Mar 15, 2023
In this episode Steve Gullans talks about theboard’s role for life biotech startups and IPOs, ScientificAdvisory Boards, how therapeutic drug companies are different andorphan drugs – and everything life science.
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Background - Steve'snetwork and expertise extend from academia to Wall Street. He hasmanaged teams through successful financings, scale up ofoperations, clinical trials, deal negotiations, IPOs and M&As.He has also served as board director for more than a dozencompanies, currently including Orionis Biosciences, Alexis Bio,iSpecimen, and Navigation Sciences. Steve began his career as aprofessor at Harvard Medical School, has co-authored over 130scientific papers and is a fellow of the American Academy of Artsand Sciences as well as the American Heart Association.Steve has also as CEO of a public biotechcompany and co-founder and Managing Director of Excel Ventures, alife sciences venture capital firm and he is currently the CEO ofMetis Minds, a digital wellness company addressing ADHD.
On Scientific Advisory Boards -“Scientific advisory boards generally, as the nameimplies, involve scientists giving advice to a company, or it couldbe to an institution ... helping them with their innovations orwith a large number of companies as they try to figure out how tomaneuver their way through the technical challenges of thescientific process.”
BioNtech had no plans to go into vaccines, but ifyou have the right community of people, you can actually pivot whenyou need to. But on top of that, it's really about giving sageadvice and critical advice that often the board cannot provide.
“Joe: One scientific advisory board that I'm veryfamiliar with is the one that we have on St. Jude Children'sResearch Hospital … For some of the deep dives, they'll bring inoutsiders, not members of the ongoing SAB, for very specificexpertise, but I think it's fair to say that for the board, thatthree, four, five hours that we spend with them each year is someof the best time that we have all year.”
Metis Minds – “I just decided tocome out of retirement because I've been focusing the last fewyears in learning about the digital technologies that will allow usto retrain the human mind.
“Metis Minds is was developed by a team in Bostonin collaboration with others around the world. It's simply an EEGdevice that sits on the forehead of a child or it could be anadult, and it controls through Bluetooth a video game on an iPad orother pad. It looks identical to the games that my grandkids playtoday, like Subway Surfer. It's an adventure avatar game, and thespeed at which the game operates is determined by how much youfocus and concentrate. Eight human trials have shown it actuallyworks.”
Therapeutic Drug Companies – “anearly stage biotech therapeutic drug company, it really needs a lotof capital. The path is well worn, and at the same time there iscapital available, but you have to check certain boxes in order toaccess it.”
“In general, you have a preclinical developmentperiod. It could be in academia, it could be in a private company,or you use the best available animal model to show the compound youhave, whether it's a biologic, a small molecule, a peptide, itcould be a natural product, it could be anything that showsbenefits and safety in small animals.”
“A fundamental difference in terms of operatingtherapeutic drug companies is you never haverevenue.”
“There are two hallmarks. If it gets a 90%failure rate, why would anybody invest? The answer is because youdon't actually have to ever have a sale. By the time you finishphase two clinical trials, the pharma companies line up becausethey prefer to run the phase three trial themselves and they buythat company.”
On Theranos – “I am one of manyscientists who looked at the Theranos' slide deck during itsmultiple financings. My partners say, "Why can't we invest atthis round, Steve? Because look, the valuation is now 3 billion, itused to be only 1 billion.” The answer was because people who knewthe science knew that it defied the laws of both chemistry andphysics at the same time they didn't use a drop of blood to find abacterium. If there was only one bacterial cell per 10 milliliters,you're going to miss it. That's a very simple concept.”
On Diversity of Perspective on a Board– “What you often need to do is you need to reach outsideyour network because there is such a demand for highly talentedpeople that the shortlist of obvious people already haveappointments at Pfizer and the big companies.”
“One of our life science companies had somebodyfrom Wayfair on the board, , but her understanding of IT technologyand how you actually create marketplaces online was instrumental inpointing the company to the right partnerships, the right people,and all sorts of things.
Arkayli and Orphan Drugs –“Hemangiomas, is the red tumor-like spot on a new infant, justborn; it happens to tens of thousands of kids. Often they disappearon their own, but the founder identified a way to treat it with acream, but she didn't have the wherewithal or the understanding howto do it, and at a conference, she met some people who were expertsin drug formulation and making creams with absorbable medications.It's an approved drug.”
You and Your Urine – “When I wasat Harvard Med, there was a course called You and Your Urine, wherethe students had to come to class and had to pee into a vial …Yougot to have a little fun while educating. I guarantee the studentsremember that lecture.”
Board’s Role for Biotech IPO –“Yeah, there are several roles for boards. In many cases you'llhave a board member who's from a crossover fund like RA Capital orComREIT or Deerfield, and I did a couple of crossover deals myself,where you invest right before they go public. You jump on the boardand then you help with the S-1 and the filings and everythingelse.
If you're a crossover investor, they know all thepublic investors and they sort of are on the bellwether of whetherit's a good deal, so ideally a board member helps recruit acrossover investor to be an investor in the round before theIPO.”
“It's about this is going to be a blockbusterbecause it's a once a month injectable, not twice a week. That isbullet point number one, gang. I know you have love all yourscience, but it's these kinds of understandings that really triggerthe public. Both retail and institutional investors want to doit.”
