4
Apr
2024

How CymaBay Survived a Safety Scare

Dylan Neel, MD/PhD candidate at Harvard Medical School

In November 2019, Sujal Shah was the CEO of a public company with two promising late-stage clinical trials underway. The company was worth more than $900 million. 

A couple months later, he found himself cornered in a parking lot by an activist investor—one of a handful pressuring him to shut down and liquidate his company CymaBay Therapeutics.

“I can smile about it now, but it was easily one of the most difficult times of my professional life,” says Shah, CEO of CymaBay (now a wholly-owned subsidiary of Gilead Sciences).

At the time, CymaBay was running the key clinical trials to determine the safety and efficacy of its PPAR-delta agonist, seladelpar, for two liver conditions: primary biliary cirrhosis (PBC) and metabolic dysfunction-associated steatohepatitis (MASH). When the clinicians scoring the end of treatment MASH trial results reported worrisome pathologic findings, Shah knew it could mean the end of seladelpar and CymaBay.

Sujal Shah, CEO, CymaBay Therapeutics (now part of Gilead Sciences)

“We had a moral decision to make at that point in time—wait for more data to be analyzed or immediately halt the trial. We decided to immediately stop the study…after all we had no way simple way to determine whether or not the pathology findings were definitively due to seladelpar or not.”

The consequences were swift and severe. CymaBay had to lay off two-thrids of its employees. The stock fell by 76 percent in a day. Most experts told Shah to abandon seladelpar and move on—an investigation would be difficult and take far too long.

“I couldn’t sleep, and would lay awake at night thinking: none of this made any sense? I had to at least try to figure out what happened.”

Shah and his team at CymaBay stuck to their convictions and launched an investigation into the results—an investigation that four months later would totally exonerate seladelpar from having caused any of the atypical pathology observed.

FDA clinical holds were lifted. The trials started back up. CymaBay’s shares regained their value and more. In March 2024, Gilead acquired CymaBay and seladelpar for $4.3 billion in total equity value. Most importantly, there is a promising new treatment for PBC on the horizon.

“Patient stories were the biggest motivator for me during these difficult times, I learned that many of them had been doing well and feeling better than ever before on seladelpar—it was all the fuel I needed,” Shah says.

Trained as a biomedical engineer at Northwestern University, Shah originally thought he would become a physician, but instead pursued research. After earning his master’s degree in biomedical engineering, Shah eventually went to business school where he was drawn to healthcare investment banking.

“What attracted me was the ability to learn about the entire biotech industry, while also gaining a very concrete financial toolkit.” After rising through the ranks at Credit Suisse and then Citigroup, Shah began his search for an operating role in the industry in 2012. It was during this time that he first met the management team at Metabolex (renamed CymaBay after going public). A year later, he would join full-time as the company’s chief financial officer. 

In our interview, Shah discusses the creative financial mechanism by which he took CymaBay public, lessons learned from the challenging development of seladelpar and the rationale for his management decisions along the way. He shares advice with those in biotech, stressing the importance of letting data drive decision making. Shah admits that at a certain point you just need to have faith: “Ultimately, you must believe. Believe in yourself and in others.”

Read more of our conversation below.

What initially got you interested in science or medicine?

I have always had a propensity for math and science. The intersection of quantitative skills and human biology always seemed remarkable. However, my original goal was to go to medical school and become a physician.

When that path became challenging, I really didn’t know what to do next, so I applied to graduate school [master’s program] in biomedical engineering. I found a laboratory at Northwestern using biodegradable polymers as scaffolds for tissue regeneration. I really enjoyed the research, and at the end of the master’s program could have considered staying to complete a PhD. Yet at the time I made the decision to get a job and go into industry. I didn’t see myself working in a lab for the rest of my career and wanted some real-world experience.  

What was your first experience in industry like? What led you to business school and then investment banking?

In the several years after college, I didn’t have a lot of direction. I took a job at a startup company based in Pittsburgh, called Tissue Informatics. The company was a little bit too far ahead of its time. The mission was not dissimilar from what organizations like PathAI are now attempting with digitized slides and developing algorithms for diagnosis.

The company [Tissue Informatics] was growing, but when the tech bubble burst in 2000, financing dried up. Around this time, I applied to business school with the goal of changing the type of role I could get within biotech. During business school [at Carnegie Mellon] I interned at Roche with an interest in business development and had a full-time offer to work for them after graduation. I also gained exposure to healthcare investment banking and ultimately ended up taking a role with Credit Suisse First Boston when I finished my MBA.

What was your experience like in life sciences investment banking? What skills did you learn that helped you later?

As an investment banker, you gain exposure to many different areas of healthcare and within biotech, many different therapeutic areas. What attracted me to the field was the ability to learn about the industry, while also gaining a very concrete financial toolkit and exposure to capital markets. The transactional experiences in banking later proved to be vital during my 12 years at CymaBay.

The hours [in banking] were intense, but it really does drill into you discipline and a particular skillset: if you asked me to build a three-statement financial model or merger model I could probably still do it, even now! The 100-plus hour work weeks also toughen you up, which came in handy during later parts of my career at CymaBay.

I also learned that the heart of our industry is letting the science and data drive decision making. The best management teams are very honest internally and externally about what data is saying. There is no room for rose colored glasses—you have to be transparent, honest and clear-minded.

After your investment banking career, what led you to start working with Metabolex—the company that later became CymaBay?

After leaving investment banking, I was working as a consultant with several companies and a biotech venture capital firm. I was using this time to look for an opportunity to become Chief Financial Officer of a biotech company.

Eventually I met the team at Metabolex. The team needed financing (about $30 million) to keep the venture going and run another clinical study for an asset being developed for chronic gout. To be honest, raising this amount seemed like an insurmountable task given existing investors were reluctant to put any additional capital in the company without a new lead investor. In fact, I did not join the company initially because it was in such a tough financial position. Over the course of the following year, I helped them raise the money though as a consultant. By the time we pulled off this financing, I was so emotionally invested that I decided to join full time as CFO in 2013.

[What was the financing that you were able to pull off as a consultant and then CFO?]

After a year of trying and failing to find new investors, Metabolex had about three months’ worth of cash left by mid 2013. The board had pretty much resigned itself to bankruptcy. I remember sitting in my car and coming up with an idea. When I was working at Citi as an investment banker, there was a research analyst who left to join a company called Coronado Biosciences. At Coronado, they were able to raise about $20 million from retail investors—basically high net worth individuals where the average investment would typically be between $50,000 to $100,000 per person.

To pull this off, they used a group in New York called National Securities, which has a network of independent brokers. I decided to go to NYC with our CEO at the time to meet with some of these broker firms on behalf of Metabolex to try to raise $30M in funding. After hearing our story, National Securities felt they could raise us $15M. But first, we had to raise the other half from “smart money” biotech institutional investors. As part of this recapitalization, I also had to get J&J’s venture capital arm, JJDC, to forgive $16 million in a convertible note Metabolex owed them in exchange for $3 million of equity credit in the surviving company if we were somehow able to pull off the $30 million financing. JJDC agreed and we were subsequently able to raise $15M from existing investors and venture debt.

Once this happened, we told National Securities “Go!”, and they raised about $17 million within three weeks. The deal turned out to be a about $32M financing with a $52M post-money valuation—so the existing investors were heavily diluted. However the company survived, and we were eventually able to go public. The way in which we went public was quite unconventional—a self-registration form 10—but that is a story for another time.

What was the company’s early focus and what series of events led to the focus on primary biliary cirrhosis?

Before I joined the company, Metabolex had licensed the rights to a second-generation insulin sensitizer to J&J (Janssen). As part of that out-licensing, Janssen offered upfront cash, future milestones and royalties and a clinical asset in return.

Seladelpar, which is the drug that became the future of CymaBay, came from this deal with J&J.

Seladelpar is a selective and potent PPAR delta agonist. Well-known drugs like fenofibrates target the PPAR alpha isoform, which has an established role in LDL and triglyceride biology. Metabolex was originally interested in understanding if PPAR delta agonists could also be used for mixed dyslipidemia—liver disease was not even in the conversation at this point [early 2000s].

In addition to lowering total cholesterol, LDL-cholesterol and triglycerides in patients with mixed dyslipidemia, seladelpar reduced alkaline phosphatase [ALP]. Although these patients did not have ALP above the upper limits of normal, elevated ALP produced in the liver is associated with impaired bile flow [cholestasis] in patients with primary biliary cholangitis [PBC].

