Alan 00:00
During this call, MediciNova may make forward-looking statements, including statements that address the team’s expectations for future performance, including but not limited to its ability to complete its clinical programs or otherwise obtain positive clinical results going forward. Forward-looking statements involve risks and other factors that may cause actual result to differ materially from those statements. For more information about these risks, please refer to the Risk factors described in MediciNova most recent filed Annual Report on Form 10-K and subsequent periodic reports filed with the SEC, as well as its most recent press releases, particularly the cautionary statement contained therein.
The content of this podcast interview contains time sensitive information that is accurate only as of the recording of this episode. Except as required by law, MediciNova disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this podcast was completed. I’m very pleased today to welcome David Crean to our podcast Healthcare Insights by KYBORA. So David, welcome to the podcast. It’s a pleasure having you and meeting you. As I always say, you know, I think it’s great to start the the conversation here by getting to know you a little bit better. So if you could kind of take us through your career in the biotech industry, that would be great.
David 01:36
Thank you, Alan, and once again, thank you for having me on the Healthcare Insights by KYBORA. It’s certainly a pleasure to to join you. And Prior to joining on, I think we have a lot of commonalities that we’re going to spend a little bit more time on. So just to give you a little bit of general background, I’ve spent my entire career at the intersection of strategy and capital formation, starting with a PhD in biophysics, actually have a background of our bachelor’s in in pre Med and then an MBA and finance really great mixture and followed now by many years in corporate development, strategic advisory, investment banking and venture capital.
And throughout that journey, I’ve always gravitated towards organizations working on truly challenging problems in neuroscience and immune mediated disease and chronic metabolic disorders. And you know, this sort of gets back to what ultimately brought me to MediciNova, which I believe is, you know, that the mission and the team where we’re focused on advancing therapies for some of the most devastating and underserved conditions. ALS, certainly progressive Ms. hypertriglyceridemia associated with type 2 diabetes and fibrotic disease associated with mass. So we can certainly unpack that little bit more and and feel it back. But you know, ultimately it’s that career of science and business and putting it together.
And I think it’s a really, really powerful combination for the area that I’ve chosen to be in, obviously in biotech and as a Chief Business Officer.
Alan 03:13
And I, I noticed in the in your back background that you, you worked at Allergan for a while in, in corporate development position and then you went into a smaller biotech. What pushed you to do that versus kind of staying the the, I guess the big corporate trajectory?
David 03:30
So yeah, I was at Allergan in the corporate business development function there was there for 12 years supporting a number of the therapeutic areas that Allergan was pursuing, you know at that time. This is prior to them being acquired by AbbVie. You know, I had it at some point a, an involvement with doing the corporate BD activities in the ophthalmic therapeutic area that which is what they were primarily noted for, but then went over to in doing business development, corporate development for Botox and the aesthetic business. Very, very interesting, you know, molecule and platform and very, you know, strong growth area for the, for the company also got involved with neurology and then also dermatology.
So those 4 therapeutic areas were certainly very large strategic growth drivers for the company. And after 12 years, I felt like I, I want, I wanted to get some additional experience beyond, you know, strategic biopharma where I ended up leaving the company and taking a position with a private equity backed company on the East Coast. And I wanted to get more experience really with how private equity looks at that the healthcare space and, and that life sciences, how do they acquire companies or make investments in company and how do they grow. And I felt like I needed to get out of that strategic biopharma mindset and get in more into the financial investor mindset.
And that’s why I went into the company, a smaller company, private equity backed. And you really learn a lot about how private equity looks at investment and growth of companies and then also on the exit side. And so that was a very, very instructive and educational aspect for me. I really, really enjoyed it. Understanding the private equity mindset is very, very different than how investors in the venture capital space think and how investors in this strategic biopharma think. It’s just a really wonderful, wonderful experience. So I did that for several years just to understand that space of private equity as an investor and then, you know, ultimately then took it to investment banking, which is really a great experience because now I have all this experience around the table, whether it’s an investment bank or private equity or VC and a strategic biopharma.
So it was very, very powerful to to sort of round out my experience.
Alan 06:13
Did you just to digress a little bit, but I presume you saw the transaction that Bain Capital did with BMS when they bought, but some of their neuroscience asset, actually, I didn’t write about it. I thought it was an interesting investment where because traditionally we didn’t think about a PE group buying a development stage organization, right? They’re more looking for cash flow where they can condone more debt on to the company. But in this case, I think it was a trying to replicate a little bit of the the Cerevel success, which was also in the neuroscience space, right, which is interesting. So what are your thoughts on on private equity investing into the neuroscience space specifically?
David 06:57
First of all, just at a higher level, what, what I think you’re seeing unlike what traditionally that asset class of private equity as you noted, they’re they’re into EBITDA positive companies, people that are generating cash flow and life science companies, especially early stage life science companies are generally not in the the investment thesis. What you’re seeing lately over the last few years is a number of the larger private equity firms which are either making diversified bets away from that EBITDA positive predictable cash flow into earlier stage companies. One, because they’re the potentially a larger reward versus the asset class of private equity.
