, you went through Berlin and through the biograms, that’s where we, where we met. And yeah, can you walk through the main steps of the history of the company? 

Szabolcs Nagy: Sure. Sure. Sure. Sure. So as you say, it all actually funnily enough started right around the corner at Semmelweis University where two of my co founders, Donnie and Krish were CSO and CTO respectively.

They were collaborating to essentially build the very foundations, the seeds of the simulated cell. Like one of them is an, as an electrical engineer, software engineer. Math whiz turned biochemist, and the other is a, as a medical doctor that wanted to, you know, find a more rational way of, of treating and diagnosing disease.

And they essentially put two and two together during their PhD work and figured out that you can represent. Cellular biology as a network that can be simulated and and eventually also figured out how machine learning can be used to train and parametrize and then grow and expand this network.

And we took this, I essentially came along to help canalize the spin out. Funnily enough, I had nothing to do with any, anything that we essentially work in. I had nothing to do with oncology, drug discovery. Let alone AI, but but I did actually have some experience spinning out cool IP and cybersecurity actually from university and making that successful.

And I wanted to recreate that, I wanted to do that, but in a more meaningful field. And of course that meant years of learning for, for all of us. I mean, for me about everything, essentially. To be even remotely useful, but for the guys also there had to be a lot of learning done to better understand ultimately the problems that we could use with this cool technology because we were very much a science first team where, you know, really cool idea, cool early results, but what is really the problem that you’re solving and what is the product?

And that’s something that I hope I helped figure it out, figure out just based on my previous experience doing this in a different field. And what really catalyzed us was. The ability to work with Bayer very closely during as you said, the grants for apps programs that he used to, you know, run at that time, a shout out to the entire team because of course they really transformed us because they gave us a chance to sort of roll around Bayer HQ, talk to everybody from the C level down to bench scientists.

And that really revealed some of the core use cases they’re running experiments based off of the, the best knowledge of a trained scientist falls short. They’re just too many experiments need to be run to really understand what’s going on. And we started developing simulations to help tackle those core use case around identifying biomarkers, overcoming resistance, designing combinations, and understanding mechanism.

So these were very early inputs and they allowed us to really develop the, the simulations in a direction that actually is useful and, and can be deployed sort of in the day to day life of a drug discovery scientist. Because we, we wanted to make sure that very early on, we don’t spend that, you know, 10 years, you know, raise, you know, tens of millions and not really have anything that’s impactful.

So that, that’s what we focus on for first years. And then around 2020, 2021 is when we started fundraising, when we had enough data from the early pharma collaborations that we were predictive and we’re finding interesting things and actually impacting decisions across the, the R& D process. And as you mentioned earlier, we then very, in a very targeted fashion, validated core simulation use cases and solutions we have and in our own discovery work.

And then we raised our Series A about two years ago from Merck or QS to actually really start commercializing essentially the simulations. 

Philip Hemme: That’s nice. And then I saw you, you raised or Accenture invested, I 

Szabolcs Nagy: think it was in May or? Yeah, yeah, yeah. We joined forces with a couple, a couple of new companies and sort of struck some interesting partnerships and we’re doing some more now.

We hope to announce some of that in the next quarter because one of the key questions around, like, how do you get simulation into the sort of day to day life of. Of scientists that have never used such a technology and just do not run their process, do not work like this yet. Is of course, like who talks to those scientists, who talks to maybe the leaders at those companies all the time and who helps sell technology to these types of enterprises and companies and companies like Accenture seem to be like, you know, sort of a left field out of left field collaboration.

But of course Accenture is one of the most successful companies on the, on the, you know, on the earth. Accenture. selling technology to, to Pharma. They definitely, you know, I know they’re more for IT. Fair point. I wanted to say actually, can they sell to R& D? That’s really, that remains to be seen. That’s definitely a work in progress, even on their end.

But I think what they, what their focus on, on our field reveals is, It’s that if you really think about it, pharma R and D does not yet really know how to buy technology, which you can completely understand because people in R and D are extremely smart, really good scientists, really good decision makers, and they know how to partner around therapeutics.

But some of these new technologies clearly sort of stretch the boundaries of how they used to work. value things that they get from partners. And as we said, first generation of drug discovery or AI and drug discovery companies clearly went to a business model that fits the way the industry works, but I think us and a lot of others that are, you know, sort of the next wave of technologies, hopefully we can start shifting the way that pharma we use and biotech we use technology and how they value it.

Philip Hemme: Okay. 

Szabolcs Nagy: And that starts with learning how to, how to sell technology and educating our sort of buyers essentially on how to buy technology in R and D as well. And companies like Accenture are also trying to figure that out because as you say, it’s not ID, IT, sorry, that’s going to buy an AI technology to make better decisions in drug discovery and development, but but clearly somebody will need to sort of figure out how to do it.

Okay. the inside of these companies and partnering with. Much larger enterprises than us that sell to these sort of end users routinely helps us also learn how to do it better. And also hopefully get to more more, more entities and maybe be more integrated into their Workflows and other technologies that they purchase.

Philip Hemme: Okay. Yeah. So for example, it’s a step to, yeah, to see AI drug discovery or any kind of digital tool for drug discovery. Absolutely. 

Szabolcs Nagy: As in like, I mean, if you really think of it, yeah, if you think about it, what they’re trying to do is, is, and of course, many others, McKinsey and the others are also doing this they’re trying to figure out how do we sell to essentially a new budget, a new type of customer.

But for doing that, or in order to do that, it’s not enough that they’re extremely. competent at the basic computational technologies of our time, like cloud and AI and gen AI, that’s not enough because they need to also be domain experts. And that’s what we, and a bunch of others provided are now sort of strategic partners over there.

That 

Philip Hemme: makes sense. 

[00:50:09] Building biotech in Budapest and travelling

Philip Hemme: And one, I think more personal question, but you, you, I mean, you’re living in Budapest and then I see that you’re traveling a lot to either European hubs, either Boston. How, how do you like prioritize, yeah, how do you prioritize all of this 

Szabolcs Nagy: traveling? Yeah. I also have a small daughter now, so I also need to be, you know, dedicating enough time there.

It’s a good question. I think it’s, it’s also, you know, clearly that I will say that I don’t think we’ve sort of proven that it can work like this, right. That you don’t have to move to, the UK or to Boston to build a successful, you know, AI and biotech company. I think we’re putting in a good case, but I think what I miss the most is just the, the gossip essentially around the field.

Just more information about what people are trying, what doesn’t work, what works, what’s going on, who’s looking for what, you know, who’s interested in what. That’s clearly the, the really the most useful information as you think about business models, as you think about strategy, as you think about BD, these information, like this information is what you’re missing the most.

And and the, We’ve sort of found, found workarounds for that. Essentially we’ve built a really strong board, really strong SAB, not just strong in the sense that it’s really good and smart and well validated and credible people on there. It’s more about having very strong personal relationships with them that, that I think helped us individually actually.

To, to try to sort of stop ga that or try, try to learn the information that I would learn likely sort of day in and day out if I, I live somewhere else. 

Philip Hemme: Yeah, 

Szabolcs Nagy: of course. Develop, you have to compensate, essentially you can compensate. You do have to take a bit more travel, but I think it’s more about try to do enough travel to, to get this type of information and the reason that we stayed home.

was because I think sort of two reasons. What is, of course, there’s clearly sort of operational advantages to running such a company out of the center, you know, Central Eastern Europe versus even the UK, let alone the US, you know, clearly cost advantages. And you’re also being able to tap into really good talent, especially on the computational and AI side.

They’re also actually on the biology side and talent that doesn’t really have Sort of anybody that competes for its attention, if they want to work on some of the really cool problems around drug discovery and AI in biology. because we’re really almost the sole sort of more advanced or sort of scale up phase company in this region.

And so we get to really take the cream of the crop. That definitely helps. But the other advantage is that, or the reason we stayed home is because we just wanted to do something good for our ecosystem. And of course, when people usually hear Hungary, I don’t think they hear it in a very positive context.

And, you know, clearly there’s Not just us, but a lot of others that do good stuff, good work here, that don’t agree with the politics, but want to still do something good for our country and, you know, the region more widely. And clearly if we move somewhere else, we may have an easier time of doing certain things.

But I think being here allows us to have a different view on a lot of problems, maybe think about it, things in a more, sometimes in a bit different way that gives you a competitive advantage and also hopefully like pull others with us and, you know, give a better shot at the next generation of let’s say tech bio companies coming out of the region.

Philip Hemme: I mean, you did pretty well so far. 

Szabolcs Nagy: Well, you know, fingers crossed. 

Philip Hemme: Fingers crossed for the next steps. 

[00:53:36] Data-driven drug development

Philip Hemme: Maybe last, last question before the quick fire is on. I had Thomas Clausell from Orkin on the show. I saw. And one thing that he, he mentioned pretty clearly at the beginning was, But the industry needs to be more data driven versus good anecdotal.

Yeah. I guess you must agree on this, but maybe what’s, what’s your take there? What’s your, yeah, what’s your view 

Szabolcs Nagy: there? I think actually it’s funnily enough ties to like how pharma needs to eventually learn to value technology. Technology is like ours because I think currently people are like, you know, AI is useful if it gives me a new drug or, you know, new IP of certain sort.

And. A lot of, a lot of these technologies, us included, can provide that, but I think ultimately the bigger impact of AI will not be necessarily just a new IP, it will more be the better decisions and as Thomas said, better IP, better, better IP, yeah, in a way, like I think the more systematic approach to drug discovery, just because you’re not limited to the number of experiments you can run at any stage.

You are limited to the number of ideas you can have, essentially, and and you can find the right experiment to run more like, you know, in a, in a higher chance or with a higher chance. I think that more systematic versus more anecdotal approach will really be ultimately the bigger impact. And I think already today, that’s the bigger impact AI has on the field.

I’m under the hype. And yeah. If you think about it, what we, what we usually say is that we want to turn biology into an engineering discipline, but I think this applies more broadly to human health, right? Of course, this is not going to happen tomorrow and you know, we ourselves are not the sole solution and we ourselves will likely make, you know, we hope.

A small, but overall significant dent in the overall problem. But if we don’t invest into these technologies today, if we don’t test them, if we don’t learn how to use them to make better decisions, then ultimately the field is not going to, to be sustainable as we know, it’s not going to go ahead and move, move forward.

So clearly we have to make these bets. if we are to turn, you know, biology and broadly health into engineering in the best possible way. Yeah. Yeah. Not to, not to, you know, take out the human touch, but to actually help, help put that into health. 

Philip Hemme: And do you see some actors that are better students in the, in the growth?

I mean, just better at being data driven, some farmers that are more active, more embracing it. I mean. Clearly, 

Szabolcs Nagy: clearly Roche slash Genentech, you know, made a massive bet with Aviv. Being named head of r and d and, you know, clearly, clearly a lot of them are investing into was about, but but I think say not just saying, okay, I, I really name like a CIO or versus I usually not a cio, but it’s a, it’s not just that I have a strong data science slash ai group within my teams, but it’s that, you know, really somebody that bridges biology drug discovery and ai.

He is the head of R& D for me that that is a huge sort of step forward and a big bet for sure. We’ve had really good, I’m not just saying this because we do collaborate with them, but I think AstraZeneca is, is very knowledgeable and actually has deployed various data science and machine learning technologies.

The real problems that they have. Yeah. So they’ve really invested there. You know, clearly Sanofi, of course Sanofi, I was would say, is going all out. And I think the Sanofi actually does a really good thing thing for definite 

Philip Hemme: system. But is, is it PR or, or how much of it is PR versus, but I do, but I think they put really like hundreds of millions.

Yeah. I think that 

Szabolcs Nagy: that. I’m sure that it’s PR to, to to some extent, but I will say, I think actually that’s exactly what, what this field and these applications need because they need somebody saying, listen, look at all this money I put into this particular technology. I, A made a bet. B gave this company a chance to actually progress.

C. I’m talking very openly about it. So actually that tells everybody else that they should be thinking about making these bets. So I think Sanofi really does actually do a good work across the field for just sort of advertising the use of AI better, like how impactful it is day to day. Yeah. I, I wouldn’t be able to tell, but but my assumption is that, yeah, we’ll see.

Well, we have to get our, you know, get our game up beyond oncology for that, most likely. 

Philip Hemme: Cool. 

[00:58:04] Quickfire

Philip Hemme: I think it’s a good, it’s a good way to wrap up and to, to finish on the, on the quick fire. So quick questions, you answer one sentence or yes or no first one, what’s, what’s on the top of your mind at the moment?

Szabolcs Nagy: Yes or no? Yes. What? One sentence. One sentence. Top of mind for me. Essentially pricing model. How do we. Get simulations in the door at a pharma and then convince them that they should use simulations over time, multiple times. 

Philip Hemme: What’s one of your favorite biotech books? 

Szabolcs Nagy: The Billion Dollar Molecule.

Philip Hemme: The biotech store, yep. 

Szabolcs Nagy: I think it reveals how crazy this industry has always been in terms of its approach and how much it’s just sick of luck plus capable people like giving it their all. 

Philip Hemme: Yeah. And how much you need to sell your story. Yeah. If I remember actually fair point from this, from this book.

Szabolcs Nagy: Yeah. Yeah. 

Philip Hemme: How much selling matters point, even when you, yeah. One mistake you made in the past 12 months.

Szabolcs Nagy: One mistake. Not fixing my sleeve schedule before BB Maya’s arrival. I don’t have a chance anymore. About 

Philip Hemme: how much do you sleep at night? 

Szabolcs Nagy: I guess? Well, actually up to 6.5 hours. Which is, I think, historically, okay for me. 

Philip Hemme: You’re still functional. Yeah. What’s the, oh, what’s the most impressive drug on the market at the moment?

Szabolcs Nagy: First of all, you have to say Keytruda for sure. I think just the story of how it got to where it got to, and also the approach of then, like, making it essentially a standard part of any trial, I think, you know, kudos to Merck. 

Philip Hemme: And 20, what is it? 25 billion. Yeah. And you want to say something? Yeah, yeah, I’m saying One of your favorite European biotechs?

Favorite European biotech? The 

Szabolcs Nagy: company? Yeah. I think Biontech. Hmm. Biontech for sure. Just because they also do, the founders also do a lot to give back to the industry and invest more. Hmm. Yes, 

Philip Hemme: we had I just talked last week with the, the former CBO. So this episode will come up and I think they do a lot on AI as well.

Yeah, yeah. Last question. One of your biotech heroes, European or not European 

Szabolcs Nagy: biotech heroes? I think I will say Aviva gv for the simple reason that I like, I’m really interested in, in seeing the. the outcome of that experiment at 

Philip Hemme: Genentech. I 

Szabolcs Nagy: think like you know, she’s, she’s making a lot of bets around, you Implementing AI into a lot of, some of the things that we also want to implement it, but also of course, others are working on.

And I hope that they share more about their learnings. Awesome. 

[01:01:20] Thanks for listening

Szabolcs Nagy: Thank you. Thanks for having me. Great chat. It’s fun. Yeah. Thank you.

Philip Hemme: I’m convinced that AI and machine learning will change drug development and that simulation will be a big part of it. I’m also impressed by what. Zabi and his team was able to build especially out of Budapest. If you also enjoyed this episode, please hit the like, follow, review button. Any of these actions would help a lot to give more people access to the show.

If you want to see similar videos, please feel free to check the channel where we have many more. I would also be curious to hear what you think, so please leave a comment below or send me an email at philip at flot. bio. All right, thanks for staying until the end and see you in the next episode.

Adrian Rawcliffe, Adaptimmune 🇬🇧 | Tecelra, TCR Cell Therapy | E22

We’re online with Adrian Rawcliffe, the CEO of Adaptimmune, the TCR cell therapy company behind the first engineered cell therapy for solid tumors that was approved for a rare form of sarcoma.

We talked about Tecelra’s commercial rollout. We also talked about what’s next in cell therapy, and Philly Cheesesteak vs Fish and Chips.

— — —

Thank you to today’s sponsor, Merck, who can support your antibody drug discovery. Learn more and claim a cool antibody pin here: https://bit.ly/48m9spf

The life science business ​of Merck KGaA, Darmstadt, Germany operates as MilliporeSigma in the U.S. ​and Canada.

— — —

⭐️ ABOUT THE SPEAKER

Adrian Rawcliffe has been in the biopharma industry for over 20 years and has worked in high positions for companies such as GSK. Adrian has been with Adaptimmune for almost 10 years, serving as CFO before becoming the CEO in 2019. I didn’t know him personally but have heard and seen great things about him.

🔗 LINKS MENTIONED

Transcript

[00:00:00] Introducing Adrian Rawcliffe

Adrian Rawcliffe: The whole reason why TCR T cells and TCR therapies are going to be effective in the solid tumor space is because they can access these targets that are not cell surface proteins. Because it turns out there are very few cell surface proteins that are completely specific 

Philip Hemme: to cancer. I may be talking about the peak sales, it was like a 400 million dollars figure for the annual sales, and with pretty high gross margin as well.

But then I saw some figures from the analysts, and they were from Google and that their project is a bit lower. And with 80 million, what’s your take on this? Don’t comment on the analyst’s forecast for obvious reasons. I, I told you what 

Adrian Rawcliffe: we believe. 

Philip Hemme: Do you prefer Philly cheesecake or Oxford fish and chips?

Philly cheese steak. Oh, fine. Sorry. I guess. Bienvenue to a new episode. I’m yours, Philippe. And on this show, I’m interviewing the best Europeans in biotech. Help you grow. Cell therapy, especially CAR T, has changed how liquid tumors have been treated. But solid tumors were harder not to crack. In August this year, the first engineered cell therapy was approved for a rare form of sarcoma.

It’s a TCR based therapy developed by Oxford headquartered company Adaptimmune. So I talked online with the CEO, Adrian, who lives most of the time in Philadelphia. Adrian has been with the company for almost a decade. He joined as CFO before transitioning to CEO in 2019. I don’t know him personally, but I’ve followed Adaptive Immune since almost 10 years and knew some of the other C levels, and I’ve heard many great things about Adrian.

We talked about the commercial rollout of Adaptive Immune. We also talked about what’s next in self therapy as well as Philly cheesecake versus fish and chips. This is a conversation with Adrian and please hit the like and follow button if you’re enjoying it. Thank you to today’s sponsors Merck for accelerating the therapeutic antibody development.

Whether you are identifying your targets or optimizing your production, Merck has you covered. They have a comprehensive suite of tools from functional genetic screening to high throughput purification. With cutting edge advances in B cell loading and hybridoma development, you will both save time and resources.

Merck is also a proud partner of today’s guests at AppSimul. So, want to learn more how Merck can be your partner for therapeutics development? Click on the link below to download your brochure and get one of these cool antibody pens. Hi, it’s Aiden. Welcome to the show. Hi, great to be here.

[00:02:35] Commercial rollout of Tecelra, the first engineered cell therapy for solid tumors

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

Obviously you just, I mean, got Tessera approved for patients. It was in August. Great news. So yeah, how, how is it, how is it going with the patient rollout? So, 

Adrian Rawcliffe: so Ticellar approved very beginning of August and you know, that’s a, that’s a sort of fairly big transition for companies like us. But, but actually in terms of the relationships with the sites and the places that are going to be actually making Ticellar available to patients.

It’s really an extension of the relationships that we’ve had with them for, for the last decade or so, because, you know, we’ve been developing the cell therapies for sarcoma, synovial sarcoma specifically, and other soft tissue sarcomas. For for for that at least 10 years now and so so it’s more sort of like it’s an evolution of that But it’s a really important evolution and now for the first time we’ve got to Be using the commercial diagnostics to be able to test the patients.

We’ve got yet the treatment sites up and running We’ve got to get the patients flowing through those sites and all of that is sort of happened A pace they’ve been a big amount of enthusiasm from this from the from the sites because I mean This is this is the first therapy that the first new therapy that these physicians have had available for their patients for Over a decade.

And so so they’re really enthusiastic We’ve had a great uptake in terms of getting sites active Patients coming through the system. And, and, you know, we’ve, we’ve sort of said it’s going to take, it’s going to take three to four months to get the first patients all the way through that, that process, get them treated.

And we anticipate doing that by the end of the year. So we are. Deep in the bowels of it at the moment. 

Philip Hemme: I was up. Yeah I was about to ask how many patients are already Enrolled or already went through the process if that was this yeah 

Adrian Rawcliffe: We we haven’t disclosed that all that we’ve disclosed is the that we we we just want to make sure that everybody’s realistic about the time frame it takes to get here, I think there’s been a couple of launches in the cell therapy space where you know that that time frame has been A surprise to people But it take takes time to get patients, you know, tested to get the the reimbursement sorted out, then to get the patients released and then are then treated.

So yeah, we’re in that process. We will dose our first patients this year, we anticipate. That’s amazing. 

Philip Hemme: And on the, actually you mentioned reimbursement. I, I saw the pricing. I think per those, the listed, listed pricing is 720 K dollars, if it’s correct. Yeah. Yes. Like, I mean, just to put it into the context as well, it seemed, when I saw the figure, I was like, Oh, that seems pretty high, even compared to let’s say Cartier, which is already, I think more than 350 and already pretty high.

Can you like, why, like, what’s the, what’s the reasons behind it? 

Adrian Rawcliffe: Yeah. So, so the Carties now in the U S are priced here. Most of them are priced between five hundred and six hundred thousand. It’s a modest premium to the, to the CAR T therapies that are out there. And I think reflecting a couple of things.

One is the absolutely spectacular data that from the from the Spearhead 1 trial that was the basis of the approval which, you know, in this space, it’s, it’s, it’s. Difficult to overstate how transformational it is. 

Philip Hemme: I agree. I saw the data published in Bandset. I 

Adrian Rawcliffe: was like, wow, that’s amazing. Amazing, amazing data.

And, and, and, and for this patient population, that’s very small. I mean, this is a, this is a very, very small population. Targeted therapy you know, it’s targeted on patients who have the right HLA type, right, right tissue type and to have the right target. So it’s a discrete orphan, ultra orphan patient population with transformational therapy.

And, and that’s, that’s the basis of the pricing that that we rolled out and we anticipate the coming, coming years. 

Philip Hemme: It’s, it’s where there’s around a thousand patients per year. In the US alone. Yeah, so, so there’s about a thousand 

Adrian Rawcliffe: to 1300 patients who are likely to be diagnosed with synovial sarcoma each year.

So yeah, synovial sarcomas is about 10%, up to 10% of soft tissue sarcomas. So there’s about 13,000 soft tissue sarcos. About 1300 of those are. the synovial sarcomas. We, we talk, we target about a third of those. So maybe 400 patients a year in the United States. And, and, and then probably a similar number, maybe a bit more in Europe.

And and it’s, it’s tissue type is HLAO2 and it’s target type is MAJ4. So you’ve got to be, you’ve got to be biomarkers for both of those. So it’s very focused therapy. 

[00:07:35] The limits of TCR Cell Therapy

Philip Hemme: I think. Yeah, that’s also the, I think, one of the limits of TCR therapies in general. I remember talking with Baco and happy that at the, at thematic they were both on the show and they also had to exactly have the right HLA that is presenting the right peptide for the TCR r To recognize that has to be super specific.

Can you talk a bit if, first, if you agree and. expand a bit on that if that’s really a limit and how you like overcome it. 

Adrian Rawcliffe: Yes. So, so I, I think about this as actually as, as, as, as the potential of the opportunity, you know, the, the, the, the whole, the whole reason why TCR T cells and TCR therapies are going to be effective in the solid tumor space is because they can access these targets that are not cell surface proteins.

Because it turns out there are very few cell surface proteins that are completely specific to cancer. So even in the CAR T space, where the CAR Ts target cell surface proteins, they’re not targeting cell surface proteins specific to cancer. They’re just targeting lineage proteins for a B cell, on the grounds that if you have a B cell malignancy, I can clear out that lineage of B cells.

And cure your b cell malignancy because you don’t have any Is not No, it’s not specific cancer It says this is this type of b cell and that that therefore if I get rid of all of those I’ve got a pretty good chance of getting rid of your cancer, but I also get rid of all your b cells but Doesn’t work very well for and you can live without your b cells and you regrow your b cells and hopefully they grow back without cancer but But for for other cancers like if you take lung lung cancer, yeah If you said well i’m going to get rid of all your lung tissue in order to get rid of your lung cancer That’s unlikely to be an effective treatment strategy.

And that’s true Now there are there are places where you could say well that is an effective trade off prostate cancer For example, you could say that’s a could be an effective trade off There are some places like breast cancer, but but actually finding targets that are really specific to cancer Is is is quite difficult You And, and there are very few self surface proteins, and when you talk self therapy, you’ve got a different level of selectivity that is required, because for, for many types of, other types of therapies, including bispecifics like, like aminocores bispecific the, the bispecifics, you, You can tolerate a certain amount of off cancer, on target activity.

So you can have a certain amount of expression in normal tissue, and still have a therapeutic benefit, a therapeutic index. But with cells, that’s very different. Because, and the reason is that for most other therapies, when the therapy is most effective is immediately after it’s been given. And then it tails off you get sort of classic pkpd sort of you know The effectiveness of therapy tails off over hours if it’s a small molecule Days months if it’s a protein but with a cell therapy The when this therapy when the cells see target When they engage with target, the first thing they do is multiply.

So, 

Adrian Rawcliffe: so they, they, they kill what they, what they see, and then they divide and they multiply. So you get this expansion against whatever it’s seeing. But so sometimes, sometimes they become too active and once they become too active, and if, if you have even low levels of target expression in normal tissue and the T cells see them, they will attack that normal tissue.

So what that means is that you need very, very clean. targets to go after with a with a with a With a t cell and most of the things that you would normally target with cancer therapeutics Are not sufficiently clean and and very few of the cell surface proteins are sufficiently clean So you’ve got to go inside the cell now.

The problem is you can’t get t cells inside the set inside the cells so you’ve got to rely on the fact that The cell protein machinery is constantly breaking down proteins that are inside the cells, venting them up using HLA on the surface of the cells. And that’s what T cells actually see. They see this presentation, the context of HLA on the top of the cells.

So I think about HLA as the way in which we get access to the intracellular target, the intracellular proteome. And there are many more. Proteins that are specific to cancer inside the cell than there are on the cell surface. So actually I I whilst it is a restriction It’s a mechanistic restriction.

It’s down to the underlying biology of the And it’s actually the way in which you get access in a selective fashion to these these these cancer targets That are very difficult to target. Otherwise and and then the other thing that I would I would say is yeah Most of us most of us have been developing these Have been developing them in the context of hlao2 and that makes sense from a okay, that’s where the largest population is, 

okay, 

Adrian Rawcliffe: but there are other Hla’s and then they present That’s like different peptides and so you could you could expand the opportunity once you know that the target works and that Cell therapy is against that target work You can expand it to other hla types and overall if you had sort of three or four hlas for each target Then you would end up with 60 70 percent coverage Maybe up to 80 depending on the geography of the world population.

So it is it is viable to develop broad based therapies that could treat the vast majority of people with relatively small numbers of HLAs. Oh, that’s the thing, 

Philip Hemme: yeah. Yeah, I remember talking with Harpreet, he was making that point. I didn’t, it was not clear to me that the, they were, the TCRs were not recognizing the, I mean, they always talk about we target the intracellular targets, but it’s presented on the HLA and it’s very small.

piece of the peptide. So you need like ultra specific by specific or TCR engineered cells to recognize. Yeah. Now everything makes sense. Okay. That’s good. 

[00:13:54] Market access in Europe

Philip Hemme: And maybe to, to get back to, to patient access, how, how is it going in Europe? 

Adrian Rawcliffe: So, so we’ve had historically, we’ve had interactions with the regulatory authorities we conducted some of our clinical trials in Europe and we are, we’re, we’re consolidating the information from the Spearhead 1 trial, which had multiple cohorts, some of which is going to be required for confirmatory evidence in the United States.

And the totality of that we believe will be able to be submitted in Europe in the years to come. So it will come behind the United States but there in the population of patients in Europe. That I think is addressable by T Stellar and over time we will be able to address that. I think also got to think about this for a business context in the context of other things coming through and the infrastructure needed to support European launch.

We can do think about that ourselves or we could think about that in partnership as well. 

Philip Hemme: Okay, because you didn’t have a fast track mechanism for, for you, but you didn’t apply for it. 

Adrian Rawcliffe: So we have prime designation in Europe. We have prime designation in Europe. And, and the discussions with the agency were conducted under that, under that designation.

And so we, we believe we understand what will be needed to receive approval. I think, I think the commercialization of cell therapies is Is more challenging in Europe than it is in the United States, but all the car, the car Ts have showed that it is possible to do that. 

Philip Hemme: Okay. Yeah, no, that’s that’s good.

Yeah, I mean, I think it’s, it’s an amazing option for patients. So should be available also too more, more globally. Yeah. 

[00:15:36] Peak sales projections

Philip Hemme: Maybe talking about the, the peak sales. Like, I, I was curious. I, I, I heard you talk on, on the Zs show, podcasts interview. about the projections you had, which were, I think in the, you, you talked about the whole psychoma franchise, maybe not specifically to since et cetera, but I remember when I wrote it down, it was like a 400 million figure for the annual sales.

And it was pretty high gross margin as well. But then I saw that at least some figures from the other lists from Google and that they projected a bit lower, maybe 180 million or something. At least that’s the why, why, like, I mean, it seems like a one to two difference, like. What’s your take on this?

Yeah, 

Adrian Rawcliffe: I can’t comment on the analyst’s on this particular analyst’s forecast for obvious reasons. I talk about what we, what we believe. I mean, the, the, so there’s, there’s two products T Cellra, the first approved. And then behind that is, is, is a, is a product called Leticell at the moment. It’ll have a brand name in due course.

And letter cell. So Tcell targets MAJ for letter cell targets, N-Y-E-S-O. Tcell was for synovial sarcoma. Letter cell is for synovial plus and also for OID Sarco. And lettuce cell is, has completed its pivotal trial. The final data for that we anticipate at CTOs this year in mid-November.

We’ve already talked about the interim analysis, which is a little old but also showed that that that trial had met its primary endpoint even at the interim analysis So this is going to be a positive trial. And therefore we believe that we will be able to register that product and have that on the market in about two years time So you’ll have tesora and lettuce cell, coming side by side and the and the and the beautiful thing from our perspective is they go through exactly the same commercial channels and footprint So that so that the commercial channel that we’re building for tselra can just absorb treatment centers In crimson, okay same position.

Yeah, it’s same systems of supplying it. Although the manufacturing process is different Very slightly different. So so the the we think there there is a sarcoma franchise with massive leverage in From a business sense in the in the in the sort of commercial channel that we’re going through man the footprint We’re building and because of that we we’re looking at okay.

What what’s what’s the value of that to us? You And the 400 million number that we put out there was the value, I think it’s about, in the United States alone, of lettuce cell and T cell PKSL, in the launch indications alone. So we think that, that’s a, we, we, we made that available because if you go back to last year, I think people thought that the entire sarcoma business could be worth something like 80 million peak.

And so we thought, hang on, you know, you’re, you’re just thinking completely the wrong, you would collect one, but you got one product, whereas we’ve got two, two, you’re, you’re, the pricing is not where we now sort of landed on a three. We think you’re underestimating the patients et cetera. So there’s a, there’s a whole sort of set of stuff there.

It’s the why we wanted to rebase where we are. But I, but I, but we think about that as a, as a good, as a good start. Yeah. We can, we can address that. We can address that at a decent margin. And then we can, as we do that, we can also be thinking about how to expand that. Yeah. Once we’re commercially invested in this space, you know, are there other soft tissue sarcomas that express major A4 how do we go after those?

Could we think about use in earlier lines of therapy? Can we think about geographic expansion? And then how can we bring the rest of our pipeline through in sarcoma? So we really own this sarcoma space for cell therapy. 

Philip Hemme: That’s good. And I can imagine from a business strategy or corporate strategy, once you are first, now you’re commercial, once you are profitable and commercial, I mean, it’s a very different game.

And you can have much more flexibility, investments, expansion, et cetera, et cetera, et cetera. 

Adrian Rawcliffe: Fair, very much. And I also think there’s a difference. There’s a big difference between the investment in in the R and D to support the expansion of an existing franchise with existing products versus the investment in R and D In things that have yet to demonstrate that they are effective or can effectively generate sales and you know just the risk profile of that to say well, okay i’m in this space What does it take to expand the label into this space?

You know the the risk profile and the investment profile of that just looks very different and you You, there’s a, there’s a different return on investment approach to that. And, and once you’ve got products, you know, if you look at the history of, look at the history of successful biotech companies, and a lot of them have been successful by you finding something that works and then working out how to maximize the benefit that that product can provide to patients on a broadest possible front.

Yeah. 

Philip Hemme: Yeah. Yeah. I’m thinking about about Argenyx in Europe, which is. Built a massive franchise on the Yes, on basically a single product. Like it’s, it’s pretty . It’s not South , but it’s an amazing example. 

Adrian Rawcliffe: But it, but it, it is also true of some really big companies. I mean, take, take Keytruda. Take Merck and Keytruda, you know, when they initially had this, they didn’t really realize what they’ve got when they were first being developed.

They were like, well, I’m not really sure how big is, is the largest product in the world. Or take or take some of the some of the crazy on 

Philip Hemme: the single. Indeed. I mean, basically single indication almost, and that’s crazy. 

[00:21:34] Next steps into 2025

Philip Hemme: So I guess for the next step also, like 2025 would be a key year for, for you guys, I guess to show that you can reach the sales you have kind of predicted and that you have also profit, the profit margin that follows and that you’re on the right track for.

To solve the prediction that I can imagine. 

Adrian Rawcliffe: Yeah, absolutely. And the, I think it was, we said we anticipate to have our first patients treated and first commercial sales in 2024. The bulk, the real sales are 2025 onwards and we’ll, we’ll be, we’ll, that’s when we’ll see the patient flow through and and the, and the delivery.

And then the other piece of that is also moving that second product, lettuce cell forward as well and behind it so that we’ve got the confidence we can get to the other patients that we that are addressable, particularly in the myxoid sarcoma space. 

Philip Hemme: Yeah. 

Adrian Rawcliffe: That’s great.

[00:22:23] Rich History of Adaptimmune

Philip Hemme: Maybe, I mean, we talked about the current topics and the next step, maybe to, to zoom out a bit on the, on the history of adaptamine and, and your, where you joined into the, where you came in into the picture.

So I think that, I mean, the history of what I know for adaptamine is, is what do you like? It’s very interesting from where the science, there’s some science coming from Germany, from Medellin, baby cousin was the renal core when you split it. So therapy versus by specifics. It’s very like European led across cross continent, but with a very global development.

And you joined like almost 10 years ago. I guess you will celebrate your, your decade soon, I guess. 

Adrian Rawcliffe: Yes. 

Philip Hemme: Celebrated 

Adrian Rawcliffe: no. Early next year. I were day early next 

Philip Hemme: year. So, and you join I think A CFO first, then you transition to CE. And must. So can you Yeah. Maybe start with the, the history of Adam before you joined and how, how then it went on when, when you joined Until, until now.

Adrian Rawcliffe: Yeah, sure. So, so so Adaptimmune itself as a, as Adaptimmune has been around since 2008 when it spun out from gy. But the history goes back to about the year 2000 when. When technology was spun out from the University of Oxford or licensed from the University of Oxford into a company called Avidex back in, back in the history.

And, and, and that Avidex was really the precursor of both Adaptamine and Immunocore. So Avidex got acquired by Medigene and then separately Adaptamine and Immunocore spun out from from Medigene in 2008, about three months apart from each other. access to the same fundamental intellectual property, which is, is, is how to engineer the T cell receptors to fundamental tools to engineering for engineering T cell receptors.

And Obviously, Immunocore uses that for bispecifics, which requires a very different form of engineering to the engineering that you do for, for a cell, for a cell therapist. So from 2008 until 2014 Adaptavir was financed by high net worth individuals in, in, in the Oxford area and, and was researching how to incorporate T cell receptors into cells.

And moving forward into the clinic in very small trials in the United States in partnership with leading academic centers, including University of Pennsylvania.

Unless no, no, no, no, not not traditional vcs. 2014 they did their first vc round proper vc round led by nea and orbimed and that put us on course for an ipo in 2015 and this was when cell therapy was was sort of starting to become really super hot He just had the first car t data. Nabatis had had done this deal with with carl june 2015 a few years before and, and it was clear that CARTs were going to be huge and the proposition that CARTs were maybe not going to be the solution for all cancers and that TCRT cells would be another wing of that was sort of starting to become accepted.

And so first round of financing in 14, IPO in 15, I joined in between those two as CFO in order to help take the company public. Which we did very successfully in in, in 2015, in May, 2015. And, and the, what we did with that is we, we then sort of use the, use the proceeds and the, the momentum that we gained from those financing and from the belief in cell therapy.

To really invest in some of the core components that we believe are going to be critical for for cell therapy. Principally manufacturing and our manufacturing, internal manufacturing for our T cells. And, and so the history of that through then to, to the approval of T cell earlier this year is sort of a, Focus on moving from a technology platform company into a cell therapy company with the capabilities that you need to actually design, develop and deliver, as we say cell therapies, which are, which are, which we think are really specific, poorly understood by the, by the rest of the world.