Our CMO at that time recognized that ALP was being used as a surrogate endpoint for potential accelerated approval in PBC and we moved forward with a phase 2 study in this indication. The anti-cholestatic and anti-inflammatory elements of seladelpar’s mechanism of action gave us hints that the drug could perhaps be useful in treating liver diseases like primary biliary cholangitis, where ALP was part of an FDA-approved surrogate endpoint.

We decided to shift our development of seladelpar from dyslipidemia to PBC. In the PBC phase 2 trials we saw striking results: clear ALP and bilirubin reductions as well as reductions in pruritus [itching], a menacing clinical symptom of PBC. This data compelled us to pursue liver disease, where there were clearer regulatory paths. Around this time [2017] I was also asked by the board to move from the CFO to the CEO role at CymaBay.

Walk us through what happened when CymaBay got a clinical hold for seladelpar in its MASH trial.

Between 2016-2017 we started generating some interesting Phase 2 data in PBC. We began enrolling patients in a Phase 3 trial of seladelpar for PBC in December 2018. At this point, we were a $500M market cap public company.

Based on our knowledge of seladelpar’s mechanism, we also decided to run a phase 2b study of seladelpar in MASH. In this study we examined measures of liver fat as a primary endpoint, but also took liver biopsies to assess NAFLD activity score [NAS] and fibrosis. Fundamentally PPAR delta drives fatty acid oxidation, in addition to its effects on reducing bile acid synthesis, inflammation and fibrosis.

We believed that treatment would lower liver fat; so, we powered the trial to detect decreases in liver fat. At the 12-week readout, it appeared that the drug did not lower liver fat significantly compared to placebo. This was a surprise to us, and the stock took a 30% hit.  However, our phase 3 trials in PBC were still progressing according to schedule, and we thought that we may see an impact on NAS and fibrosis at the 52-week MASH trial readout.

In November 2019, our two pathologists scoring the MASH 52-week biopsies gave us an alarming call. They told us that they were seeing a significant number of patients with interface hepatitis or periportal inflammation—features that were not previously reported in MASH. It appeared that these pathologic features, which were present in almost 30% of the end of treatment biopsies scored, could have be associated with drug treatment.

Over the course of a weekend, we consulted with a number of hepatologists and MASH experts—nobody knew what to make of these findings. Was it possible that the drug was causing injury? Despite the biopsy findings, we were seeing reductions in liver injury markers and bilirubin levels in trial participants. As our hepatologists pointed out, the patients had no laboratory or clinical features of liver damage. The pathology findings did not match the overall clinical picture for these patients but we had no way to prove or disprove whether or not these findings were being caused by seladelpar.

We had a moral decision to make at that point in time—wait for more data to be analyzed or immediately halt the trial. We decided to immediately stop the study and call the FDA. On one hand this was one of the most difficult decisions to make as I knew it would likely mean the end of seladelpar and also the end of CymaBay. On the other hand it was an easy decision because I was never going to put patient safety at risk.

What happened?

Seladelpar was put on a formal clinical hold. Prior to this point, CymaBay was a $900M market cap company. The Street reacted to the news: our stock tanked to $1 a share, or a $100 million in market cap even though we had $2 a share or $200 million of cash on the balance sheet. We had to lay off two thirds of the company right before Christmas of 2019.

It was one of the worst times in my life. I felt that I had poured my soul into the company: it was all gone in a flash. I couldn’t sleep, and would lay awake at night thinking: “none of this made any sense?” I had to at least try to figure out what happened.

Given CymaBay had $200M of cash and only a $100M market cap, an activist investor bought 10% of the company—he wanted to pressure us to liquidate and thus make a quick return. He wrote a public letter calling for dissolution of the company and accusing me and the Board of not acting in the best interests of investors. I knew that we had to run an investigation to figure out what happened while we also considered strategic alternatives including liquidation as required by our fiduciary duties. Many experts told us it would take years to complete a proper investigation and that it would be impossible to ever learn anything definitive.

Despite the challenge of having to prove a negative, we launched an investigation into understanding the findings and whether or not seladelpar caused them. We assembled what I would call the “dream team” of hepatologists and hepatopathologists with significant experience in drug-induced liver injury [DILI]. We were conducting this investigation in the backdrop of a COVID pandemic and a group of activist investors trying to shut us down.

At this point, there were half a dozen investors calling me daily with accusations and threats. One [activist] even approached me in a parking lot when I was on my way to a meeting. I can smile about it now, but it was easily the most difficult time of my professional life.

A month before our annual shareholder meeting where the lead activist was positioning to get his slate of Board nominees to take over, we finished the investigation.

Here is what we found: every single one of the patients with what the study pathologists deemed was “atypical” pathology in NASH [including interface hepatitis] at the end of study biopsy readings had the same pathology in their baseline biopsies before they were dosed with seladelpar. The biopsy findings were totally independent of treatment. Subsequent retrospective analyses from other trials and patients have shown that between 25-30% of complex MASH patients can display this type of pathology—periportal inflammation or interface hepatitis—at baseline.

We shared these findings publicly and the stock tripled. A couple months later the FDA released all clinical holds. We had to enroll a brand new PBC phase 3 trial and raise another $150M. However, it was worth it: we had dozens of PBC patients come to us when we were on clinical hold saying: “I have never felt better than when I was on seladelpar, please don’t give up.” This was the biggest motivator for me during these difficult times—it was all the fuel I needed.

What are some important lessons learned during the difficult times at CymaBay?

There are many lessons I learned in my time at CymaBay: let the data drive your decision making, hold patients and unmet need as your guiding light, and do not be afraid to disagree with the “experts” if you have conviction.

When the clinical hold on seladelpar was released, the activist investor who was pressuring me to liquidate CymaBay gave me a call.

He effectively said: “Sujal I have got to hand it to you. You stuck to your convictions and you and your team are the right people to lead the company.” During the investigation period, I answered every call from every activist investor. The minute you stop answering, you add fuel to the fire. In my role as CEO it was my duty to take these calls, treat everyone with respect (no matter how challenging) and stick to our internal convictions and plan

Dylan Neel is a final-year MD/PhD candidate at Harvard Medical School. He earned his PhD in Immunology, where he studied innate immune mechanisms in neurodegenerative disease. During graduate school he worked part-time at Vida Ventures and is the Editor of the Biomarker Substack. He graduated summa cum laude from Harvard College, with a degree in neuroscience.

1
Apr
2024

Can Bayer CEO Liberate Pharma From Stultifying Bureaucracy?

David Shaywitz

Pharma colleagues: does this complaint sound familiar?

This company is too bloated. It’s too slow. We have all these layers and layers of bosses where leaders at the top would decide on the strategy, and then it would just trickle down to the people who actually did a lot of the day-to-day work…. I am 10 layers below the CEO and I have ideas for how this company could be better, but they’ll never be heard because there are just so many people above me who are making those decisions.

According to Wall Street Journal reporter Chip Cutter, it’s exactly what newly installed Bayer CEO Bill Anderson heard when he joined the company last June and embarked on a listening tour.

A seasoned pharma veteran who was previously CEO of Genentech and then CEO of Roche Pharmaceuticals, Anderson had become “disillusioned over the years by the many approvals and endless rounds of meetings required to get anything done at large companies,” Cutter reports.

Bill Anderson, CEO, Bayer AG

Anderson heard the same gripes at Bayer.  He was told that “launching a new product takes years instead of months,” Cutter writes.  “Disputes between departments take too long to resolve. He learned that company rules and procedures fill 1,362 pages, he said, ‘longer than War and Peace, and a lot less exciting.’”

At the same time, Cutter also points out that “Modern corporate hierarchies have persevered because they largely work and attempts to subvert them haven’t.”

Nevertheless, Anderson is trying to “rewire” the company culture, focusing on “fewer bosses, fewer rules.”  The plan – built around a principle Anderson calls “dynamic shared ownership” — involves self-assembling groups of employees deciding on priorities, and working together to accomplish projects for 90 days, and then repeating the self-assortment process. 

The idea, as “The Journal” podcast co-host Ryan Knutson explains, is “to empower employees to make big decisions without having to get the approval of layers and layers of management.”

To guide the process along are leaders/advisors, in roles called “’visionaries,’ ‘architects,’ ‘catalysts’ and ‘coaches,’ positions focused on longer-term strategy and guidance-giving,” according to Cutter.