They’re almost acting like a venture capital term. And in facts, several the big private equity firms are also acquiring some venture capital firms to diversify their business and their their portfolio, their their investment approach. So it doesn’t surprise me like the Bain’s and the KKRs and Carlyle as a private equity firm are taking more of that diversified bets on the earlier stage companies in terms of, you know, a therapeutic area like neuroscience. I think it’s a great investment that if you’re looking at some of the areas that many of the VCs are placing their, their money from an asset class of venture capital, you know, neuroscience is certainly one of them.
Cardio metabolic disease, obviously with the really the hype around GLP ones or GLIP ones, that’s another big area. Oncology, autoimmune disease sinks, IOI, those are still some of the biggest areas. So it does not surprise me, Alan, when you start seeing some of the bets going into the neuro science areas or in particular with neurodegeneration, whether that’s Alzheimer’s, Parkinson’s, multiple sclerosis, Huntington’s disease, Those are some of the big areas that people are placing a lot of bets because there’s still very large unmet medical need. And even if, if you can make 10 bets, you know, you’re, you’re hoping that one or two is going to hit and then and they’re going to hit big.
And it could be very, very meaningful for your limited partners and your your investor base.
Alan 09:20
And I think I’ve heard somewhere, I don’t remember where, but someone saying that CNS is where oncology was 20 years ago, right? So that it’s, we still have a lot to learn, but once we uncover some of these things, it’s going to be a bonanza, right? And it’s going to be so many more investments, so much more progress that will happen in the short run. So it’s a, it’s an exciting space to be in for sure. And quite a complicated 1, though at the same time, you know, I was speaking to the head of search and evaluation at Bayer recently about something else. But he was saying to me we were talking about cell therapy. And he was saying to me that the more we discover, the more we realize we don’t know anything.
David 10:07
Yeah, I think, I think there was probably a quote from Einstein somewhere based in that too. But you’re absolutely right. The more that we uncover, the the less we feel like we know. And you’re, you’re absolutely right about your comment about oncology and then looking at neuroscience, because clinicians in oncology are basically saying, you know, if we’re going to treat certain diseases, whether it’s immune related or whatever, they’re having to throw out, you know, an armamentarium of drugs at it’s just not car T and, and whatever, but it’s other cell therapies. You’re, you’re starting to treat it with a multitude of treatment approaches. And what we’re finding is from the neuroscience in particular with neurogeneration, there’s, that’s not going to be a silver bullet.
There’s going to be sort of that approach of, hey, we’re going to have to try multiple things. In particular, if you look at like the area of neurodegeneration and Alzheimer’s, yes, yes, we have a couple monoclonal antibodies which are approved in that space case that are attacking amyloid beta in early stage. But ultimately, it’s going to be probably 3 or 4 different things. One, going after a neuron inflammatory component, 1 going after, you know the presence of amyloid beta, perhaps going after some Tau tangles, see their protein aggregates. I think there’s going to be a multiple of ways of approaching that and maybe even going after microglia just like you see an oncology.
So you’re absolutely spot on with your commonalities.
Alan 11:44
And that’s a good segue to to talk about what you’re doing at MediciNova. You know, I I think the recalling the conversation was a person that they are we were discussing, you know, the value of understanding mechanism of action, right. I mean, where sometimes big pharma insist on I am not doing a deal unless I understand the mechanism of action. Nobody was saying is that we think we understand it, but what we start to realize is that was in the same tissue, you know, 1 cell reacts this way and the one right next to it reacts differently. So we don’t really fully understand what is happening, right? And so we have to be a little bit more careful about being so insistent on, you know, having a full understanding of the mechanism of action.
So, so wait, can you take us through your pipeline at, at MediciNova? What are you working on and and and maybe what are the the key inflection points that you’re coming for the seeing for the pipeline in the in the next 18 to 24 months?
David 12:45
One of the things that sort of drew me into the life science industry was always this fascination. And the reason I’m telling you is just to give you a prelude about what drew me into a little bit more into the MediciNova story. It’s it’s this fascination with the intersection of hard science with real world human impact. And my training in medicine and hard sciences of biophysics, which where I got my PhD, really gave me a deep appreciation for this. As you brought it up, this mechanism, the mechanistic biology and then combining with the MBA and finance and later work in corporate development exposed me to really this strategic and financial forces that determine whether promising science like MediciNova has is going to ultimately reach patients.
