February 24, 2025 • 48 mins
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Recorded in-person at the JP Morgan Healthcare Conference in San Franscisco, this episode finds Matt Pillar and Ben Comer exploring the evolution of gene therapy with Dr. Tom Chalberg, Founder, Chairman, & CEO at Genascence. We discuss ATMPS' transition from treating rare diseases to addressing common conditions like osteoarthritis, share insights on the delivery mechanism and regulatory challenges in the space, and get into the nuts and bolts of the Genascence partnership strategy.
The 2025 BoB@JPM series is supported by Alston & Bird, whose national health care and life sciences practice has more than 100 attorneys actively involved and integrated across the full spectrum of legal disciplines including regulatory, compliance, public policy, transactional, corporate governance, securities, FDA, biotechnology, intellectual property, government investigations, and litigation practice areas. Learn more at www.alston.com.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:04):
Genesance is looking to read a renaissance in gene
therapy, taking it from highdollar antidote in rare disease
to an accessible approach totreating common conditions like
osteoarthritis.
Dr Tom Chalberg is leading thecharge, I'm Ben Comer and I'm
Matt Piller, and this is theBusiness of Biotech, jpmorgan
2025 edition, and we're here inSan Francisco with Dr Chalberg
(00:28):
to learn about his role indriving gene therapy from the
stuff of academic researchcenters to a doctor's office
near you.
Speaker 2 (00:36):
Dr Chalberg, it's super nice to have you.
I appreciate the time you'retaking out of your very busy
week here in San Francisco tospend with us.
Speaker 3 (00:44):
Absolutely it's a pleasure to be here in San
Francisco to spend with us.
Absolutely, it's a pleasure tobe here and looking forward to
the show, the pleasure is allours.
Speaker 2 (00:49):
So, as we do, we start with some background on
you, on our guest.
And you earned your PhD incancer, biology, genetics and
ophthalmology and went prettydirectly, it appears, into
pharma marketing and commercialoperations at Genentech.
So I'm curious when you werecoming out of academia with
(01:11):
those degrees, was pharma likeimmediately on your radar or was
it an opportunistic move onagenda working in pharma?
Speaker 3 (01:20):
So you know, it's a great question.
Thinking back, you know, I wasa graduate student, um, really
in the early two thousands and,and when you think back to that
period, it was really rightaround the time the human genome
had been, uh, sequenced and Ithought, you know what, what an
amazing opportunity to be ableto go back to school and learn
about.
You know genetics and and youknow basic science.
(01:41):
But I was really alwaysinterested in genetic medicines
and the idea that, you know, wecould use this new knowledge in
genetics and in molecularbiology to treat human diseases.
And so at the time, I joined alab that was really, you know,
more than basic science.
It was interested in theapplications of, you know, gene
(02:01):
therapy and in this case it wasreally an early form of gene
editing in order to helptechnology assessment and
technology development inpreclinical models of disease.
And so I was really alwaysinterested in, even when I was
in grad school, in how do we usethis technology to bring
(02:22):
forward improvements to humanhealth.
And you know, I was actually aHoward Hughes fellow and that
was part of his vision of theHoward Hughes Medical Institute
was how do we always think aboutfurthering human health?
And so when I was looking for ajob, you know, genentech was,
you know, absolutely one of thegreatest places to work and it
was growing massively at thetime.
This was back in 2005.
(02:42):
And I started in commercialoperations and then marketing
because I really wanted to learnabout the business of biotech
and sort of how does that end ofthe spectrum you know exist,
and sort of really being theendpoint for what we all do now
as development stage biotechs isto kind of bring forward
(03:02):
medicines to make them availableto patients who have, you know,
big needs and and and help themlive their lives.
Speaker 2 (03:11):
Was that that interest in the business side of
biotech?
Was there a little seed in theback of your head from day one
that said I'm going to be abiotech builder one day?
Like what that was?
The means to what end?
Speaker 3 (03:24):
You know, I mean, perhaps not, I mean, perhaps
there was always, you know,something you know germinating,
but, but certainly not that Iwas aware of.
I was, um, you know, despitebeing in Silicon Valley, you
know, in the early two thousandsand, and I think you know, um,
maybe now I would sayentrepreneurial by nature, but I
certainly didn't know that atthe time I was, uh, you know,
(03:45):
definitely um, enjoying, youknow, big company life and it
was really, you know, just anopportunity that came by, that
said something that I had workedon and been close to a grad
school, you know, started toform the ideas of a company and
so, together with, you know,some great mentors and
co-founders, we decided to tokind of have a go at it.
And, you know, if you thinkback, that was actually 2008.
(04:06):
And if you remember 2008, itwas a very difficult time for
his money.
Speaker 2 (04:10):
And this was Avalanche.
Speaker 3 (04:11):
This was for Avalanche, that's right.
So it was 2008, 2009, 2010.
I was still at Genentech, butwe were starting to form the
ideas that then became Avalancheand finally.
Speaker 2 (04:23):
I left in 2010 to do that full time, but, yes, 2008,.
Not a good time to launchanything.
Speaker 3 (04:29):
Yeah, I mean, in a sense it was a great time to
start and in a sense, it was abad time to start.
It was a bad time to startbecause no one was deploying
capital at all during the globalfinancial crisis of 2008, 2010.
No companies were gettingfunding, let alone early stage
biotech, let alone gene therapyfor any indications, and.
But, at the same time, I thinkyou know, during these down
(04:52):
cycles are really times when youcan think about innovation.
You know, in a more quiet way,you don't have, you know, very
well-funded competitors that are, you know, trying to outpace
you and, as an entrepreneur, Ithink often we have to think
about, you know, where, where'sthe puck going.
How do you, uh, you know, notimagine what everybody knows is
(05:15):
going to be great today, becauseit's really hard to out-compete
.
You know companies that aremore well-resourced but, um, you
know what, what is going to bepossible in three, four or five
years and how can we startworking on that now so that,
once you know the rest of theyou know investor community and
world takes notice?
You know we've made someprogress and have you know some
(05:36):
kind of um, uh, you know umalready had start an advantage
basically over over awell-funded competitor.
Speaker 1 (05:44):
That's a difficult thing to do.
I mean, what, what kind of tealeaves do you look at to
anticipate?
You know what, what, where youwant to be in four or five years
?
Speaker 3 (05:54):
Yeah, it's interesting.
I mean it's a.
It's a.
I think it's a reallyinteresting question and one
that entrepreneurs, you know,really spend a lot of time
thinking about.
And you know, when you thinkabout the kind of the investment
cycles, there are things thatare hot and there are things
that are not right.
Rare disease will come in andout of fashion, or you know CNS,
or you know now, immunology isa buzzword, I and I.
Immunology and inflammation issomething people spend a lot of
(06:15):
time.
Car-ts were hot for a while.
You know ecology everybodyremembers that wave
(06:46):
no-transcript interested insomething before the field is.
And I think that's where, youknow, entrepreneurs you know
spend a lot of time and kind ofthink about okay, this has come
a long way, but nobody's noticedit yet.
What's the overlooked area thatwe can capitalize on with this?
(07:07):
And sometimes I think you'reright and sometimes, of course,
you're wrong, but in the endthat's part of where
entrepreneurs can fit in.
The ecosystem is sort of inthis area, sort of before the
big well-funded competitors takenotice.
Speaker 2 (07:22):
That's interesting.
In order to have sight of that,it occurs to me that being in
the academic community isadvantageous, but not all folks
in the academic community havethe entrepreneurship angle or
bug or desire right, so it's asort of a sort of a catch there.
Speaker 3 (07:41):
I think that's right.