And quite different to my experience with small molecules and biopharmaceuticals when I was my previous as a company GSK. 

Philip Hemme: Yep. Alright, that’s amazing. It’s, and then, and then between, between the IPO to now, like, And, and your transition to CO Hall, how did that go? Like, oh, tra tra 

Adrian Rawcliffe: transition. I, I, I think, I think, I think we’re, well so I transitioned in, in, in 2019.

At that point we were, we were we had seen the first signal in Sarco. With what is now T Cell, or what has been called a Famicel Leticell was being developed actually by our partner GSK at the time. And we were sort of moving the rest of our pipeline into, into the clinic to go 

Philip Hemme: bring So the company you got in via GSK, or you knew the company via GSK or there’s no connection?

Adrian Rawcliffe: I did, so I ran, I ran a business development for GSK for a number of years. But actually when they did the deal with, with adapt to read, I was, I was CFR of the North American business at the time. And so I, I, I had no understanding of adapt to read. I knew, I knew Avidex from, from from. Well, way, way, way back when I’ve interacted with them but I, I didn’t, did not know adaptamine at all.

And until I sort of got the call out of the blue about this small biotech company that was giant. 

Philip Hemme: It’s crazy sometimes in biotech, the biotech world is so small. But sometimes also you sit very next to something or an opportunity and you don’t see it. No idea. No idea that was 

Adrian Rawcliffe: happening. And you can imagine, you know, as the commercial organization of GSK you know, the, the focus is not on, well, Ooh, there’s a really interesting proof of concept in human study going on in this R& D or this actually is from the market.

You’re, you’re, you’re very focused on the respiratory franchise, the vaccines franchise, and the stuff that, that’s actually real time. So yeah, you can sit right next to it and not know what’s going on. That’s amazing. That’s cool. 

[00:28:47] GSK and transitioning to Biotech

Philip Hemme: And then maybe you talked a bit before about your, I mean, I’m curious of the skills or what you brought from your experience at GSK.

I mean, you said it’s it’s very different to expand the label. But at the same time, you have this commercial exposure and what it takes. So can you elaborate a bit on that of like, I don’t know what’s what was the most useful skills or most useful experience or some examples you had? 

Adrian Rawcliffe: Yeah, so so I, so I’m not a scientist by training.

My first degree was mostly molecular biology and biochemistry, but I’m not a scientist by training. And so But I had a number of roles at GSK and actually probably the most the most useful ones were the ones that sat with the ones that sit on the interface of science of the science and the business.

So I spent a lot of time in their business development organizations of various types ultimately leading. Worldwide business development for a number of years. I also ran their venture capital fund sr1. So, it is and the the beauty of those roles and is that you get to look at an awful lot of science and r& d projects.

Yeah, I probably did diligence on whilst I was running bd Maybe we did diligence on a couple of hundred companies, a couple of hundred programs over that period, you know, deep diligence. So you, so you get to look at, and when, when you do diligence on a, on a development program, it’s a fascinating thing because you get to see in one go the longitudinal history of all of the development decisions that were taken all the way back into research.

And you get that nicely packaged up and, and you get, I said, why, why did you take that decision? I didn’t do it. Why did you choose that trial and not that trial and that indication another indication? And and I think that that was incredibly instructive in in how Good r& d gets done. And and then also and then also the the overall what to pay attention to you know, I’m fond of talking about that.

I I didn’t I didn’t look when you’re when you’re running a business development organization you’ve got to trust that the experts in the company that are doing the diligence are doing a good job And so by and large I did not look at primary materials for most of The stuff that was coming through diligence.

Philip Hemme: But you have to understand, I mean, you have to, yeah, understand them and, I mean. 

Adrian Rawcliffe: Yes, yes you do. But you rely, to some extent, you do rely on the judgement of the people who are, who are doing it. There’s one exception, which I, I, we, we learnt, which is. When it comes to regulatory correspondence, that was the one piece of the, of the, of the due diligence report that I always tried to look at the primary correspondence with the agency.

Because it’s the one where you actually get a sense of the nuance of, of the program and what the, what the agency really thinks about the product. Quite different from the potential added value attached to it. Yeah. And, and so, and so there’s a, there’s a, And there’s a big difference, I found, I, I, I, I believe.

Between looking at drugs that are sort of like transformational versus drugs that are, yeah, me too. And those look very different when viewed through a regulator’s eyes. 

Philip Hemme: I, I, yeah, it’s, it’s, I like that actually. I recently, I talked with a, with a friend and recently we were talking about the company evaluating and then he, you rapidly went, was approved drug, rapidly went to the, to see what the regulatory, what’s the, what’s the folder and what they really say and how they compare it to existing and what is their take.

And then you feel it’s very different. Message was a wash drug, but that’s very different from the wash commercial pitch. And it was very interesting to see actually, and very like detailed, but also they’re quite understandable from even like, not like super KOL level to read it. I mean, even for me, I could read it and pretty clearly understand the fight compares, which I Yes.

Very, very. Very good. Actually, I haven’t done it for that team. You know, I haven’t checked what the FDA says, but I guess for you, it’s, yeah, it, it, 

Adrian Rawcliffe: it, it, it, it’s interesting. There’s a whole lot of documentation that’s out there that shows the discussions that we had and, and yeah, there’s, there’s, there’s an interesting, interesting balancing act on this because it was actually a privilege going through that process because there’s two, and you look at it from two angles.

So, you know, we had the FD, we had to manufacture. See we have to manufacture these hours. So the fda inspected our manufacturing facility at the labor yard and we had We had an inspector there for eight days all of one week and then into the next week and They were exceptionally thorough with what they were asking and and and you’ve got this duality in your head going on because on one hand it’s like We’ve got this we know what we’re doing like There’s a sort of like okay.

We want to get through this. I want to provide you with everything But you know, like this is this is this is a lot and on the other hand There’s the view of the patient which is okay This is a regulatory agency that is going to give permission to a manufacturer to manufacture this product actually as a patient I can’t i walked away from that that process feeling Actually that regulator is doing their job.

They are going through that process and I was like, okay, if that’s the process the regulators are going through then actually I feel better as a patient Or a potential society that that regulator is actually regulating effectively even though it can be I don’t think it’s frustrated, it’s just like, it’s tense, if you’re, you’re going through this inspection for the first time, it’s a tense process.

But from a patient perspective, it’s what you anticipate 

Philip Hemme: the regulator should do. It’s, it talks also from a, even from an industry point of view, it brings trust to so many levels. And at the end of the day, that’s also what you want. Yeah, yeah. Global healthcare, bringing healthcare to patients, I mean You do.

And especially when it’s complicated and the patient cannot 

Adrian Rawcliffe: And, and, and for these therapies in particular, I think you know, because they’re manufactured on a patient by patient basis, the manufacturing is is different in terms of the The mechanics of it and then the overall the extent to which the product is the process is is so much more true for a cell therapy than it is for Yeah, a biopharmaceutical or yeah, you’re obviously for a small molecule because your ability to characterize that product and say you produce the same thing Is quite limited because this input cells are very different 

[00:35:54] Why Manufacturing is Crucial in Cell Therapy

Philip Hemme: I want to talk about manufacturing.

I wrote I wrote down here From from the previous thing you said that maybe to finish this on your first background You talked a lot about bd as well in your bd experience, but then at adaptimune On the BD, at least you didn’t, you went to the commercial on your own, you didn’t try to partner with someone.

So how, how intentional was that? 

Adrian Rawcliffe: Yeah, so, so I, and, and that’s not a, that’s not a discussion that says we will never, we will never partner on a global basis about, you know, we’ve, we’ve sort of been clear. We have some fundamental platforms. We have a pipeline, we have some product. Leveraging value of those on a global basis to the maximum extent is going to take partnerships.

And so, you know, very clear about that. Having said that Let’s get up, I go speak with, we can talk a 

Philip Hemme: bit after. 

Adrian Rawcliffe: Yeah, so, you know, that that’s a really good example. And then, you know, the what previous partnerships we’ve had with, for example, genetic and our allogeneic platform, other examples, how we can leverage the platforms that have broader utility than that we can provide, you know, if you got these fundamental platforms but at the same time I, I think that there is a, there is a desire or belief that in a new modality like cell therapy, The way that we’ve done everything up to this point in time has not been the same as it would be if We were developing a small molecule, you know And there’s lots of things that if you’re developing something that is well known and understood It’s easy to outsource or partner bits of the value creation chain, you know for us that’s that’s not apparent not as apparent in the in the In in in this new modality and so the way we go to market and the fact that so much of the commercial investment is actually on the supply chain is on actually how you deliver this product to patient Sort of meant that For this particular market, which is relatively small This is sort of perfectly sized for us and it’s something that we felt not only could we bite off But actually if you said who’s the best owner of this it would be us Because I think we are able to best extract dwelling from this.

Or for, for beer, deliver value, patience and extract value for our shareholder. 

Philip Hemme: Yeah. And I guess you had also access to capital as you mentioned. Yeah, you had the optionality to Yeah, to be able to of Pyrotech who don’t have the optionality. 

Adrian Rawcliffe: Well, it’s also, if you think about our commercial the actual true commercial investment, you know, ignore, ignore the, the sort of manufacturing investment, and just think about the commercial investment.

It’s a relatively small organization, you know, our commercial plus Med Affairs organization is about 30 people. We’re going to be targeting about 30 sites in the United States. And so yeah, it’s it’s it’s discreet and and but that’s what’s necessary. This is a this is a rare disease White glove model as opposed to a mass market And so I think I think it actually is perfectly suited to smaller smaller companies who are who are very specifically focused on delivery in this area.

It’s a typical Genzyme 

Philip Hemme: model. I read the how do you tell me your biography? Huh. Yes. But I can recommend that as a book. It sounds like that model. Yeah, that’s great. It’s good. And that’s perfect transition to to manufacturing it. I read quite a lot about this. And I heard that several times. In cell therapy, manufacturing was, I mean, is the product basically, and it was, it’s key.

I saw some examples in, even in CAR T where the manufacturing on the same CAR T can make a huge difference in the fitness of the cells, et cetera, et cetera. Can you, like, maybe explain a little for the audience of how important manufacturing is and maybe if you have some examples of adaptamine or not from adaptamine?

Well, 

Adrian Rawcliffe: I, I, I think it’s fundamental and I did not understand it when I joined the company. Although I think the people who have been deeply in health therapy for a long time have this this is this is what they live and breathe so, Everybody everybody talks about these things as if the primary differentiator for a therapy is the target, the thing it targets.

So we talk about CD19 CAR T’s and we talk about MAJ A4 targeting TCRs or PRANE targeting TCR. And, and that’s fine. You know, that, that’s the bit that we genetically edit into the cell. And, and therefore, you know, it is where a chunk of the IP comes. It is what gives it the ability to recognize a tumor that it previously wasn’t recognizing.

But the cell is doing, yeah, 150, 000 things all at the same time, and one of the, one of the beauties of cell therapy, there’s, there’s two things that differentiate cell, the cell therapy in my mind. One is, one is this, this one off therapy that gives permanent, Gain of function. Yeah, that’s the genetic editing part of the of the cells.

Yeah, you’ve been aspect of the gene therapy in a cell with cell in the form But another piece of the cell therapy and the differentiator from from gene therapy and from every other therapy Is that what you’re giving is a little engine and you can tell that little engine to do a whole load of other stuff So so you can take Cells that are previously in a particular state and you can change that state through your manufacturing process So you change it by editing, but you change it.

And I think it will be at least as much by the manufacturing process. And that’s, what’s being demonstrated in, in, in a variety, a variety of places, you know, Novartis is T charge where they, where they show fundamental differences in the fitness of cells that, that, that shorter manufacturing time seems to be seems to be.

Very significant and replicated across a range of different types of therapies. The, the, the one that we have is which we’ve talked about publicly, is that when we moved from our t-cell, previously a FMA cell to a product that’s now called user cell, which is a next generation version of of, of, of.

of T cell 1. We did two things, we did a number of things to it, but two of the things we did is, one, we used the same T cell receptor, but we added a a CD8 to make all of the cells killer cells and preserve, they preserve their T helper cell function, but they were all turned into killer cells.

So you get a much more potent product for a particular number of cells. But then the second thing that we did was we added we added an AKT inhibitor into the manufacturing process. And, and what that was designed to do, and what it seemed to do, was enable the cells to replicate, to, to, to expand without Growing older without differentiating as much.

So so you get you get a sim you get more cells You get similar dose of cells, but they they’re not as old. They’re not as then they’re not as exhausted They’re not as what’s terminally differentiated. So they’re not as far along their sort of program into into t killer cells as as or into terminally differentiated vector cells as you would expect and the advantage of that is that they are very easy to You going to you and they then expand more in you.

They then persist for longer and they have a more stem phenotype. They have a, an a, an earlier, an earlier phenotype, which means they, they are more capable of re of replicating. And they will do that in, in vivo as opposed to sitting in a, in a, in an incubator or ada. Okay. 

Philip Hemme: And this translate makes total sense and translate then to efficacy and.

Adrian Rawcliffe: Yeah, control completely different growth curve when they get into you. So theam cell grows very quickly, expands very quickly. You get any cytokine release, which we don’t see that much of with Aam cell quite quickly. With with user cell, it expands much more slowly. You know, PP Huntington takes, takes a few more days.

We get delayed cytokine release syndrome to the extent that we get it. etc. So it’s just a completely different phenotype of product behaves very differently, and actually is effective in a bunch of solid tumors that a FAMICEL T cell was not effective in. This T cell was very effective in sarcoma, outside of sarcoma, modestly effective.

User cell has been shown to be produce responses in a wide range of other solid tumors. 

Philip Hemme: Okay, that’s a very clear, very clear explanation. 

[00:44:47] The Future of Cell Therapy: When will Allogeneic and In Vivo Therapies be on the Market?

Philip Hemme: So is it, and it brings me also to another question, very similar, I mean, in a similar tone or category. I talked with a friend at J& E, obviously quite involved in, in CAR T as well and in self therapy.

And he was curious what’s your take on, let’s say, the next generation on the. Next wave of self therapy, especially when you’re talking about allogenic or in vivo yeah. InVivo self therapy. What, what’s your thoughts there? 

Adrian Rawcliffe: Yeah, so, so we have a, we have a allogeneic platform and we’re thinking about in vivo as well long term.

I, I think one of the amazing things about the biotech investment environment is it’s constantly looking for the next hot thing. And, and so, and I think as a tendency to. Underestimate the challenges and overestimate the speed at which those new next top things can be available. And I think it was very definitely true with allergen.

I think it was like, Oh, it 

Philip Hemme: took way longer than expected. Yeah. 

Adrian Rawcliffe: Way longer than expected, but, but, but that, and that doesn’t mean that it won’t. Happen, in fact, we still believe it very much will happen But it means that it will take longer because it’s not going to be the same product And so so our approach was look, you know, actually autologous cell therapies work and that because they work it’s worth trying to overcome the logistical and engineering challenges of making them available at volume at scale, which is not not not not in not Volume at scale Easy, but also not insurmountable and requires actually bringing in skills, engineering skills, logistic skills from other parts of the healthcare ecosystem that can be very useful to us.

So yeah, that, that is a problem that is being solved in real time and will continue to. And my view is the next, the next 10 to 15 years. Okay. Is autologous okay. So then I think you get to that, that point. Okay. I, I, I think it’s, we, we think it’s the next decade. Now in the hemo space, you might get to donor derived allogenetic before then.

But in the solid tumor space, nobody, nobody’s close. So I think the next 10, 10, 15 years is auto, auto. And then, you know, Aloe maybe gets overtaken by In Vivo. I don’t, I don’t know all of, all of that’s out there. In the meantime, there’s a lot of other renovation that can be done. And, and, and the thing is, There’s sort of a whole bunch of scientific innovation, I think multi targeting, multi edited, multi armored approaches and, and finding a way of developing these rapidly, iteratively, and in a regulatory environment that enables that is, is, is going to be critical to success beyond the first half dozen, ten products that people will get on the market, targeting prime, because the beauty of self therapy is you can iterate these things.

Yeah. 

Adrian Rawcliffe: And then the other piece I think is is just on the on the manufacturing when we understand all the parameters that actually define efficacy for our products over the long term And we’re sort of scratching the surface of that at the moment when we understand that then you’ll be able to design manufacturing processes that are Dramatically more efficient than the current manufacturing process and that’s the key to getting to this being a in any way a truly global widely available option.

Yeah. How’d, how’d you get out from the expensive medicines for the Western hemisphere and into, into a global solution for a large subset of cancer? Yeah, I think, I think that’s going to be key. That’s a great, 

Philip Hemme: that’s a great, great way to, to, yeah, it’s a great way to finish on the industry. 

[00:48:43] Quick fire with Adrian Rawcliffe

Philip Hemme: Before we have a, we have a, just a few minutes left or two minutes left.

Usually I finish with just rapid, a quick fire, just yes and no questions. Go for it. What? So yeah, go for it. And, and some are a bit more funny. The first one is funny. Do you prefer Philly cheesecake or Oxford fish and chips? Philly, Philly cheese, Philly cheesesteak, I’m afraid, 

Adrian Rawcliffe: sorry. 

Philip Hemme: Yes. 

Adrian Rawcliffe: What’s your favorite biotech book?

Emperor of All Maladies. Oh, I don’t know this one. Ah, yeah, there, it’s a, it’s a biography of, of cancer, a historical biography of cancer. It’s, it’s fascinating, amazing read. How much do you read actually? , I most, I mostly read, I read nonfiction and news. I’m not a huge fiction reader. No. So I’m, the answer is not as much as I should.

Yeah. , 

Philip Hemme: What’s your the, what’s your one of your biotech HEROs? 

Adrian Rawcliffe: Again, I, the risk of being stereotypical, ’cause I’m sure it’s, it’s on a bunch of, a bunch of people would say it’s John Margan CEO of founder, CEO of Alnylam. ’cause he, he, because he, he. Had an idea in a completely new modality and did absolutely what is what it takes to make that Our lion and the successful company it is today I saw you recently received the like a lifetime 

Philip Hemme: award or something.

Adrian Rawcliffe: Yeah It’s an amazing story. And there are, there are several of them, but but he’s, he’s, he’s particularly aspiring. 

Philip Hemme: Amazing. 

[00:50:20] Thanks for listening

Philip Hemme: That’s great. Let’s finish here and you’re perfectly on time for your next meeting. First, thanks. Thanks Adrian. It was amazing. Good. Great, great, great, great to speak with you. Take care.

Cheers. Bye bye. I’m impressed by the development of T Cellar and Adatimine and the benefits it will have for sarcoma patients. I’m also impressed by how clearly Adrian could articulate the big picture of TCRs, cell therapy, autologous versus allogenic versus in vivo, while having fun. If you also enjoyed this episode, please hit the like, follow, or review button.

Any of those actions would help us a lot to give more people access to the podcast. If you want to see similar videos, please check out our channel where we have many available. Also, I would be curious to hear what you think so I can further improve the content. If you could leave a comment wherever platform you are or shoot me an email at philip at float dot bio.

Alright, thanks for watching to the end and see you in the next episode.

Marina Udier, Nouscom 🇨🇭 | Cancer Vaccines, Neoantigens | E21

We’re in Basel 🇨🇭 with the CEO of Nouscom, one of the top EU immuno-oncology biotechs in the cancer vaccine space, Marina Udier.

We talked about cancer vaccines and Nouscom’s platform. We also discussed the importance of focus for success and her career.

⭐️ ABOUT THE SPEAKER

Marina was recommended to me by one of her investors. She has an inspiring story, growing up in Croatia, going to the US, and making it all the way to be one of the 11% of female CEOs of biotechs in Europe in 2024. Now she is the CEO of Nouscom, but prior she was the Operating Principal at Versant Ventures, as well as holding top-level positions at Novartis Pharma, and McKinsey & Company.

🔗 LINKS MENTIONED

Transcript

[00:00:00] Intro

Marina Udier: A good vaccine has to have three things coming together. One is a good platform, then you have put the right payload into that platform. And the third thing was, where do you put it? In which patients do you put it? We were just by chance planning our fundraise at the year. JP Morgan 2023 and the top line data went out at the end of 22.

So that was quite a nice message to start with. 

Philip Hemme: The world was a bit less open, Croatia was not part of you quite so. We’re 

Marina Udier: coming out of the, out of the 

Philip Hemme: war. 

Marina Udier: If I knew at the time all of this, I would probably maybe be intimidated. But when you’re young and you just don’t know any better, you’re kind of naive and you’re like, well, that sounds like a great story.

It’s cool. And I have good grades and you know, I will go and take a couple of tests and fill a few forms and go for it.

Philip Hemme: Bienvenue to a new episode. I’m your host Philippe. And on this show, I’m interviewing the best Europeans in biotech to help you grow cancer vaccines well through a hype cycle. They were super hot 7 10 years ago in the immuno oncology wave, to get out of fashion, to now back hot again. In 2015, Newscom was founded and a few months later Marina joined and ultimately has been CEO for several years now.

So, I went to Basel to talk with Marina. Marina was recommended to me by one of her investors and she really has an inspiring story from growing up in Croatia just after the war, to studying and working in the U. S. to now being, in 2024, one of the 11 percent female biotech CEOs in biotech in Europe. So we talked about, you see, cancer vaccines and Newscom by a platform.

And we also talked about the importance of focus. And capital letters, as well as her career. So here’s my conversation with Marina. And if you’re enjoying it, please hit the like follow button.

All right. So welcome to the show Marina. 

Marina Udier: Thanks for having me. 

Philip Hemme: It’s great to meet you. And yeah, we talked, we tried it. And it’s great to meet you now. 

Marina Udier: Yeah, it worked. Third time is a charm. 

Philip Hemme: As we said, a lot of traveling in the traveling season. Indeed. Indeed. Indeed. 

[00:02:18] Cancer vaccines & Nouscom

Philip Hemme: So, I want to start with the, the cancer vaccines field.

I mean, I think you are one of the leading company worldwide and especially in Europe. There is also NyCode, where Agnete was on show. We talked about you guys since the episode, and also BioNTech, I think they just announced it. positive results on one of the mRNA vaccines at ASIMO. So I’m just wondering if you can, yeah, how do you position yourself compared to the others?

Marina Udier: No, that’s a great question. And I’m thrilled to be here talking about cancer vaccines when the vaccines have been finally validated for different technologies. I’ve started working in a space back in 2016 when I joined Nuscom and, at a time the field was very hot, right? Because after the past, you know, not very great successes we came upon the field of new antigens and checkpoint inhibitors.

And the synergies between the two and a lot of new companies were being formed around that time, including BioNTech and Moderna focusing at that time on cancer vaccines so much before they became famous for being, you know, these big COVID companies. And then it took a while to, you know, for those to find the way and what I usually tell to investors and you know, general audiences.

A good vaccine has to have three things coming together. One is a good platform. And here is where different technologies differ. And I don’t, never thought, and I don’t believe that there is one platform that is going to be it. The winner takes it all, but there will be always space for more. We have a platform that differs from both NICOD, obviously, and RNA.

We can talk about that in a bit, but that’s important, right? You got to have the good platform that can induce good immune response. Then you have put the right payload into that platform. And here is also where different companies took different approaches to select the new antigens. The first selection is either off the shelf or individualized or personalized.

Exactly. And we did both and we actually did it in a, in a different order than most other companies. So most companies actually went with a personalized program first and then build various off the shelves program. We actually did it in the other way and, and I can elaborate on that shortly. And, and we also tested a personalized vaccine.

And the third thing, which I think people really didn’t think of in the beginning was where do you put it right in which patients do you put it? Because you can have a great drug, but if you put it into the wrong patient population, it won’t work. And I think some of the vaccines that are out there that have shown.

great activity in, in, for example, adjuvant setting, didn’t show similar levels of activity in metastatic setting. So really the place for vaccines, at least with some technology seems to be in this lower disease burden. So like if you look across those three areas, then, then various technologies differ between.

Which platform they use and why that platform induces good quality immune response and what kind of new antigens they present to the immune system and then where do they actually test that. 

Philip Hemme: I remember we talked about where the most efficacy is in the patient section, and that seems like on very late stage patients seems to be working less well.

This is going early, but that going early is also very hard from a clinical trial setting and enrollment. Huh. So how do you And how do you do it for your phase two? 

Marina Udier: Yeah, no, that’s a great question. So we actually run a phase two study at the moment in first line in the frontline metastatic.

Cancer patients who are positive for a mismatch repair deficiency. So that’s a subset of colorectal cancer patients. And we went to this population based on very encouraging phase one data that was published and which was basically used in our recent fundraising. So again, because our platform is, is really potent in inducing, strong and durable and.

specific phenotype of T cells, we have found mechanistic evidence that shows that you can induce vaccine specific T cells in the periphery, which then traffic to the tumor and, and kill it, right? Even if the mass, if it’s a significant mass is there. So of course the phase one, it’s a phase one, you find your dose, you determine safety and immunological activity.

And a hint of efficacy, a signal or a signal of efficacy and then you have to demonstrate it that the proof is there. And that’s exactly what we’re doing right now with the Series C. So that’s on one hand and, and so on the other hand, we have with the same asset, which we called NUS209, this is an off the shelf program that is built on the selection of 209 new antigens.

We also, It’s a lot of neo antigens. It’s a lot of neo antigens. Compared to others online. Exactly. And, and this is one of the things that really differentiates us from pretty much anybody in the field. Most companies go for 20, I think Moderna goes for 30 some, 33, 34. We can deliver 60 in each of our vectors.

So, our platform is Vital Vectors. Two different viral vectors which are specifically engineered so that they are replication incompetent. They basically are used to deliver the payload. And the capacity of those vectors is larger than most other modalities, most other technologies in the field.

And with the two on nine, we actually, develop this program to have four of these vectors made and then mixed as a one, one vaccine. So the patient still gets one vaccine, but it’s from the four vectors and they’re four times 60. Well, exactly. Minus space for some other things that, that make the vaccines work as well as they do.

Exactly. And there was a lot of discussions early on before we, we even went into the clinic, you know, do you need more or do you need to perfect these algorithms to give you? A very good subset of 10 or 20, right? Because the first vaccines went out with even 10, and then eventually 20 and 20 is I think the, the most common number.

And our approach, or you can even call it philosophy, was Well, if you give more information to the immune system, you have better chance of actually catching the immunogenic ones. And various algorithms were developed. I think each company has its own flavor of how you predict these new antigens. And by that, I mean, are they going to be immunogenic once they reach the patient?

And one thing that I think can be said with certainty for all of them is that no algorithm is perfect, right? They, they do. They do their job and their job pretty well, but no algorithm will give you 20 out of 20 immunogenic neoantigens. So our approach was always, well, the more you give, the more chance you have to really hit the right ones or the really immunogenic ones.

And we have seen in some of our clinical data later that. even your antigens that are selected or prioritized down the list close to 60, in fact, were immunogenic. So if you cut your selection in 20, you wouldn’t have caught them. 

Philip Hemme: Yeah. Okay. 

[00:10:39] Bioinformatics algorithm

Philip Hemme: Because you’re talking just for, or maybe also for the audience, the algorithm is when you go for a personalized approach, you try to predict, or you try to, I guess you go for, from a sample to predict which and the antigens would be the most potent.

Marina Udier: The most potent. 

Philip Hemme: And then you’ve got some bioinformatics behind. 

Marina Udier: Exactly. Exactly. But, but in fact, the same principle applies to, in our case at least, to an off the shelf selection. The only difference is that, in addition to the algorithm being different, you pre select and then you use that selection for all patients of a certain class.

In the personalized, you Do the vaccine for every patient as they come, but the principle is similar. We went for this wide selection of 209, not believing that every patient will have 209 active active frameshifts or, or these frameshift neoantigens. But in fact, that the sharedness of these neoantigens will be sufficiently high that the vaccine will truly be off the shelf, but universal for this population of patients.

Philip Hemme: And it’s, I guess, from like for, for cell therapy, I guess, the. Or as a personalized approach, I mean, it makes sense from an efficacy point of view, but from a CMC and I mean, then becomes rapidly high cost and quite tedious to, to, to, to, to do. So I guess for you guys, it’s an advantage to be able to go off the shelf on the beginning is.

Marina Udier: That’s one of that certain, yeah, it’s one of the advantages because the, as, as, as you rightfully say. You pre make the, the, the lots and then you fill the vials and then you ship them and patients who are coming into your trial, as long as they have the biomarker, which is this mismatch repair signature, they are candidates for the vaccine.

And we expect to find, and we do find a subset of the 209 in all of them. 

Philip Hemme: Yeah. Okay. And then. Okay. The, the trial I saw that it’s, it’s a pretty, I mean pretty large trial over a hundred patients and a global trial, I think you have 40 centers, something in, in the U. S., mostly U. S. and Europe. Yep. And it’s a combination with Keytruda, right?

Like, so, can you, I mean, tell a bit more about the trial of what’s at least, what’s public? Sure. 

Marina Udier: Yeah. Yeah. We can, I’ll, I’ll try. So you’re right in that our trial is a combination of the vaccine and Keytruda versus Keytruda. Yeah. And the reason for that is because Keytruda is an approved standard of care in this patient population of newly diagnosed colorectal cancer patients who have the mismatch repair deficiency.

So in immune oncology, the sort of single arm trials, the It’s get you only so far, right? You can learn, as I said, some of the early stuff about the safety of your product, the activity, immunological activity, and the signal of efficacy but if you really want to demonstrate efficacy, you have to go for a randomized approach.

And so we, as you said, we are running a global trial in U. S. and Europe with a little over 40. sites, I believe six countries. So it’s quite a meaningful clinical operation. And we are doing quite well operationally, executionally. The, the proceeds from R series C have certainly allowed us to push that and to, bring that operation to where we want it to be so that we can see.

The data readout next year. 

Philip Hemme: Okay. Yeah, because the data readout, you Was it planned for Q1, or? Oh, somewhere I read it was March 20, 25. 

Marina Udier: Yeah. In the Q1, Q2. Yeah. Sometime in the first half of next year. We are on time. You’re on 

Philip Hemme: time. Yes. Like a Swiss clock. 

Marina Udier: We’re like a Swiss clock. Although we’re a global biotech, but we have some Swiss DNA.

Philip Hemme: Swiss DNA. That’s something we could, I heard you a very A lot of Swiss are very famous for being focused, but I think they’re quite serious for being focused, but they do a very focused and lean operation. So, and I want to, to jump on this a bit, a bit later.

[00:15:16] Hype cycle in cancer vaccines

Philip Hemme: Maybe to, to zoom out a bit, one thing you mentioned about that the field was very hot and then it’s a bit less hot.

I think there are some, if I remember well as well, like I remember CureVac at, I think it was JPM, 2017 or something, they had like a phase 2 cancer vaccine that didn’t work, I think, at all. And there were some setbacks, but I think recently you had some more positive news as well, I think, at least Moderna, combination results.

I think it was also a sketch reader, right? Cause like seeing that head back, I don’t remember the results, but it was, it was like really significant activity and significant combination. So can you tell a bit, a bit more on the, what, like on top of that, of like, what were the specific, not, I don’t know if it’s catalyst the right word, but the specific things that happened.

Marina Udier: No, that’s, that’s a great question. So in my experience, as I said, I started this journey when the field was getting really hot because of the neoantigens and in fact, for a while and, and a while is like a couple of years, two or three years, people were talking only about neoantigens. And I remember telling everybody, you know, But you need to have a platform to deliver those neoantigens, right?

Like neoantigens are one part of the equation, you actually have to have the right platform. So the early, clinical data with neoantigens were not so positively received because you could see immunological activity, but there was no clear correlation with clinical activity or efficacy. And that’s what confused, right, the field and the investors.

And then people try to find reasons for that. And, and one of the reasons was that either You don’t induce the right type of immune response and in, in cancer vaccine, you need to have CD8 T cells, so called CD8 neutron killer cells that kill the tumors and you need to have the CD4 or the helper T cells and they need to also have a certain capacity.

memory phenotype because you want your protection to be long lasting. So again, some of the early, questions were, well, if you activate immune system, but that doesn’t lead to clinical activity, what do we do with this? And part of the solution of that problem was for some companies, well, maybe you need to test it in the different patient group.

So in the metastatic population, if you have a technology that that is maybe not so potent, then your cells are not enough to kill this tumor mass because these tumors can be quite large and also multiple. But if you go to, for example, adjuvant situation, which is after surgery. So for patients who are candidates for a section of the tumor, then the tumor is either completely resected where some cells, residual cells are left, or, or.

Resected in a, in a, in a meaningful way. And then your cells have to act on a, you know, much sort of smaller target. And the Moderna data that you mentioned was quite important, I think for the whole field because Moderna has shown for the probably first time that you can demonstrate clinical activity or efficacy.

With a vaccine. So they had a positive so called proof of concept or a phase two trial in adjuvant melanoma. And that really lifted the whole field because somebody has shown that you can do it. And for us, this was quite meaningful because we were just by chance planning our fundraise, at JP Morgan 2023.

And this data, the top line data went out at the end of 22. So that was quite a nice sort of message to start with to say, Hey, you know, the cancer vaccines are validated as a, as a modality, right? And then within that modality, there are different ways that you can tackle that. And again, I never believed that this is a winner takes it all kind of a game and you can find different ways to address different stages of disease.

And some, technologists have really embraced this, this adjuvant or resectable population. We believe that we can make a difference in the metastatic population because, again, of the both potency and payload. And we have a very interesting, population that I believe it’s quite unique to the field where we don’t treat patients after surgery, we actually treat patients before the disease even shows.

That’s our so called Lynch program or the interception study. That’s in phase one. That’s done in collaboration with NCI or the National Cancer Institute in the U. S. And we have been very fortunate to be able to test this technology in this group of individuals who have a genetic predisposition to have mismatch repair deficiency because they have a mutation in one of the genes that control mismatch repair.

Basically your DNA gets Broken, quote unquote, all the time, and then it gets repaired. And if that machinery for repairs, it’s broken, then, then, you know, mutations usually lead to cancer. And so these I really didn’t I wasn’t aware of Lynch, even though it’s a quite prevalent 300 people have it.

So the population of prevalence is quite high. Most of the cases are. not diagnosed. And one of the reasons for that is because there is really nothing to offer to these patients other than surveillance. The, the, the thing about this mismatch repair deficient tumors is that they, they are not discriminating between organs.

So, They can give you colorectal cancer, they can give you endometrial cancer if you’re a woman, they can give you gastric cancer, ovarian and others, but those are the most common ones. So GI and GU. And if you are an, you know, lynch carrier, then you could have more than one cancer of the same organ or of different organs.

And so what these individuals usually do. Is undergo annual colonoscopies for colon, and then to monitor closely. And then women often undergo prophylactic surgeries after they, have decided not to have children anymore. And those are pretty terrible choices if you ask me. And so the idea that you can intercept, right, it’s, it’s not prevention, it’s really not prophylaxis, because it’s not.

a vaccine that you give to everybody, but you’re really targeting people who have much, much greater chance than of getting cancer versus normal population. And you give them the vaccine so that you induce T cells that will do the surveillance for you and then catch cancer with the vaccine. Or even pre cancer situations like neoplasia in case of colon cancer, which will then be kept in check and really reduce that incidence.

Philip Hemme: And in this case, it’s, it’s still an off the shelf approach. It’s an off the shelf. But it’s not in combination, I guess. Exactly. It’s a monotherapy. 

Marina Udier: It’s a monotherapy, exactly. 

Philip Hemme: And I think you will have some results on that one also. Soon though, you will announce soon. 

Marina Udier: We will announce soon results. So we have published the first set of 10 patients at the CITSI conference at the end of last year.

And that was an oral late breaking abstract that we received very well. The, the quality and the breadth and the potency of immune responses that we have observed. has really been unmatched with anything that I have seen, including our own metastatic data, by the way. And, and that has, and, and it was it was incredible because after that presentation and, and publication, we we started getting calls.

We just closed Serious C. We actually announced the close of the Serious C. Around the same time in November of last year at Jeffrey’s and, and people started calling like what is this thing? Can you tell me more about it? So we, we were busy, the, the lynch kept us busy both on the execution part because we of course wanted to see what the final data set will tell us, but also on the sort of looking forward side.

It’s an incredibly exciting topic to talk about. When 

Philip Hemme: I looked at your pipeline, I thought, okay, probably the phase two is the most important already, like, and close to a prior readout. But from what you said, it sounds like the two pillars, it’s two pillars, pretty. 

Marina Udier: It is the same asset, right? It is the same compound.

So it is the same. This, this, this you know, conglomerate of, of the collection of frameshift peptides or neoantigens. So these frameshift peptides are in our view quite important because they are, foreign to the immune system. They are they come as a result of a mutation that leads to a shift in reading frame.

So, you know, you lose a, a, a, a letter, you lose a base, and then as a consequence of that, you start producing. gibberish, right, which the immune, which your system doesn’t recognize. But it is foreign and foreign things are usually good, right? Immune system recognizes something that’s non self, right?

And then starts activating the right type of cells against it. So it is the same, information that is given, but in two very different situations. One. Where you treat a patient who has a disease, and in our case, this is in combination with Keytruda because Keytruda is the standard of care.