It’s a radical departure from the usual way of conducting business in large companies, Anderson recognizes.  “The first go round, it’ll be a little messy,” Anderson says, “but that’s okay because the thing is, the thing we’re comparing to is a system that doesn’t work very well. So this is the thing. We don’t actually have to be that good to beat the current system.”

Cutter describes an example of the new way of working, focusing on a self-assembled team focused on expediting the launch of a new line of vitamins.

The team didn’t spend time creating a polished PowerPoint presentation to show company higher-ups. Executives were instead periodically invited to the Garage [a dedicated innovation area] to look at designs and ideas on the walls and offer any suggestions.

Typically, the timeline for a product launch takes into account the multiple layers of approval needed for each stage of the rollout. If eight people gather from different departments, each of them would spend much of their time getting their individual bosses to sign off on an idea.

“They’ve got to convince eight people,” Anderson said. “And when one or two of them says, ‘No, no, actually, I like this better,’ then the other six have to go back and convince their managers about the new plans.”

Not any more, Anderson said, gesturing with cupped hands and making the sound of an explosion. 

The team “hit its mark,” Cutter writes.  “Bayer’s new line of One a Day vitamins, packaged in a palette of pink and purples, went on sale in March, a year ahead of schedule.”

As Cutter observes, “Anybody who has gotten an early taste of this, a lot of former CEOs, management thinkers, and others, they are all captivated by what happens here because Bayer is touching on problems that are so familiar throughout corporate America and so if this works, it could be dramatic.”

The Challenges of Scale, The Drive For Control

Whether or not Anderson’s solution sticks, he is unquestionably getting at a real problem in large corporations: the tendency of entrenched bureaucracies to inhibit agility and dampen innovation (or, to put a somewhat finer point on it: to crush the souls and extinguish the spirit of often highly innovative employees drawn to industry by the desire to have an impact and make a difference).

This challenge also is highlighted in my favorite management book: former Pixar CEO Ed Catmull’s Creativity Inc., as I’ve discussed here.  (An expanded edition was recently released, as Catmull discussed with the WSJ here.)

Ed Catmull

As Catmull sees it, “full creative engagement” requires us to “uncouple fear and failure – to create an environment in which making mistakes doesn’t strike terror into your employees’ hearts.” 

This sounds great as a mantra, Catmull acknowledges, but in practice, managers also are typically told “the success of our enterprise depends on your group doing its job on time and on budget.”

Consequently, he says, if managers “have to choose between meeting a deadline and some less well-defined mandate to ‘nurture’ their people, they will pick the deadline every time.”

Managers, Catmull explains, “typically want two things: (1) for everything to be tightly controlled, and (2) to appear to be in control.”

And now we get to the crux of the issue:

But when control is the goal, it can negatively affect other parts of your culture.  I’ve known many managers who hate to be surprised in meetings, for example, by which I mean they make it clear they want to be briefed about any unexpected news in advance and in private.  In many workplaces, it is a sign of disrespect if someone surprises a manager with new information in front of other people.  But what does this mean in practice?  It means there are pre-meetings before meetings, and the meetings begin to take on a pro forma tone.  It means wasted time.  It means employees who work with these people walk on eggshells.  It means that fear runs rampant.

I suspect most pharma veterans will recognize these behaviors.  (See also Safi Bahcall’s Loonshots – my WSJ review here, and additional biopharma discussion here.)

The question is whether these patterns of behaviors are inextricably tied to the smooth functioning of massive sprawling corporations, with their need for alignment, their reliance on hierarchy, and their instinctive prioritization of tight control to drive consistency, efficiency, repeatability, and standardization? 

One alternative, presumably, might be a more trust-based cultivation of originality and creativity that Catmull champions. 

There are other challenges related to company size: in a smaller organization, the relationship between your individual contribution and the mission and success of the company is much easier to discern, and often immediately palpable.  But in massive, incredibly complex companies, most of the time, your sphere of control can feel far removed and often detached from the overall trajectory of the company as a whole.  Hence the tendency to keep your head down and focus exclusively on your specific deliverables, which you rely on to maintain your bearing.

These stark contrast between the cultures of small and giant companies was recently highlighted by startup CEO Noam Bardin (see here), whose company, Waze, acquired and absorbed by Google.   

“What seems natural at a corporation,” Bardin said to WSJ reporter Christopher Mims, “multiple approvers and meetings for each decision—is completely alien in the startup environment: make quick decisions, change them quickly if you are wrong.”

Bardin also described to Mims the differences in incentives he noticed before and after the acquisition.  “Before the sale,” Mims reports, “everyone’s financial interest was aligned with the performance of the company’s products. Once Waze was a subsidiary, getting ahead was all about getting promoted.”

Adding to the challenge, employees in large companies typically operate in the disorienting miasma of corporate buzzwords and platitudes, constantly repeated. 

Terms like “innovation” tend to be invoked so often, and applied to the most pedestrian activities, that they quickly lose all meaning in what can feel like a “Successories”-inspired world.   Minor accomplishments, particularly those in line with high profile management initiatives, receive outsized recognition, and highly burnished “success stories” are celebrated and socialized. 

One result of all this is a remarkably hermetic environment within large companies, sort of an alternative, self-consistent universe with its own rules and customs, sustained in large measure by the established structures and defined hierarchy.  Truth is what your manager, and his or her manager, says it is, and you challenge these orthodoxies at your peril.

Speculation

First, I’d argue that big companies lean into process and control because it feels more reliable and scalable than creativity.  Indeed, Catmull’s core thesis, as he tells WSJ reporter Emily Bobrow, is precisely that there is not a “formula” for success, and you need to reinvent yourself creatively each time. 

As I’ve frequently noted, this is the exact antithesis of what anyone in large pharma companies wants to hear or is prepared to hear.  Instead, pharmas characteristically overindex on perceived “success factors,” and may doom future projects by applying with excessive rigor the putative lessons learned from previous blockbusters.

Second, big pharmas will continue to search for tools (including potentially AI) that essentially enable them to leverage their size and process, and industrialize innovation. This basically means they seek to use brute force to produce superior medicines.  So far, based on the high fraction of pharma products born elsewhere, this hasn’t proved especially successful, but the hope is always there.

Third, since I don’t think the cultures of most big pharmas are likely to change meaningfully, I anticipate we will continue to see the pharma version of “the big sort,” the demographic self-assortment that leads to the geographical clustering of like-minded people (e.g. progressives moving to blue states and conservatives moving to red states).  Drug developers who find comfort in process, control, caution, and stability will migrate to and remain in large pharmas, while those who prefer living a bit out over their skis will choose smaller biotechs – provided market conditions enable early-stage companies adequate opportunity to find their footing.  

Most of the top creative physician and scientists I know in drug development are now working in small biotechs – often after previous roles in large pharmas. We have seen a long-term trend of talent migration from large pharma to startups – see Luke’s column from September 2017 on “How’s It Going for Big Pharma Vets at Startups?

Fourth, remember that while smaller biotechs may be more innovative (or at least embrace more risk), most drug development efforts fail; even with the most creative people in the most supportive environment, science is incredibly, unfathomably, brutally unforgiving.  The single biggest advantage big pharmas have (see here) are the resources to remain in the game long enough to absorb the many inevitable failures – and then run with the very rare success, whenever it arrives.  

Even the most innovative small biotechs struggle to remain independent, and are generally acquired by big pharmas; Genentech, memorably, was fully acquired by Roche in 2009. 

Pixar, incidentally, was no different.  As Pixar Chair and majority shareholder Steve Jobs told Catmull when Jobs was contemplating a sale to Disney, “Pixar is a yacht.  But a merger will put us on a giant ocean liner, where big waves and poor weather won’t affect us as much.  We’ll be protected.” 

The challenge, of course – for Genentech, Pixar, Waze and others — is sustaining their distinct creative culture in the context of the larger corporation. 

Not surprisingly, as Bruce Booth of Atlas Ventures has described, a lot of top R&D talent tends to recycle into the startup ecosystem after an acquisition.  Given the challenges of maintaining (much less retroactively establishing) a culture within large pharmaceutical companies that truly supports creativity, let’s hope market conditions sustain and foster the virtuous cycle Booth describes, as this may most effectively enable the continued, essential cultivation of genuine innovation in the life sciences.