And that combination is now shaped how I lead and certainly how I think about about innovation. So what what threw me into the MediciNova story was which which is what resonated with me was deeply this on the neurodegeneration, on the metabolic disease, on the inflammatory disease and then the enormous unmet medical need. And MediciNova has two platform assets which are being applied across numerous indications, therapeutic indications MN-166 or otherwise known as ibudilast has a very compelling biologic assets base as well as clinical data and it has, you know, numerous mechanisms of action. And I saw that as an opportunity to help accelerate strategic development, partnerships, capital formation, then obviously the ultimate approval of that drug to be used by patients in the various areas.
So we’re at a late stage biopharmaceutical company. We’re based on La Jolla CA. We are actually traded dual listed. We’re traded on the NASDAQ. We’re also traded on the Tokyo Stock Exchange JASDAQ and we’re focusing on as a core focus on MN-166 or ibudilast. It’s an oral small molecule with anti-inflammatory and neuroprotective properties and we’re targeting diseases where neuro inflammation and glial activation are central drivers of some of these disease processes, for example in ALS or in progressive multiple sclerosis. And then also there’s this other compound compound, MN-001, which is being used for metabolic and fibrotic pathways relevant to hypertriglyceridemia associated with type 2 diabetes and MASH metabolically associated steatohepatitis.
And those are very, very important diseases. So if you look at our core program in ALS where we just completed our target, target enrollment for our Phase 2/3 clinical trial, you know, we’re very, very excited about seeing what how that date is going to ultimately roll out or it’ll be about probably about a year from now. But it’s a very, very important program for us. Obviously, ALS is involved with neuroinflammation, microglial activation, oxidative stress and excitotoxicity. And the interesting and exciting part is our compound MN-166 targets several of these pathways simultaneously and that’s where I think the clinical differentiation is in.
Our clinical studies suggest signals of slow progression and preserve function with a favorable safety profile. Obviously the goal is to become a backbone therapy for complementing existing ALS treatments. So the protocol is very formulaic in nature. Last patient that gets enrolled, you know that that’s sort of the the gatekeeper, right. In terms of the timeline, we have a 12 month waiting period by protocol on that to take a look at the data and see what comes out. But the DSMB has the within the protocol, the the right to start taking a look at the data a little bit earlier, perhaps even as early as six months. So we’re we’re excited about that because there’s nothing available for patients and their advocates.
It’s a horrible, horrible condition. We’re excited about that. We’re we’re also excited about some of the business development activities that we have ongoing regarding progressive multiple sclerosis. We’ve completed a phase two trial there. We actually published it in the New England Journal of Medicine and we’re very excited. We took it to the FDA. They gave us feedback here. This is what your Phase 3 is going to look like. And oh, by the way, it’s going to, you know, our projection is going to cost about 80 to $100 million. So, but you know, unless you have the balance sheet to support something like that, it’s, it’s, it’s a tough pillow swallow, but we’re excited about the mechanism of action to sort of go over this whole topic, but we’re going to need a partner for that to move that forward because it’s takes a little bit of money to do that.
And then lastly on that MN-001 or other compound, you know going into hypertriglyceridemia, obviously major underappreciated driver of cardiovascular metabolic complications, especially in Type 2 diabetes and our compound there MN-001 really has shown in seven independent trials to improve triglyceride levels and metabolic markers. And so we’re very, very excited about that. We just finished enrolling our target patient enrollment in that and our Phase 2 trial and we’re going to be reading out on that data probably first to second quarter of of 2026 for our top line data. And what’s interesting about that, the data that we have on that to date as well as some, you know research stated provides strong scientific validation for the lipid profile improvements observed in our prior clinical studies with MN-001 and also reinforces our potential to address multiple interconnected metabolic disorders, whether it’s hypertriglyceridemia or non alcoholic fatty liver disease or type 2 diabetes.
And these are you know conditions that share a number of underlying pathologies of lipid dysregulation and chronic inflammation. So we believe that our compound is multimodal activity including anti-inflammatory, anti fibrotic and it positions it to be uniquely used amongst a number of emerging therapies. So that’s going to be also a target for you know business development activities as well. So very, very exciting. So hopefully I gave you a. Sort of. Flavor, flavor. All things that are going on right now.
Alan 19:47
Your your Phase 2-3 in ALS is that registrational trial. So if you’ve got positive data, can you register? Can you file?
David 19:57
Yeah. You know, one of the beauties in this area 1, there’s, I say beauty from the standpoint from being the, you know, company and developing the area. But you know, if you’re a patient and advocate is just horrible. There’s really nothing available unfortunately for patients. So our Phase 2. B/3 is actually registrational ready. The FDA is very, very flexible and working with biopharma in the space and sponsors of clinical trials to help bring forward innovative technology that are showing promise. So our Phase 2B3 can actually be applied for a registration trial. It all depends on obviously on the data and we’ll see what the DSMB you know recommends to the the FDA obviously MediciNova doesn’t control that, but we’ll see you know what what happens on that.