But in the other way, you can actually, you know, go into the high risk population and, and intercept that disease and lead to a lowered, potentially lowered incidence of that disease in the future. That is an incredibly. exciting possibility that we are quite actively exploring. Yeah. 

[00:26:04] $72M series C

Philip Hemme: Talking about the fundraising that’s, that’s one thing that I saw.

I mean, it was 72 million end of last year in 2023. Out of my memory in, in Europe, I mean, there’s not that many rounds of that size, especially. I mean, there was a vector, I think was probably the largest one was, I think it was a series a plus above a hundred million. But otherwise, I mean, it’s really large round and you have a long list of investors and top investors from before coming in the round.

I mean, one thing I can mention, I think I mentioned to you as well, is that Sophia from Andera came in, which. Yeah, I know her quite well and I, I, I like the company she invests in, the people she invests in in general but can you, yeah, tell a bit more on, on the, maybe even the, the investor story because I think it started, I mean, I think Vincent was pretty early on, Abingworth was pretty early on and then there’s a long list of other VCs.

So can you, yeah, talk about it a little bit? 

Marina Udier: No, I’m happy to. So, yeah. Nuscombe was founded in 2015 and it was founded by Versant and then LSP now EQT. And Versant and LSP were also investors in Okairus. Okairus was the company that has the same scientific co founders at Nuscombe and that was a great story also and, and success for the company.

For those two investors, in addition to a few others so Okairos was acquired by Glocks. So just a couple of, a year or two before Nuskum’s story began. So this is. Maybe also a rare story of repeat entrepreneurs in Europe. And so when the founding team came back and said, we have an idea to, you know, optimize technology, you know, cancer neoantigens have become sort of a hot commodity.

And Versant and LSP sort of jump on that and founded the company. I was actually a member of the Versant investment team at the time. So I heard a story about this. It’s phenomenal. Okairos you know, a success and Ricardo Cortese, who was the founding CEO of both companies. And, you know, that was kind of a myth, within, within Versant.

And I was, you know, doing my thing, minding my own business for the most part. And then I was approached by a partner who was sitting, a Versant partner, Guido Hermani, who was sitting on a board of Versant. newscom and say, do you want to, you know, they want to get involved and help out. My role was at the time both looking for new investments and working with the portfolio companies.

And I said, sure, you know, that sounds great. I came to this office and I spoke with Ricardo and I sort of said, well, you don’t need help. Like you need a full time somebody. It was a, you know, very much research organization at the time, maybe 15 people, all of them in Rome. Ricardo was the only one who was here.

So I said to him and to Versant, well, this sounds very intriguing, but I think they really need a full time help. And so one thing led to the other. I became that full time help. I was hired as the chief operating officer at first. Versant at the time and LSB put in 12 million seed funding or series A, I think it was 

Philip Hemme: called.

Full time was. Small, but not that small. 

Marina Udier: Not that small. Yeah, it was meaningful. I mean, it, you know, it lasted for a good couple of years or even longer. And then sadly Ricardo passed about a year after I joined the company in 2017. And Alfredo Nicosia, who was the the CSO of Akairos and he was then the CEO of Newscom Alfredo and I really you know, hold hands, held hands and raised in 2017 the 42 million Euro Series B.

That’s where Abingworth and 5AM came in. And we then didn’t raise. until last year. So that was quite a long time. And the reason for that is because A. we had non diluting funding from a collaboration that we have with Janssen or J& J. J& J Innovations, I think it’s called these days. They were quite fond of our technology and our approach and our manufacturing capabilities.

And the this, this is disclosed now, but we have had a multiple collaborations, license and manufacturing collaborations over the years. And one of those programs actually entered a clinic in 2022. So that combined with our capital efficiency really allowed us to stretch the, you know, the money and actually generate clinical data.

I think what was, you know, we went out really at the you can argue at the worst possible time in, in biotech industry, but you know, you need money and you know, you have to go and get it. So I think the few things came together for us in that fundraise one was that we actually had clinical data. I think if we were a sort of a, a tell me story, then it wouldn’t have gone that, that well.

We were a show me story. So we had clinical data, we had good plans. As I mentioned, we, we wanted to run the right study. To really show that a compound can work. We had a team that’s with a track record of execution. And we had supportive investors who carried us not only through all those years, but actually actively participated in new financing.

And so we were very pleased when in spring of 2023, we got a term sheet that was a big deal. And we brought in as you said, a long list of investors because once we got one term sheet sort of everything started coming together and, you know, all the investors we talked to and who were interested, but kind of, you know, decided either to sit on the sidelines or were taking their time.

They all of a sudden jumped in and said, well, you know, I want to be a part of this story. So we upsized the rounds from the original target. We, we, we were up to raise a little. But we closed at, as you said, 75 million. And actually this was extended earlier this year to, to something like 83 plus, with the addition of of Angelina Ventures.

So we, we are quite happy that a. We were successful in in closing the round, but not only that, that the round was upsized and allowed us more capital to do potentially more things. And last but not the least, the quality of investors, as you mentioned, Sophia and Andera partners, M Ventures, BPI, France, Indacost, Angelini.

XGen, I mean, these are really really good quality European investors that, that sort of nicely compliment the, the syndicate that we have in place. Yeah. 

[00:33:35] Managing a biotech board

Philip Hemme: I said, yeah. And I saw you I mean, coming with having a long list of investors, you have a lot of board members. 

Marina Udier: We do have, we do. 

Philip Hemme: I think you are one of the board, the largest board I’ve seen in quite a few biotechs.

I think it was how many, like 12 or something. We 

Marina Udier: have nine we have nine board members and then we have a few observers. 

Philip Hemme: That’s why they’re all listed on the website. 

Marina Udier: Yeah, exactly. So they’re all listed, but the board is technically nine people. I mean, the, the serious thing is, B board was eight. So you know, from eight to nine, it’s not that big of a deal, but, you know, you’re right.

And, and I was just on a panel this earlier this week related to another event and, and it was about biotech boards and, you know, the questions started with you know, how do you choose your board? How do you compliment the expertise? And the first thing I said was, well, when you’re a private company, your shareholders are your board.

We are lucky to have in addition to our shareholders, also an independent chairman. Who who I work very closely with and, and who has been really fantastic support over the last years. And we also have, another independent scientist who has been with us basically since the beginning of the journey and, and who really, really understands our technology.

So it works. I guess that’s the most important thing. It’s big, but it works. 

Philip Hemme: I’m curious about the boards of other, of the other lessons. I mean, some of, I think, at least Abingworth, they’re not on the board anymore. No, no. So you have replaced over the years. Even if the investors, you have prioritized new investors, I guess.

Exactly. 

Marina Udier: Yeah. I mean, this, this is more of a shareholder matter as, as I believe is, is common. So you can not just add and add and add but you know, we, we did keep most of the board members from before. We have replaced some and we added more. 

Philip Hemme: Can you, yeah, share a bit more on the, on the board dynamics, because I think, I mean, board in every, every company, most companies have a board, but it can mean like very different things.

I mean. in a publicly listed company, like whatever, Fortune 500 is very different than in a biotech, private biotech, than in a startup, than in whatever. But in biotech, I think at least my understanding is that the investors are also pretty active, pretty hands on boards as well. So can you elaborate a bit more on like, what’s the dynamics for, for your board and how, what were some of your lessons there?

No, no, no, no, no. 

Marina Udier: Yeah, there certainly are a few. So we operate through, through subcommittees we have three subcommittees that are looking at different areas, RR& D. clinical strategy, finance and audit committee, and we’re having an enumeration committee. So the committees do the work and we, we really quarterly, right?

We update the committees on what’s going on and where we need decisions. And then The chairs of those subcommittees then with the team, right, with me, and it’s a subset of the team then present to the board. And for the most part, this works reasonably well. Of course the new board brings in new dynamics.

So kind of the board has to get to know each other because some of the relationships are known, but in that context, rights. Some of, most of the relationships are new. So in the beginning I had to put an extra effort to just make sure that we are on one hand comfortable with the, you know, information and communication.

And on the other hand, this doesn’t become sort of a problem. My only focus because you know, there is a balance to be made there. And I think when you, when you talk about a series C company that is running a global phase two trial, you have to believe that you have a management team in place who knows what they’re doing.

Right. And the board’s role is to, oversee that and govern that and, and, and pressure tests, but actually not around the company because that’s the management job. We have a management team of seven. It’s a quite fine line. It is a fine line. It is a fine line. And, and at times there have to be perhaps some reminders of that.

But again, As long as we actually do what we say we would, then that trust, right, starts building. And then You create the trust over time and so on. You create trust over time, right? If you’re credible, if you do what you say you will do and you do it consistently and over time, right, then the Board, different board members become comfortable.

And of course, some things are easier done than others. You know, there, there, of course, are always questions, you know, how about this? How about that? But you mentioned word focus a couple of times. I do remind occasionally board then, well, we can do all of that, but you know, our priorities are one, two, and three.

So it was funny. There was one board meeting when I literally said we can do. Three things, well, and you want us to do four and you’ve got to choose, right? And we chose. 

Philip Hemme: I 

Marina Udier: like 

Philip Hemme: that. 

Marina Udier: And we chose. I mean, again the board is here, I think nobody on the board is here to be intentionally unhelpful or disruptive, not at all.

But they are curious, right? And they’re excited about their new investment and they want to see data and, you know, they, they, you know, they, they want to be in the loop. So, so it all comes really from good place. And again, my job is to kind of. Consolidate all of that and say, all right, we are going to address this and this.

It’s 

Philip Hemme: funny. I’m laughing because I have a similar experience with Applied Biotech with my balls, where when you, I, at least my experience, when you bring a lot of smart people in the room, obviously everyone has smart questions to ask and everyone has smart inputs, but you can rapidly discuss things that are not quite, so we, we learn quite a lot of like, what do we, Even put on the agenda or put on the slide because once it’s on the slide, it’s on the screen and there’s everyone watching for sure you will discuss it.

Exactly. It’s not necessarily the most important. So that makes me laugh. 

Marina Udier: I had maybe I had some training early in my career to, to prepare for that. And that was from my days at McKinsey. So I I went from grad school to, to a consultancy and of course this was a very different world. And the way that the teams operate within McKinsey, you have sort of a team that is a full time on the study and, and, you know, they kind of collect everything, they, they’re in the positive of all the knowledge and then you have partners who waltz in, you know, a day, a week and, and kind of, you know.

Give support to the team, senior support to the team. But to your point, right, like these people are smart. They have seen a lot of things and unless you’re careful, they can easily become a firing missile. And if they’re undirected, then that leads to explosions left and right. So, one of the things that I was trained on is to control for that or at least try to aim for that in the right in the right way so that you get your attention to where you want it.

Because we, you know, we do have, as antibiotic, we do have hard questions to solve. I think it would be quite, interesting, right, to claim that you can do everything yourself. Not at all. There is a reason why you want all these smart people to help you. So what I am trying to do is really focus people on the problem that I have.

Sometimes that requires answering the questions that they have, but you know, I, I am not shy in asking for help whether that is on the content or on, you know, I want to talk to so and so and you know them or whatever it is. I think the more you can use your board in a ways that they help you the better.

Because if not, they’re going to come up with questions of their own and, and then you will have to deal with that. 

Philip Hemme: That’s a good one. 

[00:42:22] Personal story of Marina Udier

Philip Hemme: It’s also a really good transition. I wanted to go a bit on the, on your personal background. I mean, you mentioned McKinsey. You, I think you are originally from Croatia, right?

Marina Udier: That’s right. I was born there. Yeah. 

Philip Hemme: Yeah, you’re born there. And then can you elaborate a bit more on you went, you, I think you started, Oh, you, your undergrad, I don’t remember where your undergrad was, but your grad, you went to the U. S. So you got, can you, yeah, a little bit on the, on this transition? How did all that 

Marina Udier: happen?

Yeah. So I, I was born and raised in Croatia and I actually finished my undergrad there. And my major was computational chemistry. And that was a pretty new field 25 years ago. And I was eager to, you know, go and learn and study under somebody who was. World class, so I was very determined to, you know, do something with that.

And so it was a very interesting process back in the day when, you know, internet was still, I mean, emails existed, but I remember having all these envelopes on the table with all these paper applications, et cetera. Long story short, I was accepted to quite a few actually graduate programs and one of them was at Yale with Bill Jorgensen, who was, you know, quite a name in the field of computational chemistry.

And so I didn’t. Yeah. And it did take a lot of arm twisting to, to make that call. I mean, it was a big decision to pack up. It must have 

Philip Hemme: been really hard to get this graduate position. I mean, I can imagine, at least also a bit my experience of finishing my studies in the U. S. and I’ve seen it’s, it’s possible, but it takes 

Marina Udier: It’s a fairly selective process.

Philip Hemme: Selective. And I can imagine the 2000s must be 

Marina Udier: Yeah. This was the 99 actually. Not 

Philip Hemme: just internet, but also Maybe the world was a bit less open. I mean, Croatia was not part of Europe. You have quite some We 

Marina Udier: were coming out of the, out of the over in the, in the early nineties. So yeah, it was, I mean, if I knew at the time, all of this, I would probably maybe be intimidated, but you know, when you’re young and you just don’t know any better, you’re kind of naive and you’re like, well, that sounds like a great school and I have good grades and you know, I will go and take a couple of tests and fill a few forms and go for it.

And I was thrilled I still actually remember the day when the Yale letter came and I was like, Oh my God, this is happening. And those five years at Yale were probably one of the best that I remember because you’re, I haven’t just been growing as a, as a professional actually. literally was discovering the world you know, beyond this small country sort of in the middle of Europe.

And, and this was fantastic. And you know, of course I didn’t know what McKinsey was not only when I came there, but not even after. But they showed up on campus one day when I was you know, close to finishing my PhD studies. And, I kind of got intrigued by the value proposition that they put out there.

So. I went through another fairly selective process again, probably I didn’t know any better. I was just, well, let’s see what happens and what this fuss is about. 

Philip Hemme: Maybe it was less big than it is now, Mackenzie, maybe, or like, but still. It was 

Marina Udier: pretty big deal, but I think what Mackenzie was doing at a time is putting more emphasis on recruiting non MBA students and, you know, sort of putting focus on so called APDs or advanced professional degrees.

That’s why they want to. Some schools and their Ph. D. departments or law departments or med school students and they figured that the training that you get in those disciplines actually is quite useful in business. And it just offers a different way of thinking than candidates and people who just kind of grow through, through a business school.

So I think they, they were trying to increase that football. Yeah, more technical as 

Philip Hemme: well. 

Marina Udier: More technical and 

Philip Hemme: just You did it for, I guess, for some projects or strategy projects. 

Marina Udier: Yeah, it 

Philip Hemme: More analytical, you mean. 

Marina Udier: It was analytical, but it was also just the whole problem solving process, right, is different for a scientist than for a non scientist.

And I think McKinsey believe that there is a value in that when you have some knowledge and you learn business, that that can be a very powerful combination. And I, you know, the, the five years that I spent at McKinsey in Chicago were, were also a great learning. I really look at those as, as training, really.

Training on the job. So instead of going to business school, 

Philip Hemme: Training over training over training. We keep learning. 

Marina Udier: Indeed, 

Philip Hemme: indeed. 

Marina Udier: And so, but consultancy is a consultancy, right? You are kind of a guest somewhere and, and you you know, work on a problem, but I never got to see any of my projects being implemented.

And so after some time I, I wanted to actually work in, in the industry. I wanted to have an operational job and that’s when Novartis sort of came into the equation. I also wanted to be back in Europe for personal reasons. Yeah. So you did 

Philip Hemme: 10 years in the US 

Marina Udier: and 10 years in the US. And so it kind of felt like it’s time to, to come back at least on the continent on the same continent.

So that’s what brought me to Basel. And Novartis was a really, a great part of that journey. I, I spent now 14 years in Basel seven were with Novartis and the rest was with Vercent and Nuscombe. Yeah. Yeah. 

[00:48:17] Transition from Novartis

Philip Hemme: And how, how was it, did the, the transition from big pharma to, to ver, I mean, to cent, to , I guess, must have been also a pretty big decision for you, right?

Marina Udier: It was I I love Novartis, you the 

Philip Hemme: Yeah, yeah, yeah, yeah. Cent, they have quite a few ex 

Marina Udier: excellent 

Philip Hemme: Novartis ex pharma. 

Marina Udier: Yes. No, the 

Philip Hemme: Gado was also. 

Marina Udier: No, Guido was ex Roche but he, he was at Versant for, for quite a while before I came, but you’re right, Claire and Carlo and, and Gerald have been either at both McKinsey and Novartis, or at least at one of them, I don’t know if that was by design, but I was actually recruited by one of them out of Novartis, which, which I liked.

I mean, I, I learned a lot. I worked in areas of. Neuroscience and oncology. I was in commercial roles. I was in development roles. You actually learn how the whole thing works. But a big company is a big company and I actually was starting to get a little bit irritated by constant push to choose your path, right?

I was selected for this executive female leadership program that David Epstein sponsored and caring about very much. And I was being given advice that I should really. Choose whether I want to be a commercial person or developing person. And I was like, but I kind of want to do both. And that, you know, that was one of the factors that sort of kept on coming up in, in, in all the discussions.

And it was really the opportunistic, right? Verson was growing their office, their presence in Basel. At a time, I believe they, they thought that the science in Europe is of very good quality and they can do good deals here because of the, you know, different valuations And so it was a big decision to, to do that switch.

It wasn’t maybe that difficult. It just felt very natural. I was very intrigued by being able to think about science again because, you know, I didn’t really think about science. It was more about. You know, commercial and putting things together, navigating the big organization, getting your stuff done within that context.

So I really, I was lured by this, okay. You work with different, with smart people, but a good team, you, you do a lot of interesting things, earlier stuff, science. So I was lured by that. And I’m also glad like the transition to Newscom was, as I said, a no brainer almost because I knew the team, and, and I liked them instantly.

There was a very good chemistry between us and we’ve had a lot of fun on the journey. 

Philip Hemme: That’s amazing. I like how always and often when you look at, look backwards, how things connect. And after things, I guess how things make sense always backwards and in your story. I mean, there’s so many things that are very connected.

Marina Udier: It is. And in hindsight, it’s easier to explain and some, some choices and rationale. At the time, not everything was so obvious and you, I had to be a bit brave and, and a few of these cases or crossroads and just believe that you can do something. You know, both moving across the world, right, was the first one and then You know, leaving everything, you know, behind, right and, and going into this world of business was, was a, was a shock at first because you just, you know, you’re, you’re an expert of something and then you’re kind of in kindergarten the other day.

It’s you know, it’s it takes some humility to, to go through that. 

Philip Hemme: I can imagine. So I think it’s a great inspiration, great story for us so far. It’s a younger audience, so someone in their 30s or still is dating or where to go. But I think what I’m thinking as well, I mean, also in my case, it can be a bit intimidating as well to, to see, okay, or like to already know how this past can work.

But I think for your case, what you mentioned is like, you didn’t know. Or you didn’t calculate, okay, I will go first to McKinsey and try to do consulting, and then I go to a big corporate, and then I go to start, I mean, at your time, maybe there was less access to information as well, but I think sometimes a bit of naivety and not knowing too much, maybe can help.

I don’t, I mean, I don’t know. 

Marina Udier: I mean, I think you have to have also a little bit of luck along the way for the right thing to happen for you at the right time. I mean, luck is also useful in, you know, in fundraising, you have to have, you have to have a little bit of luck there. As I said, we really went out at the right time, but it’s funny 

Philip Hemme: when you, when you mentioned the, some of the, the Moderna data.

I, I wrote down like timing that we could discuss those because, 

Marina Udier: no, it’s you know, People ask me, what’s your secret, right? I got a lot of calls and a lot of questions, like, how did you do it? And you have to have the fundamentals, right? You have to have a good story. You have to have good science. You have to have data.

You have to be a good team who, because investors are investing in, in technology and teams and people, right? Somebody has to actually execute it and you have to have a little bit of luck. 

Philip Hemme: I 

Marina Udier: mean, that’s something that I don’t know how you quantify, but. You know, it kind of has to happen and doesn’t always work in your favor, but in our case it, I think it did.

[00:54:00] Luck and timing in biotech

Philip Hemme: The quantifying is a, it’s, it’s a topic I’m thinking about quite a bit at the moment. I mean, just as we discussed as well, I mean, the podcast. Just, and what we discussed, the market in biotech right now is, is not great. And so even for the podcast, I mean, having the guest side some guests are not in a good situation.

They don’t want to talk at the moment, but that’s okay. But more like for us, so advertisement budgets are just basically not there at the moment. So that’s That’s tough, but it’s very hard, I think, right? Maybe you can elaborate on this as well, or you’ve had this experience as well, when you, when you have been lucky, then you can recognize it was luck, but when you’re Let’s say unlucky, unlucky sounds more like an excuse and sounds more like, it’s, I think, I feel like it’s hard to, and to find that balance and to quantify it.

Marina Udier: Yeah. It’s, it’s really hard, but you know, I think the word that I used when I was describing this was a tailwind. It’s, you know, it’s sort of like a nice. Nice, you know analog from our daily life, because we’re on airplanes all the time, right? It’s a tailwind or a headwind. You just get a little bit of a push.

I mean, still, you can have all the luck you want if you don’t have a good fundamentals and a good team and a good data. It won’t work either. But some companies, to your point, today or these days are in a difficult situations and, and there is nothing they’re doing wrong. 

Philip Hemme: Yeah. 

Marina Udier: It’s just that, you know, investors are being peculiar, they’re, they’re looking for more specific things, they’re taking their time.

You know, we, I think we did raise our round in a reasonable amount of time, but you know, the B round was much faster from big meeting to a term sheet to, you know, a contract was faster. Okay. It was a smaller syndicate, but still you know, decision making process was different. So it is tough out there and some are not going to make it and, and that’s maybe not due to anything that they’re doing.

[00:56:10] Headwinds, Tailwinds

Philip Hemme: Yeah. I like this tailwind, tailwind. I like a lot to do the fundamentals and do what’s in your control. Do it well. Then the rest is, I mean, Inshallah, whatever. It’s tailwind, headwind. A lot of things are out of control and you can put that, like, out of control as luck. I 

Marina Udier: mean, as an entrepreneur or, or you know, a biotech executive, you kind of have to have that mentality because.

By definition, you don’t control everything, right? You don’t control the markets, you don’t control investor sentiment, you don’t control interest rates, you don’t control geopolitical, you know, nightmares. There are a lot of things you don’t control, so you kind of have to really believe that if you do things that you can control right, that You know, this will lead to something and it helps to kind of have and focus on near term things.

And it’s really like every day you kind of get up and you do stuff until you, you can’t, right? Like, you know, if you come up against the wall, then you either find a way to break through or go around it or you don’t, right? And, you know, it’s a, it’s a, Different mindset than in a big company. And I found this environment to suit me better.

Some people are struggling with making that transition because there is something about the comfort of the pace of the big company and support, right? You’re a phone call away from anything that you want. Whereas we have to be a little bit creative in how we. find information and how we figure things out.

So in some ways it’s a bit, it’s a bit personal. 

Philip Hemme: Yeah. It’s a good, that’s a good transition to one thing you control is focus, at least I think. 

Marina Udier: Yeah. You decide what is the priority. 

[00:58:13] F O C U S

Philip Hemme: So can you, I think you, you mentioned it a few times and I think you are Well, I was quite surprised that you have a pretty small team for such a, running a global trial.

And I guess this comes automatically or you have to be more focused, I can imagine. I know. Can you elaborate a bit on, I don’t know, you yourself or some examples of yourself where was focus or of the team? Yeah. Where are some examples that show that you’re Or some learnings on the focus side of things.

Marina Udier: Yeah. So we, we, I mean, we are now a team of about 60. We grew since the, the financing closed, but to your point, right, if you’re on a global trial in six countries and 40 sites, then, you You know, this actually is not a lot but we do have most functions, most functions that you would expect to have in a company of our stage from research to clinical to technical to finance and business.

And I’ve been incredibly proud of of the organizations that we have built and the team that that is in place now. And, and most of them have been with us for, for years, So, so that’s been terrific. And the best example of focus I can give you was last year, right? We. We had to raise money.

And that was the only thing we had to do. And we were doing that and running the trial, right? Like we sort of put everything else a little bit on hold and put all of our energy into executing the trial so that we have, because that was part of the story the, the investment story. Just having this, you don’t want to pause a trial.

How long? You don’t wanna, you don’t wanna pause a trial? No. Because we really believe that it’ll work. And going in a very disciplined way after investors and telling your story and moving that process forward. Following up not being discouraged or disappointed. Right. Because this was even with our.

ingredients that I believe were good that we had. It was not everybody’s cup of tea, right? For some we were too early, for some we were too late. It’s just the, the nature and so you just kind of have to, you know, let that go and don’t be discouraged and just keep on going. So things were simple. Simple, but difficult.

Philip Hemme: Yeah. 

Marina Udier: We have a little bit different problematic now, which is we have possibilities and we have capital that we can put to work behind those possibilities and you have to make choices. And here you have to, as I mentioned, one of the discussions I’ve had with the board this year was, you know, they wanted sort of everything and I said, time out, right?

We can do this and this and that. So that’s what we can do and that’s what I can promise. This doesn’t work, right? So we need to think about, right, how do we do that? And what do we not do instead? And they understood that. So prioritization is something you have to do in biotech. You have to always say 

Philip Hemme: no to a certain, 

Marina Udier: always make sure that you’re spending your time on the right thing.

And in my case, I always have to spend time on things that nobody else wants to spend time on. Either because they, they won’t or they can’t. I think you’re self selecting a bit in this job for, you know, dealing with problems which are not always fun, right? I mean, sometimes they are, I sometimes get pulled into fantastic discussions, but sometimes you’re left with, you have to get it done and if it’s not get done before it comes to you, then, then you sort of have to tackle it.

Philip Hemme: But I, I, I, one, one, one thing I like a lot on, on Focus are on sentences. Saying yes to something is saying no to something else. And when you think it that way, then if you take the list of four things, if you say yes to four things, you say no to, or like, you say no to something else, or then, 

Marina Udier: because you know, the, in biotech execution is really key because it’s, it’s time, right?

Time is your worst enemy in a way, because everything is always, you know, are you on time with this? Are you on time with recruitment? Are you on time with data? And if you’re not, then it’s a problem so time is, is a precious commodity and we are very mindful about that our, our CFO there was a meeting in which our CFO, she actually calculated how much it costs, a meeting, like it was a two hour big meeting.

It was a preparation for something and, you know, sort of unprovoked, she said at the end. Well, This just cost us X, you know, I don’t remember what it 

Philip Hemme: was. Thousands of viewers at a two hour meeting. 

Marina Udier: Yeah. So she said like, let’s just be clear. This is what this costs us. So it, you know, you better turn up.

You better make the most of it. And we also value in person time. You know, we are a, we’re a global company, right? We are present here. Our, our footprint is in Italy. Lab and manufacturing are in Italy. We have a finance team is well, part of the finance team is in us. And we have a few people also in UK.

So we are a global company. And some, most of us met this week in Rome. And we do. treasure this time in person because so much can get done effectively when you’re actually sitting like this and looking at something and, you know, drawing on the whiteboard and, and not just staring at the zoom screens.

Same for the 

Philip Hemme: podcast, like having a conversation offline is like, it’s not comparable to, I do a few online, but it’s really not the same. 

Marina Udier: Yeah, no, nothing. It really cannot replace but I think we learned to, to also leverage the, the virtual meetings in a better way, right? And before COVID, you would get on a plane for an hour meeting in, in the U.

S. And now you Expensive meeting. Especially in time of the pandemic. Very expensive meetings. And some meetings you probably should, but maybe for some, maybe not for all. It’s good 

Philip Hemme: to have the options, I 

Marina Udier: guess, 

Philip Hemme: to 

Marina Udier: Yeah. Hybrid. 

Philip Hemme: Hybrid. For the, for the funny story and for such a topic that I, I, there’s a company, I think it’s called Shopify in, in the U.

S. and in their agenda They put the cost of every meeting automatically. I don’t know how precise it is, but basically every meeting, one hour, you will see if you invite eight people, we’ll see the costs. And then you think first you will think before sending the invite. I remember, 

Marina Udier: I was in a meeting at Novartis with David Epstein.

It was, it was some sort of a, you know, presentation to the public. to the PEC, the Pharma Executive Committee. 

Philip Hemme: It was the CEO of Novartis Oncology. 

Marina Udier: He was the CEO of Novartis Oncology, but then he was the CEO of Novartis Pharma. 

Philip Hemme: Yeah. 

Marina Udier: And he calculated that in disease area X, that was discussed that a patient dies every, I don’t know how often.

And at the end of the meeting he said, a patient just died, you know? And What, you know, what are we doing? I mean, you know, he, he was I think rightfully calling the people and instilling the sense of urgency that, you know, running around Basel and sitting in boardrooms and flipping through PowerPoints is, you know, needed to, to bring people, but, you know, he was really trying to say, this is real, right?

People are dying every day from this from this condition and we have something that might help and. You know, how are we getting it out there? I think he was, he was real. He really lived his passion. And I think he still does. 

[01:06:33] Gender diversity in biotech

Philip Hemme: Maybe one kind of last topic before the last part, I want to talk about gender diversity as well.

I’m, for the podcast, I’m trying to bring a bit more, I mean more diversity on the show. And it’s been not that easy but I’m glad I had amazing female and also ethnic diversity on the show. And one, one stat, and to be honest also with you it’s not easy to find, especially on CEO positions, female CEO.

So I was super excited to talk to you as well. And to hear what you, what you like, yeah. How do you, how do you feel about it? How, how is your experience like, like, yeah. 

Marina Udier: I think Dooscom, it’s a very special company in that way because not only is a female led, but most of our management team is female.

We have two male executives and five female executives and the vast majority of our people, of our employees are female. I think it’s 80%, something like 80%. And so this is a bit going in the, in the other direction. And I have to say, I, I didn’t, like, I didn’t, first of all, start that when, when I joined Newscom, it was already like that.

You know, Ricardo and Alfredo were around, but most of the people in the company were women. And I remember asking Alfredo, how come? And he said, They’re great. And, and some of, most of them actually were his former students or postdocs or people that kind of followed him around. And as we built the company I, you know, I was always focused on getting the right people in the job.

But I was happy when, for example Tiffany joined us our CFO she actually recruited her when she was in Basel. And Loredana, our, our head of manufacturing and, and CMC, and they have, they have started recruiting. You know, women and we are even have been even joking to say, well, are there any men qualified for this job or what’s going on?

So our environment, I think it’s quite special. And we have created, you know, place and conditions that can support that because our organization is also quite young. I think the average age is about 40, and that carries with itself, right? Of course certain things that you have to work with and, and, you know, have flexibility for.

The, you know, that is, of course, in contrast with most funds that you meet with most you know, investors that you meet. So I, I kind of, you know, have seen both sides of it. I have, I have not in, in the early part of my professional journey, I really didn’t think about it too much because McKinsey, for example, was such an, you know, meritocracy.

That all that matter is what you have to say about something, irrespective of your, your tenure, irrespective of your gender, irrespective of anything, right? All they cared about is can you add value to this problem solving and actually push everybody. It was, but it was very specific also to the culture of the company and the focus on people.

So I, I really didn’t think about it a lot at the time. And then as I said, I was quite fortunate when I was at Novartis to be You know, selected and recognized for this program that I mentioned, this executive female leadership or EFLP, where you know, I, I connected with a group of female leaders and we each got a sponsor.

I’m usually a male sponsor because that was the composition of the executive team who was, whose job was, and it was deliberately called a sponsor, not a mentor because their job was to sponsor you. In the organization. So I felt quite privileged to have had opportunities to work in environments that either recognized or cared for, for equality and for diversity.

Biotech is a little different because again I think, funds are still predominantly male, although, you know, there is some diversity there. I was actually just this week with one of my investors and I was happy to see that they’re 50 50. That’s quite unusual. Yeah. But they are predominantly male, especially the senior level, exactly the partner or the managing partner level.

And, and, you know, whether we like it or not, then you kind of, you, you support what you understand or like or, or know. So I think the change has to also come through, you know, in the, in the investor groups and communities. even before or in parallel as it comes to biotechs and private biotechs in particular, because you don’t have any NASDAQ rules or you don’t have any other, you know, government mandates what, who you have to need, have on the board and, and, or the management team.

So, you know, I have kind of gotten into a situation where you know, diversity is not only welcome, it’s kind of a way of life or it’s, or it’s even dominant. But it, you know, I was in a situation where this was not the case. And so I was made aware of that. I have two kids that are both girls. So I think about that also in the context of, you know, the next generation and, and, you know, what the world will be like for them.

And, and hopefully. easier than what it’s been for me on what is for me. 

Philip Hemme: It sounds like it’s still overall a pretty positive experience, because I heard some stories where it’s really not that positive and it’s very sad to hear actually. 

Marina Udier: No, I have to say I was, I was fortunate in that sense that for the most part I was supported and, and you know I think it comes from, again, your credibility and your ability to actually get the job done and deliver.

And once you do that, then, then this kind of comes a little bit a little bit to the background. 

Philip Hemme: It comes, you can, we could have a focus on the fundamentals, whatever your gender thing, if you focus on the fundamentals, I think it probably helps. Yes. Yes. I wrote down as well, I heard from at bioequity, there was a, I think it was from McKinsey actually, a report that in private biotech in Europe, only 11 percent of female CEOs, which I found first, I think was pretty representative from accurate to what I’ve in mind, but it seems very low.

I think it’s also, I mean, how do you feel about the change also? Because I think it’s, It’s changing, but maybe not changing fast enough, but I feel like there is some change. 

Marina Udier: It is. There is progress. I have, I have, a network of, peers in Europe and in U. S. and of course you kind of self select, right?

And, and it gets developed over time. And it’s very helpful and it’s very helpful to have. Peer group full stop, right, of, of of CEOs in general, because it is a very peculiar job. And, and when people, I remember when I, you know, was earlier in my career and I was reading like, oh, it’s lonely.

I was like, well, how lonely can it be, you know? But it is lonely at the top because there are some things that you really cannot talk about with anybody, you know, not your team, not your board, you kind of have to figure out how you’re going to. Approach certain things or how are you gonna, you know, solve certain situations or even how you yourself, how you give yourself energy to go through all of that so that every day you break through walls and, and, you know, not sort of get, get stopped by them.

Yeah. And so it’s helpful to to have that kind of support group, that peer group where you can call somebody and they know exactly, right, what you’re going through. And I have a few of those where I can just text and say, can we talk? And, and, you know, they immediately know, okay, you’re up to something and you just kind of have to get it out.

And at least hear that you’re not completely insane and that, you know, you’re thinking about things in the right way. But yeah, to your point on the, on the female numbers, I, I think, I think we could do better, in biotech in general and in private biotech in particular. And I, I, you know, I, I really welcome welcomed Sophia’s participation in the board.

Not just because she’s a Vaughan, but she’s actually a great board member and she is you know, helpful in, you know, sparring and thinking through some ideas. So again, it’s just a different way of it’s a different dynamic sometimes. 

[01:16:01] Quick fire

Philip Hemme: It’s great to, to finish. I have done that for episode 20.

So you will be the second time. It’s kind of a quick fire, just some yes and no simple questions and some, or one sentence answer. What’s your. What’s your favorite biotech book? 

Marina Udier: My favorite biotech book is Bad Blood. 

Philip Hemme: Bad 

Marina Udier: Blood. Wow. 

Philip Hemme: Quite a story. That’s quite a story. The Stalinist story here. Yeah. What’s on top of your mind at the moment?

Marina Udier: What’s on top of my mind at the moment is actually our Lynch study and how do we turn that possibility into a real opportunity for, for us and for patients? 

Philip Hemme: What’s the let’s see here. What’s favorite? But what’s the most impressive drug on the market for you at the moment? 

Marina Udier: At the, well, I mean, obesity drugs are certainly making a lot of headways.

Not exactly my area of expertise, but they seem to be quite popular. 

Philip Hemme: Is Bazel, is Bazel the is Bazel the best biotech hub in Europe? 

Marina Udier: I would say yes to that even though I was I was told ahead of time, do not get yourself fed into yes or no questions. I would say yes to this one I’m, I’m actually involved with a biovalued organization here.

So. It’s pretty good. 

Philip Hemme: Yeah, I think 

Marina Udier: if not the best it’s pretty it’s at the top

Philip Hemme: How much do you sleep per night 

Marina Udier: seven eight hours? Yeah, I’m trying to keep a healthy balance 

Philip Hemme: for serious, but she’s good and who is your but one of your biotech heroes 

Marina Udier: ah It’s hard. It’s hard to choose to choose one. There are 

Philip Hemme: There 

Marina Udier: are many, there are many. 

Philip Hemme: I 

Marina Udier: mentioned David, like who is of course very famous, but I’m actually going to add another one who is a friend and maybe not so well known, but Paula Reagan.

She has, I met her when she was building the company that was spun out of Sanofi and she actually has put a drug on the market. So I’m very inspired by her story and she did it in a, again, very, 

Philip Hemme: you know, 

Marina Udier: in a, in a typical Biasic way, but she’s my, my personal my, somebody that I admire a lot.