6
Mar
2024

Early Detection, and Treatment, for Alzheimer’s: Valerie Daggett on The Long Run

Today’s guest on The Long Run is Valerie Daggett.

Valerie is the founder and CEO of Seattle-based AltPep.

Valerie Daggett, founder and CEO, AltPep

This company is working on an unusual diagnostic-and-therapeutic strategy against Alzheimer’s disease.

I wrote about the company in June 2023 when it raised $53 million in a Series B financing that included Section32, Alexandria Real Estate Equities, and Eli Lilly among others.

At the time, I wrote:

What if you could screen everyone at age 40, with a simple blood test, that could detect trace amounts of the toxic forms of amyloid-beta protein that build up over 10-20 years in people with Alzheimer’s?

What if the blood test had 99 percent sensitivity and specificity to the toxic forms of the protein structure, ignoring normal forms? What if you could go a step further after a positive early diagnosis, and give a treatment that binds the same way, but is optimized to clear out those misfolded proteins before they start bunching up into plaques that damage neurons to the point of no return?

This might sound like daydreaming in Alzheimer’s diagnosis and treatment, but Seattle-based AltPep is imagining such things and has secured $53 million in Series B financing to pursue its plan.

Valerie is a professor of bioengineering at the University of Washington. She has been on the faculty there for 30 years.

Her academic research has been building, and building over time, pointing toward this moment in which her team can make peptides that are so exquisitely able to distinguish toxic forms of amyloid-beta protein from the garden variety. They can also capture and remove those proteins.

In this conversation, Valerie describes how her research evolved in this direction, and why she decided to continue working on it in the business world to see if can fulfill its potential for diagnostic and therapeutic purposes.

Now please join me and Valerie Daggett on The Long Run.

21
Feb
2024

Joy, Gratitude and Next Steps for Timmerman Traverse

Luke Timmerman, founder & editor, Timmerman Report

Reporting this morning from Tanzania.

I’m feeling joyful and grateful.

My latest biotech team wrapped up another $1 million Timmerman Traverse fundraising campaign for the Damon Runyon Cancer Research Foundation. All 20 members of the team reached the summit of Kilimanjaro, the highest peak in Africa at 19,341 feet.

We raised awareness of Damon Runyon’s national network of brilliant, brave and bold young scientists. We raised significant funds to support them. We forged meaningful friendships on the trail.

We cried. We laughed. We sang. We danced. We hugged. We marveled at the night stars. We were in awe of the strength and hospitality of our Tanzanian hosts.

Some people faced challenges on the trail like never before. Many had to dig deep. 

These mountaineering programs have now catalyzed the biotech community to give back $8.9 million since 2017. More than 120 people have accepted the challenge and participated in these experiences around the world. About 10,000 people have given at least once to one of these campaigns. Many people are giving over and over. 

The Timmerman Traverse campaigns are tapping into something deep and meaningful.

The desire to give back to those who are less fortunate.

The desire for physical challenges.

The desire to experience natural beauty.

The desire to form strong, lasting friendships.

Ultimately, it’s about being part of something much bigger than one’s self.

I’m feeling the fire in the belly. I’m hungry to make an even bigger impact. This campaign with Damon Runyon Cancer Research Foundation is the start of a big year. 

This year, I’m challenging myself to step up to a new level, leading not just one, but *two* more biotech community expeditions for worthy causes.

The first is the Timmerman Traverse for Life Science Cares. That team is fully recruited and preparing for a magnificent pair of day hikes in the Pacific Northwest in August.

This team will raise $1 million to fight poverty in the United States. This program is now entering its fourth year and has already raised more than $3 million to fight poverty in the US since 2021. I’m proud of the impact this program has had, and the ripple effect it is having.

This program has already given birth to an initiative that’s creating 1,000 biotech industry internships for young people from underrepresented minority groups around the US. And we’re still in the early days. Watch for an announcement of the Timmerman Traverse for Life Science Cares 2024 team in March.

The second expedition is the Timmerman Traverse for Sickle Forward. This team will go back to Kilimanjaro in September, in conjunction with National Sickle Cell Awareness Month.

This will be another $1 million campaign to raise funds to expand newborn screening of sickle cell disease in Africa. Newborn screening can prompt the kinds of early interventions that save lives. We’re talking about catching sickle cell early, so infants can go on prophylactic antibiotics, anti-malarial medications, or have access to cheap, generic hydroxyurea. These are practical interventions in low-resource settings.

We also have a partner willing to make a $1-for-$1 match to amplify sickle cell research in the United States. That means this campaign has the potential to raise $2 million to fight sickle cell disease and uplift people around the world with this long-neglected malady.

I’m not doing this alone. As the old African proverb says, if you want to go fast, go alone; if you want to go far, go with a group.

This campaign for Sickle Forward is being led by three co-chairs.

  • Luke Timmerman, founder and editor, Timmerman Report; 3-time summiteer of Kilimanjaro and climber of 6 of the 7 summits.

    Ted Love, chairman, BIO

  • Ted Love, chairman of the board, BIO; former CEO of Global Blood Therapeutics, developer of novel treatments for sickle cell disease.
  • Alan Anderson, physician-scientist, medical director of the Comprehensive Lifespan Sickle Cell Disease Program, PRISMA Health in Greenville, South Carolina; Executive Director, Sickle Forward

All three of us will climb Kilimanjaro with the full team in September.

It’s important to add that Eric Murphy will be with us. Eric, the lead guide for Alpine Ascents International on Kilimanjaro, has worked with me on all three campaigns on Kilimanjaro since 2019, plus another trek to Everest Base Camp.

His unparalleled knowledge of the mountains, clear communication, patience, and trusting partnership with local guides and crew are what make these large-scale expeditions possible. He’s a great friend. 

Alan Anderson, physician-scientist; founder, Sickle Forward

My task now is to recruit a few fellow sickle cell disease warriors from the biotech community.

If you — or your company — is willing to step up and make a major contribution to help children in Africa live longer and healthier lives, please see me or Ted or Alan.

I can provide you with an invitation with all the details to get started.

Let’s show the world we can come together and take action against poverty and health disparities.

luke@timmermanreport.com

20
Feb
2024

Timmerman Traverse for Damon Runyon, Kilimanjaro 2024 Photo Gallery

The Timmerman Traverse for Damon Runyon Cancer Research Foundation is in the books.

We have raised about $1.1 million for this national network of brilliant, brave and bold young scientists. 

All 20 members of the team made it to the summit of Kilimanjaro, the highest peak in Africa, at 19,341 feet. 

It’s an experience none of us will ever forget. 

We had some rainy days, some sunny days, and truly stellar night skies. We were lucky to have picture-perfect weather on summit day. We marveled at the changing landscape, from the forest zone, to the heather and morland, to the alpine desert at higher elevation. 

Team Roster 

Enjoy the photos

CLICK to ENLARGE

17
Feb
2024

New Medical Podcast (Like Winter and the 2024 Red Sox) Offers Bleak Outlook, While Four Books Instill Hope

David Shaywitz

As Bostonians tentatively emerge from the bleak cold of another New England winter and begin to search for signs of spring, we instinctively turn to the Red Sox. 

Unfortunately, I am informed by my daughters that the team’s prospects appear dismal this season, so we’ll need to look elsewhere for hope.

We might consider instead Boston’s other great preoccupation: biomedical science. 

Here, our prospects are better. I’ll tell you about three recent books, and one forthcoming one, that highlight the promise of medical innovation, and emphasize the urgent need for more rapid progress.

But before we get there, to remind us that we still are in the middle of winter, a few words on a medical podcast that offers a chilly, somewhat grey and gloomy take on medical training and the muted expectations of future clinicians.

“Not Otherwise Specified” podcast, Season 2; Dr. Lisa Rosenbaum, host

Most practicing clinicians I know seem unhappy about both their work and the direction medicine appears to be heading. Common complaints are that medicine has become more bureaucratic, detached, and “corporate” than they hoped and expected when they went through medical school.

Lisa Rosenbaum, MD; host of “Not Otherwise Specified.”

This dissatisfaction is palpable even (perhaps especially) at the trainee level. Many interns and residents have come to regard medicine as a job, rather than as a calling, as was perhaps the case for previous generations.  In fact, some suggest that the idea of medicine as a “calling” represents an insidious corporate ruse, designed to justify the extraction of cheap labor.