I mean, you know, academics areterrific at innovating, right,
they're extremely creative andthey have a lot of time to sort
of think and trial new things aspart of the you know um of of
having a setup already in anacademic lab and having some
grants and having some, you know, skilled labor.
Um, you know, sitting aroundlooking for new projects.
(08:02):
And you know, some academicsare terrific entrepreneurs and
start many, many companies andthey start all of their own
projects and some would rather,you know, stay in academic labs
and sort of let the technologylicensing offices you know,
prosecute the opportunity.
So I think, you see, you know ahuge variation across the board,
Um, but you know, as, assomeone who you know developed
(08:24):
this interest inentrepreneurship, you know
there's certainly opportunitiesif you look for them where
exactly, as you say, there's,you know, projects and
discoveries that are waiting foryou know, because universities
don't sell things Right, theydon't manufacture and sell drugs
, and so there's, of course,always a handoff to industry at
some point in the process.
Speaker 1 (08:43):
So there's, of course , always a handoff to industry
at some point in the process.
Was it something that you hadto nurture in yourself, the
entrepreneurial piece, or did itcome naturally, like you
recognize it as something youwanted to do and just look for
opportunities?
Speaker 3 (08:55):
It's interesting.
I mean, you know, I rememberleaving Genentech in 2010 and
starting Avalanche.
Starting Avalanche and I wasthe first full-time employee,
and sort of thinking about, ohmy gosh, you know what's going
to happen next week, how am Igoing to?
You know what's going to happenin quarter two?
What's going to?
Where are we going to be a yearfrom now?
And just sort of being filledwith this uncertainty around the
(09:20):
future, right, and sort of ohmy gosh, where's our next
funding going to come from?
We don't know what the data aregoing to say.
And having, you know, grown upand spending your time in school
, where you really have quite alot of control over you know,
your whatever next grades, yourproject in grad school, your
project at work, where you kindof have a pretty, you know,
(09:42):
clear idea of the progression ofyour career, and so on and I
could certainly see that, had Istayed at Genentech, that it was
so different.
Being an entrepreneur and sortof the stress of that is
actually quite real and quitesignificant.
But then sort of realizing thatyou know, when you take step
(10:05):
back and take a moment of like,this is why we're here, this is
why entrepreneurs are doing whatthey're doing because it's
risky, because it's uncertain,and sort of letting that, you
know, watch over you anddrowning in the, in the
uncertainty of the position, andgoing from there to okay, we
don't know what tomorrow's goingto look like, we're just going
to make good decisions along theway and follow the there to
okay, we don't know whattomorrow is going to look like.
We're just going to make gooddecisions along the way and
(10:27):
follow the data and, you know,listen to advice and try to
build something that's valuableand then you know, hopefully,
good things happen, yeah.
Speaker 2 (10:37):
The time between Avalanche and Genesance.
I don't want to like belabor ittoo much, but let's take a sort
of a brisk walk from, uh, fromAvalanche to the founding of
Genesance.
Speaker 3 (10:47):
Sure, so, um, so I left Avalanche in 2015 and it
was following some disappointingclinical data and it was a
difficult time, you know, forthe company because we were
going to have to restructure andI decided to, you know, set
down, bring in a new CEO, and I,um, took a job, uh, with a
brand new startup called Encorusthat Mitch Feiner and NPM and
(11:07):
Deerfield were starting and itwas based in Boston.
So I spent most of my time inBoston for about a year, year
and a half to get that off itsfeet, and that was a great
experience.
It was awesome to work in adifferent biotech market you
know we'd been in the Bay Areato get to know the Boston
ecosystem a little bit and towork with some terrific
investors and a great board andsome really terrific operators
(11:29):
as well.
So that was always designed astemporary because I wanted to
move back to California and soin 2016, came back and since
then, really have been doing,you know, formation and seed
investing, and this means, youknow, starting companies,
putting you know capital in thefirst you know, couple million
(11:50):
dollars and really, with theidea of, can we de-risk some of
the key elements so that we canget to a place where it's really
fundable at a bigger level, andso that really involved tech
transfer from universities,designing some experiments that
we thought could add a lot ofvalue, and then building the
rest of the story so we could goout and pitch it to, you know,
(12:12):
later stage investors who areready to fund later stage work.
And so the first project thatwe did was Cyclos Vision, and
this was founded, you know,right about that time, 2016.
Um, cyclas Vision, and this wasfounded, you know, right about
that time, 2016.
And it was, uh, you know I hadthe great pleasure of working
with um Jay and Maureen Knightsfrom the University of
Washington, who had thisterrific um technology for
(12:34):
myopia and um, basically, theyhad, you know, developed this
hypothesis about how myopiaworks, and they had even done a
very early clinical test withkids wearing special glasses
that could slow down theprogression of myopia works, and
they had even done a very earlyclinical test with kids wearing
special glasses that could slowdown the progression of myopia,
and I thought this is prettyinteresting.
Now, myopia people really don'tappreciate.
I think in the United States itdoesn't have quite the
(12:55):
visibility and it's for themarket.
Speaker 2 (12:58):
No pun intended on it .
Speaker 3 (13:00):
Exactly.
We're a little myopic hereabout myopia, um, but when you
get into the field a little bityou realize that this is an
enormous problem in east asiaand singapore and china and
taiwan and japan, where almosteveryone has nearsightedness and
one in five people, by the timethey turn age 18, have severe
nearsightedness that can lead toocular complications and other
(13:22):
kinds of retinal problems laterin life.
And so um, cyclist visionCyclas Vision was a terrific
project.
You know, my co-founder,michael Furtick, came from the
tech world and we started thiscompany together.
We licensed the technology fromUniversity of Washington and
built a company, ran a phasethrough trial which was really
successful, and um ended upselling the company to Cooper
(13:43):
Vision, then spun it back outinto a joint venture, a
standalone joint venture withEsselor Luxottica.
Product's been very successfuland is selling very well in
China and ultimately helpingkids see better, which is so
gratifying.
So really credit to Jay Knightsand Maureen Knights and their
team at University of Washingtonfor having the vision to create
(14:06):
that product.
You know, after Cyclops we'vedone a couple of more companies
that are really in thisformation.
You know, spirit of putting thefirst capital, transferring
technology from the universityto the company, building the
company and trying to get itthrough the initial stages.
(14:27):
One has been Genesance, andwe'll talk about that.
The other is, as you mentionedin the introduction, a separate
project for Glaucoma coming outof Trinity College of Dublin,
and so both of those have beenmajor focuses for, for for for
me for the last several years.
Speaker 2 (14:45):
This uh, the, the greater mission to uh apply gene
therapy solutions to broadindications that are outside the
realm of where gene therapieshave lived for so long in, like
ultra rare and rare diseases.
Is that part of the?
Uh, I don't know.
Is that part of the I don'tknow?
(15:05):
Is that part of the thing thatenergizes you?
Speaker 3 (15:08):
Yeah, it's really been a, you know, a long term,
you know, interest and an ideaand hypothesis and hope that we,
you know, could bring geneticmedicines and gene therapy to
major public health problems,right?
So you think about, you know,gene therapy.
Well, it's like right in thename, gene therapy, genetic
disease, and so a lot of peoplewere sort of having this
(15:30):
one-to-one correlation of genereplacement, genetic disease,
mendelian, you know, trait, andthis has been, you know,
successful for a lot ofcompanies, a lot of investors
and patients, but not a lot ofpatients, right?
So, because these areas are,you know, very severe, high in
(15:51):
need, but tend to affect fairlymodest patient populations, and
so, you know, even going back toAvalanche, the idea was, you
know, we know that this targetis important, but delivery is a
problem.
So how can we get away frominjections into the eye every
four weeks for the rest of yourlife?