I will tell you from our standpoint, we need to be prepared for any eventuality out of that data if it’s so compelling that we get encouraged to file an NDA. So we are starting to prepare our team, starting to build that team that especially on the regulatory side or any potential eventuality of having to file early.
Alan 21:16
That’s great, great, interesting and I hope that you are successful with it because to your point, there is really nothing out there that is making a great difference, right? I mean, so the unmet need is enormous. We found having worked on helping and advising some firms on in the space, the the investment or the investor community is very reluctant, you know, to support any development in this space because of the cost associated with it. But also the high level fail, the high rate of failure that you are seeing in the ALS unfortunately. And you know, you have the story of Amylyx and things like that, which was not great either. That’s you know, we can, we could spend next three hours talking about that.
You know, unfortunately, money going after certain certain of these asset is not great, right. So we wish that they’re they’re more focused. But then, you know, on the other side, you have and this is not ALS, but it’s more about the reformulation, the story of Karuna and things of that where you’re seeing, you know, great success and the belief in the ability to, you know, modify a compound so that it has a better effect on patients. And then seeing big pharma going after an asset like that because they believe in in it. Even even if there wasn’t like a, you know, it wasn’t a global opportunity just focused on the US was sufficient enough for them to drive a really interesting deal.
And then now you’re seeing, you know what the Karuna team, which is at Seaport now using lymphatic system delivery for CNS is interesting as well. So you know, hopefully starting to see some progress. So, so I certainly hope that you get some good news from the board that you can you can move forward because I think that that in the short term that could unlock a lot of other value in your pipeline, right? I mean, even you’re talking about, you know, having to raise 80 to $100 million and do a phase 3IN progressive Ms. You know, hopefully if you’re positive on the ALS side of things, you, you get halfway there at least, right? So.
David 23:31
Yeah. I mean the nice thing is as it relates to if you want to sort of parse out the the various program, we have a balance sheet to support getting through the catalyst and the value inflections. As relates to the ALS program, you know, whether we need to file early and do an NDA. We’re we’re putting that team together. We just announced bringing on a very significant key opinion leader, a person from prior with prior FDA experience in that area with clinical and regulatory experience to help guide us through. He’ll be certainly very key clinical and regulatory are a contributor to the company. So we need to prepare early in the with the eventuality or the potentiality I should say of perhaps even filing early.
So we’re we’re excited about that. So that’s the, the ALS program, our cash balance sheet which gives us about a 2 1/2 three years runway right now. We we can go through that without having to raise additional money. So it’s actually a great time to go out and raise money when you don’t need it, unlike many biotech in the in the space and that are going through this terrible time of trying to raise money. So we’re in that great position. And then you take that. If you look at our other pipeline compounds of of multiple sclerosis, great data. But if it’s going to take 80 to 100 million, you don’t have the balance sheet to support that. Yeah. We have to obviously seek out, monit other monetization strategies, partnering strategies to bring on people who have and you know the infrastructure, stronger balance sheets to bring that forward to patients who are in need.
So we’re excited about that. We think there’s a real great opportunity for, you know, strategic partners to come and look at that and move that forward in the same thing is true on the cardio metabolic side as it relates to cholesterol reprofiling and triglycerides with our second compound MN-001. So we’re excited about that. Partnering is definitely in our in our strategic plan and our mission. We’re, you know, our core capability is developing great compounds, but we’re not planning to develop a, you know, a commercial sales force that takes a lot of money and a lot of time. And you know, frankly there’s other people who are better at it than than we are.
So why why do we feel like we need to, you know, sort of build that we can where we can partner that out. And frankly, I think it’s a just the right thing to do for shareholder interests and shareholder value, so.
Alan 26:05
I agree with you. I mean it’s a, it’s a completely different business model. Once you go commercial rate, we’ve seen a lot of failures in the neurodegeneration space. What are your thoughts around that? Why? Why is that an area that is so complicated, so difficult to correct DF? Do you have some ID’s?
David 26:27
Yeah, I don’t know if I have, you know, the answer to everyone’s questions. It is a very difficult area to trying to approach whether it’s with ALS, Parkinson’s or with Alzheimer’s disease or Huntington disease, others. There’s a lot of complexity to that. I think there’s bottom line is I think the biology associated with just even those four that I just mentioned, although we’re not in Parkinson’s or or Alzheimer’s or Huntington’s were just you know primarily Ms. and with ALS, look biology is multifactorial. I think these diseases in these areas of ALS and Ms. involve neuro inflammatory degeneration, oxidative stress, perhaps mitochondrial failure and glial microgarial dysfunction.
And hitting one pathway isn’t often enough. So you have to take sort of that an approach of throwing a number of things at it. You know, frankly, I think that’s what companies are doing. Secondly, besides the biology being multifactorial, which is causing all this complexity, I think you have clinical heterogeneity and patients progressed differently. I’m even looking at ALS or you can sort of segment out different patient populations within it. Just with even in ALS, very similar to like looking at Alzheimer’s disease, you have multiple different forms of dementia. So clinical heterogeneity, patients progress differently, which frankly makes trials harder to power and interpret.