[01:18:37] Thanks for listening

Philip Hemme: Great. I think that’s a great way to finish the 

Marina Udier: Thank you for that fire drill. It was fun. 

Philip Hemme: Great. Thanks a lot. 

Marina Udier: Thank you, Philippe.

Philip Hemme: I’m impressed by Marina’s story. How it mixes curiosity, perseverance, humility, and a dose of luck. I’m also impressed by the new SCUMM platform, especially the, I mean, the Phase 1 and the Phase 2 running. And I can imagine in 2025, there could be a big value inflection point, especially if the clinical results are positive.

So keeping my fingers crossed for her and for the team. If you have enjoyed this episode, please hit the like. below review button. Any of these actions would help more people get access to this podcast. If you want to see similar videos, please check out the channel where we have many more. I would be also curious to hear what you think, so you could comment wherever you are or shoot me an email at philip at flood dot bio.

All right, thanks for watching to the end and catch you in the next episode.

Harpreet Singh, Immatics 🇩🇪 | PRAME, TCR Based Therapeutics | E20

We’re in Munich 🇩🇪 with the founder of one of the 15 most valuable European biotechs, Harpreet Singh of Immatics.

We talked about the field of PRAME receptors, TCR therapeutics and cell therapy at large. We also talked about the combination with mRNA therapeutics and his upbringing in a Sikh family in Germany.

🔗 LINKS MENTIONED

Labiotech.eu | “Interview Harpreet Singh – Why Being in a New Field From the Start Can Pay Off in the Long Run”, Sep 2019

Flot.bio | “Bahija Jallal, Immunocore 🇬🇧 | Commercial, Diversity, and AI | E14”, Mar 2024

Edwin Moses | How to Build Large Biotech Platforms (like Ablynx) | E13

ApexOnco | Immatics’ PRAME gift keeps on giving

Transcript

[00:00:00] Intro

Harpreet Singh: We think that these are keys to make solid cancers accessible to immunotherapies, because TCRs can tap into the intracellular target space. 

Philip Hemme: Quite a lot of scepticism in Cell Therapy. 

Harpreet Singh: Well, it matters so much whether you get it right. This is true for every type of drug, but for cell therapy, you have a relatively high cost of goods.

And so you have to give something back in return that is so mind blowing for physicians, patients, for payers. Look, valuations and market capitalizations are somehow subjective. I would argue that the way they’re determined, maybe not an exact science.

Philip Hemme: Yeah. I’m new to the new episode. I’m your host Philip. And on this show, I’m interviewing the best Europeans in biotech to help you grow. There are 14 biotechs in Europe that are worth a billion dollars or more. The number 12 is Immatics. In the year 2000, Harpreet co founded a company in Tübingen, Germany, just after his PhD.

It now counts almost 500 people, now also spread across Houston and Munich. So while I was in Munich, I caught up with Harpreet. We’ve known each other for a while, but it’s actually the first time we met offline. He has one of the deepest commitments for patients, while being super sharp, but also honest and fun.

So we talked about the PRAME receptor field, as well as TCR therapeutics and cell therapy at large. We also talked about combination with mRNA therapeutics and his upbringing in a Sikh family in Germany. So here’s my conversation with Harpreet and if you’re enjoying it, please hit the like and follow button.

Harpreet Singh: Welcome to the show, Harpreet. Philip, it’s a pleasure to be here. Thank you very much for having me on your show.

Philip Hemme: Yeah, it worked out. It took a bit, but we made it.

Harpreet Singh: Excellent.

[00:02:00] PRAME & TCR space

Philip Hemme: I want to start with the PRAME and TCR space. It’s a very hot space. You guys are one of the world leaders. There’s also quite strong competition and actually one of your main competitors is Immunocore, and Bahija was on the show a few episodes back.

So I’m curious to hear, let’s say your side of the story and how you differentiate. 

Harpreet Singh: Sure. I mean, let me start with the most important thing and that is actually not a thing that is the patient, right? That’s what we all serve of. And I also listen to, to Be’s show and, and she also made very clear where her focus is and how delighted she is.

about really making an impact on the lives of cancer patients. T-cell receptors, or TCRs, have a unique opportunity to actually really open up the target space. And we think that these are keys to make solid cancers accessible to immunotherapies because TCRs can tap into the intracellular target space.

And that’s what TCRs and companies like Immatics and Immunocore do. And it’s still a young field. It’s still a budding field. And I’m delighted that there are, that there’s more than one company around, that there’s several companies actually doing this. So I think about companies like Immunocore, Adapt, Immune, T Scan and others as peers, not competitors.

I’m delighted if all of us are successful. This is still a small field. It’s not about being the kind of biggest fish in a small pond. It’s about going out in the ocean and really serving. As many patients as possible. 

Philip Hemme: Actually, I felt like the patient centric was, I think, was one of the most patient centric guests on the show.

I think it’s, and it sounds like you have also a similar approach. I like that a lot. 

Harpreet Singh: Well, this is something that we and I also personally have been thinking right from the start. I mean, if I go back into my history when founding the company sort of translating science into something that could be potentially transformative for cancer patients, making a real impact on the lives of cancer patients was the primary driver to kind of create something crazy, which is like creating a biotech.

The odds are, as you know, kind of quite slim. A few years, a decade. But I’ve been personally, and we as a company and the fantastic team of Immatics have been always driven, dedicated, obsessed about how we can actually serve patients. And that is something that’s driven all our research and science right from the start.

Philip Hemme: I like that. It reminds me of the, I read the biography of Henry Termeer and it was also really eye opening because I think there’s, there’s a, like, a lot of people say that. But then when you see really the action and in details of what it really means and when you need to take a decision, prioritize really patient and be patient for good, I think that’s where it’s quite the difference.

Harpreet Singh: It is. And there’s also transition within a company or a group when you actually move from the kind of theoretical to the practical phase, right? So we have been talking about patients for quite some years, even when we were in preclinical phase and what the kind of promise is to deliver to patients.

But once you actually start infusing patients, and in particular, IMA203, that’s our PRAME directed cell therapy, we saw objective recess responses and deep responses already early on in development, even in dose escalation, and some very meaningful impacts that we’ve achieved in the patients. One of our earliest patients, a sarcoma patient, now alive now for more than three years, has been even treated twice with cell therapy and saw very, very deep responses.

This is a gentleman living in Chicago. There’s actually several companies and restaurants all over the world and it’s really making an impact in a local charity community in Chicago and no other companies like Immunocore also have these examples. But then it becomes actually very evident what impact for patient means and, and one of these patients also visited us and, and that’s been very meaningful for the staff and very emotional.

So it’s a very, very strong way to kind of then. really see and observe what has been crafted for years with the hands of our scientists, how this actually now really translates into benefit for patients. 

Philip Hemme: You mentioned the clinical results, I mean, the amazing results, from the, was it interim data?

Can you, yeah, maybe just go a bit. A bit deeper on different, the response rates you observed, how many patients you dozed. 

Harpreet Singh: Yes, with pleasure. And so one special thing about Immatics is that we are a TCR company, but we’re not restricted to one TCR modality. So there are two different modalities. There is a TCR-T.

So that’s the autologous cell therapy based on T cell receptors, adapt immune or T scans are companies that are also doing. TCRT, and there is TCR based by specific, like our peer immuno, that’s what we’re doing. We’ve decided early on, based on the strength in our discovery platform, based on the strength of creating targets and finding targets and creating TCRs for both of the modalities that we want to actually pursue both of these avenues.

So we will be talking about these two different modalities. So let’s start actually with TCRT. So there are like three differentiating factors always in our drugs. That’s a target. That’s a TCR, and then it’s the way how we manufacture. We’ve started with targets that we’ve identified through our mass spec platform called X President.

Analyzed thousands of targets, ultimately ended up with a list of 200 targets. that are suitable candidates. PRAME ranks among the top, actually, of those. And the platform is to identify peptides. Exactly. So the target is not the protein. When we talk about PRAME, the PRAME protein, which is actually intracellular, is not the target.

It is a small peptide that’s been derived from the overall PRAME sequence that’s presented on the surface. of tumor cells at very high copy number, almost exclusively, with the exception of, of testis. That’s why it’s called a cancer testis. Antigen, and can be then recognized in the context of a so called HLA receptor, biotether receptor.

Philip Hemme: And that’s why, I guess, similar to Immunocore, you need a very specific TCR to, to the peptide and not to a big protein. Exactly. So 

Harpreet Singh: this now, this peptide embedded in the HLA receptor on the surface, so this prane peptide needs to be recognized by a tether receptor, so that’s the second differentiating factor.

We’ve been actually very good. And creating T Cerceptors, you have to know that most of these T Cerceptors by nature are actually not suitable. The way that nature has designed T Cerceptors is that they’re promiscuous. That’s the least thing you need in drug development. You want a very specific TCR that just recognizes.

The pre peptide in the context of HLA, not other peptides, not other HLA molecules. So we had to actually look at dozens, up to 150 t receptors actually, to kind of find the one that was really suitable. And we found one that was very, that is very specific, but it has just the right affinity. It’s kind of single digit micromolar affinity, which is ideal for cell therapy.

The third element that’s differentiating is actually the peptide. The manufacturing. So one element that, that Stefan Walter, our COO actually took very serious right from the start is to really get the foundation right, which means years of non glamorous work. So while other companies. We’re like talking about CRISPR gene editing and second, third, fourth generation stuff and all kinds of stuff, which is super interesting, right?

We actually put our heads down and, and did down to earth CMC work, optimize the manufacturing time, brought this down from 21 and 14 days to seven days. We’ve worked on how we actually expand these T cells. We found that removing the monocytes. It actually helps enormously, something very simple and mundane to do.

We experimented with different cytokine cocktails, non glamorous, non exciting work, not something that you can actually put on a nature medicine paper on a podcast, but it had a tremendous impact on the quality of these T cells. The result is that we can manufacture the T cells within, among the shortest time in our industry.

These T cells are younger, more vigorous, they can, they get less exhausted. And now what’s the outcome? When we infuse 1 to 10 billion of these T cells, that’s the range, we see in more than half of these patients deep confirmed recessed responses. So we’ve recently shown data in 30 melanoma patients, mostly cutaneous and UVL melanoma patients.

We’re talking about patients that are an average fourth line patients. I’ve seen three previous lines of treatments. Our cutaneous melanoma patients have seen Two previous lines of checkpoint treatments our urethral melanoma patients often have seen Chemtrail, obviously, which is a drug by Immunocore.

And now, these patients also come in with large tumors that are fast progressing, more than 100 millimeters. 70 percent of these patients in the brain are living. This is all stage 4C, right? So we’re talking about really, really very advanced. Patients, these patients have an average or mean median progression free survival of only two months, right?

And overall survival could be as low as four to six months if we look at kind of internal control groups as our patients in dose escalation. Now, if we treat these patients with our cell therapy, what we’ve seen is 55 percent of these patients, N equals 29, overall safety was safety was, was 65 patients in, including dose escalation.

These patients, 55 percent have deep confirmed objective responses. So these are partial responses, some are very deep, up to 80 90%. And we see median duration response of more than 13 months, despite 70 percent of these patients having actually deep. Liver or brain lesions, despite 80 percent of the cutaneous melanoma patients have been treated with the best possible first time therapy, that’s Ipinevo, right?

And so this is kind of the, almost the worst patient population you can imagine. And we’ve seen quite an impact. So this has been a surprise for us. We didn’t expect that. 

Philip Hemme: We go from two, three months of mean, means, or median survival to 13 months. 

Harpreet Singh: So we have not yet sort of published our median progressions pre survival.

That’s two to three months on average in this patient population, but we provided the objective response rate, 55%. The median duration of response, which is 13 months. 

Philip Hemme: Okay. That’s, that’s already, that’s already amazing. Yeah, I mean, that’s, that’s it. 

[00:12:43] Types of Cell Therapy

Philip Hemme: Can you, can you just, I mean, we went pretty deep into prime this year.

Right away, if we zoom out a bit, especially for third tumor, you have the, the tail tumor fat infiltrating es lymphocytes. And then for the cold tumor, you have the, the car ts basically. Mm-Hmm. , if use the word for self therapy. I think for you guys, I mean, TILs are one of the quite one of the direct comparison of competitors.

Can you, can you like, yeah, give me the picture of, yeah, let’s say solid tumor, liquid tumor, different technology. I call it. 

Harpreet Singh: Yes, absolutely. So let’s start with CAR T versus TCR T because CAR T is the kind of TCR T. It’s a more well known entity. It’s been approved in lymphoma and other liquid or hematological cancers.

There’s CD19 CAR T and BCMA CAR T, which are both approved by several companies. Very successful. Amazing results. There’s a really high degree of complete responses that have been seen, patients even cured from these. So this is very, very, these are very, very impressive results. There’s a limitation that CAR T has, the same as antibody based therapies, and that’s that there can only access extracellular or surface based targets.

Cu19, BCMA are those that are only on the surface and they’re actually B cell lineage targets. You basically kill the entire B cell compartment. That’s how you kind of really control the tumor. If we now go into solid cancers. There aren’t many surface targets around and solid cancers and those that are around, like HER2 Nu in breast cancer or DLL 3, a novel agent where Amgen is active in small cell lung cancer, are actually sort of restricted, typically, to one or two tumor types and to certain fraction of these tumor types, so you don’t have these Very broadly applicable, solid cancer targets extracellularly, typically, and that’s That’s why we have to sort of now dive into the intracellular target space.

That’s what we can do with T cell receptors. That’s why we require TCRs. The only downside of TCRs, as probably a lot of our listeners here know, is that they now require an HLA restriction. So our patients have to undergo a qualification upfront. They have to be HLA A two A oh two positive. That’s roughly 50% of patients here in Europe.

This is roughly 42% of patients in the us so that’s still a substantial fraction. The good news is once they’ve sort of overcome that quality, initial quality qualification, they will be mostly pain positive. So 95% of melanoma patients are. 90 percent of uterine melanoma patients are PRAME positive, almost 100 percent of uterine cancer patients are PRAME positive, 80 percent of ovarian cancer patients are PRAME positive, 65 percent of squamous lung cancer patients are PRAME positive, so the vast majority of solid cancers have a very high prevalence in PRAME and so that breadth of PRAME is what makes it so interesting.

So that’s CAR-T versus TCR-T, right? Now let’s look at the other side of your question. That was TILS. So TILS stands for Tumor Infiltrating Lymphocytes. So it’s a very different technology. It actually exists already since the 90s. Steven Rosenberg at the National Cancer Institute was one of the pioneers.

Patrick Yu was with him at that time. Pioneer. And so what they did is actually do a tumor surgery. That’s always the starting point. That’s, that’s a restriction. Then take basically isolate the T cells from the tumor surgery and kind of reactivate these T cells. by culturing these T cells ex vivo and then giving them back.

Now, you don’t know what these T cells recognize, whether it’s prame or something else. Most people actually think it’s neoantigens that these TILs recognize, and then they actually reactivate them and put them back into the patient, and so they can go after these 

Philip Hemme: neoantigens. And take out the lymphocytes that are already active against the tumor.

Harpreet Singh: That’s a prerequisite for all cell therapies, whether this is CAR T, TCR T, Or TILs reacquire to a short term, so this is a few days of so called lymphodepleting chemotherapy. So this is kind of chemotherapy done for a few days not to shrink the tumor. Typically doesn’t do anything on the tumor. But to really remove the existing T cell compartment so that you create space where you then bring in, through the T cell infusion, where we bring in our T cells and the T cell product.

Philip Hemme: That’s, that is, very curious. And, and, because TILS, I mean, they, they, I mean, it’s maybe old technology, but they got, I think, approval recently. Yes. And it was pretty nice results as well. And in solid tumors as well. 

Harpreet Singh: Yes. We’re delighted. Actually, this is the company Iovance. They’re another peer of us.

They got an approval this year in cutaneous melanoma. So that is very similar to the patient population that we’re going after with encouraging results. A response rate around 30%. And a median duration of response that was not met or not reached at the time point of final analysis. When we look at the entirety of the data, it looks like roughly a year of realistic median duration of response.

So that’s fantastic. That’s good progress in this, in this patient population. We think our data can go beyond that with our 55 percent and, and median duration response that’s maybe actually similar, but the TCRT has some other advantages. Significantly lower cost of goods, no requirement for tumor surgery, shorter turnaround time because our culture step is only seven days plus release.

Then also very importantly, TILs require an infusion or several infusions of high dose IL 2, that’s a cytokine, basically kind of keeps up the T cells and makes them further expand in the bloodstream. For TILs, that’s required and relevant. And that, unfortunately, high dose IL 2 comes with kind of pretty significant toxicity.

And TCRT does not require high dose IL 2. We actually use low dose IL 2, which can be easily also applied in an outpatient setting and does not actually add any significant toxicity. Well, IL 

Philip Hemme: 2, 

[00:19:05] Manufacturing cost

Philip Hemme: I, I worked a bit with molecular partners. Oh, right. Between LaBiotic and, and FlintBio. And we had a, we were looking to a program on IL 2 and so I look, and I saw a lot of IL 2 programs.

didn’t work for toxicity. I guess it’s a, it’s a different, but there’s definitely a lot of toxicity involved as well. That’s sounds, sounds, sounds, sounds really good. So I guess I wonder, do you have like, I mean, all of this sounds good on decreasing the cost of manufacturing and improving the, the speed on the manufacturing.

Do you have like a, or would you like estimate number? I mean, are you cutting the cost by whatever? 10%, 50%, what’s the, like, what’s the estimate? 

Harpreet Singh: So we have not disclosed yet our cost of goods, but I can give you some kind of qualitative measures that I think will give you and your readers your listeners, a A view that this is a significant reduction in cost and time.

So typically TCRT and TIL, manufacturing is done at a range of 14 to 21 days. And so having these T cells in culture for such a long time has an advantage. You can grow them to very large numbers, but comes also with very big disadvantages. And that’s really that this is more error prone. Your manufacturing success rate.

Maybe lower your cost of goods because this manual labor involved increased dramatically. So we’ve cut this actually to a third or a half considering which metric you look at. So that’s a significant reduction. But it has two other advantages. The manufacturing success rate goes up. We’re actually striving for more than 95 percent and we’re already there now at phase one.

So there’s a good chance that we would actually be well above this even in a commercial setting. So it depends on which of these manufacturing sort of things to look at. But it’s spanning from 83 percent to 95%. I can tell you 83 or 85%. It’s actually not good enough because it creates a lot of nuisance for physicians and patients to kind of want to be above 50%.

So above 90 percent is what’s been typically desired. Our ambition is to be above 95%. That’s a metric for the achieve, right? And that’s important, not us, not just to reducing costs of goods. It’s really also important for patients and physicians, right? Not make them undergo that. So look aphoresis, our aphoresis process twice, right?

Philip Hemme: And I guess you will see it also and you can make a result, you will have better response rate and better. 

Harpreet Singh: Yes, and that’s the other aspect actually in enhancement of the quality of the T cells. So we actually figured out that we can still get a very high number of T cells if we cause them only seven days.

So half or a third of what others have done in TCRT, so still high numbers, but actually now with that reduced manufacturing time. These are so called younger T cells, immunologists talk about effective memory and terminal differentiated and naive T cells, and in our setup, the fraction of naive and effective memory T cells is very high, and that’s typically associated with better engraftment of the T cells, better persistence, better tumor infiltration, and this translates into better and deeper responses and ultimately, hopefully, better overall survival.

So this is where we have actually. use manufacturing to really enhance the product to the benefit of the patients. 

Philip Hemme: Yeah, that’s, that’s it makes me think about, I mean, the importance of, of manufacturing in cell and gene therapy in general, but I think it was always pretty clear that it was important, but I feel like in the recent few years, it was even clearer and that could really differentiate on the manufacturing as well.

I think I, I remember, one, one result from selectors, I think, and they, They really, they showed that in the manufacturing, I don’t remember the exact number, but they could show like a significant activity difference in T cell with the same like editing, but just from a manufacturing process showing how important it was.

I mean, that’s, yeah, I guess, I mean, it’s good for what you, what you. 

Harpreet Singh: Well, the cell therapy field really has, has come along quite a lot. I mean, there’s been two movements. I think there has been increasing skepticism, particularly with investors on. The commercial viability of cell therapy because of the original issues that we’ve seen, but there have been also enormous developments, particularly in the manufacturing of cell therapy and advancements that we could actually also piggyback on and, and further advance, right?

So the shortening of the manufacturing, the increase of the manufacturing success rate, the quality of the T cells, also the safety that we have with our IMA203, which is a CD8 only cell therapy. product and does not have that very high degree of CRS that’s seen also in some CAR T approaches and eventually, obviously, the efficacy.

So, our view is that, so if we make our patients jump through the hoops of cell therapies, which is obviously more tedious than having a simple off the shelf drug like our Bi Specifics, right? We need to offer these patients something. and return that really is very meaningful or even transformative, right?

And so a high response rate, long duration of response extension that’s meaningful on progression free survival and eventually the gold standard overall survival, all of that needs to be way beyond what actually typical, therapies offer. And we’ve set ourselves very high bars right from the start.

So long before we actually started cell therapy, our chief medical officer, Cedric Britton, who came into the company from GSK, where he was the head of cell therapy, previously was actually the first R& D employee at, at Biontics, a very experienced person and a fantastic person as well. Cedric said right from the start, Harpreet, we’re only going to start this if we have at least 40 percent response rate.

That’s a very high bar and last line solid cancer. But we determined that this bar is relevant and necessary and even critical to make this not just medically meaningful, but also commercially viable. And commercially viable means we want to really be able to deliver this to as many patients as possible in a sustainable fashion.

Right. And so that, that’s what commercial viable needs for us. 

Philip Hemme: Yeah, I mean that’s what, that’s what the Kim showed as well. I think the revenues are, I mean, I talked with someone who was the head of Celgene at Novartis Univers. He was in charge of, of the commercialization of, of Kim. I said he got some gray hairs from that , and it was really like tough.

[00:25:44] Commercialization

Philip Hemme: But at some point, I think, I don’t remember the, the revenue metrics, but I think was, what is it, half a billion a year now on the waters. It’s not in the blog poster scene, but it’s still like, pretty high. I mean, they showed that this commercially was, was viable. Like what’s like, yeah, I mean, I, I, it makes me also think about the second thing was on, on what you said, like there’s quite a lot of skepticism in, in self therapy and I, I see that.

And I mean, I see even like some of the valuations of self therapy companies are like trading half the cash or something. And it’s like. You’re pretty crazy, 

Harpreet Singh: but what do you think of that skepticism? Well, it matters so much whether you get it right. This is true for every type of drug, right? But for cell therapy, you have relatively high cost of goods, right?

And so you have to, as I mentioned, give something back in return that is so mind blowing for physicians, patients, for payers, that, that, that the existence of cell therapy and the application is justified, right? And so what patients love in cell therapy is That this is one and done. I mean, imagine you’re like 200 miles from a large academic centers.

You don’t want to go back there like every third week or like in the case of IMTEX every week. Which is pretty tedious. So they, they love the one and done the, the single application, although it’s a tedious application, right? Part, but then it’s also to stay close to the center of the brain, but it’s one thing.

And, and, and the other part is obviously the efficacy, right? And, and what’s something that’s, I think, been under emphasized is deep responses. So a lot of these biologics, that are being developed exert a good amount of tumor control, which can then actually translate into a nice survival benefit. But actually shrinking tumors really matters.

I mean, our patients are coming in with more than 100 millimeters of some of target lesions. So that’s the kind of total diameter and that’s just the target lesions that are measured by the urologist. If you add the non targeted lesions, some of our patients have 200, 300 millimeters. So this is like a grapefruit and up to, in some extreme cases, a basketball of a tumor.

Those large tumors really have a significant impact on quality of life. These patients and their physicians are seeking drugs that are dramatically shrinking tumors. And that’s something that cell therapy is particularly good at. And it acts very fast. We’ve seen some of these very large tumors shrink within a few weeks, substantially then deepening over time.

And over months, and even beyond a year and longer, and giving a kind of substantial relief to these patients. We recently had a mucosal melanoma patient with a large tumor in the face, sitting basically in the nose, and sort of saw a near, near to complete response. And this patient now can exercise again, can work again, can actually smell again, and thinks this is a miracle.

And to some extent it is, right? And so physician and patient are enthusiastic about. The impact on quality of life and that’s, it’s to be added. This is where cell therapy offers something unique. So cell therapies that are as powerful as C19 and BCMA CAR T therapies or as our PRANE therapies, this, these deep lasting responses that really make this tumor shrink so substantially that, that has a meaningful impact on the quality of life.

[00:29:11] Valuations in Gene Therapy

Philip Hemme: I mean, it’s impressive results like, and also, I mean, if I turn around what you just said, also, you mean in the self therapy space, you have to be. As excellent you will have a bucket of people like on the top and then maybe a bucket of like you have basically a gap between the more excellent and the less excellent or is that is that I mean I’m not paraphrasing what you’re saying but the way it’s it seems a bit the case from the evaluations you have one at the top of pretty like fair evaluations and similar to what was before I mean still crisis mode and this lower but some other like bottom is really low.

Like, I don’t know. I mean, just, 

Harpreet Singh: well, valuations and market capitalizations are somehow subjective. I would argue that the way they’re determined, maybe not an exact science, right? So that multiple movements, for sure. Sometimes you think that actually a word that’s spoken by the Federal Reserve Bank of the US has more impact right on our space than, than the actual data.

But that doesn’t, this is secondary, right? So I mean, I would always argue that, and certainly also at this moment, that given what we are showing, Immatics is obviously kind of undervalued, but some people think this is a decent value. So there’s a continuum in the perception on value. I think people are clearly recognizing that Immatics has a lot to offer.

It is outstanding results that have really surprised ourselves, to be honest. And self therapy, but it’s also the prospect that we are developing bi specific, so true off the shelf biologics that can be deployed into not just the academic centers, but also into the community setting and that can be actually deployed and, and manufactured and, and, generated and delivered to patients in the same way.

as antibody based biologics can. And so this prospect of Immatics having a very good results in our cell therapy, and now sort of operating also with a second generation biologics and platform is actually, I think, very promising also to investors and is, is, is really appreciated. If you look at the cap table of Immatics, so the kind of top 10 shareholder list which is public information, you’ll see.

relevant names, such as Perceptive Advisors, T. Rowe Price, RTW, Baker Brothers, Wellington Management in Boston. But what I like about these, these shareholders is that they’re really thinking long term. They see the big picture and I’m delighted and pleased and we feel privileged to have shelters like those on our side, obviously complemented by our very strong German shelter place like Divini and Atos and others who have been in the company in the private setting right from the start and have been Loyal and big believers right from the start.

Philip Hemme: Yeah, I would say. On the, on the, I want to make a quick comment on the results, but even Apex, Jacob Plath, who I follow quite a lot for oncology things. I’ve rarely seen him so enthusiastic and so positive about like results and you’re like, oh, Immatics and PRAME successes. Unity is really like. I guess, I don’t know, quite neutral which was, I mean, which I guess I will link also to the articles, I think, if people want to, to read, which I guess for you guys must be also quite a good recognition.

Well, we 

Harpreet Singh: were actually almost overwhelmed by the response. We had decided to release our data as part of a quarterly. Yeah. Update prior to ASCO. So it wasn’t even like a proper medical conference release and our clinical team was overwhelmed by actually a request to meet by investigators at the last ASCO meeting based on this data and the data that we’ve also released sort of at the, at the SMR meeting last year.

And so. That is something actually very meaningful, more than, to be honest, kind of movements of the share price that, that physicians are really recognizing the value that we could deliver to cutaneous and uveal melanoma patients. And so I’m delighted about that interest. Yeah.  

[00:33:17] Fundraising with Dievini and Struengmann

Philip Hemme: That’s amazing. Maybe just to, to finish or to finish on the, on the financial side of it, what’s also.

I mean, you, you have a, I mean, a few things, but first on, on Divini, yeah, that’s interesting. That’s very interesting because you’re backed by those, by the same, by the same investor of Kurovac and you are basically in the same city and tubing and how it is you started there. And that’s the SAP founders, Dietmar Hopf holding, and then Athos is the Strongman Brothers.

Correct. Just also for context. I didn’t know both of them invested actually. Yes, 

Harpreet Singh: actually. No, this, we, we have few privilege that, that both of these, billionaire families actually committed to Maddox early on. And Dietmar Hopf and Divini, that’s his family office, sort of Got in in 2007, so this was pretty early on when we were private and then Andreas and Thomas Strungmann joined in 2010, if I recall that correctly.

I really maintained their position, have been very loyal supporters. Also, through ups and downs so without these, these families, in particular, Dietmar Halbwey and Maddox wouldn’t exist. And I just had dinner with Thomas Strungmann last night. And so this, we, we feel privileged by this kind of tremendous support that these two families alongside other investors, like also MIG here in Munich and Grazie Equity in Stuttgart have actually provided.

They were instrumental for our success and the foundation that we’ve created then with the IPO sort of adding now this, this already very good list with. Really long term thinking often long only investors, including specialists and mutual funds is very meaningful to us. 

Philip Hemme: That’s amazing. I think for, for the, for the audience as well, we had actually someone who connected us again, but Ingmar from the founder of Kervak, and we went quite a lot in, quite in details into the early stage and how he actually met.

But it was, it was Divini, how they meant to, to, to invest. And that was pretty like for, for context. And we talked quite a lot about also like quite specific to the German dark or German speaking market that you have this kind of like two, three. Sam in the office is super successful in biotech or tech and reinvesting in biotech, super long term hundred plus millions of euro dollars.

And also super successful financially, but also. Cool. patient and have amazing innovations in the market. I mean, biotech is the talks by itself. So I think it’s, I mean, people are curious, they can, they can, they can check this out and also people are curious also about, about the Baker brothers and the other long term investors you mentioned, I think that’s also really impressive list of investors.

And we talked with, we had Edwin from Hublinks on the show and we did like I mean, 10 minutes on the Baker Brothers and he said quite openly, especially not that many people talk, there’s not that much public about them. So it was, it was really interesting. 

Harpreet Singh: Well I listened to that, that podcast action preparation of our meeting and I can tell you everything he was referring to, to Baker Brothers, but also those type of investors that think like the Baker Brothers was absolutely accurate.

So as I mentioned, we feel privileged. to have such investors on our side and supporting us. And they are also very demanding in the sense that they really challenge what we do, which is exactly what I think good management teams need. 

Philip Hemme: Yeah, 

Harpreet Singh: no, that’s, 

Philip Hemme: that’s great. Maybe to just a quick quote before moving to more personal notes on the, I’ve seen that you’re very busy, planning for the end of the year.

Can you elaborate a bit on this? 

Harpreet Singh: Yes. So we had a very exciting first half of this year with CELT RB data that we kind of pushed out, but the second half will be even more exciting. Because we have actually up to four data updates upcoming, so there will be two data updates around our cell therapy. We have two different generations called IMA203 and IMA203 CD8, where we will provide more data than we’ve done before.

But what’s particularly exciting is actually that we’re opening up a new chapter now in the second half. That will be the first clinical data sets. So, as I mentioned before, we are maybe unique as a biotech company and in the TCR space that we have decided to develop both of these TCR modalities, not just cell therapies, but also TCR biocifics, such as our peer immunocore does.

And we have two of these. biosephics in our clinical pipeline, more in the preclinical pipeline to follow. The first one is called IMA 401, which is direct against MAI J4, MAI J8, so different target, not PRAME. It’s not the MAI J4 peptide that everyone is going after. It’s actually a more proprietary version of a MAI J4 peptide.

And the second one is PRAME, again, the same peptide as we are sort of using for IMA 203, and we’re expecting two data readouts. For these two bi specifics. Now what’s special and differentiated on our bi specific platform is that these are second generation half life extended bi specific. So like the first generation bites by Amgen, actually the original company was Micromet, and then or the first generation Imtax by Immunocore have a pretty short half life, which means that you either have to continuously infuse them, like the first generation bites, Or have to give them a weekly doses and even the weekly dosing.

There’s a question, maybe is this a slightly underdosed, right? Depends on the PK. Our goal was to actually offer something that can be given in a kind of convenient fashion for the patient. So every two weeks is something we’ve already established, but even every three weeks is something that we’re going for.

So that’s also more compatible with. Schedules of checkpoint inhibitors and from combination settings, but at the same time not make any compromise on efficacy. So to really develop this like a classical antibody. Where you, with even every two or three weeks schedule, have a kind of steady state PK, so continuous pressure of a relevant dose of the drug in the bloodstream and the tumor mark environment on the tumor.

That’s sort of how we develop our bio siphics. And so Carson Reinhardt, our chief development officer, who came from Micromet, has been really, together with the team, pioneering this platform, Adamatics, and, and developed a, I would say perfect molecule. I’m maybe slightly biased, but it is truly perfect.

It’s perfect molecule, a perfect bicivic format, which we call T CIR. And all our bicivics are based on this, on this format. And we believe that these could be differentiated. Obviously, we have not released any data that in, that they could go beyond tumor control. So what we’ve seen with first gen.

biocivics that they often were more focused on stabilization of disease. That can be meaningful, right, as we’ve seen in, in Yubing melanoma with GP100 to extend survival. But, but our ambition is to also see responses, our ambition is to kind of show differentiated patterns where we potentially could see also deep response, which have been rare, and filtration biocivics or deepening over time.

As I mentioned, reduction of tumor mass matters. Obviously, overall survival is the gold standard, but we would like to also sort of Really establish the best possible impact on quality of life for these patients on this journey of kind of having hopefully a very strong extended life span. That’s good.

We’ll keep my 

Philip Hemme: fingers crossed for the results. 

Harpreet Singh: Stay tuned. Yeah. 

Philip Hemme: Maybe that’s a good, a good segue or so to, to switch to a more. To a more personal, personal background. I’m wondering, first thing, I mean, it’s quite a personal question, but you’re wearing a sick turban. Correct, yes. Which, which is very, very uncommon in the, in the biotech, let’s say in, at least I don’t know anyone else in Europe.

Even in the US, at least, I don’t know many. I’m wondering how, like, like, I 

Harpreet Singh: don’t, 

Philip Hemme: I don’t 

Harpreet Singh: even know how to really approach it. That’s all right. I think I know where you’re going to. So yes, it does. So I’m, I’m obviously of Indian heritage, which is, which is I think pretty obvious for those that are sort of looking at the video podcasts of this part.

So I’m wearing a turban and a beard, which is common for, for, for Sikhs. I was born, raised in Germany, but my parents actually immigrated to. Germany in the early seventies and so that’s been determining my heritage, but also my identity. So it’s not something I’ve chosen to be a Sikh. When you’re born into a religion, I think this actually applies to most people, right?

But it’s become part of my identity and the impact is certainly that it makes you stand out, right? And you can stand out in a positive or a negative way. And it emphasizes, so if you do this negative way, it actually emphasizes negative impact. I believe it’s been rather positive, for me. And if you do something good and something that’s impactful, people certainly are more likely to remember you.

So I would say that’s been a, that’s been a positive impact. I’m proud to be a Sikh and, but it’s not something that’s determining actually my work or the way how we behave with each other. We have a very diverse team at Immatics. We believe strongly in diversity of mindsets. So it’s, it’s less important to me, although I know it is almost politically incorrect to say this, it’s less important to me.

What skin color somebody has or whether somebody has a turban or not, what’s important is how people actually think and think differently. I think gender diversity really matters because we know that, that human beings that are male or female or are sort of diverse think differently. And so we strive for better gender diversity.

We still have some gap, particularly in the senior management to kind of get there. That’s, there’s a lot of awareness with us. But that kind of diversity of mindset is something that we strive for and that we see actually really makes a difference in finding the best results, the best solutions, challenge each other respectfully as part of our values and really looking at things from different angles.

Thank you. 

Philip Hemme: I wasn’t, like, it’s, it’s a bit I wasn’t sure how to really ask it. Oh, fine. Yeah. 

[00:43:46] Sikh origin

Philip Hemme: It reminds me, we had Navid from, from Novo, like two or three episodes ago. And one thing that he said, I think it’s, it’s, it’s similar. He really embraced diversity for him personally, but also for the people he worked with.

But he also said that there are some challenges earlier in his career. Can you maybe touch on those? If, if you had something, let’s say, specifically to, let’s say, European biotech, or if you had some challenges? 

Harpreet Singh: No, no, actually, I have to say not at all. So I have never, I mean, when you work in biotech, right, this is a largely academic setting.

These are all people that have gone through college and many of them had PhDs. And these are educated people that are often having, I think, a kind of more, Open minded mindset. So I have not occurred any negatives nor any type of racism throughout my career, I have to say that. So I’ve been very blessed and fortunate, but it also depends on your own attitude, right?

If you’re looking for that all over the place, you’re also more likely to kind of observe this, and I have a very positive attitude. towards these kinds of things. So, so I have been blessed sort of not to be at any disadvantage because of that. Yeah. 

Philip Hemme: I think it’s a powerful message as well for, I mean, if in our audience, we have people from, or whatever, less represented gender or races, I think it’s a powerful message as well.