(16:11):
Wouldn't it be nice to havesomething that lasts longer?
And can gene therapy be used asa biofactory, if you will, to
create the protein?
You know?
We say, instead of making it,you know, over in South San
Francisco in a big bioreactorand then splitting it up into
millions of patients, can weinject something in one
patient's eye and have thosecells themselves make the
(16:32):
therapeutic protein thatcontinues to last.
And so that's been a hypothesisfor you know, a long time.
And I think there was at firstresistance, which is
unfamiliarity with this idea,because gene therapy and genetic
disease sort of went hand inhand.
But as people started to thinkabout you know we've learned so
much about the manufacturing,the regulatory, the quality
(16:54):
control, the immunology of thesegene therapy vectors how can we
sort of leverage all of thosetools into major diseases that
affect a lot of people thatstill have very high end need.
So certainly osteoarthritis is,you know, leads that list.
Drug delivery to the joints isvery, very difficult.
(17:15):
And recombinant proteins orsmall molecules, whether you
inject them in the joint theyquickly leave the joint.
If you inject them systemicallythey really don't reach the
joint in very highconcentrations.
And so how do we sort of flipthat narrative into a local,
long lasting delivery followinga single injection?
And so you know it was AnitaCaravalla, who's our co-founder
(17:38):
at Genesance, who had becomefamiliar with this project when
she was at Pittsburgh Universityof Pittsburgh in graduate
school and sort of brought thisidea of.
You know we're interested ingene therapy for comedies, can
we do this in joints forosteoarthritis?
And so we, you know, workedwith Chris Evans, who had moved
from Pittsburgh to the MayoClinic, and his other longtime
collaborators, Paul Robbins andSteve Ghazani, to take the
(18:02):
technology that they've workedon so long in terms of the
molecular mechanisms ofosteoarthritis into a commercial
entity and be able to bringthat forward in terms of real
development.
Speaker 1 (18:15):
Part of it came from the University of.
Speaker 3 (18:16):
Florida as well.
That's right.
So Steve Guzzani had gone fromI mentioned.
Chris Evans went from Pitt toMayo Clinic.
Chris Evans went from uh pit tomain clinic.
Um, his longtime postdoc wentfrom pit to university of
Florida and had um, in largepart actually been attracted to
be a Florida because the vetschool has a very active um
equine uh research program andso, um, you know, it turns out
(18:39):
that horses actually getnaturally occurring
osteoarthritis which turns outto be the closest thing to the
human disease, that that we seein the preclinical world.
And so that the ability to youknow model that in horses and
then um, and use that largeanimal model and I think that's
been a really a key successfactor for gene therapies is the
(19:03):
ability to scale up inpreclinically so that then we
can just scale over.
And you think about the earlyexperience and you know, leprous
congenital hemorrhosis forlexterna or in, you know, with
the hemophilia products, wherethose were, you know, proven out
in large animal models beforegoing clinical, and that was
sort of the ability to you knowreally learn a lot um with these
(19:24):
preclinical models.
So you weren't kind of scalingup and moving into humans at the
same time.
You were doing it, you know,sequentially, and I think that's
been a key success factor forthe field.
Speaker 2 (19:40):
My quick aside here.
My daughter had a show horse, aquarter horse, when she was
very little.
The mare developedosteoarthritis and I took the
horse to the Cleveland EquineClinic and had images taken and
the veterinarian came out aftertaking the images and said the
good news is this horse'sarthritis is so progressed that
it doesn't know which leg tolimp on, so you can't tell that
she's limping half the time.
(20:01):
And she's very safe for yourdaughter, because she's not
going to want to jump, so youprompted that story.
Speaker 3 (20:07):
No, that's exactly right, it's very common Lameness
in a horse is a huge issue.
Common Lameness in horses is ahuge issue and of course it's a
large weight-bearing joint, justlike humans with hips and knees
have large weight-bearingjoints.
That you know, unfortunately,over time degenerate, right,
it's one of the most commondegenerative diseases.
It's just that it's local inone or more joints.
You know, as we age and, ofcourse, brought about by, you
(20:31):
know, like many diseases ofaging.
You know complex etiology.
But we think that by blockinginterleukin-1, which is the lead
inflammatory actor and alsocauses cartilage degeneration In
fact the original name for itwas catabolin because it
catabolizes tissue that byblocking this important central
bad actor that we can hopefullyhave an impact for patients that
(20:52):
we can hopefully have an impactfor patients.
Speaker 2 (21:01):
You you, when you take a genetic therapy to a
common condition likeosteoarthritis or glaucoma for
that matter do you face some ofthe same, like logistics and
distribution and supply chainchallenges that the field has
been struggling with for yearsnow, or is the manufacturing and
distribution paradigm somehowdifferent?
Speaker 3 (21:21):
So it's interesting.
I think in some ways it'seasier and in some ways it's
much harder because there arevery different dynamics in place
.
So when you think about asystemic application of gene
therapy, you know these areoften dosed at, you know, five
times 10 to the 14th vectorgenomes per kilogram, right, so
that could be, you know, doingthe math.
(21:44):
I mean one times 10 to the 16thtotal vector genome particles,
right, or more.
That's a lot of vector tomanufacture and the cost of
doing that is very high and andthese are rare diseases.
So it's justifiable to chargehigh prices because you're
(22:04):
having a huge impact on thepatient's um, you know, health
and outcomes and lifespan, andso all you know, whether it's a
gene therapy or protein therapy,rare disease medications are
more expensive, right.
But when you are looking,thinking about bringing this
forward to a very common disease, you face a totally different
(22:25):
pricing.
You can't charge three milliondollars for a product and you
wouldn't want to be completelyeconomically infeasible.
And so the idea is OK, if we,if we want to charge something
that's a five figure price taginstead of a six or seven figure
price tag, how do we go aboutdoing that?
Well, one of the things is thatthe cost of goods needs to be.
(22:47):
You know, in order to be abusiness, the cost of goods
needs to be much lower of goodsneeds to be much lower.
So you know, thinking aboutthat, systemic doses and common
diseases are currently, you know, not workable because the
systemic dose costs six figuresto make.
You can't sell for five figures, that's not a business.
But you know, the diseases thatwe've worked on, whether
(23:10):
they're ocular or whetherthey're intra-articular
injection, are far lower doses,like 10,000-fold lower, than a
systemic administration and thatmeans that cost of goods are
very approachable if we scale inthe right way that we can get
it down to the four figures ormaybe the high three figures in
terms of the cost of makingthese therapies.
(23:31):
So at the same time I think werun into other sort of new
challenges, right?
So when you're charging a veryhigh price for a drug, you know
the way that these companies forrare diseases currently think
about distribution is they workthrough distributors to kind of
take orders, but oftentimes theyship directly, you know, on dry
(23:52):
ice or on liquid nitrogen, to atertiary academic medical
center who has all the hospital,pharmacy and facilities to be
able to receive that, to storeit for as long as they need and
then to administer it to thepatient, and the several
thousand dollar cost of doingthat shipment is inconsequential
right to the price and theoverall cost of the medicine.
(24:15):
I think in common diseases, youknow, we're facing a very
different kind of a dynamicwhere, if we're trying to make
it and deliver it to the patientfor, you know, $1,000, a $2,000
shipping cost is completelyimpossible and infeasible, right
?
So what that means is that youknow we need to do this through
(24:35):
sort of a traditionaldistribution pathway, like
biologics, you know, likeLucetis, which I worked on in
Genentech, are distributed todayand the cost of doing that is,
you know, much more to the uniteconomics.
But that being said, we don'texpect that every single, just
as an example, every singleclinic will have a minus 80
degree freezer, and so, you know, generating the kind of
(25:09):
stability data that will let us,you know that's compatible with
, you know, are overcoming orhave overcome on the way to, you
know, delivering on the promisefor gene therapy for common
diseases.