In a compelling new season of the New England Journal of Medicine (NEJM) podcast, “Not Otherwise Specified,” Lisa Rosenbaum, a cardiologist and contributor at the NEJM, has tackled this delicate topic with the nuance and empathy that have long characterized her work. You can find the trailer here and follow along.

Through a series of revealing interviews, Rosenbaum explores evolving perspectives on medical training. She discusses the outsized impact of COVID on trainees, who seem to have been pressed into intensive service while many senior physicians and hospital administrators provided nominal oversight from the safety of home – an experience that indelibly scarred and understandably soured many young doctors.

Rosenbaum also explores the difficulty experienced by medical educators as they try to figure out the evolving relationship with trainees, whose expectations for a comfortable and conducive environment can conflict with the intense immersion many educators believe is critical for both learning and successfully transitioning to the real-world practice of medicine.

Educators, according to the podcast, are increasingly wary — if not terrified — of criticism through either social media or satisfaction surveys. Social media has the potential to tarnish the reputation of the institution, while poor marks on satisfaction surveys can interfere with accreditation and cost program administrators their jobs. 

Indeed, medical educators are so concerned about being called out that Rosenbaum was nearly unable to find anyone to speak on the record.  This fear of professional cancellation evocates the difficulties of challenging emerging orthodoxies that writers such as John McWhorter, Yascha Mounk, Jonathan Haidt, Bari Weiss and others have thoughtfully examined.

What emerges from Rosenbaum’s podcast is a sense that many young doctors feel like they aren’t so much being trained as they are being taken advantage of by a cynical system.  Meanwhile, many educators struggle with the concern that trainees are unduly fragile, are not being adequately trained, and seem content with a less visionary (or alternatively: more grounded) view of what it means to be a doctor. 

Put another way, many young doctors view medicine is a job, a way to earn a relatively comfortable living. Like other employees, they seek work/life balance, and satisfaction outside the daily grind of demanding patients, endless documentation, and daily disputes with payors

Whether this represents an advance for healthcare, because doctors appropriately have been brought back down to earth, or a setback, because the transcendent aspect of the mission has been lost, remains to be seen.

(My perspective on work/life balance and finding joy in your work rather than exclusively outside of it, here.)

Chasing My Cure, by David Fajgenbaum

If Rosenbaum’s podcast describes where the average doctor is headed, David Fajgenbaum’s “Chasing My Cure,” published in 2019 (I listened to the audiobook, narrated by the author), reminds us of the promise and possibility of medicine at its most outrageously ambitious.  A high school athlete and then quarterback at Georgetown University, Fajgenbaum was drawn to medicine, specifically oncology, following the death of his mother from brain cancer while he was a sophomore in college.

David Fajgenbaum, MD, associate professor of medicine, University of Pennsylvania

Fajgenbaum started medical school at the University of Pennsylvania, but soon found himself dealing with a collection of rapidly worsening symptoms – fatigue, swollen lymph nodes, and then multi-organ failure – that sent him to the ICU and initiated a long diagnostic odyssey.

Eventually, he was diagnosed with Castleman Disease, a rare, devastating lymphoproliferative disorder that was (and unfortunately remains) poorly understood. It seems to be associated with persistently elevated cytokines, often including IL-6. Fajgenbaum found himself on the brink of death multiple times (he was even administered last rites) as he perilously ricocheted between relapse and remission, from severe illness to tentative recovery.

Fajgenbaum also found a new career purpose. When he realized that no one really understood the disease that was trying persistently to kill him, he resolved to approach it scientifically, and coordinate the required foundational work himself. He organized the Castleman Disease Collaborative Network (CDCN) and attended business school to learn the best way to build innovative organizations. He also established a systematic method to diagnose Castleman Disease, successfully fought for a diagnostic code for the illness, and methodically collected samples from patients with the disease, including himself.

The initial therapies he tried – anti-IL-6 antibodies, intense chemotherapy – didn’t deliver sustained remissions. As he reviewed the data from collected blood samples, including his own, he hypothesized that in his cells, the mTOR signaling pathway might be overactive. That led him to try rapamycin (sirolimus) to see if it might help tamp down his persistently elevated levels of inflammatory cytokines. 

The result was extraordinary. Before starting on the medicine, Fajgenbaum experienced horrific relapses every nine months or so. Since he started on sirolimus, he’s been relapse-free – for 10 years and counting.

Motivated by this experience, Fajgenbaum, now a physician on staff at the University of Pennsylvania, created an organization called Every Cure. It’s an effort to systematize drug repurposing, with the view that existing drugs might be useful for some of the many patients suffering from conditions, especially rare conditions, for which there’s no treatment.

Fajgenbaum’s book also highlights the complexity of research; while anti-IL-6 antibodies help some Castleman patients, they didn’t help him. Meanwhile, sirolimus, a medicine that transformed his life, sadly wasn’t helpful for some other patients with the disease.

Fajgenbaum exemplifies perhaps the ultimate example of the purpose-driven life, drawn to medicine by the explicit intention to avenge his mother’s death. Over time, his motivation expanded to leveraging biomedical science to defeat Castleman disease, and beyond that, to helping other patients find existing medicines that might help them.

For Fajgenbaum, from the beginning, medicine has always been a calling.

To repurpose the words of Senator Ted Kennedy in 1980: “The work goes on, the cause endures, the hope still lives, and the dream shall never die.”

We the Scientists, by Amy Dockser Marcus

Amy Marcus is a brilliant and unusually sensitive reporter at the Wall Street Journal who covers biomedicine from the perspective of patients. Her latest book (published February 2023; I listened to the audiobook) offers a moving account of the efforts by parents of children afflicted with the fatal lysosomal storage disease Niemann-Pick type C (NPC) to catalyze research into their children’s condition.

Amy Dockser Marcus, author, “We the Scientists.”

Marcus poignantly contrasts the desperate urgency of NPC parents with the more deliberate pace of traditional science and focuses on the parents’ efforts to become “citizen-scientists” to accelerate the development of scientific understanding and potential treatments. 

We learn, sadly, that in even the most motivated hands, science and the pursuit of cures can be incredibly frustrating and disappointing, the process stuttering and often divisive.  The challenge of simply willing a cure into being is likely to feel all too familiar to many other patients and advocates, although hopefully, advances in both science and its democratization, as Marcus describes, will lead to the progress that patients urgently require, and families so urgently seek.   

Gene Machine, by Venki Ramakrishnan

With the classic exception of James Watson’s The Double Helix, scientific autobiographies tend to offer a gauzy, somewhat airbrushed account of the author’s personal story and scientific insights, a stylized rendition of the hero’s journey. Jennifer Doudna’s A Crack in Creation, published in 2017, is an example of this archetype.

Venki Ramakrishnan, Nobel Prize-winning structural biologist

In the words of Marcus, who reviewed it for the Wall Street Journal, Doudna (who shared the Nobel Prize in 2020 for her pioneering work on CRISPR) “offers little insight into how the human side of science—fights over credit, the potential for profit, a desire for recognition—may affect the presentation or analysis of data.”

In Gene Machine (2018; again, I listened to the audiobook), Venki Ramakrishnan – who shared the 2009 Nobel Prize for his work on the structure of RNA – affords us at least a glimpse into the human drama as shares the story of his career, emphasizing the many turns of fortune that led to his eventual prize-winning work. 

While not as brazen as Watson (famous for sentences such as “I have never seen Francis Crick in a modest mood”), Ramakrishnan discusses his insecurities about recognition, his irritation with other researchers, his initially reluctant but ultimately impassioned campaign for the Nobel, and his view of prizes in general – particularly the seemingly arbitrary and outdated criteria associated with how they are often awarded. 

His depiction of top researchers as frenemies engaged in intense “coopetition” as they build upon each other’s work while aggressively seeking to be the first to uncover an important insight will ring true to – and potentially trigger – anyone who’s spent time in the lab.

Race for a Remedy by Makhdum Ahmed

I was given the opportunity by Makhdum Ahmed – a physician-scientist and drug developer – to preview his first book, Race for a Remedy, due to be published this summer. Ahmed nicely integrates his own journey from academic physician-scientist to industry researcher with the story of several important emerging technologies he’s had a chance to explore: small molecule oncology drugs, cell therapies, and most recently, bispecific T-cell engagers.