And you’re powerful, like role model that’s showing that, you can embrace it, it can be positive, don’t have negative experience. I quite like this, like mindset message, especially, I mean, Europe is quite immigration friendly, but still like less than some other countries, let’s say, compared to the U. S.

So I think it’s, yeah, I, I like that, I like that a lot. 

Harpreet Singh: And we have pictures of the, of our AMADEC team. So we have like almost 200 employees now in, in the U. S. Most of them based in Houston, Texas. Houston is a melting pot, similar to Manhattan. Our people coming from all over places. So the diversity is clearly palpable and visible.

Transcribed Right. But you also have that diversity, as I mentioned, of mindsets from people that come from academia, from pharma, from biotech, from different areas in the U. S. that are culturally different. And that influences the way how you think. And that’s exactly what we want. So certainly we see. Even more of that diversity in, in, in the US, Europe and Germany are a little more homogenous, but this is changing as well.

And so if you now, nowadays, we’re currently in Munich, if you nowadays go to a restaurant in Munich, actually the chances that you hear someone speaking English at the next table is more than 50%. 

Philip Hemme: It’s pretty high, actually. I always saw Munich a bit less international than Berlin, where I’m based, but it’s actually, I feel like, very similar.

Yes, I mean, it’s probably the highest in Germany. 

Harpreet Singh: And it’s an excellent basis. But so Munich, we have an office the kind of headquarters of the companies in Tübingen, which is a typical academic city, university based city where we have an excellent access to actually, talent there from the university and the Max Planck Institute actually.

So you opened a new building as well. We did actually. So expanding our team. And so currently the team, because there was not enough space was spread on different buildings in different parts of Tübingen. And now we’re bringing everybody together on one campus called Campus Sternwarte. Sternwarte stands for observatory because there’s a historic star observatory there.

We just opened this actually. A few weeks ago, I had the prime minister and the minister president of Baden Württemberg sort of helping us opening and the mayor of Tübingen was a fun event actually. I’m not, I mean, there are different CEOs and founders. Some people are very fond of buildings. I’m not very interested in buildings.

That’s brick and mortar for me. But what I’ve recognized with our new building is that it really provides a very attractive new home. And that matters kind of on how people act and come together, particularly post COVID. It’s been become more difficult to bring people together. We don’t force this to kind of for people to come in every day, but we want them to come in regularly.

Obviously in the lab, they have to come in every day or in our manufacturing. So really creating a space where they come together and actually enjoy working together and can mingle and have a cup of coffee and have these informal interactions. The fun interactions is so important. but also for the work that we’re achieving here and that we’re trying to achieve for the benefits of cancer patients.

Philip Hemme: in many ways, but also for work. 

Harpreet Singh: Look, if you think about the history of mankind, 99. 99 percent we’ve been sitting around a fire and attracted socially. Nobody’s taught us to actually do this over teams or zoom. So that’s a very, very 

Philip Hemme: good thing on zoom. That’s a good one.

[00:48:31] Expanding to the US

Philip Hemme: Maybe on the, on the, on the, actually what you mentioned on the geography, but how like you were first, one thing that I always liked about, about you guys are very early on going to us and.

Houston vs. MD Anderson, I think was 20, was it 2015 already? Correct. 2015. Yes. Now also if Tubing and Munich, I’m curious, can you touch base on this? I’m like, why you went so early to US? Why opening this Munich office if you already have a German office? 

Harpreet Singh: No, absolutely. So the drive towards sort of moving into the S was very practically driven.

At this time we were diversifying to other therapeutic areas. One of these therapeutic areas, so really leveraging our specific ability to discover targets in TCRs was adoptive cell therapy. We did not have the expertise, nor was the regulatory 2015 actually already ready to kind of embark on new targets.

So there was some hesitance with regulatory. Yeah. And we were the only agencies in Germany at that time to really start phase one trials, safety trials with very new targets. And so we needed the expertise and the right environment. And so we explored partnerships in the U S that would allow us to really jumpstart, propel us forward.

We had discussions with multiple, actually, larger academic institutions. Who had experience already in cell therapy and the one that convinced us immediately was M. D. Anderson Cancer Center. Actually multiple investigators, Patrick Hugh was one of the drivers at this point, Cassian Yee, Lawrence Cooper, but also the president of M.

D. Anderson, Rhonda Pinion at that time, who said, okay, we really would like to kind of join forces with you. Let’s think beyond a typical collaboration. Let’s think about a joint venture. But the condition is that you come over. And if you come over, we’ll give you office space, we’ll give you lab space, we’ll even help you finding GMP space.

We have a wonderful collaboration with UT Health. That’s a sister institution. Of MD Anderson that have supplied us now for years with extremely high quality, very cost efficient GMP space that was really relevant. And we even got a kind of relevant grant from the state of Texas to kind of start this there.

So this was the ideal setup. What we’ve recognized to, to really jumpstart CELTR. Stefan Walter, our CO, was the first one to kind of move over. I moved over a year later with my family, lived there a few, few, few years in Houston, Texas. And this was kind of a great start of our cell therapy journey. I mean, while we’ve recognized actually some other merits of the Houston, Texas area, that’s access to talent.

So while we see companies struggling with access to talent at the West and the East Coast, but also this talent struggling with the high cost of living, Houston offers a very attractive cost of living, but also sort of has much less. competing biotech around us for talent. And we have particularly well educated and trained people in the areas of cell therapy, manufacturing, QA, QC.

So exactly what we need. Actually, we have just now set up a large hundred thousand square feet R& D and GMP manufacturing facility is not being formally opened. We’ll do this sort of early next year. So then there will be another opening, but it’s already partially operational. And it allows us to now not just operate all the R& D for phase one or phase two studies, but also actually manufacture.

The GMP material for phase two, phase three studies, and for the initial market supply in the first year. So we have really decided to take this to the market. We want to sort of take cutaneous melanoma, at least, if not all severe melanoma, to the market. And we all, and, and sort of, and for this we require our own fully controlled manufacturing facility and that’s what we’ve built.

Philip Hemme: I was wondering what’s you, because one of the thing I was wondering, obviously, I was in Boston two weeks ago. I was kind of comparing, okay, Boston, obviously hotspot and a lot of European biotechs would typically open in, whereas in Boston. 

Harpreet Singh: Oh, Boston is, Boston is beautiful. And if you are like our partner, Moderna very well established, I think you have little trouble to finding access of the access to talent, but, but from a, from a, Sort of early biotech development perspective, Houston is the ideal place.

Yeah. Yeah. 

Philip Hemme: I would love to talk about the Moderna deal as well. I think it’s, it was one of the also trigger for, for, for me to reach out as well. And I love, I love Stefan and Moderna actually, so, but yeah, just, I mean, people can, can look at it. I will, I will link as well. I think it’s an amazing deal and two amazing companies.

So 

Harpreet Singh: I’ll just say one sentence because we have lack of time and this is that Moderna Animatics Have a joint vision. How we can not just help each other in our respective platforms, that’s part of the deal, but also really develop something that goes beyond how we apply biospecifics, right, up to potentially multiplexing biospecifics with a fantastic mRNA map from, and that is what both these companies think could be entirely disruptive to the solid cancer field.

It’s a long term vision. It’s one that I think we can accomplish by joining, so how we’ve joined our firepower and our competencies, but it’s a fantastic collaboration. 

Philip Hemme: Yeah, I’m looking forward to see what comes out of it. 

[00:53:59] PhD to CEO

Philip Hemme: Maybe a last, last question, but personal before going into the last quickfire.

You shared quite a lot of, in an interview on La Biotech actually from a few years ago and I would link to the article you shared quite a lot on like your challenges for moving from academia to founding the company, you on like the early days. One thing that I’m curious about and what’s quite like, striking and quite unique about you as well is that you, You started, I think you were a CEO.

So at least there was a, let’s say experienced CEO who came in. I don’t know if Paul was at the time. Okay. And actually it’s fun. Yeah. Anyway, it was off. I have to say this funny story, but in 2014, I was in, I was in San Diego at bio and then I was talking randomly to Paul, like I didn’t know him. And then I was, I was studying in Boston.

I was like, big eyes, everything shining. Oh yeah. I meet a lot of like. Companies have raised more than a hundred million, and he was like, yeah, me too. And I was like, okay. So that was funny to meet him at that time. But anyway, that’s a bit of a sideline, but then what’s interesting with you is that you then you took the CEO role and now you’re the CEO.

Can you talk a bit about there on, like, what your experience was like transitioning from being founder and taking CEO afterwards? Sounds a bit like the, whatever, Larry Page, Google story of like, successfully, I don’t know. 

Harpreet Singh: Well, these comparisons may not be appropriate, but, but it, it’s been a, it’s been a really fun journey with lots of challenges.

I mean, it, the Immatics story started with really a conviction that how can we translate it. The findings that people like Tony Weinschenk a co founder who’s created our express and platform and me and others could translate this into patient benefit. Right. And we then found out quickly that actually creating a company is the most effective and efficient way to do that because there is a different capital requirements and resource requirements.

If you want to do proper, what we regard as proper drug development. So we created Maddox. We recognize that we are scientists with very little background in, in kind of how to run a business. And so I became chief scientific officer, but it was clear, clear, right from the start to investors that I have no ambition in the beginning to become the CEO The company and so help the board, the private board that time to bring in our first CEO, Paul Heim, which was exactly the right choice.

Paul came with a commercial background, but also clearly understood the biotech world already very, very well. Given his kind of experiences. And so this was the ideal start for us. At a later time when, when we created our cell therapy and I moved to the U S with my family to kind of build that cell therapy franchise, I became CEO of the Immatics subsidiary, Immatics US.

And so that was for me, a first glimpse into kind of a broader role and to run beyond the R and D also other aspects. Including sort of having discussions with investors and, and being involved in business development. And so that was something I found very exciting that, that broadening of my horizon.

And later in 2019, I returned to Germany, became the group’s CEO. And since then, I’m enjoying. This, this part of the, the job and the commitment I have to the company enormously. 

Philip Hemme: It’s amazing, yeah. I guess, I mean, we talked with Dominic yesterday and like there was this like, you mentioned a lot on like, this personal fit is the most important, like you need to enjoy yourself.

It’s not just CEO for being CEO, you need to enjoy, you need to fit for the company. Look, 

Harpreet Singh: we have a very short lifespan on this planet that’s available to us, and when you operate. In cancer, and you see how patients die and how quickly they die, or anybody who is lost. Someone that’s very close to you, value life, but also means that you actually value what you can achieve every day.

And, but while we’re doing this and doing something meaningful, we really want to also have a blast, right? And so the fun, the fun part and the enjoyment is absolutely critical. But for what’s so central for me, it’s the kind of purpose of the company. We’ve declared this right up front is to really make a meaningful impact on the lives of cancer patients.

Everyday matters that we can. Do this. And so for me right now, the most exciting part being a CEO of Immatics is to actually help not taking this into what we call the commercial setting. And we think what commercial means actually goes back to our purpose because commercial means that you take this.

Let’s do that. Let’s let me say this a little more sort of drastic. You take this from the ivory tower of academia where we run clinical trials that are available for a very small subset of patients. We take this into reality to patients, to larger number of patients, to larger geographies. That’s what matters, right?

That’s our purpose. That’s also my personal professional purpose to do this. And so recently hired a head of commercial Jason Brown, who’s actually done commercialization at Kite Pharma, one of the most successful companies in cell therapy. He’s setting now up kind of the first, very first set up of our core of the commercial team and, and he’s bringing in this, this commercial mindset into the company.

Philip Hemme: Amazing. 

[00:59:21] Quickfire

Philip Hemme: I mean, To finish, so I mentioned this before, but as this is episode 20, I want to try something new. So you’re the guinea pig, so a quick, a quick fire. So just basically very like straightforward question. If you can just answer yes, no, or within a, within one sentence. Okay. And we test it out.

Let’s see how it goes. Well, shoot. What’s your, what’s your favorite biotech book? 

Harpreet Singh: It’s not a biotech book. It’s actually a management book. And I’m reading right now. It’s The Hard Thing About Hard Things by Ben Horowitz. I can recommend it to every CO and leader. What’s the biotech 

Philip Hemme: content of news 

Harpreet Singh: you consume the most?

I love to read diverse newsletters, podcasts. One of them I like is Endpoints. John Carroll’s a fun guy. 

Philip Hemme: Are you investing in other biotechs? 

Harpreet Singh: I actually do, although not directly, but Through a friend, a fund, Grazie Equity, one of our shelters, they have a fantastic fund, they’re investing in, in small tech and also some of them biotech.

Do you meditate? I don’t, but there are other ways to actually bring yourself into good mental states. Such as? Breathing. And really actually sort of giving you the time to think about what you’re doing.

Philip Hemme: What’s your favorite biohack? 

Harpreet Singh: Biohack? Oh dear. I don’t think there are hacks. I don’t think that there are too many shortcuts in drug development. There are a lot of parent hacks I know about, but 

Philip Hemme: Biohack is a very tech, tech term. But let’s say, well, usually men tend to like Optimizing your own body can be short term, can be shortcuts, but can be also long term, sleep or exercise or whatever.

Harpreet Singh: Well, sleep exercise is clear. Something that people underestimate is actually what you eat and how much that actually impacts your health. We are taking too much sugar and bread and all that kind of stuff into us and that causes chronic inflammation and that’s not good for the brain or the body.

Really kind of moving towards a low carb, more ketogenic, and nutrition is something that my wife believes very much in and she’s driven me into that kind of thinking. Yeah. Enormous impact. I can tell that. 

Philip Hemme: Very good biohack. So you mentioned your family. Do you have children? I have a son. Yes.

He’s nine years old. 

Harpreet Singh: Do you prefer train or plane? I’m, I prefer plane in Germany. The train system unfortunately doesn’t work anymore and I have to travel to the US very frequently. That is not really possible with the train 

Philip Hemme: explain. And the last one, who is your, one of your biotech heroes? 

Harpreet Singh: Oh, there are, there are lots, but, I have to really think back.

I mean, I, I, I’m thinking about the tech heroes like Steve Jobs and others who have done this. Yeah.

So one is actually Thomas Vittman, who has actually passed away a few years ago. He was Co founder of Actelion and was actually the very first chairman of Immatics. And so he came in as a chairman, yes, and also as a entrepreneur and taught me a lot of things in the beginning, a great human being and, and such a loss for the world.

[01:03:01] Thanks for listening

Philip Hemme: That’s, I think it went very well. Thanks a lot. I think that’s, that’s wrapping up everything. Amazing conversation. I really loved it. 

Harpreet Singh: Philippe, such a pleasure. Thank you very much for having you, having me on your show. And you can always do this again. If you like. Sounds good. Thank you. 

Philip Hemme: Thanks for listening to the end.

I’m impressed by Harpreet’s stories, both before building Immatics and what he has built with the company. I’m also impressed, I have to say, beyond my expectations. Of how solid the pipeline platform and the company is. And I’m really looking forward to what’s coming in the next few years. If you also enjoyed this episode, please hit the like, follow, review button.

Any of these actions would help us a lot. And help more people access the podcast. I would be also curious to hear what you think. So if you can, leave a comment in whatever platform you’re on. Or shoot me an email at philip at flot. io. Alright, see you in the next episode.

Dominik Schumacher, Tubulis 🇩🇪 | Founder-led ADC Biotech ⭐️ | E19

We’re in Munich 🇩🇪 with a “true” biotech founder, Dominik Schumacher of Tubulis. Not many biotechs in Europe are led by a founder PhD under 40 and have scaled to raising over 100M. I know only two, one is Thomas at Owkin and the other one is Dominik at Tubulis.

We talked about building a champion ADC biotech, the super hot ADC sphere, and the difference between luck and success.

💎 ABOUT THE SPEAKER

Dominik has had an incredible career, which he started from a young age. With the founding of Tubulis, he has won many start-up awards and in 2019 he was awarded MIT’s Innovators Under 35. As a life science investor, he has invested early in many European biotech companies.

🔗 LINKS MENTIONED

Transcript

[00:00:00] Intro

Dominik Schumacher: But we forgot one thing, we didn’t do any market validation. Again. So we failed, we didn’t get the grants. And then we went out to really talk to as many people as possible about our platform. People were telling us, Antibody drug candidates, why are you doing it? It doesn’t work. What led to the decision?

What do you think it is? No, the lead word behind the money. China seems to be really big on ADCs as well. There’s a lot happening in China. There’s a lot of ADC development happening and quality is really good. There’s competition that we look at seriously and take seriously.

Philip Hemme: Bienvenue to a new episode. I’m Yoastolep and on this show I’m interviewing the best Europeans in biotech to help you grow. There are very few biotechs in Europe that are founder led. The founder, young founder under 40. And that I’ve scaled in the hundreds of millions of Eurodollars raised. And actually, I know only two.

Thomas Clausell from Rokken, who was on the show before. And Dominic from Tubulus. So, I went to Munich to chat with him. We were in touch before, but it’s the first time I met him offline. He is a true founder. And Has an amazing story of building a ADC champion. So here’s my conversation with Dominik and if you are enjoying it, please hit the like follow button.

Dominik Schumacher: All right, welcome to the show Dominik. Welcome. Welcome to Tubaliz. It’s so great to have you. Thank you. 

[00:01:44] Entrepreneurial biotech family

Philip Hemme: I want to start with your personal background and and how you got to be Let’s say one of the best biotech founders, CEOs, under 40 in Europe. It’s not that, that many in that, in that level. And actually talked about you was, was Andreas Schmidt.

I just, I just mentioned as well. And, and you mentioned that you were, you come from a, we put big life science family as well. I’m wondering how, just if you can tell a bit more about this and how it impacted you to where you, where you are now 

Dominik Schumacher: and 

Philip Hemme: to your, to your journey. 

Dominik Schumacher: Yeah. Yeah. It’s true. I’ve been very exposed to entrepreneurship from the get go.

My father is a biotech founder as well. One of the very early days in, in Germany. And that was an experience for me because it really. Show me what it mean, what does it mean, all the good and the bad. And from very early on, I had the motivation and I was looking for things. Okay, I want to do something myself.

I want to, I want to also spin something out or build. The new technology, the one example is I was, I was 12 or so, and I was looking at, I was at the doctor and then I went to the pharmacist and I had to take this paper with me. I was like, why, why do I have to take this paper? Why can it not be automatic and why do I need to take the prescription?

So I thought, okay, I can, I can do some web pages, so probably I will be able to program a system that enables you to do these digital prescription. I took all my my energy into it and was going, I went to pharmacists and to the associations and also, Hey, this is my idea. Let’s do that. And they, the feedback was, you know, our customers are 70, 80 years old.

They love the paper. Don’t take the paper away from them. And it’s too complicated, exactly like that. So I had, from that, I took two learnings for me. The first one was know your customers, the end customers, not the first customer, but really the one that is using the product. And also in the end, I was like, ah, I should have done it.

I should have done it and tried it out because, and I got, I mean, one, one interaction, two interactions, and I got scared. And then the take for me was. And if I wouldn’t have been alone, I would have done it. So find someone who you can really rely on them to go to that journey and really know you. It’s an amazing lessons 

Philip Hemme: also for, for where you are now.

It resonates a lot. I mean, I, I started building stuff when I was 11 as well. And like building, I mean, not the business, but more that’s a business and then started with redundancy and stuff. And I was always building so I can a hundred percent relate. And I think that’s, I mean, that’s a trade that is, you know, To me, like a sign that you’re really a founder from, like, comes from deep down when as a young, you’re already building things, and then if you don’t need money and if you don’t need anything, it’s a very good sign that you were quite made to be entrepreneur.

Dominik Schumacher: Yes. I mean, it’s really always this looking for, it’s so much fun at that point. It’s so much fun to come up with ideas and try to get them into reality. 

Philip Hemme: And then, so down the line, you still, then you went to study basically life sciences, I think, chemical biology, if I’m correct, or chemistry and business, chemistry and business.

I’m curious how you then balanced the urge to film and the continuing to study, especially when you did your PhD. Yeah, I had some challenges there. 

Dominik Schumacher: Which I can totally understand. I mean, There were many other ideas in between, which failed, but I was blessed because I found, I was looking for a project where I could do my PhD and that can translate.

And I was blessed to find someone who was, I was then working with on that project, which is now I see Zoe Jonas, who also saw that potential. And then we were basically, I was looking, I was finding quite some, the first half of what. My, my learnings that I mentioned, I found there. So it was actually easy to stay in it because it was the project to be founded.

Philip Hemme: That’s amazing. It’s amazing. You went into your PhD, you was already the reason for entrepreneur mindset. And then how did it go during the PhD, like between the PhD and then the, the spin out, like what were the big 

Dominik Schumacher: steps? So we were, we, we started to work on the technology and the platform and we were really excited about the results that we were getting.

And I was Jodas is a, is a fantastic scientist. I know science, I can do it. But he’s fantastic. He’s really good. So that was kind of was our role. And I was always trying to, okay, how can we get funds for that? So as you can independently work on that. And that’s how we were doing things. I was still in Berlin back then.

He was in Munich and it was prior to video calls. So we were actually on the phone all the time. And it was super funny because at one time Jonas told me that the, the LMU. Came to him saying, okay, here must be something wrong. This is the biggest phone bill in the entire department. It’s your phone broken.

And it was not because we were talking. And then we were, we were actually in Germany. You have these fantastic translational programs that you can apply for from out of the CENP, a university. It’s called Exist, Fossils, Transfer. And GoBio after. Yeah, it’s similar to GoBio. And it sounded a little funny.

Fantastic. So we did that, but I forgot one thing. We, we wrote a grant, super good, but we forgot one thing of my learnings from the beginning. I blanked about it. We didn’t, again. So we failed. We didn’t get the grants. And then we went out to, we talked to as many people as possible about our platform, the positioning of it, what we should do with it.

People were telling us, antibody drug candidates, why are you doing it? It doesn’t work. And we were trying to find, to, we were saying all the time, yeah, that’s why we do it. But the explanation we were trying to find why we do it and how we position it, we did via market validation. And then we got the grants and then basically from that on, we were able to do further validation and then founded the company and did some VC finance.

[00:08:46] Market validation

Philip Hemme: I like that a lot. I like that market validation parts because I feel like, especially I’d say in Europe, especially even in Germany, where You always approach it from a science and then we’ll find an application, but I think it’s obvious, like, okay, I’ve got science. So there will be an application, but I think it’s not that easy.

Can you maybe share a bit more there on the, some of the lessons as well, you had there on like, for, I mean, potential farmers listening to us, like on the release of market validation, how you. Yeah. How do you approach it though? 

Dominik Schumacher: Yeah. First of all, talk to as many people as possible. I guess many different people.

Many different people. Many different people. And I mean, you will hear a lot of different things. I think the, what do you really need to find out your way and master in the end is to filter the important information that you get because you will hear everything basically. But then also really, really try to.

get something concrete out of these interactions. And for us, I mean, back then it was really, we were starting to, okay, maybe we can do material transfer agreements, letter of intents, these kinds of things, and at the end only easy to sign paper, but they meant for us. They meant quite a lot. And we were, it’s a validation.

Yeah, it’s a validation. It’s a validation. And, and of course, also listen to what people say, but don’t take everything for granted as well. I think this is a fine, fine line. 

Philip Hemme: How did, You managed on lesson filtering feedback. I think one of the, at least also for me, one of the key lesson was like, do it for long enough, like enough perseverance to let the time to have positive negative feedback.

So like I was stolen even now as a company, but Labiotek were like, okay, we do at least 18 months full time. I mean, we are full time was at the end of our studies, like doing it. to see if it works or not. How did you, like, I mean, I guess you were kind of doing your PhD or the end of the PhD as well.

But did you have also a bit of this of like, okay, I do whatever it takes, whatever happens, I do at least 

Dominik Schumacher: 12, 18 months. We had that once. It’s funny that you ask it. We had it once. And that was, Actually, after failing for the for these first grants and it was one failure then after the other for, for similar reasons, but they came in and then we were like, cause I said about it.

So if I don’t know the exact timing, but by let’s say the end of the year, there’s not a light at the end of the tunnel, then we’ll just stop and that’s going to be fine. We’d worked out at the end, but this was really the only, only situation. And I think it’s also part of my personality that I’m not thinking about this too much.

For me, it’s a healthy piece of naiveness. 

Philip Hemme: I think it’s amazing for people listening. Also, like I mean, it always sounds, if you look at tubeless now, and if you look backwards, it always sounds good. Like, I mean, first it looks easier than it is and it looks more obvious, but when you are in the moment, it’s really not.

And that’s, I think, one of the most difficult thing about startups in tech or in biotech, in startups in general, we were also three months away from stopping. And so, and I think most of founders I know in biotech or tech, they are at this moment, very close to failure. And I think it’s very hard. to manage this moment where you, you wake up one morning, okay, I’m doing it, it would work.

And the other morning you’re like, fuck, what am I doing here? Like it will never work. 

Dominik Schumacher: That’s true. And I think it’s only natural that you sometimes have this, but that it’s so good that if you’re not doing it alone, I’m so sure there are so many out there that can do it alone. I’m happy that I don’t have to do it alone.

And it helps me a lot because then you can just simply, you’ll find you have someone to talk to about it. You’ll find a solution. 

Philip Hemme: I can I mean, I think especially in a more deeper tech, biotech, it’s so complicated. So, so, so hard that alone, I think it’s almost impossible. I mean, besides if you arrive with like, whatever, you made a massive exit and you arrive with a hundred million, whatever, own capital and then, okay, it’s maybe a bit of a different game, but otherwise, yeah.

Dominik Schumacher: That’s true. And I think it’s also, I mean, we are looking at this this way and it also helps us or guides us a lot, how we actually interact with our team, man. It’s a team effort and it’s one of the, this is the most, one of the most amazing achievements that we actually have. And we have such an amazing team where it’s just so much, it’s a privilege to be working with these talented people.

And everybody is so committed and everybody’s running in the basically same direction. And it’s only in for the, for getting this innovation where we are so convinced about and the patients and really understanding, okay, how much impact can we now have for these patients? And that is, that’s possible because it’s a, it’s a joint ride.

Excellent. And that’s 

Philip Hemme: what matters a lot at the end of the day. That . Yeah. 

[00:14:32] Why Munich

Philip Hemme: Maybe, I mean, we took a bit of a parallel to the final story, but maybe going back to, to UA in Berlin. Mm-Hmm. Uns was in, in Munich. And then you both decided to set up the entity in, in Munich. Mm-Hmm. . Where was kind has always a little bit this burden.

Unique competition, but what’s, what was, yeah, what led the decision? 

Dominik Schumacher: No, the lead word, but I mean, back then, you know, you had the money is a good answer, which is a good answer. But it was not. It was in the time of the non dilutive funding, a real a German exist, which is what you can apply for everywhere.

But then we were also applying for grants like M to the power of four is basically a Bavarian grant. So more grants and then Bavaria. 

Philip Hemme: It’s a, it’s a good, I mean, it’s, it’s a good example also of how grants, I mean, can work also, I mean, work successfully and also how the grants and the infrastructure is a key factor for, for ecosystem.

Yes. It’s a good example. Like, I mean, Berlin definitely lacks a bit and even, you know. If I’ve been there and stuff, but from a infrastructure, for sure, Berlin Munich is better, you know, better set up and has a bit more critical size. I mean, 

Dominik Schumacher: that’s true. 

Philip Hemme: A bit, a bit more, I mean, 

Dominik Schumacher: yeah, it’s a bit more Berlin is changing also from that end rapidly and, It’s true what you’re say in where, where I am, but there’s also a need to continue, continue, be in that position and to continue to think that could we could do a little bit more there.

Philip Hemme: Yeah. I think all over Europe we could Yeah, true. And it doesn’t really matter at the end if it’s Berlin and I think it’s, it’s really Europe US starts to be a bit different, but even then it doesn’t really matter. I mean, we had so many guests on the show and like at the end, I think one trade I saw. And many of them was like, they’re thinking very European or global from the, from the beginning.

And they don’t really care if they are in Berlin, Munich, wherever, small city Dijon, small city in Spain, they just try to be a global, have a US presence. I saw you, you guys have also, opened in the US pretty early. I think that’s a key thing. I mean. Yeah. 

Dominik Schumacher: And I mean, yeah, it does not really. It depends a little on how you want to build your company, of course, also, I mean, for us, another key reason to be in Munich is.

the talent, the scientists, the big amount of the talent pool is just big.

[00:17:33] Founder-led biotechs

Philip Hemme: Now that’s maybe talking about, still on the kind of founder led, I think that, I mean, there’s really, as I mentioned, kind of in the first sentence, but the first intro, but there’s not that many, let’s say founder led biotechs in Europe in general, especially people who came out of the PhD and you reach like a critical size in.

Where you guys are, let’s say raising three digits rounds. And first, there’s not that many biotechs who raise three digits rounds, but where was it with a founder CEO? I think in the U S it’s quite a big thing. I think in the last few years where some tech people come into biotech and like, what the fuck is happening here?

Why isn’t the founder like founder scientists to make it a company? You have like Curie, Curie. bio or Curie. bio who like specifically focus on financing or only like founder, founder led biotechs. Maybe you, you can like, talk a bit about this, like what’s, I don’t know, what’s your, yeah, what’s your experience like, why, yeah, how, how do you see it?

Dominik Schumacher: Whether, what is a better model or 

Philip Hemme: Yeah, like how, first, I mean, how did you manage that? Why is there so few?

Dominik Schumacher: I mean, I think it’s, it’s a very intense, tough journey and you need to be, you need to challenge yourself also personally all the time. And not only the company, but you also need to challenge yourself. How can I grow and how can I create most value for that company? And, for me, one of the key ways to do that, and I don’t know when this was is a reason why I’m still here, but But I always wanted to hire extremely talented people that are much more talented than I am and their specific expertise and really ensure that they can do what is best for the company.

So my job is really every, all the others, they should, they are in the position to, okay, what, what do I need to do for this drug to be successful? I don’t care about the budget. I, what is the best thing for it. And then they come to me and I, my job is to try to find money that we can do that. And that’s a little bit how I, how I look at my role, one of the parts of my role.

Yeah. And of course my role has changed tremendously and you need to be willing to do that. You need to, and you need to be happy in that role as well. So it’s not for everyone. Yeah. And I can totally understand if someone says no, but. I love the science. I want to be involved with the science. I don’t have crazy, I mean, if you compare it to the beginning where it was basically in every science call, I’m, I’m not in science calls anymore, only in the ones where basically a lot of Discussions have already happened and conclusions have already been taken.

Philip Hemme: So even asco, you didn’t even go to 

Dominik Schumacher: asco? I didn’t go to asco. This. Okay. We had, we had a lot of other things going on where my contribution was more valuable and that’s why I didn’t go to as, but I mean, I, ASCO is amazing. . 

Philip Hemme: That’s, yeah, I like that. I think there’s a, I mean, there’s definitely a personal fit as well.

Can you talk a bit about, I mean. I think for the founding scientist, it’s a bit more common to have CSO who’s late, but especially in the CEO position, especially in Europe, it rapidly tends to be, okay, let’s, let’s bring in a experienced CEO. I guess you had this, or like this challenge or these discussions, especially, I guess, with the VCs.

Dominik Schumacher: Oh, how was 

Philip Hemme: that 

Dominik Schumacher: thing? I mean, I think, as long as everybody has a feeling that the cereal of the current cereal of a company is the one who can drive value best for the company, this discussion will not happen. This is a discussion didn’t happen. This is, how hard to believe you. No, I mean, I, I was not exposed to such a discussion.

Okay. And but it would, I mean, in the end if it would happen, it would be okay if we come to the conclusion that there’s two companies in a phase where someone else can do it. And that’s how I look at it. And that’s why I’m also super relaxed about it. Because. This, I’m, I mean, I’m the CEO because I want this company to grow and want, and I am pretty sure about that I am the one who can have this company grow and bring it to success.

If you come to the situation where this is not the case anymore, it’s also time to say, maybe now someone else. Yeah, 

Philip Hemme: I like 

Dominik Schumacher: that. 

Philip Hemme: I mean, I like it at the end, I think. I mean, at the end, I don’t think there is a, A bit like the Q value and stuff in the US, which I’m not too fan is like this, like, Oh, like one model is better than the other model.

At the end of the day, I think like, it’s very multifactorial, as you said, like, it’s exactly the point. And some models and both models, I think, or even if you take the lot of models and can work very well, I think. And yeah, yeah, it’s super. And he works less well for the ego of some of the founding scientists, but it can work for in general.

That’s good. You agree on this? Actually, it’s funny because in, I looked up also for when, when I saw that kind of this founder led biotech and I looked into in Europe, which ones are like founder led and what is, what is especially, let’s say founders for a PG and you have actually a lot of successful biotechs.

So some of the bigger ones. Where was founded at PhDs, but then it took, I mean, I was that some of them, like molecular partners actually, I worked with them and Mm-Hmm, , there’s still, there’s still like, I think there were six PhDs or something, and still a PhDs. It took them a while to, to grow. But I mean, and more of this was the same at this I think was Postoc or PhD.

Mm-Hmm. was same. Selectus influenza was the same. Vac was the same. I mean, some of the big biotechs actually were the founder. I think sometimes it might take a bit longer, especially for the many. Found a CEO to also get the experience and all the skills. I mean, there’s a lot of skills to learn, but at the end of the day, it seems that it works quite well as well.

On the, on the younger one, I think the only one that comes to my mind is Thomas Clausell, actually from Orkan. It’s a bit more on the, on the tech bio side. And he was on the show as well. I think it’s you guys as a two, I think, if not the two only ones who are in this like range and the scale and still in the 40, at least, I don’t know any other, maybe you can, if you know, you can add.

Congrats on that.

It’s certainly impressive. 

[00:25:20] Balancing 3 kids

Philip Hemme: To finish on the personal side, I mean, and then I want to move really on, on Tribulus and really on going into the, the bio part. What I heard also actually from, from Stephanie was that you have also on the family side, you have three kids and that, that was also, I mean, quite, I mean, that’s surprising, but, quite a, quite a thing as well to build a company that scale and having a family at the same time, how did you, can you like elaborate a bit on this or share some of the challenges or how did you manage to, to do both at the same time? 

Dominik Schumacher: I mean, first of all, of course, with tremendous support, from, from my family, from my wife.

But it’s also, but the challenge is sometimes for me is. We cannot be, you cannot be the perfect father and you cannot be the perfect CEO at the same time that just doesn’t work. But what you can do is maximize the time I do, for example, I have a kiss and sends it, it’s super high quality time and that, then when you’re, there’s no email, no phone in that time, right?

These are, so some kind of principles that I try. No, I don’t always succeed, but there’s things that I try to do to. to, to manage that. And it’s also, I mean, there’s a lot of energy. I have three boys. It’s a lot of energy. And it’s, it’s also, it’s sometimes tough, but it’s also really great. And it’s, it’s just giving me also a lot of it.

That’s, that’s, 

Philip Hemme: I mean, I’m, I’m in the, now thinking about kids or having the discussion with my wife as well. So it’s kind of, I can, I can feel in one of the challenge I have, especially as a founder, is like, especially now it’s kind of very early stages, a lot of Uncertainty But it’s kind of managing this and there’s definitely some trade offs.

How did, what, what kind of trade offs did you have to make? 

Dominik Schumacher: Yeah, well, again, I mean, the trade off is for me that it’s impossible to be perfect and everything at the same time. You can be, I mean, you need to find white times when you are fully perfect for the kids and then when it’s really is needed, you need to be perfect for the company, but it’s.

challenging sometimes to be there at the same time. That’s a, that’s kind of the trade off. But of course it also needs, I mean, you can also, well, earlier on you can interact and talk with your kids about this and talk what they’re trying to find out what they need and how you can support them best.

And I think this gives a lot of connection also. That’s fair. I think, 

Philip Hemme: especially, I mean, if there’s three, I don’t know how close they’re together, but that’s can be challenging versus, I don’t know, one is already quite challenging, two, three. But that’s also fine. It’s also, I mean,

let’s, let’s see. I mean, let’s see for myself. Maybe I will, I will message you at some point. Always.

It could actually, I quite like this. Like I cannot be perfect, but I can, let’s say, try to be perfect on this mindset. I think it’s also quite a founder mindset. Like usually a lot of founders are very perfectionist in general. I But one mindset I like to apply quite a lot and it goes in that direction is like, I would just try to do my best.

So try to be the best CEO and the best father at the same time, I mean, in my case, whatever else. I just try to do my best with what’s in my control. 

Dominik Schumacher: And then, yeah, let’s see. Yeah. And also understand what is actually the best mean for your kids. Yeah. Doesn’t need to do as the best is actually. Know your customers.

What they, what they, what they need. 

Philip Hemme: Yeah. No, I agree.

[00:29:31] Tubulis & ADCs

Philip Hemme: Maybe moving to, to tubulism, I mean, on the, on the technology, you mentioned you’re in the ADC space. Can you describe a bit broadly the, I mean, you have platform company, describe it broadly like where you’re at, 

Dominik Schumacher: no? Yeah. I mean, ADC is a super hot space and it’s great to be in that space.

Obviously helps us a lot that there’s so much attention on the format. But what we wanted to do, and I mean, when we started, I also already mentioned before, everybody was like, Okay, it doesn’t work. Why are you doing that? Pharma companies were shutting down their the ADC units. It’s crazy because it’s not even 10 years ago.