Speaker 2 (25:22):
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.
On the business of biotech, theregulatory paradigm occurs.
(26:26):
It occurs to me that there'sgot to be a challenge there too.
Like regulatory bodies that are, you know, that are evaluating
or prosecuting genetic therapiesfor rare disease, ultra rare
disease, disease, ultra-raredisease, I'm assuming tend to be
a little bit more liberal thansomeone who comes along and says
(26:47):
, hey, we're developing a genetherapy, uh, that for an
indication that has a giantpatient population.
I can imagine the agencieswould be like all right, let's
pump the brakes here a littlebit like.
This is a modality that we, youknow we haven't necessarily
seen a lot of broad patientpopulation applicability Also.
Speaker 3 (27:04):
I mean yes and no, so I mean you think about rare
diseases and the bar is, youknow, I don't want to say
necessarily lower, but certainlyit's infeasible to run multiple
large trials in rare diseasesbecause there aren't enough
patients to recruit or find ortreat, and so certain, and you
know, the risk of mass exposureto huge populations isn't there,
(27:27):
right?
And so the idea of a raresafety event, you know, becoming
a major public health problemjust doesn't really exist.
And so that framework for rarediseases is, you know, sort of
over here.
Right, the framework for commondiseases has existed for a long
time, you know, with smallmolecules, with biologics, et
cetera, and it is feasible to do.
(27:49):
You know large studies and itis certainly, you know, going to
be used in large populations.
So, yes, fda and EMA and otherregulatory agencies want you to
characterize those.
You know the safety profile, inother words those adverse
events, and you know the safetyprofile, in other words those
adverse events, and you know,but to say that products like
this haven't been used in thosepopulations, I mean that's not
(28:10):
quite right.
When we think about what was thefirst gene therapy, you know it
was probably the polio vaccine,right Back, you know, and this
is given to millions of healthypeople, including kids, and so
the bar for vaccines being verybroadly distributed and healthy
(28:31):
people rather than sick patientsis very, very high.
Right, probably rightly so, yeah, and so I think probably the
gene therapy for common diseasesis somewhere in between.
These are sick patients, butit's a large population, so of
course we have to gocharacterize them, I think you
know, of course it's.
You know the office of OTPwithin CBER, you know, has their
(28:56):
own way of doing things that'sseparate from the device
division and separate from thedrugs division, and so you know
we're in the process, the genus,of going to talk to the agency
this year about phase two designand sort of future development
program, and so I think we'lllearn more.
There are phase three programsthat are, you know, in large
indications, for example formacular degeneration, and we're
(29:19):
entering phase two.
So we're going to learn moreand more about how regulatory
agencies are thinking aboutthese uncommon diseases.
But the framework is sort of,you know already laid out by
vaccines and by other majorindications.
You know where biologics andsmall molecules have come before
us, yeah.
Speaker 1 (29:34):
Do you have a sense of how large your phase two will
?
Speaker 3 (29:37):
be.
So we, the phase two in youknow for for genisants is really
going to be designed to provideclinical proof of concept, so
that's a pain and function study.
We'll also look at structuralendpoints, so we'll look at MRIs
of how the joints are doing,and so we think that's going to
be about 250 patients in thisphase two.
So certainly not tiny, butcertainly not huge either.
(30:00):
I think you certainly can studyin a well-designed pain trial.
You can certainly see clinicalsymptom improvement in
osteoarthritis patients with OAof the knee.
Speaker 1 (30:14):
As you're talking to investors and you're gearing up
to launch a clinical trial whatdo you see in terms of the
financing environment?
And I guess, what questions doyou get from investors when
you're telling them we'redeveloping a gene therapy for an
indication like osteoarthritisfor the knee?
Speaker 3 (30:33):
Well, certainly from an investment perspective, these
last two to three years havenot been what the previous seven
or eight years were, right, andI think everybody recognizes
that the investors are becomingmore selective.
The market's been down,interest rates have been high,
whatever the sort of you know,drivers of the market have been.
You know it's been moredifficult to finance companies
(30:56):
privately, it's been moredifficult to do IPOs and prices,
you know, and valuations aredown right.
And so I see that as aninvestor and, of course, you
know, as an operator andentrepreneur as well.
I think you know investmentgroups are different, right, and
they all have different theseson, and that's wonderful because
they have different ideas ofwhat the future holds.
(31:17):
Some investors are going to say,you know, osteoarthritis, not
for me, it's a very difficultarea.
And some are going to say,osteoarthritis, not for me, it's
a very difficult area.
And some are going to say, wow,this is the biggest opportunity
in all of biotech.
Why?
Because when you're puttingtogether a huge patient
population 32 million Americanswith osteoarthritis, 1.2 million
(31:38):
new cases of kneeosteoarthritis every year, huge
patient population together witha massive unmet need there are
no therapies, right.
All we have is pain control andsort of temporary
symptomatology, nothing reallytreats the underlying disease,
and so these two things togetherreally drive an enormous
(31:59):
opportunity space, and so that'swhat got us excited.
Hey, people have been trying toblock this target for a long
time.
No one's been successful.
We think we can do this withgene therapy, and now, with the
latest clinical data, we'veshown we can express this at the
target levels in thesepatients' joints for the long
term.
So what's next?
Okay, we need to run a properphase two to really show the
(32:22):
value of it.
Speaker 1 (32:24):
From your seat as a CEO, and then also from an
investment and investorperspective.
Are you optimistic this yearabout public markets, about cash
coming into biotech?
What's your, what's your readon 2025?
Speaker 3 (32:39):
I think it's too soon to tell.
I mean, obviously there's beena lot of chatter in the hallways
, you know, this week JP MorganHealthcare Week in San Francisco
about.
You know, is 2025 looking moreoptimistic?
I think that was the headlinethis morning.
You know that sort of dealannouncements have driven sort
of a more upbeat tenor.
I've heard other people saythis feels a lot like 2023 and
(33:01):
2024.
So I don't know, I won't lookinto my crystal ball too hard.
I'm sort of certainly hopefulthat inflation coming down,
perhaps interest rates comingdown and the market's sort of
back to normalizing andrewarding innovation Certainly
hope for that on all our behalf.
Right in the biotech industry,that 2025 will be a great year.
Speaker 2 (33:25):
You mentioned the.
You know you're talking aboutthe investment community and the
.
You know different appetitesamong different investors just a
few minutes ago, and it seemsto me that when things are tight
and tough, like the company youkeep, becomes all the more
important Finding thoseinvestors who do get excited
about an opportunity like this.
(33:46):
So this is a broad question,but what advice would you give a
biotech builder on, you know,turning over the right rocks to
find an investment partner,tough times or otherwise?
Right, because you don't wantthe wrong investors either, when
things are flush, when there'smoney to be had.
So what advice do you offeraround finding the right
(34:07):
investor for your specificapproach?
Speaker 3 (34:12):
I guess you know this is a great question.
There's a few things I'd sayyou know.
One is that you never reallyknow who your investors are
going to be and you canhypothesize that this is a great
strategic fit for this fund orthis company.
And I find that you know veryrarely are you, is that have a
strong predictive value, right?
What you think someone shouldbe interested in, you know
(34:34):
doesn't necessarily correlate towhat their internal discussions
you know are mapping out thestrategy for that company or
that fund.
So you know, therefore youreally don't know what meetings
are going to be useful.
So take meetings, because youmay learn something, you may get
an introduction, you maysomething may surprise you.