And maybe that’s where we’re going to get to, you know, the use of artificial intelligence to help put together these trials a little bit better and looking at patient selection. So I’m excited about that happening. Third, I think, you know, I find endpoints are are somewhat difficult and almost blunt instruments, if you will. It’s hard to measure subtle neuroprotective effects over short time timelines. And so I think there’s some complexity when you start looking at endpoints, you know, on the primary side, secondary endpoints, what have you, you know, so I think there’s some evolving nature there on on making some progress there. But they are they’re currently blunt instruments as I call them.
And then I think timing matters is kind of that fourth point as many treatments may need to reach patients earlier in disease to really show benefits. We saw that with Alzheimer’s disease, you know, you can take the monoclonal antibodies, but you know, they don’t really have much effect when for later stage disease, they really have to be used early stage disease where it’s called non clinical or cognitively normal patients. But you’re showing some, perhaps some biologic biomarkers and showing that there’s better, greater benefit earlier in the disease course to show full benefit. And I think the same thing probably holds true for a number of these other areas.
I think programs like Amylyx, which unfortunately drug had failed when it got approved on the Phase 2/3 data, but it failed when it when it went through the the full course of a a pivotal study. You know, it, it highlights the urgency and the challenge for drug developers like MediciNova. And even when you have promising early data, confirmatory trials are are still very, very demanding. And that’s why you know, I’m excited about MediciNova’s. ibudilast or MN-166 and they’re multi mechanistic approach which is not only targeting as I mentioned their inflammation, but glial activation, excitotoxic pathways. And I think so I think it really positions it well in terms of competitive differentiation versus so many others.
But that’s why drug developers are with all this complexity are really putting so much emphasis on having a robust trial design, you know, incorporating imaging biomarkers when you can and then patient stratification. So those are the, I think the big, big things to sort of answer your question.
Alan 30:36
No, I think you’re, you’re right on the money on this. You know, we looked at platform trials for one of our client as well, because to your point is just, you know, combination therapy is going to be the solution that one one way or another. Actually, you know, I’ve been thinking that, you know, the FDA should actually give a little bit more flexibility when it comes to especially this disease and having to do these combination trials instead of forcing you to do multiple studies with each one of the compounds and then with the combination and things like that. You know, hopefully there’s some willingness to to do that, but I, I think you’re right in, in terms of, you know, the, the patient selection is super important.
The endpoint are so difficult and so subjective. And you know, and that’s why you see something that looks really good in phase two and failed miserably in phase three. There’s also, you know, there’s no translation from there’s no mouse model that you can use. I mean, it’s just, it’s such a difficult space to be honest. So, so I kind of like your, you know, the approach of having one compound that kind of hits multiple of the, you know, potential culprits. And then, you know, hopefully you’ve got a little bit more of a chance there to really, you know, making a difference for for patients. So that’s great. Switching a little bit back to your long experience in the industry and having worked in big pharma, private equity investment side, but also you know, smaller publicly listed and, and private biotechs.
What do you think in your mind makes a company attractive from a partnering standpoint? What are some of the characteristics that it should have to be to be attractive and maybe the the color rate to that? What should you avoid? Which should not?
David 32:30
Yeah, wow. Why? How much time do we have, Alan, whether it’s as an investment banker or you know, in the asset class of VC or private equity or even in the deal making mode of strategic biopharma. When I am evaluating partnering opportunities from the industry side, for example, maybe 3 or 4 things really stand out for out first and foremost team. That’s always 1. You know the management team, do they know what they’re doing? Are they, are they experienced? Because first and foremost, as an investor, you’re making a bed into people first and foremost, or even, you know, from a biopharmaceutical standpoint, if I’m going to in license something or try to acquire it, you’re really writing a check into people and into the asset that they developed.
So team, but there’s going to be 4 things. One, then I, I think secondly, you know, is there a strong coherent biology, the mechanism matters. You know that mechanism of action as we talked about earlier, if the science is compelling and is supported by translational data, I think partners will engage if you build it, they will come. So the mechanism matter. Secondly, is there a third, I’m sorry. So we have team, we have strong coherent biology. And then third, clear regulatory path, even if it’s early in the in its stage of development, understanding how the FDA or the EMEA or the Kōseirōdōshō (Japan’s MHLW) or other regulatory agencies around the world, understanding where the regulatory agencies is and their mindset will require what they will will require is super critical because it’s super important.