Too long ago. Yeah. That’s crazy. But that’s, that’s what happened. And of course everybody’s asking, yeah, but they just closed. So why, why, why are you doing it? And what we want to, I mean, now there’s so much has been done in this space. We have so much knowledge now and we, we, we try to harvest that knowledge and really use it.

To, to make, try to get these format to fulfill their full promise. We have right now, ADCs in the clinics approved. We see a lot of patient benefit when it comes to overall response rates. Patients do respond. And we really see that these molecules can deliver. And reduce tumor burden, but the duration of a response actually is not that different.

It is improved, but it’s not the same of a difference compared to chemotherapy. And that’s, what we want to do and want to address with our platform. And what we, where we have been trying to make sure that we don’t impact the antibodies properties, even though we load them with a lot of super hydrophobic molecules, make sure that these antibodies actually don’t interact with healthy tissues and can actually deliver constantly over a very long timeframe payload to the tumor so that the tumor Payload then can really actually, destroy the tumor and reduce tumor burn.

And we do that by different, there’s a lot of, there’s flexibility. That’s what we, what we want to have when we design ADCs. It’s different to what CL Internet Access, that linker, one payload, and I’ve tried it for many different targets. We think every ADC Worst case, every ADC looks different. 

Philip Hemme: Okay.

Yeah, because I saw even early presentation you gave was really this like combination of the antibody, the linker and the payloads, but you had some technology around there. Can you be a bit more specific on the, like, what’s actual technology in terms of doing this combinations? 

Dominik Schumacher: Yeah. So when it comes to, I mean, antibodies, we, We, we have antibody experts at house, we get antibodies from external, we in license them.

But it’s not like we are a target innovation company, it’s not like we are antibody engineer, smooth pros, that’s not awkward. You’re not gentlemen. 

Philip Hemme: No, we’re 

Dominik Schumacher: not. We, our core expertise lies within the chemistry and how we can use this to, to create these ADCs. So we attach things to an antibody. We do that via, for example, the top tech technology.

We do it via the P5 technology, independent, independence of what we attach. One is better than the other. That’s where we have flexibility. You can attach two, three, two, four, six, eight. Even false payload doesn’t matter. And we always have these, we call it biophysical properties of the antibodies. And then we have various linkers with different solubility enhancers, cleavage mechanisms.

And we have a tool that we call Alco5, which is basically now at the other part of the spectrum. So if you have antibody, linker, payload, P5 Taptic is what, how you add things to the antibody. Alco5 is how you add thing payloads and. To the linker. Yeah. To the linker, exactly. And, this has also been super limited.

And with Arco five, we now open up the space of things that we can actually attach and we can deliver to, go to new mode of actions, more integrated mode of actions have an answer to and a resistency, be able to treat patients I mean, had to, was super. Super, super, paved the way for ADCs now to optimize one inhibitors.

Everybody works on it. We also, our lead asset, are making use of these patents. But we also start to see patients with resistance, you know. So there is always a need to continue to innovate and bring new mode of actions. And that’s what we enabled with AlcoFluff. 

Philip Hemme: I understand that and I heard also that, from my understanding, that the increased amount of payload is also really a challenge.

As in, you can attach 2, 4, but once you want to 8 or you even mention 12, that’s very hard and you are one of the only ones who can attach so much and still have a very stable confirmation. That’s, yeah, that’s right. 

Dominik Schumacher: Yeah, I think, I mean, it’s the, the, why is it hard? Because put so much things to an antibody that, where the antibody is not made for.

So basically, it it’s too much burden, kind of. And that’s the drug, drug antibody ratio. Exactly. And then you have better, You have bad biophysical properties, so it starts to aggregate, or you have premature cleavage of linker payload because of chemistry not being good. You have unspecific interactions with healthy tissues.

And that’s basically, I think we are not the only ones that can do a HIDAL, but we are one of the only ones, if not the only one, that can do it and still make sure that we remain the properties of the antibody that it had in the first place. 

Philip Hemme: How, how easy is this to measure this, this antibody property?

Like, 

Dominik Schumacher: Oh, there’s various different ways of doing it. So you can do like hydrophilic interaction chromatography, and then you measure directly the hydrophobicity of the molecule. And how it changes, you can you can, of course, you can also always measure the binding, you can measure aggregation, you can do pharmacokinetics studies where you see, do I have aggregation, do I have increased, clearance, which could be meaning you have increased unspecific interactions.

Philip Hemme: I mean, my question the other way around was like, how is it to prove for you, for you, for tubulus that you can do 8, 12 and still have very high biophysics? Yeah. 

Dominik Schumacher: I mean, in the end it comes to, to, to half life. What does it do in, and then live in the organism how long can the antibody actually be exposed?

Philip Hemme: Okay. Yeah, that’s good. Because I, I saw, so like as you said, I mean, ADCs are just super hot. We can talk a bit later about it on the whole space. It’s, I mean, it’s fascinating space what’s happening at the moment, but it’s really hot. But I also wondering where’s the innovation really was because I, I saw one, one exit was Mablink in France was, was last year, I think it was.

One was the biggest exit in, in French biotech last year to, to, I think it was j and j. Mm-Hmm. . Correct, correct. But they were really on the linker technology, I believe. Gen Mels acquisition, what was it? General, the profile bio. Yeah. It was also, I think on the, on the linker 

Dominik Schumacher: was 

Philip Hemme: a fol 

Dominik Schumacher: light receptor of everything.

A . Yeah. They bought the product. 

Philip Hemme: Yeah. And so but the thing. At least I remember listening to an interview from Jan from GenMap saying that they had also Linker technologies that GenMap didn’t have, I guess. Yeah. I mean, I was, I was, yeah just wondering exactly where the, where the differentiation is.

[00:38:25] ADC space is crowded

Philip Hemme: Because also one thing about ADC is like, if ADC is too crowded, I mean, I will show you the, the graph, but it was, in short, this, this figure, you know, Well, it was just, I guess, I guess, you know, that kind of figure, but it was like, that’s just like, in your case, like 2. whatever 53 in the clinics was the same mass for the same payload, like, I mean, and some in phase one, two, I mean, on the linker sounds like, I mean, there’s of course, a lot of options, but also a lot, a lot of people doing something.

So yeah. But, but I think you answered already quite well on like how you differentiate and how, you know, what, at least the technology makes you unique. So, I mean, yeah, and, and also what I just saw, I mean, the great news, I think was this week, last week, you dozed the first patient, or recently at least.

We dozed the first patient, yeah. So you’re a clinical company now. Clinical company. Amazing, right? Very exciting to us, yeah. So that’s a phase one to A. And at the same time you got FastTrack on the same program, if it was in the same week, 

Dominik Schumacher: really. Very shortly after, we got FastTrack. 

Philip Hemme: So that’s, I mean, that’s amazing.

Can you tell a bit more on the Yeah, so dozing and the FastTrack of what’s, yeah, also how you differentiate there. 

Dominik Schumacher: Yeah. And this is an, so this program is a NAPI to be targeting, ADC for treating patients and not wearing and non small saline caps. And that P2B was not in the, actually in the crowded space.

Oh, it’s actually, we are and this, this, the, you. The uniqueness of the target is that it’s quite well understood. And we are first in class for that for that target. And we are, we are super convinced based on the preclinical data that we have a very special program there. We have very long lasting efficacy profiles in preclinical experiments, very good tolerability profiles.

And of course, now we need to translate this. And if this comes true, these really long lasting. efficacy profiles to see that and patients, if this translation works, then this will be messed. 

Philip Hemme: How, like, how big is the trial and how, like, what’s the kind of expectations on the response rate and the long lasting?

Dominik Schumacher: We do have, of course, we do have clear expectations. We CMO that has a very good idea, but, kind of, kind of covered it. 

Philip Hemme: But I guess it’s a. I’m pretty small. I like the smaller trial. It’s not that. Phase 1, 2, 

Dominik Schumacher: A, like, well, it’s always good, important to have, you need to have sufficient data. You need to be able to understand the drug.

And with the trial, how we designed the trial, we are very confident that we will be able to do it. 

Philip Hemme: Okay. Oh, you didn’t, but you cannot disclose how many patients you are targeting or that’s not on the clinicaltrial. gov 

Dominik Schumacher: design or like? I know exactly how much we will handle target, but there’s also a number in the clinical trial of COVID, I guess, yes.

Philip Hemme: For those interested, you can check out the exact detail. Okay, now that’s, that’s good. I didn’t see this, that you were, I kind of guessed, but I didn’t see that you were really first in class on this target, but that’s, that’s To the best of our knowledge. 

Dominik Schumacher: Yeah. I mean, there’s so much ongoing on so many things under the radar.

Philip Hemme: That’s good. On the, on the fundraising side, on the financial side, I mean, you said you were also in charge and you’ve been super successful there. And actually that’s how I first heard about you guys, via Sophia from, from Andera. Yeah, I know. Very well. And she told me I Check, check them out. Take the, yeah.

There we saw it. That was the, the series B we got the numbers here at 63 million artisanal dollars, May 2022. And she led the round. She was amazing. And she’s, she’s great. I mean, yeah, it’s she, she’s great VC. And then before that you had a 11 million series a dollars again, that July, 2020, that was Biomath partners at the Grindr fund as well.

And then the last round, B2, B2, but, well, at least another round, I mean, I would. Probably call it more a series C, but March, 2024, and that was the more than a hundred million, a hundred thirty eight million dollars equity ventures. So the X XLSP next tech, and you even had the U S U S venture.

Can you, I don’t know, like just share a bit, how, how did it go through the fundraising? I guess that ADC is so crowded. So much traction behind ADC was, I guess, a challenge, but also a massive opportunity. Can you like share a bit on how, how it went for the funnel? Yeah. And you went the whole COVID thing, you race, basically for the whole COVID 

Dominik Schumacher: thing.

And maybe I can, I can tell you a bit on our last race because here we, it was really for us super important to get, to build trust and get exposure in the U. S. I mean, it’s so, such an important market. We are a European based biotech company and we will always be a European based biotech company, but of course.

We, we need to build the trust and we need to get access to the financial markets there. So that was a key driver behind us doing this additional financing round. And we, we, we did it in a, in a, in a phase where, still massive downturn, but of course we were confident to do it because of the ADCI.

And also because we are. I have this partnership, the deal with BMS that obviously gave us exposure and validation. So, that’s basically the reason why we went out and why we why we did this additional financing race and super, super happy that we, get, these folks. And also, I mean, next tech for me, next tech is, it’s a hybrid investor between Europe, Europe and U. S. Mostly in Switzerland. They started in Switzerland, but they are super exposed to the U. S. And they have an extremely good network. Very talented people. Extremely, great fund. And yeah, so that definitely helped us. And of course, this was a joint decision with our investors from the series B and from the series A round, because timing was for us, it was just right.

Philip Hemme: That sounds yeah. And I guess it was almost two years after the round before, so, was right time also to, to get that. I was about to ask you a song, like why, why you didn’t want to. A US investor to lead or co lead. I guess you went, so it was next to, I mean, being kind of half, and I guess you were discussing with many other VCs as well, like you can imagine, like, like in other rounds.

[00:46:12] Deep Track Capital

Philip Hemme: Maybe one, one thing I’m curious also, you, you mentioned you had a deep track capital in it and Fraser and both are like really big specialty investors in the top, at least deep track. I like, I recently, actually this week I saw them like randomly in the, in the figure that they have over 5 billion in the management, I think, and are basically in the top 15 healthcare funds, specialist funds globally.

Which is pretty crazy and it’s crazy that you managed to get them, especially on the earlier round. Usually they would invest probably a bit later, like pre IPO slash public companies. Can you, can you talk, and also they’re quite secretive, or at least they don’t, not that, that visible. Can you talk a bit about that?

How, how you got in contact with them? How was it? How was it like, how, how was the discussion? What do you think about them? 

Dominik Schumacher: Yeah, I, I mean, I totally agree to your analysis the quality of that fund and also Frasier, I mean, they’ve, they’re around since the 90s. What amazing experiences within this, these funds this is crazy.

And, Yeah, again, it is also here constantly talking, being there, interacting with people. And I was, having several meetings with some of the folks from these funds. And then, at some point they started the diligence and in the end, It’s always the quality of the science that gets the attention of these funds.

Ah. So, yeah. 

Philip Hemme: And they didn’t want to lead the landlord. That’s the, 

Dominik Schumacher: we, we we have with NexTag and a qt. Fantastic. Yeah. Hunt is to lead. So Yeah, that’s 

Philip Hemme: good. 

[00:48:17] Vision for Tubulis

Philip Hemme: Maybe on the, yeah, that’s maybe on the, on the, to finish on tubes on the, more on the vision of the company from, from what I’ve heard as well, you are.

really, you really want to build it in the, into like large biotech versus optimized for, for exits, et cetera. I mean, obviously it depends on the option, but can you share a bit more on the, on the vision and, and what it means in terms of decision you had to take? Yeah. 

Dominik Schumacher: So we are super, super excited about the platform and we want to, be a global leader in ADCs, and with the positioning that we have right now, I think, we are on our way and on top of that, we want to be pushing the boundaries of this modules, pushing, innovating heavily.

That’s why we invest so, quite, quite a bit into our discovery work and to our platform and to new things. And we, we do it because. We are actually quite convinced that with our, due to the technology platform that we have, we are one of the only ones that can do it in that way. And that’s what, what we want to be seen.

Can you 

Philip Hemme: share a bit about this on like, on, I think it goes, there’s some parallels to you staying CEO or whatever, CEO or not, but like on staying independent versus exiting and kind of what’s the best for patient. I feel like, at least, let’s say, a bit for my personal analysis, like, of course you can bring drugs to patients with big pharma, and in a lot of cases it works well, and there’s an amazing expertise there, but in general, I would say, being more independent, longer, you can create more value, even patient value, financial value, but also patient value.

Do you agree with it? 

Dominik Schumacher: I think it again always depends. It depends on the individual situation. Turbulence is super strong independently. We have, just with this financing round, we have, I mean, we have a lot of power to build this company, further with this company. We have, a super hot area that we are playing in right now.

So, we can be super fast. We can be extremely fast. And we can take decisions extremely fast. And I think this is of great value for patients. And we understand our science best and we can play our platform in the best way to continue to deliver innovation. And I think this is, this is why I’m really focusing on building this company, but this doesn’t need to be the case for everyone. And always there’s something that I think it really depends. It depends. 

Philip Hemme: Okay. And I guess you will, I mean, in any way, I mean, you always use this, but I don’t believe it fully, but you always hear that the best way to get a big exit is to build a company and the value for patients, which is true in some way, whether in whatever business, even in biotech and whatever business, if you have amazing business metrics, whatever the industry is a metric, you get a better exit.

But I still feel, and especially also I had some experience with exiting the first company, that there is some strategic and some decision that lead more to independent company or more optimized for exiting, and yeah, I 

Dominik Schumacher: mean, I guess you agree, Jos? Yes, of course, of course. And, for me, it’s always the, the focus needs to be what is best for the company and what is best for me.

Being able to build this company, keep opportunities, keep optionalities. That’s my role. That’s my, that’s why I am the hired as a CEO to create. 

Philip Hemme: And I was about to say, it depends also a lot on the options and and the opportunities you have. Yeah, that’s good. 

[00:52:59] ADC space is hot

Philip Hemme: Maybe to switch a bit more on the industry topics on like, on the top of, of of tubulus, I mean, on, ADCs, like a few things that I find, I find very interesting.

I mean, we mentioned kind of the gen lab acquisition. Interesting to see that it’s a kind of the first, we are like billion dollar biotech acquisition from a biotech company at this European biotech buying another biotech. It was, it was I think sun, it was, West coast based. I think they were mostly West coast based, but it’s interesting to see.

But that’s, yeah. And what’s also interesting, or maybe you can comment on this recently. I saw that there was some like less good news on the ADC front. I mean, I saw that like BMS walked away from a deal with ASI. I think it was a massive deal. It was 650 million upfront only three years ago. And they walked away.

And then there was this like massive Daishi sent you a deal with Merck, the U. S. Merck, like 4 billion up front. And then, I don’t know how many, what is it, 18 billion dollar milestone October 2023. But they got a massive like FDA rejection just recently. Can you comment a bit on this? On like, what’s your feeling?

Yeah, where, whatever, where is it? Yeah, what’s your feeling about these, these news, how you, how you read them, like? 

Dominik Schumacher: Yeah. I mean, of course, when it comes to BMS and eyesight, there’s probably a lot of things that we don’t know about it. In the end, it’s always challenging, to develop drugs and independent.

And sometimes it’s not the drug that is, challenging, but it’s different situations that are challenging. So I don’t, I don’t think this is a general, this creates a general view on ADCs or has an impact on ADCs. And also when, I mean, Daichi is Daichi Senkyo is, as the last guy said, Anita is in the field, they have, a really powerful platform, the really powerful, NDCs, but also for them, it’s sometimes challenging to, and I, I don’t know the details there, but I think it’s, it’s challenging.

And they will solve it. And they will solve, pretty sure. A few billions to solve it, I guess. 

Philip Hemme: That’s, that’s, I mean, they, they kind of invented some of them. They were the first 

Dominik Schumacher: ones to topize the maze of one and a bit, I guess. 

Philip Hemme: Yeah. Can you talk more about the history of ADCs? Like, because what’s one surprising thing is, is, is, It’s not the only, but it’s one of the only really biotech funded or bio like technologies that is actually leading from Asia, coming from Asia, Japan and China, but mostly Japan.

I mean, you have IPS cells as well, but in general, there’s a lot more from the U. S. or Europe. 

Dominik Schumacher: And also for ADCs. A wave of ADCs have been created. Oh, not created, but a lot of pioneering work has been done in the U. S. Ciengenetics. Ciengenetics. They have, nobody else before, to my knowledge, but nobody else before Cgen has been doing manufacturing for.

ADCs. Okay. So they have basically showed us how it can be done. And then we, of course, it’s like, pharma companies, there was a first wave immunogen is, we had, They weren’t bossed on the weapon. They were, they were not acquired, but They, they had so many ADCs in the program. They had, there was so much rich science coming from them.

And of course, with LHR being approved, this was a fantastic success for that company and now, got acquired acquired. But, a lot of pioneer work came also here from the U. S. Because 

Philip Hemme: I heard, I don’t remember the details, but I heard a story that was in, that was some Japanese, like, in the suburbs of Tokyo, scientist, and it was, he was working with IDCs, like, when no one, no one at all was touching it, and he was not even recognized.

I don’t remember who it was, but I don’t know that story. So if you find that again, that’s interesting because I think he was like really forgotten and like no one cared and then and he was working almost solo on it and for a decade or so and then And now more recognition. I will, I will try to find it.

[00:58:03] Chinese biotech

Philip Hemme: And that’s the other interesting thing as well. China seems to be really big on ADCs as well, at least like buy and take. I think they did two or three deals with Chinese ADC players. Can you talk about this a bit? Like, Oh, like how? Yeah. I don’t know how. Is it true, how do you have also, I guess you have some interactions, do you see it, how do you see that?

There’s a lot happening in China. 

Dominik Schumacher: There’s a lot of ADC development happening in China. And the quality is good. Yeah. The quality is really good. Okay. Of everything. I like that. Yeah. I mean, it’s a competition that we look at seriously and take seriously. 

Philip Hemme: That’s that’s good because I mean, in Chinese biotech, I mean, first, I mean, things are going really fast.

It’s crazy. I’m looking at it also from a, My wife is Chinese, so I’m kind of exposed a bit, and she works in biotech as well. So we have some discussions, some daily discussions about it. But what’s crazy is that, let’s say 10 years ago, it was like not much or very little in Chinese biotech. That’s true.

Like generics are big. And some like providers on the CRO, they’re already pretty big. But on real biotech, and now it’s crazy. Like in the last, let’s say last five years, it’s crazy. I saw you in the stats. I think 2023 there was more money raised in China alone, not even Asia, China alone, than all Europe combined in biotech.

Dominik Schumacher: I don’t know that number, but it doesn’t surprise me. Crazy. And I think what also changed is, When it comes to clinical development, I mean, China is super fast and clinical because they have these big centers and to recruit patients is super fast, but the And the big challenge there has always been that the history, the treatment history of the patients has been completely different compared to the ones that you see in Europe or in the US.

So the patients just react completely different to your drug. So the translatability of data from one area to the other, it was just super tough. Chinese companies, they do their trials in the US as well. They start from day one and do it in the us and that’s, that’s definitely different. 

Philip Hemme: Reminds me of, I don’t remember the name of the ASCO result was, I think Chinese company, Chinese run trial, but they showed superior result to Keytruda in, in one indication.

But it was only Chinese data or Chinese patient data. And then huge question of, yeah, I guess exactly what you mentioned of like. Will FDA accept this data or recognize them? But it’s also not surprising, I mean, same as a European biotech, if you want to access, if you want FDA approval, you need to run a trial in the FDA, I mean, in the U.

S. 

Dominik Schumacher: Yeah, it makes sense. Even there it makes sense. But, you know, if you, the European patients and the U. S. patients, very often, Treated super similarly similar. And of course if you have, if you do a trial in a patient that has been exposed to various previous treatment lines exposed to toxicity and the like, then it meant environment as well, I guess then the environment and then it’s just behaving in a certain sense to, to your drugs.

For example, if you have a drug that makes neuropathy. And the previous, the patient already had three drugs that make neuropathy, then it was much easier and faster to get neuropathy again. But if the patient did not get any drug that was causing neuropathy, then it’s the first time and the body can actually cope quite a bit until then you really have severe neuropathy.

And that is the kind of differences that really make it hard to really translate them. I 

Philip Hemme: can imagine biomarkers also have massive difference in terms of Depending on the biomarker, yeah. Yeah, biomarker and the biology, I mean, and even the U. S., I mean, it’s still a, what is it, 60 percent Caucasian population thing in the U.S. And I guess in Europe, whatever, 80, 90%. I guess there’s some more common genetics than with the Asian population, just a reaction to drugs as well. All right, 

[01:02:53] Luck vs success

Philip Hemme: so, maybe a last, last topic, which you mentioned a bit of like, okay, we are in ADC. Basically, the topic is about luck and timing, and you mentioned it a bit with ADC, I’m wondering how, like,

like how, or like, yeah, I mean, how, how luck plays a role in your, in your whole like career and was a curious story and how do you, how do you approach it? How do you, how do you see it? I 

Dominik Schumacher: mean, in the end, luck always helps like in the sense of. We’re doing it at the right time, but for one example, but we also made the decision to do it now.

So, it’s not pure luck, right? Yeah, yeah. Because, I mean, and I totally understand what you read, but, 

Philip Hemme: I don’t mean it in a degrading way. No, no, no. I don’t mean it as a hundred percent luck. Actually, I mean You, but you need a meeting and how much luck you need it, you 

Dominik Schumacher: need a little bit of luck. But at the same time, and this is always what, this is a good thing about the human, you always remember the positive and the luck.

This the situations where you’ve been lucky, but there has been also, of course. I cannot tell you how many doors have been closed for us. And then you just need to say, okay, but there will be a much better door opening very soon. And so I continue and I go on. 

Philip Hemme: Because I mean, yeah, I like that. It’s funny what you said that you wouldn’t remember.

Like, I feel like we were definitely more lucky situation than unlucky, but I feel like, especially at this, let’s say founder and CEO level. We tend to remember much more what we have done, what was in our control than what was random slash luck component. How do you like, how do you, how do you 

Dominik Schumacher: approach that?

I try to reflect and try to analyze, analyze situations, be rational about things. And? And then you can have a rational view on it. You 

Philip Hemme: sound pretty, like, pretty handle and pretty, like, very aware of it. I like very, yeah, I don’t know if aware is the best word, but very rational about it and, and reflecting on it.

I try. It was the same discussion. You cannot be perfect, try, try. No, I mean, because I think that’s one factor as well, whether, I mean, again, not, not in a degrading way at all, but when I, when I looked at, at your story and when I looked at tubeless. There is definitely a factor of like being in the right space in the right time.

Of course, I mean, what did Einstein said? Whatever. Luck smiles only to the opportunist or whatever you need to, to take the decision and to provoke luck as well or be there when there’s luck that shows. But still, I mean, that the space is so hot is basically kind of outside your control or like you were there and your PhD already.

I don’t know why you went into ADCs. If that’s, I mean, you were basically unlucky at the beginning that no one wanted to do it and then they lucky in. Very hard to isolate how much difference it would have done. But for sure, for example, on the fundraising, I mean, would have been less thought you you have probably a factor of whatever two, two, three, two, three, four X difference or five X.

Dominik Schumacher: Yeah. Could be. And I’ve been, we had one, when we did the series B finance, we did it in the right timing because we knew before, but indeed now I can say it was the right timing. Because just after us closing that the finance markets was that so just two months later, starting kicking off the finance 

Philip Hemme: in the 2022 could have an old one. Yeah, that’s a lot of, yeah, yeah, sometimes, I mean, there’s definitely, there’s definitely like, yeah, involved, and I guess, I mean, the whole discussion, there are some moments where you say also like, yeah, some like, but you, you’re also very good at, for working at some, yeah.

Overall, I think it, it, it wraps up even what you said of like, being in a biotech family. I mean, this is definitely outside your control, but you can also, also, what you make out of it. And how you not profit from it, but how you, whatever, absorb it. Yeah. It’s also everything connected somehow. I think it, it, it wraps up, it’s good.

We, we, we started with something connected to like, we, we finished with something for like yeah. Amazing. Congrats with, with everything. I continue, I mean, continue the whole adventure. That’s a, that’s amazing. 

Dominik Schumacher: Thank you so much. It was, it was fantastic. 

Philip Hemme: Thank you.

Thanks for listening to the end. I’m impressed by Dominic’s stories and how much we have in common as a bio founders. I’m also impressed by the quality of the platform and the level of ambition. If you also enjoyed this episode, please hit the like, follow or review button. Any of these actions would help so much.

I would be also curious to hear what you think. So if you could leave a comment on any platform you are below or should be an email at philip at flots. bio. All right, catch you in the next episode.

Otello Stampacchia, Omega Funds 🇮🇹 | Competition, Boston & Pasta | E18

We’re in Boston 🇺🇸 with top VC Otello Stampacchia of Omega Funds 🙌

We talked about the highest competitive tension in biopharma now that he has ever seen. We also discussed his career, especially the challenges and opportunities he had from moving to Boston over 15 years ago. We explore his insights on venture capital, Omega Funds’ biotech investments, and life science innovation.

💎 ABOUT THE SPEAKER

Otello is the founder and managing director of Omega Funds which he started in 2004. As an investment guru, he leads the investor relations and strategic initiatives. Previously Otello led the fund investment of one of the largest private equity asset managers in the world, AlpInvest Partners. He’s also been involved in many European biotechs such as Lombard Odier Immunology Fund, Goldman Sachs, and Index Securities (now Index Ventures).

Transcript

[00:00:00] Intro

Otello Stampacchia: Just across the industry, with the possible exception of Novo and Lili, almost everybody needs to do supplemental pipeline acquisitions. So the challenge is there aren’t many assets like that. The whole discussion makes me think about how much cash there is in pharma ready to be deployed. Yeah, it’s close to a trillion.

This is an incredible job. You, me, smart people every day. No, it’s true about you and obviously the CEOs that we invest with, of course you. Lessons learned. Again, I should have probably moved to the U. S. earlier because it would have allowed us to scale the organization and the fundraising faster.

Philip Hemme: Bienvenue to a new episode. I’m your host Philippe and on this show I’m interviewing the best Europeans in biotech to help you grow. Boston is the biotech powerhouse in the world. It hosts many top biotechs, pharma, academics, but also top VCs. And one of them who has a strong European background and connection is Othello from OmegaFonds.

So I went to Boston to catch up with him. I’ve known him and followed him for a few years where he has been very successful. especially on the exit 5. And he’s just a super fun and chill person that you talk to and also has strong contrarian views. So we talked about the highest competitive tension in biopharma today that he has ever seen.

We also talked about his challenges and opportunities for moving to Boston a bit over 15 years ago. So here’s my conversation with Zotelo and if you’re enjoying it, please hit the like and follow button.

Welcome to the show. 

Otello Stampacchia: Thank you. Nice to be here. Nice. Nice. Yes, you picked a very beautiful day today. Thanks. Very nice. That’s amazing. 

[00:01:57] Competitive tension in biopharma

Philip Hemme: I, I want to, I want to start with competitive tension in, in biopharma the shit today. Actually, I saw one, a few posts on, on LinkedIn and that’s kind of the trigger for me to, to reach out.

And that’s why we have this conversation now. And that was just after one of very nice exit of iBio. Right. And but you said that you have never seen such a scarcity for clinical stage assets in your past 25 years. I 

Otello Stampacchia: think that’s fair. Can you expand 

Philip Hemme: on that? 

Otello Stampacchia: Yeah, maybe a bit of background. So I used to do M& A when I was in banking in the 90s.

And I had a nice overview on what was going on in the European pharma consolidation at the time, and I’ve been a VC now for about 20 years, actually, with Omega, and before that I was doing also VC. So I think what’s driving the current situation is the result of, you know, I would call relatively macro trends within the pharma industry.

So one is the fact that, as you know, pharma companies need to continue to replenish their pipeline. Historically, in addition to their own R& D, they always done transactions, partnership acquisitions from smaller companies. But what was available to them up until a few years ago was also large transactions with other pharmaceutical companies.

That’s no longer available because of the environment with the FTC in the U. S. So I think over the last, I want to say three, four, five years, there’s been a shift towards smaller transactions from the pharma point of view. And those transactions have been rewarded. A very good example would be Merck, who has a very large patent expiry in a few years with Keytruda going off patent.

And they started really adding to, to their pipeline via some of these external transactions. Prometheus, obviously a very large drug. And a few others, including some of our companies like Imago and other companies have done the same. So Appview recently with Cerevel and a few other acquisitions. So, so I think what you’re seeing now is a result of a few years of needing to fill in their pipelines.

Usually a late stage clinical asset in our, you know, universe would be in a company that’s already public. What you’re seeing, though, is that the public market has been much more selective, in my opinion, rightly so, that’s a different topic, perhaps, but much more selective over the last few years.

I get a lot of, well, ways to put that away, but but, you know, again, different conversation. And as a result companies are staying private for a little bit longer, and they’re not unhealthy, in my opinion, and so what you see is that the, the low hanging fruit in terms of very lay stage.

Publicly available assets that have achieved a certain level of maturity is kind of gone, right? There’s no, I mean, obviously it’s not a steady state. So there’s obviously companies that go public and developments develop. I guess it’s always a great scale. It’s like 

Philip Hemme: this less, less, less mega deals available, less later stages.

So you end up more pressure. 

Otello Stampacchia: Right. No, that’s exactly right. So if you start, not that I’m a person like that, but if you are the head of clinical or the CEO or the head of business development in a large firm for companies, and you need to fill in a huge pipeline gap in terms of revenues, you start from, you know, large potential drugs.

And those will usually be housed in, in companies that have achieved a certain size, right? But once you buy those, and there aren’t a lot of those, then you need to start going, you know, smaller in terms of size. So, so that’s happened and that’s happened for a few years. And now as a result, the pharma companies are looking at private companies.

So I think just this morning, I believe Kind of a cascading Correct. Casing though. Right. And also eventually, by the way, this is going to end up again, that probably is something for next year and the year after next, but eventually these pharma companies need to also replenish their late preclinical and early clinical pipelines.

So what you’re seeing, excuse me, you started with large public companies, biotech acquisitions, then smaller public company biotech acquisitions, now the privates. And eventually in the next one or two years, you’re going to see probably more large revenue BioBucks headline preclinical deals or early clinical deals.

So, so back to your question, I’m sorry, it’s taken me a while to answer it. I guess. This is a dynamic that is now industry wide because there’s a, just across the industry with the possible exception of Nova and Lilly, almost everybody needs to do supplemental pipeline acquisitions. So the challenge is there aren’t many assets like that.

And. I guess our luck has been that we always focus on clinical stage asses or from clinical strategy. So as a result, we’ve been very busy, but also as a result, we’re seeing a lot of these competitive dynamics play out, which led to the post that you mentioned, which I saw was 

Philip Hemme: very popular. What was it?

What? It’s the. Now, what is the 20th deal in the last two years or something now? So, so, 

Otello Stampacchia: yeah, so, so thank you for pointing that. So, so since January 2022, I believe we had 10 MNA exits in our portfolio and three listings, you know. And I hope both numbers will go up a bit, but, you know, obviously, we can’t guarantee that, but 

Philip Hemme: We are very busy right now.

That’s what we do a lot. Yes. That’s amazing. It’s, it’s, yeah, I didn’t see it. I didn’t see the cascade that much, but it’s, it’s really, I think it makes, makes total sense. Yeah, and it reminds me also of like, so in, in like the, all the trend of, I think it started really a lot in 2008. They’re really like shutting down internal programs, internal R& D and going, and going more external R& D.

So I guess that kind of started the movement and now we are like, we’re doing pharma. Yeah, within pharma. 

Otello Stampacchia: Yeah, I mean, it’s a very long trend. So, I hope I remember the numbers correctly, but when I, when I started Omega about 20, 21 years ago now, about 40%, maybe 44, 43, whatever percent of all clinical trials were done by smaller companies.

Yeah. So now it’s about 75%. So, and I think if you speak to most people in pharma, they acknowledge there’s a real challenge in doing fundamentally innovative. Again, there are exceptions, I mean and there’s always going to be phenomenal programs that these companies develop. Again, I mentioned Lillian Noble, there’s quite a few others, but it’s almost a built in structural issue.

These organizations are massive, it’s super hard for a true drug developer to push forward for a controversial program, it’s just not going to, it’s going to be a lot of inertia. It’s easier in a small company. I guess what’s, what’s 

Philip Hemme: also, and I want, I want, it’s interesting and I want to challenge or what’s your view on it, but what was interesting as well is that this number you mentioned of going from 45 to 75, what’s interesting in the background is that it was positive from the ROI for Pharma as well, as it was basically cheaper for them to buy in than to do the internal R& D.

I’m wondering now with the size of the deals, when you pay 1. 3 billion upfront funds for. Early stage clinical compound, or drug, starts to be more expensive if you pay, whatever, 10 billion, or a company that doesn’t, free revenues, like, 

Otello Stampacchia: yeah, no, it’s a great question. So and listen, I used to run this counter cash flow analysis when I was a banker a few years ago.

I think that. There’s a couple of comments on that question. Maybe I use the Merck Prometheus example, and then you mentioned iBio, which is the latest acquisition. By the way, we weren’t the founders of this company, but we invested in the latest financing. So a lot of credit should go to the founders of the company, by the way, but so back to your question.

So, so I think the thing that really shocked me when Merck announced the Prometheus deal, which was a relatively expensive deal, if I remember correctly, it was close to 13 billion, 12. 8 or something like that. The, the Merck share price went up by more in terms of value by more than the acquisition.

And that is a fantastic result because a, he provides. Management of this pharma company is the cover to say, well, okay, we’re doing top line accretive pipeline, accretive transactions versus what they used to be able to do before the FTC kicked in, which were these financially accretive transactions where you basically buy big companies, cut down all the costs, you keep the drugs, you already have your sales force, but that doesn’t give you a top line growth.

And we need top line growth in this business. That’s what this business needs. You can’t just keep engineering your way out of a lack of a pipeline. So that was something that really was important to me. And it’s happened since. In a number of these other transactions, once you see them announced, very often the market cap of the buyer goes up by more than the value of the acquisition.

You’ve seen this for a number of things that AstraZeneca and so on have done. Now, the second question when you talk about iBio is that, A lot of these acquisitions are for very large market opportunities. So I think the challenge right now, and it is a problem, I believe, for some disease and for some patients, is that pharma is really not interested in indications that are less than a billion minimum.

And I understand that. I think it makes perfect sense from their perspective. So now, again, back to your question. Okay. Well, you see, okay, you know, it’s a company that just finished their phase 1b, 2a study, right? You’re talking about iBio again by the way, I wasn’t the Omega board representative, but you know, obviously I was quite involved from our point of view, but it is an absolutely massive market.

And, and what really shocked me when they announced the data at an ophthalmology conference is that every single patient responded. So what Merck has done, and by the way, there were other people interested in the drug, obviously, but what Meck has done, which I thought was very attractive to, to us and the company, was they’re gonna go straight into Registrational trial.

So I think from a, obviously I don’t have the DCF point to me, but, but the, that is a quite phenomenal thing because if you, if you do that, and this is a, a huge market, right? See, see what Vamo is doing from Roche and there’s a few other drugs on the market. Of course it just, it’s a pretty large trial to run us.

Right. Which is why this was a great fit for a pharma company. I have to say they’re very good at that. They’re very good at clinical trial execution for large, large trials. So again, I agree prices are going up in the space. But at the end of the day, that’s, that’s what people need to pay. If it is a large addressable market, the option for these companies would be not to be acquired and go public and it is still an open IPO market to be able to finance these large indications once you have very convincing clinical trials.