Another thing is that you knowit's easier if investors declare
(34:58):
themselves, right, and sogetting out there at academic
conferences to talk about yourscience, putting press releases
out to say you know, here'swhere we are Sort of being open
about, and broadcasting, youknow this is where we are and
kind of what we're working on,what we hope to do, actually
will help investors who areinterested declare themselves,
and that's easier than reachingout to, you know, hundreds or
(35:21):
thousands of different funds,and so sometimes that's a, you
know a good strategy.
I'd say you know, in terms ofyou know who are the right
investor partners.
In my experience it's very hardto predict.
You know, going in and sort ofjust by the tenor of you know
the conversations, what thoserelationships are going to be
(35:41):
like.
You know four years down theroad, when things get tough
right.
That's actually quite hard topredict, but it is possible to
align incentives to some extentand sort of pick investors who
are going to share incentives.
So if you have a long-termstrategy and you need investors
that are going to be there for awhile, pick someone who has
(36:03):
that long-term mindset that canbe patient capital that's not
going to want you to.
You know, do an IPO in sixmonths, right, I think it's.
I think it's possible to sortof align those incentives.
Um, obviously you know people'sreputation.
Talk to other companies thatthey've worked with in the past
and sort of get a read on.
You know what was?
What was this investor likewhen things were going great?
(36:25):
What were they like when thingswere going not so great?
How helpful were they in termsof, you know, helping you
overcome your challenges?
And so you know, certainly thoseare all helpful and you know,
look, it's kind of fancy toprognosticate and say, oh, this
is exactly the type of investorthat I want to have in this
(36:46):
company, but at the end of theday, like you have to eat the
food that's on the table and soyou know, if every company we're
so lucky that you know we have,you know 20 different.
You know sets of opportunitiesto choose from and you can
optimize who you want to workwith, like, wow, amazing, that's
wonderful.
In my experience that's notevery time.
Yeah Right, that's that's alittle bit of a rare moment, um,
(37:07):
or a rare company, and so youknow often a deal's available
and that's the one you're goingto do, and I think you know most
entrepreneurs will realize youknow that's that's kind of the
real policy of you know, uh, youknow biotech, entrepreneurship
and and, and you know, earlystage um stage, raising capital.
Speaker 2 (37:25):
I like the use of the word fancy there.
Speaker 3 (37:28):
It's kind of fancy.
Speaker 2 (37:29):
Let's not get too fancy right.
Speaker 1 (37:31):
I have a similarly broad question that I wanted to
ask based on something you saidearlier.
I think you got to know theBoston area ecosystem through
Unchorus and you mentioned youwanted to come back to San
Francisco.
What do you like or dislike?
I guess?
How would you compare Bostonand California for a biotech
(37:53):
company that's looking forfunding or that's doing science?
Which do you like better andwhy?
Speaker 2 (38:00):
I'm going to jump in before he responds.
He's a native Californian.
He's a Menlo Park guy.
So he's probably going to giveyou a biased response.
Just like just like you had towork University of Florida into
your question earlier, Ben's anOrlando guy.
He was getting a shout out tothe home state there.
Speaker 3 (38:16):
Well, I mean, so you're, of course, you're
absolutely right.
So I'm from California, I'mfrom Menlo Park originally and
you know sort of companies thathad grown all the way up from
(38:40):
startups to commercial.
You know large pharma,commercial entities, right, and
that was certainly true, youknow, 10, 15 years ago, probably
more true here than it was inBoston when we were kind of
getting around the time, we weregetting out in Coruscant.
But look, the Boston ecosystemhas just grown so enormously
(39:03):
with big pharma setting up shopthere, with university
collaborations, and one of thedelights about being in Boston
is that it's all extremelyconcentrated in kind of Kendall
Square area.
And then of course you have youknow other businesses that are
out in, you know Waltham andother areas, but there is such a
vibrant biotech community, youknow in Boston tech community.
(39:29):
You know in Boston Um, at thesame time I, you know Palo Alto
still has such an amazingentrepreneurial uh, ecosystem
and vibe, and I think you knowone of the um.
I was asking you, you know inthe in the elevator right up, if
you watch the HBO show SiliconValley, because it's this just
incredible um sort of, you knowart imitating a life parody of
Silicon Valley, and you watchthat show.
You know living here and yourecognize all these patterns
(39:52):
right, and there's a real joy tobeing an entrepreneur in this
area because the ecosystem is sorich in terms of all the
supporting elements, but alsobecause I think, you know,
people are really um sort of,you know, culturally rewarded
for taking risks and rewardedfor thinking big and thinking
(40:13):
bold and being brave, and sothat's, that's a you know we're
we're incredibly lucky righthere in in in the Bay area and
Silicon Valley, to um be part ofa culture that says, yeah,
that's possible.
Let's, let's dream about aworld where that could be true.
Speaker 2 (40:30):
Does Silicon Valley have the tech bio leg up on
biotech in Boston?
Do you see a differentiationthere in terms of the approach I
mean?
Speaker 3 (40:38):
perhaps because there's so much technology and
AI and so many engineers hereand so many tech investors are,
you know, in this area.
So you do see a lot of thingshappening here and every wave of
the newest thing sort of seemsto always be in San Francisco
and Silicon Valley At the sametime.
I mean, of course, you have,you know, incredible, you know
(41:00):
computer scientists you knowcoming to MIT and Harvard and in
Boston as well, and so I do seea lot of you know kind of
research and platform companiesyou know coming out of the
Boston area that are just youknow, just absolutely
tremendously innovative.
Speaker 1 (41:16):
Yeah, I haven't seen the statistics for 2024, but I
know for a number of yearsrunning, Boston has held the top
title for NIH grants.
So the NIH science grants youknow for, yeah, you have MIT,
you have.
Speaker 3 (41:29):
Harvard.
You have all the hospitalsthere as well.
So it's, I mean, it's atremendous ecosystem and you
know, in the Bay Area it's bigbut it's awfully spread out.
So I think that's.
You know, if you talk toemployees, they're probably
frustrated by the long commutesin the Bay Area versus jumping
on the red line, you know, to goto Kendall Square.
Speaker 1 (41:45):
I noticed coming up 101 from the airport and I
didn't remember this and maybeit was cloudy the last few times
I've been through.
But there are a ton of bigpharma buildings right there in
South San Francisco.
Is that newer, or have they hadshops there for a?
Speaker 3 (42:01):
while Well, genentech certainly has for a long time,
and then, I think, throughacquisitions, others have built
presences there.
Speaker 1 (42:09):
I mean big name companies with their names on
top of big buildings along 101there.
Speaker 2 (42:15):
Yeah, let's reel it back into Genesance and get a
little bit of a sense for whereyou are right now and what the
next significant inflectionpoints might look like.
Speaker 3 (42:26):
Sure, so, um, so Jansons, uh, you know, as I
mentioned, is developing aproduct for osteoarthritis that
blocks interleukin one, which isthe major bad actor.
Um, and this is a response forpain and inflammation, but also
for cartilage degeneration.
And so, um, the initial firsthuman study was run by Chris
Evans at Mayo clinic and thiswas back in, you know,
(42:47):
approximately 2022.
And then we Genesance was, youknow spun that technology out
and completed our Series A, andthen we got a serum grant from
the California Institute ofRegenerative Medicine, and those
two you know financingstogether allowed us to progress
into the next stage, which was aPhase 1B clinical study.
So we call it Donatello, inkeeping keeping with the
(43:09):
renaissance theme of genasanceand the idea.
You know there were a coupleobjectives.
One was to it was dose rangingwith and without immune
conditioning, because so manygene therapy protocols have some
kind of immune conditioning,whether it's with steroids or
biologics, to see if you canimprove safety and efficacy of
(43:30):
the gene therapy by modulatingthe immune system.