I mean, we’re learning that obviously and following that sort of to a tee in the ALS space with MediciNova’s MN-166 ibudilast because now we should work. We’re engaging with the FDA. We want to understand how they think about things and they’re being flexible. They’re showing that willingness to to be flexible. So I think it’s really important. And then the last one, as I mentioned, so we have team, we have strong coherent biology. We have clear regulatory path or release understanding the regulatory path. I think that last one is just a realistic development plan and that it’s not overly complex, that it’s not overly expensive. You’re being realistic about what’s it’s going to cost because I’ve obviously you’re limited partners or your investors going to want to know whether it’s on the private side or on the public side and that you’re aligned, the team is aligned with the assets risk level.
So if you’re phase two or phase three or if you’re even earlier stage, you’re trying to really put together a development plan that’s going to meet its goals and trying to hit the target product profile. So those are super important to me. The things that are unattractive when what you see out there in the market that you really try to worry about whether you know you’re going to want to either partner or invest in it is look, if you have weak or inconsistent clinical signals that just don’t support it. If you have over complicated or unfocused pipelines, you find companies doing too much at once and they’re not really just focused on a single asset to try and drive value.
That’s just like throwing spaghetti at the wall in my opinion. And then lastly, where I frankly spend a lot of my time is, you know, frankly on valuation expectations that really don’t reflect the stage or the data quality. They all think they’re worth a billion dollars or more and the data doesn’t support it. The stage of development doesn’t support it and nor does it, you know, the data quality, whether it’s preclinical or or clinical. And so I think partners want team clarity, credibility and alignment at the end of the day. And that the companies that are going to win are the ones that are going to communicate and have that narrative on their strategy, which is very transparent and grounded in evidence.
So there you go.
Alan 36:32
Yeah. No, that’s a great, great, great summary. If I, if I would add 1/2 to what you’re saying is having an understanding of the competitive environment in which you work not only now, but when you launch, what is the world gonna look like by the time you start commercializing this product? And we see that often. It’s like you have great scientific team doing great science and things like that, but they have no clue who else is working on this, what is being developed, what the market will look like by the time they launch a product. I know it’s a difficult exercise to do, but it’s something that you know, really needs to be done more often in my opinion, for all the companies that are in development stage.
You know we we worked once assisted an oncology company that was working in myelodysplastic syndrome and did quite a bit of work, failed to phase three decided to [unclear ~37:28] and continue because they did a sub analysis and realized that the smaller segment of the patient population reacted well. So we launched a study spend another few $100 million in doing that. And by the time they got their result, they realized that the drug worked. But the difference between their performance and the standard of care which had evolved by that time six or seven years later was so minor that it did not make sense launching the product. So there is like $650 million down the drain, which is, yeah, it’s amazing, right?
I mean that you get to the to the screen, so.
David 38:19
You bring up a great point about competitive landscape, competitive differentiation, So kudos for, you know, bringing that up and raising that because you’re absolutely spot on.
Alan 38:28
Thank you. What do you, what do you think will be the impact of AI? I think you mentioned it a little bit in terms of patient stratification, but if you’re kind of taking a a broader look at the industry, how do you think AI will will impact biotech industry?
David 38:47
One thing I will say is if you look at you know from the venture investment world, nearly six out of every 10 investment dollar right now is going into an AI enabled healthcare or life science company. So it’s real one. People are putting a lot of time and energy behind it and money check writing behind it. But so you really have to think about what is it going to do to potentially in the short term and in the long term, because there’s so much money and interest going into this area. And frankly, a lot of companies are pouring a lot of their strategy and their dollars into it. So in the short term, I think AI is going to bottom line transform efficiency, whether that’s target discovery, you know, coming up with newer molecules, faster, better, more targeted trial design.
We talked about that with these neuroscience complexity trials, patient selection, real world evidence analysis, so transforming efficiency. I think in the short term, we’re going to see AI accelerate the identification of biomarkers, super important in a number of areas, whether it’s oncology and neuroscience, what have you, reduce protocol deviations and improve moving statistical power and by using adaptive methods. So I think that’s what’s going to happen in the short term. In the longer term, I think AI will reshape how we fundamentally understand biology itself, and it will help decode complex networks that underlie whether it’s neuroscience, whether it’s oncology, whether it’s immune dysfunction or metabolic disease.
And I think AI will help enable more precise patient selection for these trials. For determining really personalized medicine, how is this patient best treated with what drug or drugs or with what treatment armamentarium and sort of shift drug development more towards mechanism specific subpopulations if you will. That’s what I think is ultimately going to happen. But I think there’s this worry out there that and not only just in their, in our industry of healthcare and life science, but other industries like, Oh well, AI replace people. Look, I don’t think AI is going to replace scientists. I think AI is augmenting them. They’re making them stronger.
And companies that integrate AI in a thoughtful, ethical manner will build a significant competitive advantage.