So that option is still viable. Now, obviously you need a team that can execute on those large trials. And I agree, pharma is better there, but at the end of the day, there’s a bit of a competitive tension. Is this am I the only bidder? Yes or no. Is this something that I absolutely need to diversify my pipeline?

And what was interesting about Roche, this is their first approach into ophthalmology. So this will become actually a cornerstone asset in my opinion, for their therapeutic area, for them. I think that obviously. I’m biased, but I think that more than justifies the price. 

[00:14:43] Cash in pharma

Philip Hemme: Good to hear. Yeah. I mean, also the whole discussion makes me think about how much cash there is in Pharma ready to be deployed.

I remember a thing was two years ago from Nubar, from Flagship, a comment that there was whatever, 760 billion in thing. I think this month I saw the figure was more like a thousand billion now in the Yeah, it’s close to a trillion. 

Otello Stampacchia: Close to a trillion. Well, I mean, these companies are very cash generative, right?

And also they can leverage. They can leverage, they can raise debt without any problem if they wanted to. They’re phenomenally resilient businesses, right? I mean, it’s wonderful to have a drug on the market, right? For a number of years, great margins. So, there’s a lot of financial firepower available to these companies.

What they need is, is top line growth and, and, and they’re going to lose, I forget the exact number, but close to 200, 250 billion of their current revenues will go off patent in the next four or five years. It’s a huge number. And even you 

Philip Hemme: mentioned, I mean, Kay Trudeau, I think now it’s like 25 billion.

Trudeau, by the time he was off patent, it would be close to 40 billion. 

Otello Stampacchia: Which is, which is any good. Just 2023 was 2023 was about 25. And I think this year is going to exceed 30 billion. No, no, it’s an incredible drop by the way. But to replace that, he’s super hard. And incidentally, I mean, think about the problem that Nova and Lily will have in four or five, six years.

Right. The, the, the. I forget exactly which drug expires when, but between 2030 and 2032, both of the GLP 1s will go off patent. That’s also very good. Yeah, we can talk about patent extension tactics, and I’m not a huge fan, for example, of what happened to Eumera, right? But you know, that’s a separate topic, which is an important topic, by the way, for the social contract.

But I can tell you, both companies are already thinking, what will happen? In those four or five years and, and they’re going to continue to leverage those cash flows in two ways. First of all, they’re going to have to increase manufacturing supply 

Philip Hemme: because 

Otello Stampacchia: they can’t supply enough of this drug and they will not be able to for years.

Yeah. I thought it is building like six plants or something like that. So Lili, between Lili and Novo, I see, I think I’ve seen over 20, 22 billion of investments in manufacturing and this is probably an understatement. So, you know, one thing is going to be manufacturing supply increase. And the second thing is going to be, well, pipeline acquisition.

And I can tell you, both companies are incredibly active into, into that. So, so you will see a lot of that cashflow being redeployed in 

Philip Hemme: my opinion. Makes, makes sense. And I mean, makes sense of also of what we just discussed, like, I mean, it’s a good fit for them, I guess, that most of the optionality is on the early, early station assets, because this means.

If they buy it now, yes. Yeah. And so four or five, six years would be ready. Okay. Makes sense. I mean, we had the Claudia from Cardio on the show and it was exactly this as well. Like they just finished a phase one B, or one B to a, I think, had great data and then had some options, but was basically the best options to go with.

To go with, 

Otello Stampacchia: I mean, what these people can do is, is really blow up the The size of the future clinical development, right? They don’t need to take shortcuts. They can invest in multiple trials, large trials. They can look at different indications. So I think for a certain type of indication for certain stages of the drugs these people, the national buyers of these businesses now, you know, I still think there should be some companies that go it alone.

Like, look at what happened to, obviously, Regeneron was a while ago, Vertex. So we need those champions as well, not just a big, big pharma. And there are, there are a lot. I mean, I forget what the exact number is, but I think there’s over a hundred, more than a hundred companies with market caps above 5 billion in our, in our industry.

And they are a great source of competitive tension, you know, pipeline, optionality, partnership potential. So. Hmm. So I think the ecosystem needs the, the very big guys, the not so big guys and the small guys. This 

Philip Hemme: place, I mean, there’s so much space as well. I mean, as you said also from a, at the end, I mean from a benefit to patients and how it translate into economic value, there’s just a huge need.

And this drives, 

Otello Stampacchia: so I, there’s two things that make me I’m glad you bring that up. The, the, you know, first of all, I consider myself incredibly lucky, right? This is an incredible job. You, me, smart people every day. No, it’s true. And, and, and it’s well, you and the CEOs that we invest with, of course, of course, but the, so we are quite fortunate to do this and we should never forget that, but, but looking at it from the patient perspective, which was a great comment you made, we are truly in a golden era for our industry.

Because there’s been an absolute convergence of a lot of technologies. You know, CRISPR cell therapy, gene therapy, you know, AlphaFold, computerized drug design and discovery, blah, blah, blah. And, and we are better at deploying this for patients. We’re not only better, we are faster. When I started, I think, investing a while ago, it would take 6, 7, 8 years to go from an idea to the clinic.

Now, across our portfolio, routinely, this happens in two, three, three and a half years, which is an incredible improvement. And the drugs that are being developed are truly impactful. Again, not to keep going back on the GLP 1s, but everybody talks about it, so it might be an easy thing for your audience to understand.

These drugs are truly impressive in terms of the effects they’re having, not just on obesity or diabetes, but a lot of other diseases. So, so I think this has been really we are at the cusp of a convergence of a lot of factors that are making this industry really impactful. Now, it is still expensive to develop these drugs, of course, it is still, we still need to figure out, particularly in the U.

S., the affordability for patients. And I do think there needs to be a proper societal debate about how insurance works in this country. Obviously, I’m European, so I shouldn’t, I shouldn’t talk about this. Yeah, but it’s a, it’s a very complicated topic. That’s the problem. So for the, for the normal average public, it’s super hard.

And it’s easy to obviously paint the drug companies as the bad people. And there’s been some bad behaviors for sure. We mentioned you Mira. Yeah. But I do think this industry fundamentally wants to have an impact on patients and develop good drugs. And, and they need to be given the opportunity to do it.

I think we could talk about yeah, that’s a very long topic as well. Absolutely. Next 

Philip Hemme: week. Yeah. We, I mean, we talked about it just for your information, also for the audience. We talked about it with Tim from having where the episode is not released yet, but we thought quite a lot. And actually exactly about this, because.

He is quite active in the U. S. without being worse. And making a lot of returns in the U. S. But at the same time as British, he’s a very strong French French anchor as well. Yeah, his wife is French. And he speaks perfect French, actually. And he speaks, so he’s also like, he was a bit, I mean, not schizophrenic, but a bit like, on one hand, okay, we need all the benefits.

But on the other hand, as a patient, it’s like, actually, what we do in Europe is, on the drug axis, it’s also not that bad. I said it. Same on like. But what I find extremely difficult and maybe you can comment on this is like, is, is where to, if you need to take a, basically a decision and, and what’s, what’s the like close it, not ideal, but like, what can be improved?

Because at the end, I mean, of course we need to find a solution. Of course we need to make it affordable, but just, I think what’s, I mean, at the end, it comes down to, I don’t know what exactly for me, I feel like it’s. It’s basically on like the margin where it’s, the key thing is saying, are you talking about 20% EBIT for big pharma per year, or should it be 18 or should it be 15?

To me, I think it boils on a bit to like, 

Otello Stampacchia: yeah, I don’t 

Philip Hemme: know if 

Otello Stampacchia: we rewarded as well, but, listen, I think this could be hours, obviously. It is a super important topic, so I’ll try to address it and, and I’ll make a couple of comments. I, I, I’ll start from the point. I don’t know if you want to regulate an industry that is so innovative as a utility, right?

If you say, okay, you should have X percent profit margins, I think they’re going to say, is it possible to regulate? Like, well, no, no, you could, you could, I mean, but, but obviously very difficult. And there’s a lot of second and third order consequences that are probably even hard to predict. I will make a couple of comments.

Maybe one is that I think the social contract needs to be understood better by all parties involved. And, and the social contract is. You society give us a protected monopoly for these innovation that I will eventually bring to the market. So I will make the investment in that innovation at the end of that protected monopoly, which is X years, right, right now with the IRA is actually quite short on it.

And by the way, there’s a whole conversation about small molecule versus biologics, which is completely insane, but let’s not go there. So at the end of that protected monopoly, that innovation would be available in perpetuity to society forever. At much lower prices. So conceptually it’s a great social contract.

There been distortions, you mentioned companies who, who extend their patents for a long time. I think that is a, not, is a behavior that should be fought against. The other thing that’s very important is that the, the price of drugs actually doesn’t go up as much as people think. And hospitals also never go generic.

Right? And the inflation of hospital costs and, and, you know, just billing on patients is, is actually much worse than drugs. So that’s the second comment. The third, the third comment is that in this country in particular, obviously, I lived a lot of my life in Europe. I still spend a lot of time in Europe, obviously.

But in this country in particular, there’s a real issue about the way health care insurance works. Because take the average European country. It’s very often going to be a national health insurance program, which means the national health program will count on you being a patient for your entire life.

So as a result, you can do an amortization of the cost of the therapy now versus your benefit in terms of your quality of life, your, your length of life for some diseases. For a much longer period of time. So you can amortize the cost over a longer period of time in the U S that doesn’t happen in the U S where you have is most insurance because us, obviously it’s a huge country.

People change insurance and your insurance is more often than not provided by your employer or private insurance. So insurance companies shake the term and yes, they made a calculation that you’d be with them for two or three years. So these causes all sorts of challenges. And also there’s this you know, Purchase benefit managers is PBMs whose whole reason for existing is they’re, they will extract a discount from the cost of the drug from the drug manufacturer versus the employers.

The problem is that this actually pushes them to a very high list prices because then the discount looks bigger, their profit is bigger. Versus an actual net cost, which is lower. So, you know, there’s a lot of distortions in this country. At the same time, I think it is untenable. that basically the US system continues to pay for innovation for the rest of the world.

That’s just not fair for the US. It’s not fair. So I think some kind of equilibrium needs to, 

Philip Hemme: but you, Geoff, I mean, you just said that it’s something around, if you calculate it on three quarter or 80 percent of the cost of it covered by the US. 

Otello Stampacchia: Right now, in terms of profits this country is probably the majority of the overwhelming majority of the profits of all the pharmaceutical sales in the world or in the US.

Again, the country also reached the benefits, right? A lot of the research and innovation is here. These are highly earned, high earning jobs. So they pay taxes. There’s a lot of investments. I mean, look just at this city, biomarket investments. I mean, go look at the seaport where all these pharma companies, including European pharma companies, AstraZeneca and so on, have been making as investments.

So the U. S. also benefits from that. And by the way, they will continue to benefit because this industry is actually a very strategic industry from a lot of perspectives. But again, very long topic and and I think you should speak to people who are better equipped than me, but it’s a 

Philip Hemme: fascinating topic.

I will just mention also for the audience, what you were saying about the hospital costs not going down versus technology slash drugs that go down. Reminds me of Peter from Kolshevsky from AI Capital. And Peter has written and said a lot about this. He is very into, as he should, absolutely, but very into one side, but I think he goes very deep.

And at least it’s very well researched. I would say, I mean, not biased, but very opinionated and taking one side. We all agree. Very 

Otello Stampacchia: interesting to see. No, and Peter, to his enormous credit, has spent a lot of time researching the topic, trying to make it available to a broader audience. He’s obviously a fantastic thinker.

So, and he should be commended for trying to explain this. It’s a very difficult topic to explain because the, the slogan from, you know, one side is the, the drug company is profiteering, right? That’s the quick slogan, which is very catchy. And our answer is war and peace, 850 pages. I mean, that’s obviously very difficult for the general public, you know, and 

Philip Hemme: yeah, anyway, interesting topic.

It’s a great topic. We could talk a lot. And I mean, amazing first part of the conversation. 

[00:29:19] Personal background from Italy

Philip Hemme: Before continuing this, I want to take a bit of, of attention to more your personal history also for our listeners to understand also where all these, all these comments come from and where you come from. And especially as you mentioned, I mean, we’re here in Boston, you grew up in Italy, started studying Italy, lived quite a lot in, in Switzerland, Geneva.

No, I think most of the time in Boston, but still quite a lot. Try not to be in the winter though. You prefer to ski instead of the. 

Otello Stampacchia: Yeah, I do prefer to ski in general, but yeah, the winter is a little bit tricky. I’m from the South of Italy and I still have a, and obviously, as you can tell, I don’t have a lot of hair cover.

But yeah, everybody, I mean, it’s a wonderful city to be, particularly this time of the year. It’s absolutely amazing. Yeah. Absolutely. 

Philip Hemme: And can you tell a bit like in short or expand a bit on your background of what’s kind of free omega and maybe some of the lessons there you had as kind of, as I said, the European, a bit two foots on both continents, especially connected to bio, biotech.

Otello Stampacchia: Yeah, I’ll, I’ll can do a quick bio. So yes, obviously I studied science quite a bit. So I actually have a couple of PhDs. Doing my PhD in Switzerland, I did three years of patent law, which was very interesting for me at the time. Then ended up working in an investment bank. So I was at Goldman Sachs for, for a few years in London in the mid to late nineties.

And that was a period that, that saw a lot of pharma M& A in Europe and Goldman was working on that. So it was very exciting. Yeah. Interesting. Then eventually I joined a very large private equity firm in the Netherlands called Alpinvest Partners. They’re now a part of Carlyle, which is a, obviously a big buyer shop.

And there As a big worth. Yes. Yes. Yes. So, so this yes. They’re all these very large private equity shops have figure out in a sense that this is a very unique asset class, which is hard to, Invest in and develop without some very specific competence, like, you know, what we have been trying to build.

Exactly. And interesting enough, a lot of our peers, ourselves included, have been approached for some kind of partnership or whatever, acquisition from one of these shops. Because, you know, it takes, I mean, the joke, and it’s not really a joke, is that I’m, I’m, you know, I’m in my mid, whatever, fifties. And I’ve been doing it now for 25, almost, you know, longer than that years.

And I’m getting good at it now. So and people laugh when they hear it, like you said, but, but it’s true because it’s a, it’s a very long apprenticeship process and, and persistence in this industry is really disproportionately rewarded. But back to your question about my life. So I ended up at Alpinvest and I was there in the Netherlands which was a wonderful place to be and a wonderful time to be there.

I spent a bit of time in our New York office as well. And I had two jobs, actually. One was to build a investment portfolio on the healthcare side. But then I was also helping the fund of funds team on building some kind of framework analysis for investing in venture funds. And so they gave me a lot of exposure to, to, you know, different styles of investment team from, from these GPs and these venture funds and different geographies and different type of companies that they were investing in.

And the thing that really struck me is that more often than not, drug companies were the most consistent sort of exits. And that looks simple enough, but I want you, when you start digging what’s gonna be needed to be successful about investing in drug companies, it’s actually very hard. So it’s an easy recipe, but very hard to execute.

It’s almost like Italian food. So the, the, the recipe is very simple. I love pasta. Right. So do I, obviously, as you can tell. But so the recipe is relatively simple, but the quality of the ingredient is absolutely essential. And if you mess up one ingredient, it’s working on True carbonara from, ah, yes.

I still don’t manage to get the eggs perfectly well. You gotta get the guanciale. Guanciale is the secret. I have the guanciale, the egg part at the end. Ah, yes. Well, we can talk about that as well. I mean, it’s one of my favorite pasta, actually. So, so I decided, okay, this wasn’t going to be necessarily the place to do it.

And, and actually just a few weeks before I got married I decided to kind of spin out. And, and I became a consultant for a few other companies for a few years to just raise money. And then we started raising a very small first fund, we did it in 2004 out of Switzerland. And then, you know, try to raise capital in Europe at the time was difficult I think still is.

I don’t think there’s a real appreciation in most institutional investors portfolio for the asset class. And certainly there wasn’t at the time. I think still is there. Yeah. I think, well, it’s changed a bit. Changed a bit. But it’s still hard, I mean, It’s funny. Most of the conversations I used to have, and I still do to a large extent with European investors that they don’t understand the asset class.

And okay. I’m sympathetic to that, but my joke to them, and some of them get upset actually, when I say that, but my joke to them is that, well, If you were to understand this asset class, what would you need me or our firm, right? I mean, we have, I don’t know, 13, 14 PhDs here, MDs and all that. And, and, and, and we don’t look at this counter cashflow.

That’s a relatively commoditized tool to look at the you know, private equity companies. We look at a one drug versus the other, the quality of the management team, clinical development strategies, what are potential buyers, competitive landscape, blah, blah, blah. So it’s very complex. But once you handle that complexity, there’s an incredible note.

to protect from, from competition. Also, and I don’t know if people really appreciate Returns are just there. And the returns are there to a certain extent, independently of market conditions. Because if you invest, and again, this is something that I don’t think the industry does a good job of explaining to our own investors.

We try, hopefully. But if you have a drug that addresses a very severe medical need in patients, And you show data that demonstrates an impact on those patients. Well, that is the most uncorrelated asset class on the planet. You don’t care about China. You don’t care about the war in Ukraine. You don’t care about inflation.

You care a bit about inflation. You don’t care a bit about unemployment rates compared to other asset classes, I guess you care. Wait, the tech industry, a huge part of the tech industry is actually much more subject to those macro factors than, than drug companies are. And 

Philip Hemme: even to our discussion, you see it today.

I mean, there you go. Even with uncertainty, nobody 

Otello Stampacchia: cares. So, so I think the, the, the, again, if you invest in this specific Aspect of our industry, which is drug discovery and development. There’s a lot of uncorrelated returns that can be met if you can pick the right drugs. Right. And, and actually, maybe I should have started with this.

One of the statistics we are proudest of at the firm is that over the last 20 years, we’ve been involved with companies that have launched 50 drugs on the market. That’s a huge number. And obviously that has had an impact on patients, which makes us very proud, but it’s also had an impact on our investors because of those exits.

So, so I think it’s a real unique opportunity to have an impact on patients and society providing uncorrelated returns to your investors and work in a very exciting field. So that was very difficult to explain in Europe. I think we, we, you know, probably are doing a slightly better job of that now, but there’s still a bit of a reluctance there, to be honest.

U U. S., The U. S. investor community has always been much more prone to accept this type of investment. Obviously, a lot of endowments, foundations, pension plans have been investing in this sector for a long time and they’ve done quite well out of it. And with 

Philip Hemme: the venture capital basically being started here.

Correct. Since you can write in the 70s. Their marginal 

Otello Stampacchia: background and everything. So they’re more familiar with these things. Yes. So we opened a Boston office here in 2007. I eventually decided to move here myself. And honestly, I should have done it earlier, to be honest, in, in, in our life. And now I spend my life a little bit, you know, across both parts.

But, but it’s been quite rewarding. I think it’s truly incredible, particularly in Boston what can be done in this ecosystem. I mean, my My comment to some of my European CEOs is that you need to start planning to have a presence here as soon as you can, because the capacity of recruiting exceptional talent in this town, in the U.

S. in general, but in this town, is truly incredible. And it’s because, you know, at the end of the day, it’s a huge city for biotech, but it’s a small city overall. So we all run into each other, constantly, like literally, on the way over, I saw somebody that I knew I had to say hello for five minutes. So, and it happens to me every day when I walk from my apartment.

So, so it’s kind of a truly unique ecosystem, particularly for therapeutics. 

Philip Hemme: That’s amazing. I mean, maybe just, I mean, if people can see with the view, but basically, I mean, if you have Kendall square there and you add seaport, I think that’s basically like, I would say maybe 20 percent of the world biotech or something in this area.

And pharma. Yeah. Biopharma, biotech. Yeah. Yeah. In like, whatever, a few square miles. Yeah. Yeah. 

Otello Stampacchia: Which is so dense. I saw a statistic, and honestly, I haven’t been able to find it again. I need to go and do a better job, but I saw statistics that I believe was 2022 or maybe 2023, or maybe 2021. Boston received more therapeutic drug, you know, development investment than the rest of the U.

S. combined that year. I mean, that’s an incredible statistic. Yeah. So, so yeah, there’s a huge concentration, there’s always like almost every other week, there’s a big conference on, you know, cardiovascular cancer and stuff like that. Always the big ones are ASCO and ACR, but, but there’s much, you know, more focused conferences here.

And you know, it’s a small city, as you said, right? So you bump into each other and that kind of Brownian motion is very conducive to business because Transcribed It used to be, so if I can take an analogy for a second, it used to be, so you had the hardware and the software, right? The hardware is the technology improvements, so CRISPR, drug discovery, X ray, crystallography, all that stuff.

The software is that people can transform those technologies into drugs. And that drug development expertise used to be locked up within big pharma companies, like up until I would say 10, 15 years ago. These people would not leave pharma. They didn’t think you could do a good job developing a drug in a small biotech.

Now that’s completely changed, right? These people are actually very happy to leave pharma because they don’t have the bureaucracy in a lot of cases. And biotech companies can actually now raise the money to do the proper drug discovery and development work that they need to do. So, there’s been a much more fecund intersection between those two industries that used to be, you know, not necessarily as joined to the hip as they are now.

And in this city, you see it very clearly. I mean, literally the amount, I mean, there’s head of R& Ds of pharma who come here to our office almost every day. So, and we learn from that and we learn what they need and we try to put it together for them. So, it’s a very symbiotic ecosystem. 

Philip Hemme: That, that’s a, maybe on the, what I like with your, yeah, it’s a great submarine lessons on your background.

[00:41:10] Getting into venture capital

Philip Hemme: Just to go back. I like this part. I was always curious when I saw your, like your track or whatever, the different steps, I was curious and I was missing a bit the link of what brought you into venture into like starting your own venture fund. But now I kind of get it. But can you tell this like, and you said, you just said like it took you, I mean, now you’re just starting to be good, which we must be about Warren Buffet to say, yeah, 10 years ago, , I wasn’t sure what I was doing.

It’s true though. I guess. I mean, 20 years human learning a lot, but can you tell maybe from a, if you remember how it was basically 20, I mean, 20 2004 to thousand 10, like. Or some of the lessons you had of like moving into venture, especially, I think a lot of people, I guess, a lot of people listening to us want to go into venture, I think it’s a wonderful world, I think it’s also new ones, but maybe what was some of your, of your lessons there, like, 

Otello Stampacchia: Yeah.

And to, to be honest, I always, I was always excited about the idea of getting into venture and I ask advice. So the one thing I would ask people is advice, but, but back to your question and say, and there’s one particular person who was very helpful in providing advice, Kate Bingham at SV Life Sciences that you probably know.

And so she told me, I was still doing my PhD and I asked her, well, you know, I would like to get into venture. She had just got into a venture fund a couple of days, years, sorry, before me. And she, she told me, well, there’s a couple of ways you can start as a junior person with a scientific background. That was a while ago.

That was a long time ago. There was nine. What’s he? Four gunmen. What are you working? Everything else. Wow. I was still doing my PhD. You’re already thinking about venture? I was already thinking about venture. Wow. I wasn’t obsessed about it, but I enjoyed the concept and, and I wanted to figure out how would I get into it.

Philip Hemme: Yeah. 

Otello Stampacchia: She said, well, you know, you can start as a junior analyst or whatever with a scientific background, but then you might end up being pigeonholed. In a research only kind of role and I was already consulting for a few venture firms and banks at the time and I saw that happen in me. It takes very long to.

And it would take very long. Analyst associate. Or, right. Or you go out and learn something after your PhD like another skill set. So I went out and I joined a bank to, to learn because I knew nothing about finance. I didn’t know how to use Excel. Now I can probably make coffee with it. So there was very good advice.

And now, you know, the lessons learned, you know, there’s a lot of lessons. I mean, I mean, this is the ultimate Renaissance job, right? You need to be good with people. You need to be good at analytics. You need to have a lot of content because without good content, it’s very hard to make good convictions at good investments.

You need to, you know, be sometimes brutal because sometimes there need to be changes in a company and, and they’re not fun, to be honest. And if you avoid that discussion, no good things happen. But I like this, this aspect of having to learn to do a lot of things. And obviously I like to continue learning.

I also like the impact that he has, as I mentioned earlier, but you know, lessons learned, you know, so many, I mean, you mentioned, yeah. Yeah. So, I mean, hiring the right people is essential. In my opinion. So you didn’t talk about your co founders because I, I think that was just me at the beginning really.

Yeah. Okay. Yeah. But eventually, yes, I had, I had a few people joining me and, and at the beginning probably there weren’t the right people. And then eventually we, we managed to figure out how to find the right people, but there’s also natural. You’re just the only founder left still, or like 

Philip Hemme: operational, no?

Otello Stampacchia: Yeah. Yeah. I’m, I’m, I’m always a bit operational. I’m trying to be a bit less operational and focus on other things. But Yeah. So the history is that really it was me for, for a few years, like two or three years. And then we started adding, you know, general counsel, CFO, some junior investment professionals.

And then eventually as we managed to grow, we, we add the more senior people and so on. So, so I think again, the evolution can be fast or slow depending on where you start. Again, lessons learned again, I should have probably moved to the U. S. earlier because it would have allowed us to You know, scale the organization and the fundraising faster, and that would allow us to hire a certain type of team earlier, but you know, there’s also personal choices, of course.

I mean, the other lesson is don’t fall in love with your investments. I mean, obviously we need to be passionate about it. Because without passion, nothing happens really in our business. But in some cases you need to take a cold, hard look at your investment. At the end of the day, we are investors. So our job is to make a profit.

For the people who entrusted us with their capital, and to help patients. Yes. No, things are not mutually exclusive. Yeah. On the contrary. But you need to keep in mind that you cannot stay on a board forever. You cannot be an investor in a company forever and so on and so forth. So that’s very hard.

Hard scale 

Philip Hemme: of like how much detach, how much passion you put and how much you need still a bit detachment. Yes. I mean, I have the same problem with my own companies I’m building is like, it’s super 

Otello Stampacchia: hard and and it’s not something you learn quickly. You need a few very difficult lessons early on in your life.

And I did that. I had quite a few mistakes early on that made me realize how important this is. The other thing is, is. You know, working as a team is very important because nobody knows everything and nobody knows everybody. So trying to have a culture where it’s not just one person making the investments from the beginning to the end, but you have a real team around you that can also exercise dissent.

Because, you know, it would be super easy for everybody to just do whatever the senior people say. But sometimes you gotta really listen to objections. And again, that culture is quite specific. And I think it did help me as being in the Netherlands for a few years because the culture of Alpinvest, and I don’t know if you know many Dutch people, but they’re incredibly straightforward.

So to, to a certain moment I was actually showing results. So to a certain, I mean, I remember my first investment committee at Alpinvest where they’re really kind of went at each other and I say, Whoa, okay. So that was, but you know, it’s, you need to encourage truth seeking behavior. So I think we try really hard, certainly encouraging the junior team to hear, to, to express dissent.

Because at the end of the day, you shouldn’t care about how you’re saying something. What matters is what you’re saying. And this is a lesson that is very hard to accept for a lot of people, but you know, we keep trying. So again, there’s a, there’s a lot of other lessons. I mean, this could be a whole kind of section by itself, but fundamentally perseverance pays off in this business.

Yeah. And perseverance also in maintaining relationships. Sometimes, you know, we say no to companies for years before we decide to invest. And for some management teams, that is very hard and understand that I had the same thing on our end. We had investors. We invested with us. Exactly. So, so at the end of the day, you need to invest in the relationship.

It shouldn’t just be all we’re raising money within the next few weeks. You know, you’re out. These are, I mean, in this industry, you have relationships going decades. So you got to invest your time using that timeframe. 

Philip Hemme: Yeah, that’s, that’s great. That’s great lessons. I think. Yeah. But I think as every lesson as well, I mean, what you just, it’s hard to apply them like, like individually.

I think they also go into a bigger package and what you just said about giving super honest feedback. Yes. But what you just said also, like if you know the person and you have trust, the honest feedback is very different versus. If you don’t know the person, you just give a super honest feedback. 

Otello Stampacchia: So that’s super hard, right?

I mean, one of the things that I hear a lot from entrepreneurs is, well, you know, we like to understand why you’re investing. Well, if we are investing, I don’t think they care why we’re investing, but they like to know why we’re not investing. And it’s a, you know, it’s a fine line, because we like to be thorough and we don’t like to obviously ghost people, but I don’t think.

We can be super honest either. Because people don’t take it well. And there’s real game theory about this. Where, you know, you want us to be honest, which I’m happy to do. But I see more often than not that then ten years later, when you’re doing something that I’m really interested in, you’re not going to talk to me.

Because you didn’t like the feedback I gave you ten years ago. Even though the feedback might have made you who you are now. It’s the opposite as well. I mean, yeah. So, so it’s kind of funny and I hear this advice from a lot of my peers that entrepreneurs enjoy being, you know, getting feedback from VCs and it’s true.

I don’t think they would enjoy the full feedback, and that’s a challenge. And then it’s a gradient thing where Of course, and again, I learned too much from the Dutch, maybe, so I kind of lost a little bit of my Italian kind of nature, I guess. But, but it’s, it’s a dilemma because it would be my instinct to be very honest, but the reality would be incredibly damaging to me personally, to my relationship to the firm.

So sometimes that you’re going to say, well, you know, it just wasn’t a right fit for us at the time, whatever that means. So, so there you go. Probably I shouldn’t have said all this, but 

Philip Hemme: yeah, I like, I mean, for anyone it is, if there’s entrepreneurs here, it’s, if you’re going to fundraising, it’s, it’s hard to go, but, and I’m very sympathetic also from an experience.

I mean, it’s, it’s complex. I liked everything and a lot of good lessons. There’s so many things we could discuss. Well, life is long. Life is long. Then we have a few minutes left. 

[00:51:27] Decision to move to Boston

Philip Hemme: One thing that’s maybe on, on this, on the, like, you should have moved to Boston earlier or to the US, the US in general, but Boston, like, I can also, I mean, I can quite relate to that.

And I’m wondering on your side, how you. You mentioned quickly, there’s a personal side to it. That’s what I think at the end, that’s a big, that’s the hard part. I mean, as I told you before, but I studied at BU, somewhere there, I finished my studies here. I worked at Kendall just 10 years ago. But at some point I just, I moved back to, at least I moved to Berlin to start a company.

I’m still in Berlin. I come to Boston quite often and it opened my mind as well, et cetera. But Ideally, I would like to split myself or whatever, but that’s also very hard. Like, and I think, I mean, at the end of the day for me, it was also quite personal choice. If I, if I look at basically, if I listed everything kind of more trade off in Boston, for me, to my personal taste and my personal life, everything was better in Europe.

So everything from, I don’t know, family, close to family, being in Boston. I guess you can find good pasta anywhere, but I mean Important topic. With the same level of pasta, of food, and Just above Italy here, so it’s all, it’s all good. I mean, but food in general, I mean, culture, architecture, infrastructure, whatever.

Like, a lot of things. You can say healthcare, social, whatever, a lot of things. But business. For business, it was clearly way above. I think for anyone in biotech or in tech, if they’re in Silicon Valley, it’s clearly above. I’m wondering on you, maybe on you, how did you come to that personal decision, like, did you just prioritize business over personal life?

Or how, what kind of trade off did you have to like, to face? 

Otello Stampacchia: Yeah, I mean, Well, all the trade offs that you just mentioned, right? So, I mean, first of all, I didn’t come to the decision all by myself, obviously. So, if you have a partner in your life, that partner needs to be part of the decision. I mean, maybe a bit of background.

So, I think I moved 1, 2, 3, 4, 5, 6, 7, 8. I moved 8 times in my life. And by moved, no apartment within the same city, countries. Countries, yeah. And it really started after my undergrad, maybe even before that because I moved from a little village to go study close to Milan. And that was very important for me.

It was a huge decision for my family. We certainly couldn’t afford it. But it was also a huge period of personal growth, it opened up what was a very small provincial mentality of mine at the time and exposed me to, you know, still a small university town, but very different scale. So in a sense, I’ve always been more perhaps prepared for that than the average, perhaps, person.

That doesn’t make it easier. I remember, Doesn’t make it easy, but makes it probably easier. Correct. No, it’s very good actually. Thank you for saying that. You’re right. It doesn’t make it easy, but it makes it a bit easier, at least mentally. And also, to be completely honest moving is a little bit easier now also because I’ve achieved a certain level of comfort.

So 

Philip Hemme: stuff 

Otello Stampacchia: that when I was 20 or 25 or 30 was hard because I couldn’t afford to do it in comfort now is a lot easier. So, so there’s a gradient there as well, but, but I’ve been able to achieve the level of comfort. And listen, I work very hard, but also because of the opportunities that have been given to me over time by my parents who insisted on education, my college, who also was a great place to then be able to network, learn English, whatever.

And, and back to your question about these trade offs, this remains the country that gives you a lot of opportunity. So I’m very grateful to that. And, and, you know, the scale that the business has reached would not have been possible. Without here, without moving here and, and, and build a real presence and, and, you know, establishment here.

So, you know, you got to work on your priorities. Was it not impossible or not possible as fast? Just as a Probably not possible. Not possible. Okay. I mean, it’s hard to do the counterfactual. So it’s hard to prove the reverse, of course. But, but, yes. But, but I personally think it wouldn’t have been possible.

Okay. That said, I think, It is a very personal decision, right? And to be honest, there are a lot of factors, right? You have kids, are they going to school? What do they I was about to ask. So I don’t have kids. Okay. I was about to Because 

Philip Hemme: his very dear wife is a dietic, so most of it would fit well.

We’re talking about kids and that’s where like, that’s where moving becomes like 

Otello Stampacchia: Again, this is where this country is an advantage in a sense, because, not because their childcare policies are very advanced, not because of the, because of school. No, but there’s, there’s something to be said for a unified, you know, currency culture.

The school system is more or less, I mean, obviously it’s highly stratified depending on your income, but it’s more or less the same. So you can move country across the country here and have a fundamental understanding on how your system works. Whereas, say you want to move from Berlin to Bern in Switzerland.

As you know, and that would be a very difficult decision. So, so I think that there’s a lot of corollary benefits that I don’t, I don’t think people understand about a single legal system, a single currency, a single language, a certain way of doing business, a single listing, even for our companies. Whereas you look at Europe and there’s all this incredible fragmentation and listen, don’t get me wrong.

I love being in Europe. I mean, I speak three or four languages. I lived in seven, eight different cities, all that. But this country remains quite incredible when it comes to the opportunity that it provides and the ease with which you can then take advantage of that opportunity. Now, hopefully that will continue to be the case for a long time.

I’m already starting to see challenges with that in the educational system. But back to that decision, you know, in retrospect, it was the right thing to do, but it was a very difficult decision, even for me at the time. So I don’t think it’s easy. 

Philip Hemme: Difficult decision on the way as well after the first sort of like stay or come back or I guess over the 20 years I can remember.

I 

Otello Stampacchia: remember the first winter here, which was this incredible winter, the first full winter here. Where, you know, we had an apartment and so on, a small apartment we were renting. And it was that period when I think it did a hundred and something inches of snow in the park and everything. So every weekend there was a blizzard coming in.

And at the time I wasn’t aware of Canada goose and all that. So it was very interesting for me as a, as a winter. So I, I literally three, four weeks in and say, Oh my God, this is, this was the worst decision of my life. So sometimes you got to stick with it. So that’s the other lesson. You got to stick with it.

Cause again, perseverance is probably the single most important trait if you want to succeed, particularly in an industry like ours where it takes a long time to become good at it. 

Philip Hemme: Yeah. 

Otello Stampacchia: You got to persevere. 

Philip Hemme: It’s amazing. It’s amazing. It’s amazing how, I mean, how The whole discussion, everything fits together from the early days of Perseverance, the like, longer term, already like, commitment to science, already interest in VC to, I like it a lot.

Oh, there’s also been a lot 

Otello Stampacchia: of luck, right? Sorry to interrupt by the way, but I don’t wanna, I don’t wanna make it look like there was this great plan, right? And it’s always been like this. It’s been a lot of zigzags and, and, and the people you meet along the way are very important. So I wouldn’t be here if I hadn’t met Kate, if I hadn’t met the person who gave me a job at Golden.

So Kate brought you the iBio deal. Yeah, she, she brought me the iBio deal. Exactly. Very grateful for the case. She’s, she’s really a person I look up to a lot in this business and she’s done really, really well for herself, for her investors, for her patients. So it’s important actually to identify these people that could make a difference in your life.

Because I mean, literally I got a job at Goldman because I ended up sitting next to a person at the conference. So this is where being Italian is a massive advantage, right? We talk to everybody. We are more or less inoffensive. Nobody hates Italians really. Maybe the French every once in a while, but, but but, but there’s, and I speak a few languages.

So again It doesn’t advise I would give to people who are, you know, in school or thinking of a career. Doesn’t matter what you end up doing, but being able to relate to people, being able to connect with people, being intellectually curious, and then persevere. You’re gonna go far in life. That’s, that’s important.

But again, now it looks like a good ending because it is, I mean, I’m pretty happy as a person. No, I mean, no, but mostly probably about like, yeah, I mean, there’s always something to do. I mean, it’s, I’m not a person who kind of stops. Oh, wow, we’re, we’re good. We’re done. I really don’t have that mentality. And that’s a challenge for some of my co workers because I’m never super happy, but I’m happy with what we have achieved, but we can do more, of course.