Makhdum Ahmed, physician-scientist-drug developer-author

The last approach, he says, provides an especially promising opportunity to “harness the power of T-cells (and other immune cells) without the need to extract, genetically engineer, and re-infuse a T-cell with the same end result, that is, killing off the enemy, the tumor cells, efficiently.” 

He blends in a dash of medical history and a dollop of his own experiences – enough of each to emphasize both the promise and the limitations of emerging technologies. To his credit, he doesn’t shy away from discussing examples of programs he worked on that didn’t pan out.  While his prose is less ornate than that of authors like Sid Mukherjee (my WSJ review of Song of the Cell here), Ahmed’s description of his experiences are immediately relatable, and we can’t help but root for his future success.

PS

Readers interested in medical history might also enjoy Death to Beauty, an account of the discovery of Botox and its development as a pharmacological therapy – initially for the eye disorder strabismus. My WSJ review here, with additional, biotech-focused discussion and an emphasis on the concept of field discovery at TR, here.

9
Feb
2024

Botox: A Luminous Example of Field Discovery

David Shaywitz

In this weekend’s Wall Street Journal, I review Death To Beauty, a new book by Dr. Eugene Helveston. It’s about the fascinating history of botulinum toxin and the California ophthalmologist, Alan Scott, who drove it into clinical use.

The book review, of course, speaks for itself, but I wanted to highlight for TR readers an aspect of the story that seems especially relevant for biopharma colleagues: the importance of field discovery.

MIT professor Eric von Hippel developed and championed the concept of field discovery as an underappreciated source of innovation. As von Hippel describes it, field discovery emphasizes the role of users, rather than manufacturers, in identifying relevant uses for technology.

He writes,

“Innovation process scholars have assumed that product manufacturers would be the developers of all or most new products. However, empiric research during the past two decades has shown that product users rather than manufacturers are the actual developers of many of the commercially important new products and new product applications in fields studied to date.”

This description is from a 2012 paper he wrote highlighting the role of clinicians in identifying important off-label uses for drugs. In his study, it was clinicians (not pharma companies) who originally identified the majority of off-label uses for medicines.

The importance of field discovery driven by so-called “lead users” as critical drivers of innovation is likely familiar to long-time readers (see here, here, here, here and references therein).  

This framework highlights specifically the value of inquisitive practitioners in drug discovery, and more generally the need for front-line users to pull through and refine new technology in order to more fully capture its value.

Joseph Goldstein, Distinguished Chair in Biomedical Research; UT Southwestern

Since ancient times, of course, the medicinal use of natural products such as aloe and willow bark derived from astute observation. Even in the modern era, many drugs and drug classes, especially in neuroscience, were developed by following up a clinical observation. Legendary physician-scientists Judah Folkman (as I’ve discussed here), Michael Brown, and Joseph Goldstein (see here), have repeatedly emphasized the critical importance of inquisitive clinicians.

The role of astute observation in biopharmaceutical drug development is perhaps most famously exemplified through the story of sildenafil (Viagra), a vasodilator originally developed by Pfizer for the treatment of chest pain. However, an alert study nurse noticing that the young male phase 1 subjects tended to lie on their front to preserve their modesty alerted researchers to an alternative indication (see here, and also this podcast hosted by Luke Timmerman and Meg Tirrell).

The importance of lead users extends far beyond clinicians contributing observations that point to new indications for therapeutics. Innovative front-line workers play a critical role in catalyzing the development of new technologies – principally by coming up with relevant use cases, and adapting or evolving the technology to serve this purpose. 

Technology, as we’ve discussed, often arrives with lots of promises and hype, but often with only a limited sense of exactly what problems it might be able to solve most effectively. It takes someone obsessed with solving a problem in front of them, and willing to try out an emerging technology, for a promising new use case to be revealed and developed.

Botox fits into field discovery paradigm nicely. It was originally developed and FDA-approved for the treatment two somewhat obscure ophthalmological disorders, strabismus and blepharospasm.

Jean Carruthers

However, an eye doctor named Jean Carruthers (who trained with Alan Scott) was an investigator in the original botox clinical trial. She was told by a patient that the injection (for an eye condition) had the unintended effect of improving her skin. 

Carruthers took notice, and together with her husband, a dermatologist, they pursued the development of botulinum for cosmetic indications. Botox is now well-known for its ability to reduce wrinkles, and that feature transformed it into a multi-billion-dollar business.  

Other uses of botulinum were soon discovered as well; in addition to a range of cosmetic uses, the drug is now FDA approved for a range of conditions including limb spasticity, cervical dystonia, excessive sweating, excessive salivation, overactive bladder, and migraine. 

The very breadth of applications evoke Dulcamara’s classic description of his magical elixir in Donizetti’s L’Elisir d’amore.    

Ei corregge ogni difetto,
Ogni vizio di natura,
Ei fornisce di belletto
La più brutta creatura;
Camminar ei fa le rozze,
Schiaccia gobbe, appiana bozze,
Ogni incomodo tumore
Copre sì che più non è …

(“It corrects every defect
All the faults that nature made;
It bestows both beauty and grace
To the ugliest of all creatures
It does cause the lame to walk
And the hunchback it makes straight
All the tumors, all the swellings,
It so covers that they vanish…)

To which the chorus responds,

Qua, dottore, a me, dottore …
Un vasetto … due … tre …

(“Here, dear doctor – for me, Doctor,
Here’s a vial – give me two, three.”)

Botox was initially envisioned as serving a tiny market.  Scott, the California ophthalmologist, originally couldn’t even find a pharma company interested in acquiring the company he founded to manufacture the medicine. He eventually sold it to Allergan for a mere $9 million.  Today, the product now delivers billions in sales for multiple indications, most unanticipated at the time the drug was first approved. Allergan, the company that ran the R&D programs that maximized the value of Botox, was acquired by AbbVie for $63 billion in 2019.

Inspired by this and other examples (particularly in immunology – think Humira) of a single therapeutic proving useful for multiple clinical indications, biopharma companies are increasingly focused on systematically contemplating such additional uses, seeking, in a sense, to industrialize serendipity. 

This may be especially wise since clinicians, more harried than ever, may have less time for the sort of reflection and critical observation that’s historically proved so valuable. 

Inside baseball

Helveston’s account of the history of Botox touches on aspects of drug development that biopharma colleagues might find especially intriguing. For instance, Scott somehow managed to develop the drug, through FDA approval, for only around $4 million (money he raised, in part, by mortgaging his house). 

Also surprising: Scott reportedly had no contact at all with the FDA for nine of the 15 years between 1974, when he first submitted the IND, and 1989, the year the drug he received FDA approval. The original IND application apparently sat on someone’s desk for four years before the agency was nudged to action by a well-placed colleague, yet even after that, there was no contact at all between Scott and the FDA for five years during the 1980s when trials were underway.

Helveston’s account also reveals that a key botulinum researcher in the early nineteenth century, Justinus Kerner, was also a polymath and poet who first developed the art of symmetrical inkblots, called klecksographs; these were subsequently adapted and incorporated by Swiss psychiatrist Herrmann Rorschach in his now-famous projective test. 

We are also reminded by Helveston of Paracelus’s dictum: “What is there that is not poison? All things are poison and nothing is without poison. Solely the dose determines that a thing is not a poison.”  Botulinum, of course, serves as a canonical example.  It is “the most lethal toxin known” to humanity, according to Helveston, yet therapeutic at extremely low doses.  (As an aside, we’re told that at one point the CIA supposedly contemplated assassinating Cuba’s Fidel Castro by lacing his favorite cigars with botulinum, presumably at not such low doses.  This idea was never carried out.)

“Curiosity never waned”

Arguably Helveston’s most enduring and uplifting takeaway concerns not botulinum but Alan Scott. It’s easy to imagine how Scott might have become embittered and disappointed, particularly since the drug he devoted his life to developing didn’t ultimately find much use in the indication Scott cared most about, strabismus, and Scott received minimal compensation for a product that would generate billions in revenue. 

Helveston, to his credit, explores this question, and discovers that by all accounts, Scott was remarkably content. He was truly driven by curiosity, and motivated to unlock the mystery of nature. His purpose, Helveston writes, was to “ask questions and find answers.” 

Even in his late 80s, Scott (who passed away in December 2021, six months shy of his 90th birthday) always enjoyed participating on an ophthalmology listserv where difficult cases were discussed, and where he might offer relevant insights.  He was also excited by a project he was noodling on with a grandson, a NASA astronomer, focused on developing a device to measure eye alignment digitally.  