Alan 41:15
I agree with you. I think that’s that’s a statement that is true for every industry. You know, I I tell my analyst when they ask me, I was like a igon replaces. I’m like, no, but an analyst who is a good understanding of AI will replace an analyst that does not have that, right. I mean, so you gotta be able to do more. And actually to your point, you mean like, you know, higher quality work, faster, cheaper, you know, you’ll be able to go into more the nitty gritty, the details, you know, and doing the analysis, it’ll be easier to do all of those different things. I’m very bullish on the use of AI in in the biotech industry. I believe one of my pet peeve is for the industries that today it is inefficient.
And I believe that we have a lot of opportunity. And to a certain extent, I’m happy that the Chinese development is showing us that we need to be more efficient because we were kind of living on our roles there. And now if the US biotech industry is to survive, they have to become much more efficient, right? And so I think we’re going to have to compete, which is an exciting time. You think, So what do you think? I I kind of like the key themes for the industry over the next five years. Where, where you what do you think as some of the major important development that you’re seeing in the next five years?
David 42:41
Yeah. When you brought that up in our, in our sort of our pre call, I was, I was thinking about that and five things sort of resonate with me, not only being within the industry as a Chief Business Officer, but also just for my years of experience as an investment banker and what I see in the market. 1, you know, especially with the IPO is still very, very, very poorly performing. And that I don’t see it opening up until 2026, especially when the SEC was basically shut down with the government, right? People are, you know, they’re just sitting there. But when you look at investors and how they’re going to get the liquidity to like do believe for a fair amount of chunk of 2025, we had a liquidity crisis, no or very little M and a very, you know, very few or if any IP OS, you know, LP limited partners were not getting their their liquidity with their investments.
So some of the trends that I see right now going forward, one, M&A is picking up. We’re already seeing it. I am very, very bullish about the remainder of this year, although there’s really only effectively a couple weeks left in 2025 before all this holiday stuff. But I’m excited about 2026. I think farmers must do, especially big pharma’s with strong balance sheets, must do versions of acquisition because of huge upcoming patent cliffs. And I think this is very, very good news for biotech #1 So I’m, I’m encouraged with the M&A because that’s another, you know, the other aspect of liquidity, either get liquidity from going public or through M&A when companies get acquired #2 I think these markets that biopharma is going after is huge.
I think the total addressable market of pharma’s are going to explode are certainly you don’t get much larger be creating above average returns for years to come. They’re going after some very large markets, which is which is exciting. 3rd and you had mentioned this, you know, just on your previous question, China innovation, you know, there’s just a lot going on in China. There’s a lot of pharma that are looking over in China for innovative assets because they’re inexpensive relatively and relative to the Western Hemisphere. So I think China has emerged as a true competitor in the Biosciences space and is going to reshape the industry and companies in Western Hemisphere are taking notice of that.
And so that’s a, it’s a nice little nudge. And I think companies are going to need to sort of utilize that as a motivation to, you know, stay, you know, develop truly innovative products. Third, AI transformation, which we just talked about, it’s going to transform really basically the delivery of healthcare. I don’t see it as a a little blip on the radar. I think it’s here and I think it’s real and it’s going to impact the ecosystem, including pharma. And then lastly, and if I’ve never seen innovation so incredible, I mean the incredible science that you see out there, despite all the headwinds, whether it’s NIH funding for early stage companies or pressures coming out of Washington or whatever, science is really going to reshape the industry and the bounds of our ability to conquer disease.
We’re seeing so much precision medicine and I’ve just never seen so much innovation at such a rapid pace before. So that just excites. That excites the heck out of me. I just love it.
Alan 46:13
It’s so great that you’re saying this because. Like you, you know, I’ve been in the industry 25 years now and I mean the, the pace at which the changes is coming in this industry, it’s incredible compared to, you know, what it used to be 25 years ago. I remember when I was at Bristol-Myers Squibb, you could set your, you know, your strategy for the next 5 years and you knew this is what was going to happen, right? And to a certain extent with sheer commercial will, you could make things happen. But now it’s, it’s so fast and it’s changing so rapidly. And to your point, the, you know, innovation is amazing. And globally there were so many changes as well.
I, I actually recently looked at the, is the IQVIA report that says you know where, where the, the total market rate is around 1. 31 point $4 trillion and they’re predicted to be around 1. 81 point 9 trillion by the end of the decade. So Can you imagine we’re going to add basically 25% growth, 30% growth between now and over the next five years, which is, it’s tremendous. I mean, it’s unbelievable, you know, so, and I know we learn a lot about the most favorite nation and all that. I was at Jefferies last week in London and I heard that constantly spoken about. And I, I just don’t believe that, you know, this is something that is here to stay, especially on the things that are more innovative.
I can understand that you don’t want to pay 10 times the cost of some, you know, the cost of atorvastatin in the UK, here in the US, that doesn’t make any sense. But for everything that is innovative, I think we’re still going to have good prices to foster innovation. So I’m bullish when it comes to that.