But, but I think you need to persevere. That’s in free goods, happiness. We can 

Philip Hemme: do a one way session. 

[01:01:42] Thanks for listening

Philip Hemme: I think, I mean, I’m just seeing the time and not, you know, you have a hot stuff. So amazing. I think we should do a second episode at some point. Absolutely. And, Thank you. I had so many more things I wanted to put there.

Thanks a lot. Thank you. Really a pleasure. Thanks very much. Wow, that was nice.

Thanks for listening to the end. I’m impressed by the clarity of Otello, especially on the exit side of things. I’m also very inspired by his career decisions and how everything fits together, especially when looking back over a few decades. If you also enjoyed this episode, please hit the like, follow review button, any of these actions.

would help us a lot. I would also be curious to hear what you think so I can further improve the content. So if you could leave a comment wherever you are or shoot me an email at philip at flood. All right, see you in the next episode.

Christina Takke, V-Bio Ventures 🇧🇪 | Wonder VC Woman | E17

We’re in San Sebastián 🇪🇸 with one of the top VCs in Europe, Christina Takke from V-Bio Ventures.

We talk about her path to get to the top and the benefits of gender diversity for both investing and European biotech as a whole. We also talk about her investment in Argenx when it was only three employees and the venture creation had dropped since 2022.

💎 ABOUT THE SPEAKER

Christina co-founded V-Bio Ventures in 2015 and is now the Managing Partner. Before this, she was a leader in the European Venture Capital world with 15 years of experience. She has been a partner at Forbion Capital Partners where she led many successful investments in biopharma and pharma companies.

🔗 LINKS MENTIONED

Transcript

[00:00:00] Intro

Christina Takke: When we started FIBA Adventures, we were diverse from the beginning. What you realize is that when you have different views, you start a discussion with each other. You look at investment opportunities from different angles. If 

Philip Hemme: you isolate the gender, do you think there’s a correlation? We need more role models.

Christina Takke: Yeah, you need to show that it’s feasible. I think role models, being a woman and setting up a fund is one role model. Setting up a company is another one. The moment you have these, these showcases, these role models, people think, oh, it’s feasible. I can do that. 

Philip Hemme: Sander Vandeventer mentioned, oh yeah, we invested in Argenix when there were like five people.

By preparing this interview, I realized you were the one. It’s 

true. And I think there were even three people. Oh, three people. 

Bienvenue to a new episode. I’m your host, Philippe. And on this show, I’m interviewing the best Europeans in biotech. to help you grow. There are only very few top women VCs in European biotech.

There is Kate from SV, Raphael from Jato, Regina from Wellington, Henriette from Sofidora, and there is Christina from VBioVentures. So while I was in San Sebastian, I caught up with her. We talked about her path to get there, but also the benefits of gender diversity for biotech investing, but also for the biotech ecosystem in Europe as a whole.

Uh, we also talked about her investment in Argenyx when they were three people. We talked about the venture creation drop since 2022. So here’s my conversation with Christina. And if you’re enjoying it, please hit the like and follow button. Hi, welcome to the show Christina. 

Christina Takke: Well, thank you for having me.

It’s a pleasure to be with you today. 

Philip Hemme: Great. I made you discover this part of the beach. What’s up, Sebastian? 

Christina Takke: Well, I’m very happy you took me here. I was inside in the conference the whole day. So it’s an amazing view and it’s a good spirit for, uh, well, 

Philip Hemme: being here. It’s really cool to biotech and beach, so yeah.

Christina Takke: It’s a work life balance. I think it’s quite a good one, yeah. 

[00:02:03] Top VC woman in biotech

Philip Hemme: It’s a good title to show. Um, so I want to start with say, the woman in biotech, I think you are, you are one of the very few managing partners of a European biotech fund, and especially one of the very few who have founded a biotech fund. So I’m wondering, can you just share how it feels to be in that position, having that experience?

Christina Takke: Well, thank you for asking. It’s, it was an interesting ride the last eight years, and Maybe going a little bit back in history. When I started in the industry, I joined Airbnb bank, which then became four billion. So I was really in a luxury position to become partner with four million capital partner, a fantastic friend, which really taught me.

So the, the beginning of the business, which also put me in the position to do what I’ve done then after my position at four billion. So that was 2014 when I got a chance together with my co founder, Willem Bruckert to set up fee by ventures. It’s, it’s really feeling like. Going back to some smaller enterprises where you’re responsible for everything from, from the beginning, you’re responsible for setting up the entity, setting up the name and the brand, and also, well, defining your strategy going forward.

That’s one, but also then executing on it because in the beginning, 2015, we were, well, the two of us as the co founder, we had two partners on board. So we were the four of us doing everything and that. gives you quite some satisfaction and also excitement in creating something new. 

Philip Hemme: And we will get to, to the bio.

I mean, you had some, some good news and you, you, you close the second fund. I mean, we’ll talk about that. Um, wondering on, on the, if we stick to that topic of let’s say women in VC, I saw one of your, or you, you, you said, or you wrote that diverse teams lead to better decision maker head, hence better business successes.

Can you like, uh, elaborate a bit on it and what’s, if, or what’s, what’s kind of the, I mean, it seems a bit obvious, but it’s not necessarily wrong. And what’s the evidence? Yeah, 

Christina Takke: what, what I can explain from our own experience when we started Feeble Adventures, we were diverse from the beginning. Well, it was, was myself.

I have that background in, in, in human healthcare, in biotech. being a woman and started up with Willem Broekert. He comes from the green biotech, being a man. So from the get go, we had different views on, on, on, on, on things. And what you, what you realize that when you have different views, you started discussion with each other.

You look at investment opportunity opportunities from different angles. And as long as you keep an open dialogue and, and, and a transparent relationship, I think that that helps because you’re not. Stuck with your own opinion. So the moment you have different views around the table, you express them and you listen to each other, then you take, I think, better decisions because you have more aspects taken into account.

And that comes from background that comes from, well, the education. Um, and that’s what FIBA, I think along, along the way, because you need to have, look at all the angles of an investment opportunity. 

Philip Hemme: You think from, I mean. from the let’s say, just if you isolate the gender, you think especially from the investing point of view, you will have like, typically different views or you will see it, you will look at different things, the you think there’s a correlation.

Christina Takke: But what is known is that men and female, they communicate differently. And of course, if somebody else communicate with you, you have a different perception of it. And sometimes what you see, you have this confirmatory bias, you talk to somebody who is like you and you are Uh, engage with that person and you’re convinced.

But if somebody with a different background listens to that conversation, maybe that person picks up different items in that conversation. So I think that’s important that the way you communicate and the way you perceive communication. 

Philip Hemme: Yeah, I like that. I mean, we, I talked with, uh, by each of, I mean, you know, on the show and we talked quite a lot about, about this as well.

And, and what was interesting with her was saying, okay, it’s, it’s not only fair. But she was really making the business case, basically. Yeah. In my, in the team, or at the immunocore, bring more diversity in gender diversity, and also, um, race diversity. Just leads to better decision and to better business. So, that’s also partly better.

I quite like the, like, she was very, like, frank about it, very direct, like, I’m doing it for business, mostly, and not about, just about fair. Uh, and sounds like from what you’re saying, it’s, it’s also going in a similar direction. 

Christina Takke: For us, it’s, it’s a consequence thereof. I think it leads to better business, but it needs something you would like to engage.

You need to be open to, to accommodate different views and you need to be open to accommodate different characters in your team. It’s, it’s not only about, well, getting these people, but also retaining them and creating a platform where people feel welcomed and accommodate. But I’m with, with her, it, it leads to better business decisions and we should in the industry drive for more input and diversity.

Philip Hemme: That’s great. I think you are. Let’s 

Christina Takke: see. It will stay dry. Don’t worry. 

Philip Hemme: Um, I mean, and we need more, I think role models. I think that’s also why I’m trying to get some more. gender diversity also in the speakers I have and I think role modeling and people listening I think is super important as well. 

Christina Takke: Yeah, you need to show that it’s feasible.

I think role models. Being a woman and setting up a fund is one role model. Being a woman, setting up a company is another one. The moment you have these, these showcase, these role models, people think, Oh, it’s feasible. I can do that. And it’s, and it’s always exciting. And it’s a bit nerve cracking when you set up a new fund, you don’t know if it will happen.

Of course, you have the conviction, you’re good, you can do it. But really to jump on something, we, we, We need to tell people that’s good to jump and mostly land on your feet and if you’re not landing on your feet you have Your plan B, but people need to dare to do that. And that’s something we’re working on 

Philip Hemme: Especially I guess in Europe where we tend to be a bit less risk taking and I think and actually I’d like this also your Your background.

[00:08:36] European background

Philip Hemme: I mean you’re very European background. Yeah, German You just mentioned, you studied in France, now you work, you live in Amsterdam, you work a lot in Belgium, I mean, I quite like this part as well, and I think, can you explain a bit on this, on like, how it benefits you, say on a day to day? To be so like European.

Christina Takke: But it, it benefits me because people are different. The German is different than the Dutch or the Belgian. And I’m not saying it’s, it’s really the nationality, I think, but all our history and education, uh, brings us where we are. And also when coming back to communication, it brings us how we perceive communication, how we communicate, how we give feedback.

And there’s nice literature around you, like the culture map. It’s a really nice book where you realize that how people react. It’s. sometimes individual, but always also how they were educated. And the moment we are aware of that, we can handle it and we can make it, take it as a positive and also deal with it.

So maybe because I’ve lived in different countries, which from an American perspective, probably look all the same. They are not well, the French is different from the Dutch and the Belgium. And maybe because I’m home in more than people also will forgive me a bit, but, um, It helps to open your eyes.

Philip Hemme: That’s good. I mean, I would 100 percent agree or something kind of French German background and living and traveling and working in different countries. I think also, I mean, from what you said, I mean, especially in your position investment. I mean, obviously you’re very tight to Belgium and VIB, but you also invest your pride and you look for co investors, your pride and talents.

I mean, especially in your world, you’re very open, so I guess. It helps her to understand the other people, but what I’ve also maybe it’s like, what I’d quite like to do is to be able to not only communicate, but like adapt really to the person in front of you, depending on the, I mean, to the nationality or personality, like how, yeah.

I don’t know how, and I can’t help, yeah, basically, I, I guess. 

Christina Takke: No, I think it’s true. When we set up FIBO Ventures, well, we said one thing to our initial investors, look, we are located in Belgium. We have a strong foothold here. We would like to create companies in Belgium. But in the beginning, our idea was to bring international investors to our companies.

Speaker 4: And that 

Christina Takke: was something we, well, we found very important and we managed in the first fund to do so. But that means we need to go out of Belgium. We need to broaden our network and work with people in other jurisdictions and in other countries. Yeah, 

Philip Hemme: that’s good. Maybe a last, last kind of point on this topic.

Uh, I had Aliette Felixsen from ICODE on the show and we talked quite a lot about this and she was very open also on like a bit deep on like her experiences as a woman founder and, and what worked and what didn’t work and some challenges and In short, she said one thing like, basically, don’t go to the party, like, just skip the party.

It’s basically better. Um, and actually what I remember with you, I think we were, we had a conference in Basel or something. And I don’t remember exactly where, but we went then with some, a group and we had a drink and you were like super chilled and open about it. I don’t know, it stuck to my mind. Was it also your experience or how do you approach this kind of situation?

Like 

Christina Takke: how you mean the not, not going to the, to the party? 

Philip Hemme: Yeah. Like, I mean, she was saying not going to party because basically at the party at some point, some, it can, as a woman can be a bit like not comfortable. Basically you were, I mean, at least my experience was, 

Christina Takke: well, I would never experienced that. I have to say, I think the social aspect of any business is an important one.

Okay. What you what you realize in these interactions outside of the cubicles one to one meetings, you build trust and you build a relationship. And of course, well, everybody needs to respect, um, uh, boundaries where nobody should cross these boundaries. I haven’t seen them, uh, in our area. But I think to, to interact with people on different levels is important because when we invest in companies, we invest into people.

So seeing these people outside of the cubicle, outside of the lab, it’s an important part, how people, uh, uh, react on an, in different situations and also, well, how you will get that second layer of trust into, into somebody into a company, it’s, it’s super important. So I think these social events. I may be often under.

estimated by the female colleagues, because it’s in the early days of why do you work, do it good, stay at your desk, and then then you will be promoted. But that’s not how it works. It’s multi layered our business. And it’s a lot of people business here. 

Philip Hemme: Especially as an investor, I guess. 

Christina Takke: Of course, you shouldn’t exaggerate and you should respect the boundaries.

Philip Hemme: It’s good to hear like, more positive experience. 

[00:13:49] Investing in Argenx at the start

Philip Hemme: You, you mentioned, you mentioned Fabian, and you started there, you became partner and Sander when they went was, was, uh, one of the, I think co-founder of Fabian, I think, uh, was on the show. And he mentioned, oh yeah, we, we invested in Argenyx when there were like five people and then by preparing this interview, I realized you were the one.

Christina Takke: That’s, that’s true. I think it were even three people. 

Philip Hemme: No, that’s, that’s true. You were the one leading and you were on the board. Can you tell a bit about the story of how the investment came about? Came to be, uh, you came to invest and then like. 

Christina Takke: Yeah, when, when basically Tim Torsenhans, the three founders of Agenix, they were out fundraising and I think it was 2008.

It was just when 4Wheel, when we had our, well, 4Wheel had the first closing of the, of the 4Wheel fund and it, it wasn’t an easy time to, to raise funds. There were two lead, two seed investors already in the, in the company. So they had a little bit of money to go out. But then at the time it was four beyond taking the lead and putting out a term sheet for, for an a round.

And we went around the, the, the block to, to, to, to look for core investors. At the end, there was a nice syndicate, uh, LSP joined, and then we got some Belgian investors. Uh, to the table. 

Philip Hemme: How much was the round at that time? 

Christina Takke: I think the initial a round was like 12 million euros. Okay. So not, not that much, much was sufficient to prove the technology.

Yeah. And of course there were mistakes baked or the errors made. Well, not all the programs we started in the beginning, well, we’re still alive after a few years. What I have to say with this team, and it, it, it comes to diversity, of course they were all male, but they were different in character. So the three of them, they always had to discuss among themselves before they take a decision, and I’m pretty sure there were tough discussions, pointing to the time, to the theme of diversity.

They come out stronger with it. Um, and it was a fun time. I think I learned a lot, uh, by taking the journey. We had that A round, we had then the B round, pre IPO, then the IPO on Neuronext first, which also was a long discussion. Shall you go direct to Nasdaq or Neuronext first? At the time, you always take the decisions with the knowledge you have at the time and with the data you have at the time.

I think that was decided. It took some time then to go to NASDAQ. And then this was also time when I left the board. That was the time when FIBAIO came up. Uh, much of my time was quite there. And also the. At Genyx grew, they needed different input on the, on the board, the companies you’re involved, 

Philip Hemme: it’s natural, but it, 

Christina Takke: it, it always has my heart to it.

I have to say, 

Philip Hemme: and I, and now it’s crazy. I mean, 20 billion company, I mean, massive success story. 

Christina Takke: It’s also, but it’s also very much from the beginning, the strategy, keeping your products close to your chest, developing them as far as you can. And that was what Genyx has done. They brought products to the market that follow on products to the market.

And also in the past, we were always open in, well, what can they do, what a partner can do, looking outside, working with academics to insource new ideas. 

Philip Hemme: And especially, I mean, advancing, I mean, the balance between developing your own platform and your assets. I think they were really good. 

Christina Takke: When we’re speaking about role models, there are a few role models.

The model is a role model, but also the management team is a role model. But also at some point in time, people from the management team said, well, this becomes too big for me. I’m better performing in smaller companies like Twasten Dryer. We were super happy that he joined one of our startup companies, which is Agomab in the early days.

So there you see this cross fertilization allowing people to develop, even if it’s outside your own organization. That’s something where the industry and the, well, the ecosystem around Benelux, I think we are growing there. Yeah. It’s a, it’s a good thing. 

Philip Hemme: I had, uh, I had Edwin from Uplinks, and he mentioned this, I think he mentioned that over 10 people from his management team at Uplinks are now like running or founding biotech companies, not only in the Beledix, I guess, but let’s say Europe, but still like, uh, We’re, 

Christina Takke: we’re one lucky of them where we have Cedric Verweyken from, uh, from, uh, Applinks who’s our CEO of Comfort Therapeutics.

That’s exactly what you need. They have such a learning curve, such an experience within these larger organizations, but at some point in time, it’s either because of the structure, because of their own character, they would like to do something else and more than welcome to, uh, to join our smaller companies.

I think 

Philip Hemme: it’s totally normal. I mean, it’s funny because in, I feel like in biotech, it’s always seen a bit differently, but in tech. It’s pretty normal, like, almost encouraged if you are, let’s say, whatever, Google or some startups and you want to go on to found something, for example, usually the team will support you.

And I mean, for all the reasons you mentioned, but, uh, yeah, I think it’s, it’s one of the underestimated thing in Europe, how many compared to, let’s say, 10 years ago, how much more talent pool and founder pool and is on top of the money, which is maybe more visible. But, uh, 

Christina Takke: It’s also one of the experts, at least that we buy, we had at the beginning while we creating new companies, but that means we also need to create the new management teams because every CEO was a first time CEO at some point in time.

So what we realize the moment you give people, of course, people need to be the right character and have the right ambition, but you need to also give them the responsibility to grow. It’s sometimes I have the example, the chance, sometimes I have the examples. It’s like a snowball sitting on the top of a hill.

If that snowball doesn’t roll, it doesn’t become bigger. So you need to roll these snowballs in order to become bigger and, and get to the gravity to become the next serial entrepreneur and serial CEO. 

Philip Hemme: I like that. I like that. I like your answer, yeah. Um, and, I guess on the, I mean, and you proved it was Argenyx, and I guess on Argenyx also, for you personally to set up vBio, I guess was a great track record, basically.

Yeah. I guess the return is not public, how much she really made on the return, but I can imagine she invested in a, whatever, 12 million Series A. 

Christina Takke: I guess you need to ask for Orion for that. I 

Philip Hemme: can just imagine, I don’t know when exactly, when was the IPO, how much they raised, but I can imagine it’s a very, very nice multiple.

Awesome. 

Christina Takke: It’s a nice success story and I think it’s a, it’s, it’s a good return for all the investors in there. Yeah. 

[00:20:26] V-Bio story

Philip Hemme: But I mean, for you then, I mean, as a, it is a perfect transition to, to V bio. Um, I mean, you, you started it and you think VVIB was one of the LPs? 

Christina Takke: Yeah. VB is our partner and a smaller LP in the front, the smaller 

Philip Hemme: lp.

Okay. Can you tell the story, the creation story of like what made you jump , 

Christina Takke: um, AG Genix is, is, is. Almost a little spouting point to Fibi because through Genics, which was, well, it’s a Dutch company also the ib. 

Philip Hemme: Yeah. 

Christina Takke: But so Genics is, bell is a Dutch company with a big footprint in Belgium. So all the activities are there and being on the board is, my network in, in Belgium also grew and that’s where maybe I came into the picture for that fund.

So it was definitely something driven by the VIB. It was Johan K’s vision to have a A fund, which is closely affiliated, but. An independent fund works in the, in the, in the ecosystem to helps to translate or transfer the science from the academic into, into industry, into startup companies. And there is a bit of history of the fund, but at some point in time, it was really, they, they, they contacted a recruiter to find management team, which wasn’t seemingly that easy to find management team for a new fund.

And when they called, I still tell the story in the beginning. I said, no, I’m fine. I’m perfectly fine with four. We, and we’re just growing. And then more in a second thought, I say, well, why not? We always tell our, our scientists, if you have an idea and if you have a vision, you need to jump. And then I thought a third day, well, why not now?

I’ve, I’ve learned so much the last years within ABNMR and 4B on this is a chance to put it into practice to, to, to everything what you’ve learned to well, make your own mistakes, build your own organization. And going back to earlier stages. That was, I think the combination with attracted me. That’s where we at Vipaio are good at.

That’s where we can help the most and have the most impact too. And having a research organization who, who wants to collaborate. I think that’s also important. And in, in the first five, eight years now, we learned from each other. I always tell that, well, because we, we’ve done things as we thought we would do.

But then hearing how a technology transfer organization. Uh deal with that what challenges they have and what is important to them. It’s important that it fits both parties Not only the investors but also the the tto’s 

Philip Hemme: nice It’s I mean, yeah, I didn’t know the story. I mean, it sounds like vib really kind of seeded 

Christina Takke: Well, it was, it was the vision of EurekaDune to have this, this, this fund.

And of course there needed to be more, there needs to, needed to be other investors. You, of course, had the support of the European Investment Fund in the first fund. We had some local, uh, public money. And then at the end, Willem and I, the management team, I think that was the combination you needed. You had the proprietary deal flow, you had the investors, and you had the management team.

And then that was the starting point where you could grow. 

Philip Hemme: Yeah, nice. Actually, as a, um, and now, I mean, even for, for the audience, I mean, you closed the, the second fund, finally closing 110 million euros, March 2022. That’s amazing. I mean, 

Christina Takke: and we’re now investing 100 

Philip Hemme: million bar, I guess it’s 

Christina Takke: super. Yeah. And we’re now investing out of that fund and we’re, we just announced that.

Our last, well, the last investment, not our last investment, it’s Flinders Therapeutics and we’re now looking to add more investments to that fund. 

Philip Hemme: And I saw Shelly Maggotson join, I knew her from, from Get Data. That was also, 

Christina Takke: that was also a nice fit when you look at, well, diversity comes back in our conversation, I think, multiple times.

When. And she was CEO for our portfolio companies where we out the lead, the lead asset, and that it was really what is her next step in the, in the 

Philip Hemme: organization? gta? 

Christina Takke: No, she, 

Philip Hemme: she was, 

Christina Takke: well she, she was with MES before then, went to Gata, then she did a built to buy exit, then she joined one of our portfolio companies and became CEO there.

When that company had out license the, it was a single asset company, the lead asset. And it was really the question, what is the next step in her career? And when we spoke and I asked, well, did you ever think about venture capital? And she’s like, wow, actually I didn’t. And then we, we, we spoke, she got to get to know my, my, my, my colleagues.

Um, and realized that this really has added value to have. Well, a different background in the team. She has a financial education, but it’s in the biotech industry for the last 25 years. So we were really happy to, well, to get that diversity brought into. 

Philip Hemme: That’s amazing. Um, that’s great. 

[00:25:09] Tech transfer

Philip Hemme: Um, on the, um, actually on the, on the, on the VIB and on the, on tech transfer at a bit more at large in the past, I think 10 years, every time I talk with people about tech transfer, like 90 percent of the time is very negative, like, like very negative, at least in Europe.

And then the only thing that I see when I hear positive thing is VIB, basically, almost like a bit in the UK, a bit, Sarah in France, a bit better. When I hear about the U. S. tech transfer, well, some of it is very positive, like Stanford is like, wow, it was a dream working with them compared to others, but VIB, I hear very good things, and I mean, from, I understand also from our discussion.

Uh, and they seem very focused also on tech transfer as an institution. Can you talk a bit more on like what they understood, why, why are they recognized so well for tech transfer, why it works? So, 

Christina Takke: well, first of all, of course, they have a, they have quite some history. They were set up in 95. So we now, well, approaching quite some decennial experience.

The organization is a professional organization. There are people with IP backgrounds. There are people with a business development background, people in company creation. So this experience and having seen a lot helps of course, in negotiation, because these people understand, well, everything is different, but you have some boundaries where you know, well, this is what the investor need, and this is what the TTO needs.

I guess the difference is especially well, where we had discussions with the German tech transfer organizations. It’s. You need to find a structure that enables the new created company to raise funds so that you align all the interests. And that’s something which is different from a one off business deal where you try to get as much upfront as you as you want, which doesn’t work for the startup companies.

And this is something the mentality of at least VAB and some of the other tech trusts, they understood that. And it’s a give and take. So we also need to establish the structure there. If it’s successful, also the tech transfer organization make the money. Because if that doesn’t work, well, you cut up your, your, your, your, your line in the beginning.

So it’s, I think it’s also again, coming back to the trust that you need to sit together, look at the individual company or the technology, what sometimes you have patterns, sometimes you don’t, and how you deal with that. 

Philip Hemme: Okay. Can you be a bit more specific on the. On the deal terms, they specifically look because of what they, how the structure that is, because one thing I hear quite often is a typical tech transfer academia thing is like, they think that the idea is worth like way too much and they want whatever like high two digits percentage and realistically it’s just doesn’t match what a VC or founders would invest in.

Christina Takke: It comes back to experience a world where I can’t disclose any deal terms because they also vary from deal to deal. But what we can say is when the VAB comes in, they often bring their know how, their IP as an in kind contribution. So they are part of the shareholding, but part of the founding shareholder base, which then aligns the shareholders and the investors.

Um, And also in terms of real, uh, relative, or how do you say this, realistic view on valuation. We are all interested to be able to raise the next round. If we are, have irrealistic expectations or the price is too high, well, we got stuck in the next financing round. 

Speaker 4: So 

Christina Takke: that’s the experience which comes through us as an investor, but also through them having lived through a couple of spin outs that, you know, appropriately, if you start up a company with a target and you still need to screen that, you know, approximately, well, once you have your candidate, what does the market paying for that?

And you need to make your calculations, 

Philip Hemme: you know, the range and, you know, It sounds like, I mean, it comes down to one of another topic from the discussion. It comes down to people and to the experience. Yeah, I like that. And it sounds like you can really speak similar language. Obviously you have some different interests, but you know, each other’s interest.

And what I hear sometimes is like, Oh, forget it. We cannot even talk with them. Like, and I heard that so many, many times and like, it’s painful or like it took two years to get the IP out, et cetera, et cetera. And like, 

Christina Takke: yeah. I think it’s also important that you speak to the people that can take the decisions.

And sometimes I get the feeling that in other jurisdictions in Germany, that’s the problem. You have TTOs, but they’re not empowered to close the deals. So you need to go through all hierarchy, getting all your signature on something. And there are people, deciding on if we’re too far from the business without this feeling is, is this valuation a right one?

Is that too little, too big? That I think if I hope that if other TTOs are empowered more to, to really close the deals and take responsibility, that that would be an easier discussion, but maybe I’m too naive. 

Philip Hemme: If people at TTO are listening. Yeah. I mean, My hope. I mean, it’s a, it’s a crucial element in biotech.

I mean, the tech transfer in general. 

Christina Takke: And it does make sense that the conrector of a university needs to sign off of deals. It’s not his business. It’s not his expertise. So they did these organizations to hire people with expertise and well, the foot on the ground. 

Philip Hemme: Yeah. I’m curious also on the similar topic, also people related I’ve seen, especially in some of the deals you made some, some professors At the AB seem quite entrepreneurial as a professor deep down.

I mean, this play a big role as well. Can you expand a bit on this? I’m like, if, is it true? Is it true that the professors are more entrepreneurial than in, let’s say, in other institutes? And where it comes from? I 

Christina Takke: think it’s also philosophy from the VIB from the get go. They were set up as a translational Institute.

So the, these, the professors and the research groups that are part of the VIB, they get re evaluated every five years. And we were re evaluated is on publications in high impact journals on third party income and on well, spin outs, patterns, some sort of valorization of their science. So there is a mindset of, well, we do science for the better good, but you also need to bring back something to the society and maybe that incentivize people a bit more, of course, there are professors more than others.

Some research leans itself more for spin outs. Well, we are very happy with our co founder, Professor Jens Steyrt, who was co founder of AppLinks, but also on comfort therapeutics and has more ideas to come. Some of them are more proliferative than others. 

Philip Hemme: I guess there’s a luck factor as everything in research, I guess, because that’s, that’s, that’s good to hear.

Because it’s, I think that’s one thing, I mean, I had on the show Jens Nielsen from Yeah. From, uh, Now, DII, X, Chalmers, DTU, and he, I mean, he’s been out, I don’t know how many, I think close to 10 companies, but when I think in Europe, it’s always like harder to find some of these examples of academics versus especially him, or like when I studied or when I lived in Boston, I mean, in Boston is crazy, the scientists, and like, I was amazed how entrepreneurial they were, like, almost more than me, like I think we could have more of this.

Christina Takke: Definitely. And I think also what, what you see sometimes you have these professors, they want to hold on to everything and they want to continue exercise control. And that’s something which we have some troubles to when we set up companies, we’ll say, well, you’re good as a scientific founder. You have done phenomenal research, which now will be translated into a commercial organization, but therefore you need commercial people to take it on.

And then this will. These professors also need to have the trust in the new management team because they’re not the management team. They need to step, take a step back, become part of the scientific advisory board, clinical advisory board, still contribute, but not on a day to day slide management. 

Philip Hemme: And I guess the same thing to understand also what investors want, what’s the people just understanding the bigger picture.

I think that’s good. Well, it’s getting, um, let’s see, it’s getting wet, it’s getting wet. So yeah, the, maybe on, on, on the bio specifically, I mean, what I, what I quite like was if, I mean, what you mentioned, like, obviously you are tied to VIB, but you also like expand beyond. And I think you’re one of the best now, really like really focused on early stage.

I mean, biogeneration is another one tied to phobia and Kerma and friends. Um, I want to say, and then I see the other trend is like some bigger VCs who also go into venture creation now and kind of was, was trendy. Let’s say in the past few years, let’s say, especially in the U S the flagship model of third work.

How do you see that? How, how do you like yourself in this map? 

Christina Takke: How I see myself or Fibario that’s definitely on the company creation side, on the early, on the early steps of these companies where we help can contribute and then also bring our network to the companies. To then allow them to grow what I see with the bigger funds.

They also do some company creation. My feeling is that you cannot. Invest these large amounts where they have raised all in company creation. They will do a few, but they will also need to look at the series B, the phase two companies where they can in one go invest 20 million because otherwise you will end up with a portfolio of 45 companies.

So there will be a shift and what you can do with a certain size of the fund. Our view is that you have an optimum size of the fund for the early stages. If you raise funds like 500 million, you need to do later stage investments. 

Philip Hemme: Or you do like an arch model where you put 500 million in one company.

Christina Takke: Yeah. Maybe then the diversity or the, 

Philip Hemme: well, 

Christina Takke: that’s 

Philip Hemme: a different game. It’s 

Christina Takke: a different game. And 

Philip Hemme: I guess that’s not even possible in Europe anyway. 

[00:35:44] Company creation drop

Philip Hemme: So, um, maybe on the, on the last, I’d say on the last topic on the, you had a very nice blog post. Actually, it’s nice. You write blog posts. There’s not that many, right?

Like inside a blog post, which is great. And one blog post was basically about. Company creation numbers drop completely. I didn’t realize it dropped that much. I will show the figure I was basically in. What was it like, uh, I have it here, but around 100 company creation per year in Europe per year. And then 2022 went like down completely in 2023, I guess, even lower in 2024.

We’ll see. Um, it’s like, yeah, 

Christina Takke: it’s good. You referring to that. And of course, well, we need to see how these numbers evolve. Yeah. Because what we have done, we’ve used PCI Q for, for our database. So we looked at years, years where the companies were founded. And of course, well, this is the first time they put out a pest release.

It could be that these companies were maybe installed a year earlier. But I think the big, the big number movements that, that will stay the same. So we need to look in the next year into what will happen. We felt that because when we look around and we see companies that have raised funds last one, two years, they were mostly extension rounds, seat extensions, series extensions.

We haven’t seen that many new companies. Um, they’re still there. And luckily, and, uh, I spoke on the conference also a few people. So. We hope that we’ll pick up again, because what we think it’s needed, you need to need the source and the starting point of new companies to be created in order to get to the A and the B rounds in order to develop new products, uh, through the pipelines.

So hopefully that’s something that will settle on a, on a, on a normal level. Maybe it’s a, it’s an echo from, from maybe from COVID that it was a lot of company created and then people needed to be a bit more careful. We’ll see. We’ll follow the numbers. We’ll make a new analysis. 

Philip Hemme: And you grasped it. I feel like there was also a bit of a, let’s say, not hype, but a craze for these like new codes.

I mean, I, between lab biotech and flood bio went to molecular partners and exactly trying to do that as well. Like entrepreneurial residents trying to, let’s say, looking at new code, could we do a new code? And like so many people’s like a new code, so many new codes being founded. And like, like, I don’t, I feel like maybe some people also realize that it’s not that easy or so like, and, 

Christina Takke: and people are more critical.

Philip Hemme: Yeah. 

Christina Takke: When, when I started, well, before I came to Ebenezer, I was in Germany where this was the late nineties. We had money from the government because government said, well, we need to create more biotech companies. At the time, a lot of biotechs were created. They weren’t viable at the end. I think the business plan weren’t well thought through.

And that also, well, that’s now 20 years back, but I think when going with the hypes, If money is available, people get less critical and I think more is funded. If money is scarce, people are more critical to really looking which euro I invest on which experiment. And then maybe people are more hesitant.

Maybe it’s a normal cycle and it will pick up again. 

Philip Hemme: I guess. But 

Christina Takke: for us it’s good. I think for us we’ll see, um, there is, there’s a good hunting ground for, for, for science. So you need to roll up your sleeves to, to, to create these new companies together with the founders. And we realized that by now having just a Series A round closed, which took longer than we thought, but I think it’s a very nice investment.

It’s an international syndicate to Flinders. Good companies still get funded. 

Philip Hemme: I guess for you, actually, it’s not too bad either that. I mean, if there’s less companies, obviously you have a bit less choice, but at the same time, you’re in a position, I mean, you’re in a better position. 

Christina Takke: Well, we have less competition in that area.

Philip Hemme: Yeah, I mean, I guess there’s always trade off, uh, uh, every coin has two, has two sides. Um, maybe as a, as a final question before we get, uh, we get to it, uh, the, I think two of the success, let’s, let’s finish on success stories of the Bayou. I think one of them, I think was Sindesi or you pronounce it Sindesi?

Yeah, Sindesi. And I think Agomab can already qualify it quite of a success story. Can you share a bit more on like what made these two, yeah, well, successful? Yeah. Yeah, it was, what? Successful. 

Christina Takke: Syndesi was at the, at the time, a spin out from UCB. It was an SV2A modulator where a lot of research has been done within UCB to bring the molecule as far as they were.

It wasn’t a. an area where UCB wanted to continue cognitive impairment. They were focused on epilepsy and their, their, their existing portfolio. So it was something where the scientists within UCB really said, well, this is, it’s shame. It’s it, it, it, it stays on the shelf and nobody does anything with. So that was, I think, one critical part that these people said, look, we want to do something with him.

If it’s not within it’s outside. So that’s needed. That’s this entrepreneurial mindset. You need to get it. And at the end it was execution. 

Philip Hemme: It shows that, I mean, there’s so many assets sitting on the shelves in Fava, but you need the people. And 

Christina Takke: at the end it’s execution. Well, we had a good CEO, Jonathan Savage.

We had a good CSO, John Kemp. So they really executed what was the plan, which at the end resulted in a sale to AbbVie. 

Philip Hemme: Over a billion, 

Christina Takke: a 

Philip Hemme: potential billion at least. Okay, good. And maybe finish on Agomam. Yeah, it’s getting wet. 

Christina Takke: Agomam is really a success story for us. It was very early when, uh, we came in contact through Paolo, the scientific founder, with an antibody who does something on C MEDS, activating C MEDS, and we were like, It’s a crazy idea.

Everybody wants to block Cimet, but why we move on? So it’s really where we started and my colleague Katja Rosenkrantz, she took the lead on that and she really drove around with us with Paolo to raise the first euros to get it funded. So we founded the company with a 110, 000 euro loan in the beginning to really get the first experiments done.

And now when you look where the company is now, but a 

Philip Hemme: hundred million CBC led by fidelity, I mean, which doesn’t mean it’s a 

Christina Takke: great journey, but it’s also, it goes back to people, Paolo said, well, if this is what it takes to make it a success, I’m in there. So it grew along the line. And then of course, we’re super happy to get Tim Knuderos as a CEO.

He’s an energetic person. He has the mindset and the drive. And of course, well, also the guts to acquire a Spanish company to really fill the pipeline and convince the investor that this is the right thing to do. And that enabled the company where they are now. Now the clinical data need to speak and we’re looking forward to it.

[00:42:39] Thanks for listening

Philip Hemme: Great. Great conversation. I wish we could have spoke later, uh, more. I mean But otherwise we get Now, as we discussed before, we understand why things are so green here. 

Christina Takke: Well, I can recommend everybody to come here, to sit here, have a nice view and a very interesting conversation with you. Thanks for having me here and looking forward to your next post.

Philip Hemme: Thank you.

Thanks for listening to the end. I’m impressed by how positive her experience was as a female in the biotech VC world. I’m also impressed by how good Flanders, DIB, vBio, Ablinks, Argenix are. Tech transfer and innovation. I think both sides are really role models. If you have enjoyed the episode as well, please hit the like, follow, review button.

Any of this actually would help us a lot. And I would be also curious to hear what you think, so I can improve. So please leave a comment wherever you are down below, or shoot me an email at celib at flod dot bio. All right. See you in the next episode.