So nobody had tried this in thejoint before.
So we were quite innovative,thinking about gee.
Is there a role here forimmunosuppression?
We didn't have any in the phaseone.
The first demand at Mayo Clinic, should we bring that forward
to the phase 1b and test whetherwe can get any insights?
And so we started that studylet's think about this in 2023
(43:57):
and began enrollment toward theend of 2023.
We completed enrollment and nowwe finished the six-month
follow-up.
We announced the data from thatfollow-up just last week
leading up to JP Morgan.
So that was six-month data andthe conclusions are really it
(44:19):
was safe across all doses testedand regardless with and without
the immune conditioning andwhether that immune conditioning
was a short course of oralsteroids or whether it was a
very brief course of oral withan interarticular injection of
steroids, and so it was welltolerated across all of those
(44:41):
cohorts.
An increase in the transgene,which is interleukin-1 receptor
antagonist to our target levels,in the synovial fluid, so
inside the knee joints of thesepatients.
So throughout we were samplingthe synovial fluid from the
patients to test that in aqualified clinical assay, are we
seeing levels of the transgene,the IL-1RA increase?
(45:06):
And the answer was yes, it wasgetting target levels and it's
lasting six months.
So that's terrific news.
So now we know we can have thepharmacodynamic effect that
we're looking for, and what'snext is to say, okay, we know we
can intervene in this pathway.
It's been a longstandinghypothesis that interleukin-1 is
(45:26):
important in OA symptoms anddisease progression.
Now can we bring that forwardinto a proper clinical proof of
concept study, looking at painand function and starting to
look at joint structure to seedo patients improve
symptomatically and can thatlast long-term following a
single injection?
And what's happening?
(45:49):
Start to ask the question as anexploratory implant what's
happening to the joints of thesepatients over time?
Are they actually improving interms of inflammation and are we
seeing a trend towardimprovement in cartilage and
other markers of diseaseprogression of mri?
Uh, so we're we launched aseries b to try to um fund that
(46:12):
study and so you know very, veryin the early stages of that and
so you know hopefully um we'llget some good feedback from
investors in the coming weeks.
Speaker 2 (46:21):
Uh, we also have a plan to to go talk to fda about
um, about what's next yeah, uh,that's a beautiful segue into
what you're doing here this week, like specifically what you're
doing here this week.
We all know what we're doinghere this week.
What are you doing specificallyhere this week to, uh, perhaps
contribute to that?
That uh series?
Speaker 3 (46:40):
B, certainly doing a lot of walking around, but at
least it's not raining orhailing this year, which is an
improvement.
Speaker 2 (46:47):
The sunshine has been more than welcome.
Speaker 3 (46:54):
So, you know, certainly spending time with
investors, but I would say youknow a lot of investors these
days tend to want to meetoutside of this week because
they're so busy with, you know,portfolio companies.
So most of our you knowinvestor meetings are sort of
next week and the following week.
We also like to use this weekas an opportunity to talk to
strategic partners that you knowmay be more diffuse in the
ecosystem, you know, coming fromEurope or coming from you know,
(47:16):
different parts of the U?
S, and also to catch up with,um, you know, folks who have
been following our story, tokind of give them an update.
So, um, a little bit ofeverything and more to come.
Speaker 2 (47:29):
Yeah, yeah, excellent .
Well, it's a great place to bedoing a little bit of everything
and and uh, working towardsthat more to come and I, like I
said I I know this is anincredibly busy week for you, so
I appreciate you spending atleast a small chunk of it with
us.
Speaker 1 (47:43):
Absolutely, it's great to be here.
Yeah, thanks a lot.
I appreciate it.
Genesance is looking to read a renaissance in gene
therapy, taking it from highdollar antidote in rare disease
to an accessible approach totreating common conditions like
osteoarthritis.
Dr Tom Chalberg is leading thecharge, I'm Ben Comer and I'm
Matt Piller, and this is theBusiness of Biotech, jpmorgan
2025 edition, and we're here inSan Francisco with Dr Chalberg
(00:28):
to learn about his role indriving gene therapy from the
stuff of academic researchcenters to a doctor's office
near you.
Speaker 2 (00:36):
Dr Chalberg, it's super nice to have you.
I appreciate the time you'retaking out of your very busy
week here in San Francisco tospend with us.
Speaker 3 (00:44):
Absolutely it's a pleasure to be here in San
Francisco to spend with us.
Absolutely, it's a pleasure tobe here and looking forward to
the show, the pleasure is allours.
Speaker 2 (00:49):
So, as we do, we start with some background on
you, on our guest.
And you earned your PhD incancer, biology, genetics and
ophthalmology and went prettydirectly, it appears, into
pharma marketing and commercialoperations at Genentech.
So I'm curious when you werecoming out of academia with
(01:11):
those degrees, was pharma likeimmediately on your radar or was
it an opportunistic move onagenda working in pharma?
Speaker 3 (01:20):
So you know, it's a great question.
Thinking back, you know, I wasa graduate student, um, really
in the early two thousands and,and when you think back to that
period, it was really rightaround the time the human genome
had been, uh, sequenced and Ithought, you know what, what an
amazing opportunity to be ableto go back to school and learn
about.
You know genetics and and youknow basic science.
(01:41):
But I was really alwaysinterested in genetic medicines
and the idea that, you know, wecould use this new knowledge in
genetics and in molecularbiology to treat human diseases.
And so at the time, I joined alab that was really, you know,
more than basic science.
It was interested in theapplications of, you know, gene
(02:01):
therapy and in this case it wasreally an early form of gene
editing in order to helptechnology assessment and
technology development inpreclinical models of disease.
And so I was really alwaysinterested in, even when I was
in grad school, in how do we usethis technology to bring
(02:22):
forward improvements to humanhealth.
And you know, I was actually aHoward Hughes fellow and that
was part of his vision of theHoward Hughes Medical Institute
was how do we always think aboutfurthering human health?
And so when I was looking for ajob, you know, genentech was,
you know, absolutely one of thegreatest places to work and it
was growing massively at thetime.
This was back in 2005.
(02:42):
And I started in commercialoperations and then marketing
because I really wanted to learnabout the business of biotech
and sort of how does that end ofthe spectrum you know exist,
and sort of really being theendpoint for what we all do now
as development stage biotechs isto kind of bring forward
(03:02):
medicines to make them availableto patients who have, you know,
big needs and and and help themlive their lives.
Speaker 2 (03:11):
Was that that interest in the business side of
biotech?
Was there a little seed in theback of your head from day one
that said I'm going to be abiotech builder one day?
Like what that was?
The means to what end?
Speaker 3 (03:24):
You know, I mean, perhaps not, I mean, perhaps
there was always, you know,something you know germinating,
but, but certainly not that Iwas aware of.
I was, um, you know, despitebeing in Silicon Valley, you
know, in the early two thousandsand, and I think you know, um,
maybe now I would sayentrepreneurial by nature, but I
certainly didn't know that atthe time I was, uh, you know,
(03:45):
definitely um, enjoying, youknow, big company life and it
was really, you know, just anopportunity that came by, that
said something that I had workedon and been close to a grad
school, you know, started toform the ideas of a company and
so, together with, you know,some great mentors and
co-founders, we decided to tokind of have a go at it.
And, you know, if you thinkback, that was actually 2008.
(04:06):
And if you remember 2008, itwas a very difficult time for
his money.
Speaker 2 (04:10):
And this was Avalanche.
Speaker 3 (04:11):
This was for Avalanche, that's right.
So it was 2008, 2009, 2010.
I was still at Genentech, butwe were starting to form the
ideas that then became Avalancheand finally.
Speaker 2 (04:23):
I left in 2010 to do that full time, but, yes, 2008,.