Through his final months “Alan Scott was in the game and never quit,” Helveston reports.  “His curiosity never waned.” 

In this, Scott evokes the great French geneticist Jacques Monod, whose last words were said to be “Je cherche à comprendre” – “I am trying to understand.”

9
Feb
2024

CRISPR to Protect the Bone Marrow & Attack Cancer: Robert Ang on The Long Run

Today’s guest on The Long Run is Robert Ang.

Robert is the CEO of Cambridge, Mass.-based Vor Bio.

Robert Ang, CEO, Vor Bio

The company is working on what I think you could call an elegant application of CRISPR gene editing for the treatment of acute myeloid leukemia.

The idea here takes some explaining but is pretty simple. Patients with acute myeloid leukemia typically get treated with adult stem cell transplants, otherwise known as bone marrow transplants. Vor seeks to make a single, important change to those transplants.

It uses CRISPR to delete the gene for making the CD33 antigen that appears on the surface of those cells.

That’s important because that marker is found on both blood-forming stem cells that reside in the bone marrow, and on the runaway malignant cancer cells in patients with AML.

The concept, from scientific founder Sid Mukherjee at Columbia University, is essentially, if you can delete CD33 from those critical blood-forming cells in the bone marrow, you can shield them from a powerful cancer drug aimed at the CD33 antigen.

Pfizer’s Mylotarg is the original antibody-drug conjugate that works this way. It has been around 20 years, but its use has been limited because of toxicity.

Vor has shown, in preliminary clinical trial results, that it can successfully delete the CD33 antigen from adult blood-forming stem cells, that these cells can engraft in the bone marrow to reconstitute a patient’s immune system, and that it’s safe. Then, importantly, in a few patients, the company has shown it can deliver the Mylotarg hammer, and that it can do its job, hitting the cancer cells that bear CD33, without damaging the newly transplanted blood-forming stem cells in the bone marrow.

This is a case where CRISPR isn’t the therapy itself for cancer, but it’s an important tool that enables us to reimagine how to better use an existing drug.

Vor isn’t stopping there. It’s developing a CD33-directed CAR-T cell therapy that could be given to these same patients. Nobody has developed such a treatment because, ordinarily, it would have been considered way too toxic to the bone marrow. But it suddenly enters the realm of the possible if you can use CRISPR to shield the bone marrow. 

I wrote about this concept, and Vor’s early clinical trial results, on Timmerman Report in November 2023.

Like many biotech entrepreneurs, Robert has taken a circuitous path. He’s an immigrant, and a physician. When that didn’t feel right for him, he explored the world of healthcare in management consulting and venture capital.

He found something here that he’s passionate about, and it shows in this conversation.

Now, please join me and Robert Ang on The Long Run.

22
Jan
2024

Gene Expression In Therapeutic R&D: Rick Young on The Long Run

Today’s guest on The Long Run is Richard A. Young.

Rick Young, professor, MIT, Whitehead Institute; co-founder, Syros Pharmaceuticals, CAMP4 Therapeutics, Omega Therapeutics, Dewpoint Therapeutics

Rick is a professor of biology at MIT and a core member of the Whitehead Institute dating back to its founding in the 1980s. Rick’s long and prolific research career has been dedicated to studying gene expression. He’s won a number of awards, and is a member of the National Academy of Sciences and the National Academy of Medicine.

In the past decade, Rick’s work has increasingly captured the interest of scientific entrepreneurs seeking to translate these findings into new therapies.

He’s been involved in the formation and guidance of four companies in the Greater Boston area that we discussed today. They are Syros Pharmaceuticals, CAMP4 Therapeutics, Omega Therapeutics, and Dewpoint Therapeutics.

In this discussion, we talked about Rick’s journey in science, and the confluence of factors that make this such a time of possibility in biology and drug discovery. We walked through a brief description of each company and what it’s aiming to accomplish.

And…

I will be in Cambridge, Mass. on Jan. 23 for “Bridging the Gap.” It’s an event organized by Soufiane Aboulhouda, a member of the Timmerman Traverse for Damon Runyon Cancer Research Foundation. I’m moderating a conversation with Phil Sharp of MIT and Vicki Sato of Denali Therapeutics and VIR Biotechnology.

An outstanding lineup of scientists and entrepreneurs make this a can’t-miss event.

Get Tickets Here

Now, please join me and Rick Young on The Long Run.

17
Jan
2024

One Thing Is Harder To Get From Investors Than Money: Candid Feedback

Bernat Olle, CEO, Vedanta Biosciences

Candid feedback is a wonderful thing.

It is essential for anyone who wants to get better at what they do and get ahead in life. It is oxygen for any professional with a learning mindset. It is also one of the sincerest ways to show someone you care about them.

Conversely, lack of candor in any of its forms (keeping your opinions to yourself, withholding criticism, avoiding the elephant in the room, avoiding conflict, sugarcoating) is a killer if it is allowed to infuse the culture of a company.

You simply cannot have a well-functioning team without a culture of candor.

And yet, many of the interactions between entrepreneurs and investors end in a polite, boilerplate, don’t-want-to-hurt-your-feelings, substance-free “pass” e-mail. Worse, some investors just end communication by “ghosting.”

The entrepreneur learns nothing from the interaction. The investor misses the chance to earn the trust of the entrepreneur for future encounters. A tremendous amount of time is wasted. We’re all dumber as an industry for it.

For an industry that prides itself in truth-seeking, this is ironic. We all know this is a problem but somehow allow these behaviors to perpetuate.

It doesn’t have to be this way.

The rare instances when you get candid feedback from an investor can be precious learning moments

In my first year as CEO, I remember meeting with three investors who left a mark.

One was a renowned investor in the Greater Boston community. As we were nearing the last five minutes of the meeting, he told me, “I like the science and I think this will work in people. But I don’t like your valuation, $X is more where I think you should be, and I have a couple of interesting opportunities at a price I like better that I’m working on now, so I’m a pass.”

It was clear, direct, and truthful. Was he being too candid? I don’t think so: he showed respect for my time (and his) by passing on the spot – he had reached his decision, so why procrastinate in sharing it? And price discovery in a private financing is notoriously hard! Every financing since, I’ve gone back to this investor early in the process. He has never invested, but it doesn’t matter. If you give candid feedback, you are automatically in the 90th percentile of investors in my book and I will come back when we have new data, if you are still the right investor at that stage.

A second one was inclined to invest. In one of our meetings, I brought up a new idea for a program that was a bit too green. He proceeded to pick apart the commercial model and laid bare how little thinking I had put on that end. Then, politely, he found a way to tell me “I don’t think you are well prepared”.

This was very hard to hear. I was embarrassed. But it was true. I have never again showed up to an investor meeting unprepared to discuss a topic I had chosen to cover. For reasons only known to the almighty, despite his well-founded concern, he participated in the financing, and has since become one of the go-to insiders who I reach out to whenever we’re fundraising, and I need someone to pressure-test our investment thesis.

In the third case, while working on my first financing, a deep diligence process that went on for weeks with a group ended in a crushing pass. The investor told me, “You are a virtual company still. Exciting discoveries, nice papers, great founders, but this is a new field, and you have no physical labs, no CMC capabilities. I don’t know if you will be able to do what you say you will do.

This was hard to hear, because it laid bare the fact that there was significant work ahead before we would be investable by a whole subset of investors we were courting. But it was truthful. By the next time we were fundraising, we had built these capabilities and had put them to good use. This investor was my first call. His group ended up leading our round and has continued to support the company since.

Investors who are good at sharing honest actionable feedback with management teams are rare. They leave an impression. What these three cases I shared have in common is that, in each instance, the type of feedback described is not easy to give (“I don’t like the price” / “you are not prepared”), and that each of them led me to make changes that made me better at my job.

A recruiting analogy

I spend a good portion of my time recruiting talent to our team at Vedanta Biosciences. There are always more candidates than openings and we say “No” more often than “Yes.” If a candidate has spent several hours of time interviewing with us, my view is that we absolutely owe it to them to give feedback if they ask for it.

To be clear, I don’t feel this same obligation if a candidate does not ask for it or if I pass after reading a resume and before investing time from both sides in an interview. But if I took one hour of your time (and invested one hour of mine) for an interview, I surely have five minutes to get on the phone and give you feedback.