David 48:04
So I agree, I know I agree with you in. Some cases it’s a little bit of noise. We’ll get by it. At the end of the day, I think innovation needs to, you know, sort of rise above a lot of the chaos and a lot about the noise. You can’t, you know, just live on generics and me too drugs the your entire life. You have to really fundamentally change how we develop things and there has to be, you know, innovation needs to be the priority.
Alan 48:28
So we have 5 minutes left so I. I wanted to to wrap up and, and ask you a few questions related to based on your experience, you know, and to try to understand, you know, what advice would you give to someone who is starting in the industry today? to
David 48:49
I talked to my mentors about. This all the time and frankly, I mentor also a lot of people within the industry and some of the things that I really hold true to is wants to stay curious. Don’t be afraid of having a non linear rear path. I mean, I’ve done a number of things in the in the industry and they’ve all sort of shaped and molded me and some of the most interesting leaders within biopharma started perhaps an academic labs, maybe they were, you know, an, an academician, some maybe were in the consulting world also, you know, investment banking or they had certain regulatory or you know, R&D roles. I don’t think there’s really is single right path.
I think what’s important is if you surround yourself with the right mentors, right leaders, and you get the most comprehensive experience that I had and with the right mentors that I’ve had and being given those opportunities to try all these things and really excel at them. I think staying curious and not being afraid of that on those career paths is super, super important. And then, you know, one of the things I always, you know, just with a, a background in science and also on the business side, I think it’s really important to learn the science deeply, but also how to communicate it. How’s that narrative? And I, you know, I, I mentor a lot of CEOs in this space where let’s just say that, you know, they’re the CEO or founder entrepreneur.
They have a PhD in the sciences, maybe it’s microbiology or whatever. And they know the science really deeply, but they don’t know how to communicate it. And I think that’s really critically important when you start talking to investors who are basically asking 3 questions, what do you do, why should I care and how you going to make money? And you know, if they can’t communicate the science on a business level or what’s, what’s the real importance of that, they’re not going to get funding. And I think the ability to translate these complex ideas, we talked about the complex biology into actionable plans, I think it’s one of the most valuable skills in this industry.
So yes, you can understand all the big 5 syllable words, but if you can’t communicate that down to a layman who is writing checks, who doesn’t under really understand the science and doesn’t have the PhD, it kind of falls flat. So I think that’s super critical. And then lastly, at the end of the day, why do we do this? We need to remember that everything that we do ultimately maps back to patients and families and their advocates. And if you stay grounded in that mission, I think your career will take care of itself. You know, I always tell my children, I said. You need their large base if you want to build a tall pyramid. To to your point to make these.
Lateral move to discover to learn to, you know, because that’s how you know you can build something. So so really, especially in your young years to take the chance, you know, don’t don’t chase the money, you know, take change the learning right and to your point or so build the relationships right with the right people that can really help you.
Alan 52:14
You’re giving your children very sound advice. Well done. Thank you. Is there a? just
David 52:31
trying to be grounded and having balance. I’m still trying to seek that and I’ll, I’ll, I’ll probably contact you next year and say, how am I doing on that? But balance it. But you know, I at the end of the day, I, I just try to be a consummate student, whether it’s in the industry or just in life. I just always trying to read and learn and listen. One of the things that I would say in terms of my leadership principle or habit is listening. I always tell my children, the good Lord gave me two ears and one mouth. Use A to your advantage. And so whether it’s, you know, someone in my position is a, is a chief business officer or is an executive or it’s a scientist or a clinician patient or investors, everyone that I interact with provides a different perspective that can sharpen your thinking.
And I’ve always learned far more listening than talking. And so I try to always sort of come back to that. I think it’s super, super important that we do more listening and less talking.
Alan 53:36
Excellent. I have one last. Question that I always ask all my guests, but it’s the kind of learn more about you. When you were a little boy, what did you want to be [unclear ~53:45]?
David 53:51
That’s all I wanted to do. I went to Ohio. The Ohio State. Sorry, the Ohio State. I ended up playing baseball deeply, you know, within collegiate ranks and into minor league and then I, I had a terrible injury with my knee. I couldn’t play any more. Subsequently, 5 surgeries later, I have an artificial knee. So I, I had to have a Plan B and so I went and finished all my academic studies, got my bachelor’s, my master’s, my PhD and my MBA. And now look at where I am. But I always wanted to be just a, not just, I wanted to be a, a, a baseball player. I was very good athlete and an elite athlete and that’s where my passion was. But I needed to refocus and have a Plan B.
Alan 54:38
It’s great. I’m sure you’ve read the book. Atomic Habits So so with James Clear also wanted to be a professional baseball player. I do hire a lot of D1 athletes at KYBORA because I really like the mindset of them. Very different than everybody else that you interview. It’s absolutely it does. They’re good. David, it was a pleasure meeting you. Thank you so much for your time. This was really enlightening. I really appreciate it.
David 55:10 Thank you very much, Alan. Thank you for allowing me to share. My story and I’m excited to hear what comes next.