Not a good time to launchanything.
Speaker 3 (04:29):
Yeah, I mean, in a sense it was a great time to
start and in a sense, it was abad time to start.
It was a bad time to startbecause no one was deploying
capital at all during the globalfinancial crisis of 2008, 2010.
No companies were gettingfunding, let alone early stage
biotech, let alone gene therapyfor any indications, and.
But, at the same time, I thinkyou know, during these down
(04:52):
cycles are really times when youcan think about innovation.
You know, in a more quiet way,you don't have, you know, very
well-funded competitors that are, you know, trying to outpace
you and, as an entrepreneur, Ithink often we have to think
about, you know, where, where'sthe puck going.
How do you, uh, you know, notimagine what everybody knows is
(05:15):
going to be great today, becauseit's really hard to out-compete
.
You know companies that aremore well-resourced but, um, you
know what, what is going to bepossible in three, four or five
years and how can we startworking on that now so that,
once you know the rest of theyou know investor community and
world takes notice?
You know we've made someprogress and have you know some
(05:36):
kind of um, uh, you know umalready had start an advantage
basically over over awell-funded competitor.
Speaker 1 (05:44):
That's a difficult thing to do.
I mean, what, what kind of tealeaves do you look at to
anticipate?
You know what, what, where youwant to be in four or five years
?
Speaker 3 (05:54):
Yeah, it's interesting.
I mean it's a.
It's a.
I think it's a reallyinteresting question and one
that entrepreneurs, you know,really spend a lot of time
thinking about.
And you know, when you thinkabout the kind of the investment
cycles, there are things thatare hot and there are things
that are not right.
Rare disease will come in andout of fashion, or you know CNS,
or you know now, immunology isa buzzword, I and I.
Immunology and inflammation issomething people spend a lot of
(06:15):
time.
Car-ts were hot for a while.
You know ecology everybodyremembers that wave
(06:46):
no-transcript interested insomething before the field is.
And I think that's where, youknow, entrepreneurs you know
spend a lot of time and kind ofthink about okay, this has come
a long way, but nobody's noticedit yet.
What's the overlooked area thatwe can capitalize on with this?
(07:07):
And sometimes I think you'reright and sometimes, of course,
you're wrong, but in the endthat's part of where
entrepreneurs can fit in.
The ecosystem is sort of inthis area, sort of before the
big well-funded competitors takenotice.
Speaker 2 (07:22):
That's interesting.
In order to have sight of that,it occurs to me that being in
the academic community isadvantageous, but not all folks
in the academic community havethe entrepreneurship angle or
bug or desire right, so it's asort of a sort of a catch there.
Speaker 3 (07:41):
I think that's right.
I mean, you know, academics areterrific at innovating, right,
they're extremely creative andthey have a lot of time to sort
of think and trial new things aspart of the you know um of of
having a setup already in anacademic lab and having some
grants and having some, you know, skilled labor.
Um, you know, sitting aroundlooking for new projects.
(08:02):
And you know, some academicsare terrific entrepreneurs and
start many, many companies andthey start all of their own
projects and some would rather,you know, stay in academic labs
and sort of let the technologylicensing offices you know,
prosecute the opportunity.
So I think, you see, you know ahuge variation across the board,
Um, but you know, as, assomeone who you know developed
(08:24):
this interest inentrepreneurship, you know
there's certainly opportunitiesif you look for them where
exactly, as you say, there's,you know, projects and
discoveries that are waiting foryou know, because universities
don't sell things Right, theydon't manufacture and sell drugs
, and so there's, of course,always a handoff to industry at
some point in the process.
Speaker 1 (08:43):
So there's, of course , always a handoff to industry
at some point in the process.
Was it something that you hadto nurture in yourself, the
entrepreneurial piece, or did itcome naturally, like you
recognize it as something youwanted to do and just look for
opportunities?
Speaker 3 (08:55):
It's interesting.
I mean, you know, I rememberleaving Genentech in 2010 and
starting Avalanche.
Starting Avalanche and I wasthe first full-time employee,
and sort of thinking about, ohmy gosh, you know what's going
to happen next week, how am Igoing to?
You know what's going to happenin quarter two?
What's going to?
Where are we going to be a yearfrom now?
And just sort of being filledwith this uncertainty around the
(09:20):
future, right, and sort of ohmy gosh, where's our next
funding going to come from?
We don't know what the data aregoing to say.
And having, you know, grown upand spending your time in school
, where you really have quite alot of control over you know,
your whatever next grades, yourproject in grad school, your
project at work, where you kindof have a pretty, you know,
(09:42):
clear idea of the progression ofyour career, and so on and I
could certainly see that, had Istayed at Genentech, that it was
so different.
Being an entrepreneur and sortof the stress of that is
actually quite real and quitesignificant.
But then sort of realizing thatyou know, when you take step
(10:05):
back and take a moment of like,this is why we're here, this is
why entrepreneurs are doing whatthey're doing because it's
risky, because it's uncertain,and sort of letting that, you
know, watch over you anddrowning in the, in the
uncertainty of the position, andgoing from there to okay, we
don't know what tomorrow's goingto look like, we're just going
to make good decisions along theway and follow the there to
okay, we don't know whattomorrow is going to look like.
We're just going to make gooddecisions along the way and
(10:27):
follow the data and, you know,listen to advice and try to
build something that's valuableand then you know, hopefully,
good things happen, yeah.
Speaker 2 (10:37):
The time between Avalanche and Genesance.
I don't want to like belabor ittoo much, but let's take a sort
of a brisk walk from, uh, fromAvalanche to the founding of
Genesance.
Speaker 3 (10:47):
Sure, so, um, so I left Avalanche in 2015 and it
was following some disappointingclinical data and it was a
difficult time, you know, forthe company because we were
going to have to restructure andI decided to, you know, set
down, bring in a new CEO, and I,um, took a job, uh, with a
brand new startup called Encorusthat Mitch Feiner and NPM and
(11:07):
Deerfield were starting and itwas based in Boston.
So I spent most of my time inBoston for about a year, year
and a half to get that off itsfeet, and that was a great
experience.
It was awesome to work in adifferent biotech market you
know we'd been in the Bay Areato get to know the Boston
ecosystem a little bit and towork with some terrific
investors and a great board andsome really terrific operators
(11:29):
as well.
So that was always designed astemporary because I wanted to
move back to California and soin 2016, came back and since
then, really have been doing,you know, formation and seed
investing, and this means, youknow, starting companies,
putting you know capital in thefirst you know, couple million
(11:50):
dollars and really, with theidea of, can we de-risk some of
the key elements so that we canget to a place where it's really
fundable at a bigger level, andso that really involved tech
transfer from universities,designing some experiments that
we thought could add a lot ofvalue, and then building the
rest of the story so we could goout and pitch it to, you know,
(12:12):
later stage investors who areready to fund later stage work.
And so the first project thatwe did was Cyclos Vision, and
this was founded, you know,right about that time, 2016.
Um, cyclas Vision, and this wasfounded, you know, right about
that time, 2016.
And it was, uh, you know I hadthe great pleasure of working
with um Jay and Maureen Knightsfrom the University of
Washington, who had thisterrific um technology for
(12:34):
myopia and um, basically, theyhad, you know, developed this
hypothesis about how myopiaworks, and they had even done a
very early clinical test withkids wearing special glasses
that could slow down theprogression of myopia works, and
they had even done a very earlyclinical test with kids wearing
special glasses that could slowdown the progression of myopia,
and I thought this is prettyinteresting.
Now, myopia people really don'tappreciate.
I think in the United States itdoesn't have quite the
(12:55):
visibility and it's for themarket.