When I am asked for it, I will invariably feel that knot in my stomach “I am dreading the conversation” – no one really enjoys giving feedback after a pass. But then I will remember that in almost two decades of doing this and hundreds of feedback calls, I have yet to encounter a candidate who asked for feedback and then was not appreciative of it. I find the thought of giving feedback is far more uncomfortable than the act of giving it, which can be liberating.

Most candidates who ask for feedback do it because they genuinely want to learn and continually improve themselves. If I can give the candidates more clarity on how we reached our decision in an actionable way that helps them, why not do it? I put in the work, I might as well give the feedback.

It’s not only the decent thing to do, there is also an element of self-preservation. I know our paths will cross again: another position will open up down the line, and I hope they consider us again; others will go on to do great things and they may be on the other side of the table sometime soon. We simply cannot afford hundreds of rejected candidates feeling like they weren’t treated right. Our brand as an employer depends on it.  

Why not? The Lies Investors Tell Themselves to Rationalize Not Giving Candid Feedback

I don’t have time for this. I’m very busy. They will understand”: actually, no, we don’t understand; we are very busy, too. Unsolicited outreach or immediate passes that come without a meeting need not come with the expectation of feedback. But sharing feedback with a team after spending hour(s) meeting them is the right thing to do. Entrepreneurs understand investors manage large portfolios, sit in many pitches, and that time is precious. But it takes five minutes. It’s not about the time.

It feels risky to share that feedback, I may alienate the entrepreneur”: I should sympathize with this rationalization. In my first year in industry, working as an analyst on the investor side, I passed on an opportunity because the entrepreneur was unwilling to share any info on his drug’s target; absent that information, I could not diligence the company. He reacted to this feedback with a nastygram CC:ing all the partners at my employer and calling mine the “worst diligence process and fastest, least reasoned pass” he’d ever seen. It did not feel good to be accused of incompetence in front of my boss and colleagues.

Risk aversion in the context of giving feedback is a real issue, because the type of instance I just described, while rare, can leave a lifelong impression. After experiencing this, an investor may be hesitant to give specific feedback for fear of alienating the entrepreneur and inviting future vindictive behaviors. There is some risk in offering candid feedback. Ultimately, it is up to the investor to decide if they are willing to take it. But I would argue this risk is very small if the entrepreneur has already asked for the feedback, because the mere act of asking for it self-selects the recipient into a group more likely to handle it well. The irony here, of course, is that if you have asked for feedback, the ultimate form of alienation is not getting any.

You can’t handle the truth”: an investor may feel that saying nothing is better than saying something that may be demoralizing to the entrepreneur. There are types of feedback that can be demoralizing, indeed (for example, a well-reasoned argument for why you should start thinking about terminating a program).

Crucially, some of the hardest feedback you’ll ever hear is “elephant-in-the-room” type of feedback, as in that one thorny issue that you have been actively avoiding but you really need to address. It may take days or months for entrepreneurs to digest the bitter pill of hearing this type of feedback, but ultimately time and perspective makes you most appreciative of the ultra-rare investors that go there, because it takes courage and clarity of thought.  

I would also argue that giving this type of feedback will give the investor a valuable window into the entrepreneur’s character. Did she handle it well and did it result in something being learned? Was it dismissed? Did it trigger defensiveness? Either way, you just learned something very important about the entrepreneur!  Entrepreneurs have to develop thick skin to survive. We spend our lives dealing with rejection.

I would rather wait and see if the round gets hot”:  Some investors may delay sharing feedback or communicating a decision hoping that if the round gets hot, the entrepreneur will accommodate them with an allocation. But most entrepreneurs understand that no decision means “No”.

No optionality is actually being preserved here. I’d argue that a good way for an investor to keep optionality is, in fact, to give candid feedback. Other things being equal, if the entrepreneur has options of which investors to go back to, it makes sense to prioritize those from whom you have learned something.  

Personally, I am more likely to come back to investors when they passed and told me exactly why than when I don’t know where they stand. As we make progress with our programs or in forming a syndicate, I will know if their previous concerns have been addressed.

It’s not my job”: While, as a manager, it absolutely is my job to give and take constructive feedback and help mentor teammates, some investors may view their role as purely making decisions on investments. Some see giving feedback as being outside the scope of their responsibilities. While not entirely unreasonable, this seems narrow-minded. The value of the relationships that candid feedback helps foster with entrepreneurs over a career is most certainly not zero. Ask any entrepreneur.  

It’s not you, it’s me”: I put in this category a whole set of boilerplate responses where there is only the illusion feedback. “This opportunity is not a fit” does not mean anything to anyone absent an explanation of why. Or “this is not at the right stage for our fund” or “is not the right therapeutic area for our fund” falls in the category of things that are knowable at the outset, just like you can know by reading a resume if a candidate meets a job description. They are perfectly valid reasons to turn down a meeting request, but are they credible as the reason why an investor would pass after having spent time in a diligence process? They certainly provide no insights on the real Why.

In my view, the real reasons investors rarely share candid feedback with entrepreneurs are none of the above.

The real reasons? First and foremost, it’s the easy thing. Giving candid feedback is hard. It takes courage. Humans tend to avoid hard things.

Second, entrepreneurs often don’t insist on asking for candid feedback. If you don’t ask, you don’t get.

Third, investors don’t have the incentives to give it. You can’t change human nature but there are things you can do about the last two points.  

How to increase the odds of getting candid and useful feedback: ask for it and reward the investor behavior you want to see

You don’t ask, you don’t get: it may seem obvious, but you need to be proactive in asking for feedback if you want to get it. When my first email gets no response, I try a second time, and I explain in more detail why I’m seeking the feedback. A third or fourth time may not be warranted (in this case the investor probably intends to ghost). You may have a slightly higher probability of success asking an associate or principal for feedback: some may value building a career-long relationship with you differently than a veteran investor would.

Be specific in what feedback you seek and be respectful of the investor’s time: I want feedback on the reasons for passing, and five minutes is plenty of time. Sometimes it may be more comfortable for the investor if you ask for a few things they liked about the company and a few things that gave them pause.

Listen, don’t argue: If you are lucky to get candid feedback, then listen actively and don’t argue. The time to get the investor to invest is past, now is the time to learn. It’s important to decode the feedback with clarification questions, so that you fully understand it and can act on it. But it’s equally important to not cross the line from clarifying into arguing. Coming across as defensive, interrupting, trying to “win an argument”, or being dismissive will only result in the investor being less generous with the amount of feedback.

Sometimes the investor’s reasoning will be clear and sometimes it will not be well formed. That’s fine: you can triage the feedback after you’ve had time to digest it and certainly you have no obligation to act on it if you don’t agree. But even the feedback from an investor that “didn’t get the story” will be valuable. It may reveal weaknesses in how you delivered your pitch.

Jack Welch

Reward it: “to get candor, you reward it, praise it, and talk about it. You make public heroes out of people who demonstrate it.” That’s advice from the late Jack Welch, former CEO of General Electric, and the most lucid thinker on the subject of candid feedback.

I had the good fortune of taking a class taught by him at MIT and he tattooed these words in my brain. Say “Thank You.” Tell the investor that you appreciate the time taken to give you feedback. If you agree with the feedback, you may want to share how you plan to address it. Tell your fellow entrepreneurs about this investor. And consider going further: make this investor your first call when new data emerges or when a term sheet comes in.

Create a real incentive for the investor behavior you seek.

Is there any correlation between giving candid feedback and being a successful investor?

Given everything I have said, this statement is something that I badly want to believe. And wouldn’t it be nice to end with an upbeat note. But here is something that’s been bothering me: I’m in my second decade of interacting with investors, and after hundreds of exchanges, I am not confident there is a correlation between giving candid feedback and investor performance in the top ranks.  

If you disagree, there is nothing I would love more than to be proven dead wrong on this. I have interacted with folks in the Midas List that were physically incapable of giving feedback and a few top investors that were phenomenal at it. And the frequency distribution of these phenotypes didn’t seem substantially different among different tiers of investor. Is the hopeless conclusion of it all that, in the game of outliers that is becoming a top investor, only certain other skills really matter? (For example, having a keen eye for promising opportunities or a good intuition for spotting and assessing key risks?).

Or can we, entrepreneurs, collectively shape a future where the rewards for giving candid feedback are tangible enough to influence the investor behavior we seek?

Bernat Olle is the CEO of Cambridge, Mass.-based Vedanta Biosciences.