Speaker 2 (12:58):
No pun intended on it .
Speaker 3 (13:00):
Exactly.
We're a little myopic hereabout myopia, um, but when you
get into the field a little bityou realize that this is an
enormous problem in east asiaand singapore and china and
taiwan and japan, where almosteveryone has nearsightedness and
one in five people, by the timethey turn age 18, have severe
nearsightedness that can lead toocular complications and other
(13:22):
kinds of retinal problems laterin life.
And so um, cyclist visionCyclas Vision was a terrific
project.
You know, my co-founder,michael Furtick, came from the
tech world and we started thiscompany together.
We licensed the technology fromUniversity of Washington and
built a company, ran a phasethrough trial which was really
successful, and um ended upselling the company to Cooper
(13:43):
Vision, then spun it back outinto a joint venture, a
standalone joint venture withEsselor Luxottica.
Product's been very successfuland is selling very well in
China and ultimately helpingkids see better, which is so
gratifying.
So really credit to Jay Knightsand Maureen Knights and their
team at University of Washingtonfor having the vision to create
(14:06):
that product.
You know, after Cyclops we'vedone a couple of more companies
that are really in thisformation.
You know, spirit of putting thefirst capital, transferring
technology from the universityto the company, building the
company and trying to get itthrough the initial stages.
(14:27):
One has been Genesance, andwe'll talk about that.
The other is, as you mentionedin the introduction, a separate
project for Glaucoma coming outof Trinity College of Dublin,
and so both of those have beenmajor focuses for, for for for
me for the last several years.
Speaker 2 (14:45):
This uh, the, the greater mission to uh apply gene
therapy solutions to broadindications that are outside the
realm of where gene therapieshave lived for so long in, like
ultra rare and rare diseases.
Is that part of the?
Uh, I don't know.
Is that part of the I don'tknow?
(15:05):
Is that part of the thing thatenergizes you?
Speaker 3 (15:08):
Yeah, it's really been a, you know, a long term,
you know, interest and an ideaand hypothesis and hope that we,
you know, could bring geneticmedicines and gene therapy to
major public health problems,right?
So you think about, you know,gene therapy.
Well, it's like right in thename, gene therapy, genetic
disease, and so a lot of peoplewere sort of having this
(15:30):
one-to-one correlation of genereplacement, genetic disease,
mendelian, you know, trait, andthis has been, you know,
successful for a lot ofcompanies, a lot of investors
and patients, but not a lot ofpatients, right?
So, because these areas are,you know, very severe, high in
(15:51):
need, but tend to affect fairlymodest patient populations, and
so, you know, even going back toAvalanche, the idea was, you
know, we know that this targetis important, but delivery is a
problem.
So how can we get away frominjections into the eye every
four weeks for the rest of yourlife?
(16:11):
Wouldn't it be nice to havesomething that lasts longer?
And can gene therapy be used asa biofactory, if you will, to
create the protein?
You know?
We say, instead of making it,you know, over in South San
Francisco in a big bioreactorand then splitting it up into
millions of patients, can weinject something in one
patient's eye and have thosecells themselves make the
(16:32):
therapeutic protein thatcontinues to last.
And so that's been a hypothesisfor you know, a long time.
And I think there was at firstresistance, which is
unfamiliarity with this idea,because gene therapy and genetic
disease sort of went hand inhand.
But as people started to thinkabout you know we've learned so
much about the manufacturing,the regulatory, the quality
(16:54):
control, the immunology of thesegene therapy vectors how can we
sort of leverage all of thosetools into major diseases that
affect a lot of people thatstill have very high end need.
So certainly osteoarthritis is,you know, leads that list.
Drug delivery to the joints isvery, very difficult.
(17:15):
And recombinant proteins orsmall molecules, whether you
inject them in the joint theyquickly leave the joint.
If you inject them systemicallythey really don't reach the
joint in very highconcentrations.
And so how do we sort of flipthat narrative into a local,
long lasting delivery followinga single injection?
And so you know it was AnitaCaravalla, who's our co-founder
(17:38):
at Genesance, who had becomefamiliar with this project when
she was at Pittsburgh Universityof Pittsburgh in graduate
school and sort of brought thisidea of.
You know we're interested ingene therapy for comedies, can
we do this in joints forosteoarthritis?
And so we, you know, workedwith Chris Evans, who had moved
from Pittsburgh to the MayoClinic, and his other longtime
collaborators, Paul Robbins andSteve Ghazani, to take the
(18:02):
technology that they've workedon so long in terms of the
molecular mechanisms ofosteoarthritis into a commercial
entity and be able to bringthat forward in terms of real
development.
Speaker 1 (18:15):
Part of it came from the University of.
Speaker 3 (18:16):
Florida as well.
That's right.
So Steve Guzzani had gone fromI mentioned.
Chris Evans went from Pitt toMayo Clinic.
Chris Evans went from uh pit tomain clinic.
Um, his longtime postdoc wentfrom pit to university of
Florida and had um, in largepart actually been attracted to
be a Florida because the vetschool has a very active um
equine uh research program andso, um, you know, it turns out
(18:39):
that horses actually getnaturally occurring
osteoarthritis which turns outto be the closest thing to the
human disease, that that we seein the preclinical world.
And so that the ability to youknow model that in horses and
then um, and use that largeanimal model and I think that's
been a really a key successfactor for gene therapies is the
(19:03):
ability to scale up inpreclinically so that then we
can just scale over.
And you think about the earlyexperience and you know, leprous
congenital hemorrhosis forlexterna or in, you know, with
the hemophilia products, wherethose were, you know, proven out
in large animal models beforegoing clinical, and that was
sort of the ability to you knowreally learn a lot um with these
(19:24):
preclinical models.
So you weren't kind of scalingup and moving into humans at the
same time.
You were doing it, you know,sequentially, and I think that's
been a key success factor forthe field.
Speaker 2 (19:40):
My quick aside here.
My daughter had a show horse, aquarter horse, when she was
very little.
The mare developedosteoarthritis and I took the
horse to the Cleveland EquineClinic and had images taken and
the veterinarian came out aftertaking the images and said the
good news is this horse'sarthritis is so progressed that
it doesn't know which leg tolimp on, so you can't tell that
she's limping half the time.
(20:01):
And she's very safe for yourdaughter, because she's not
going to want to jump, so youprompted that story.
Speaker 3 (20:07):
No, that's exactly right, it's very common Lameness
in a horse is a huge issue.
Common Lameness in horses is ahuge issue and of course it's a
large weight-bearing joint, justlike humans with hips and knees
have large weight-bearingjoints.
That you know, unfortunately,over time degenerate, right,
it's one of the most commondegenerative diseases.
It's just that it's local inone or more joints.
You know, as we age and, ofcourse, brought about by, you
(20:31):
know, like many diseases ofaging.
You know complex etiology.
But we think that by blockinginterleukin-1, which is the lead
inflammatory actor and alsocauses cartilage degeneration In
fact the original name for itwas catabolin because it
catabolizes tissue that byblocking this important central
bad actor that we can hopefullyhave an impact for patients that
(20:52):
we can hopefully have an impactfor patients.
Speaker 2 (21:01):
You you, when you take a genetic therapy to a
common condition likeosteoarthritis or glaucoma for
that matter do you face some ofthe same, like logistics and
distribution and supply chainchallenges that the field has
been struggling with for yearsnow, or is the manufacturing and
distribution paradigm somehowdifferent?
Speaker 3 (21:21):
So it's interesting.
I think in some ways it'seasier and in some ways it's
much harder because there arevery different dynamics in place
.
So when you think about asystemic application of gene
therapy, you know these areoften dosed at, you know, five
times 10 to the 14th vectorgenomes per kilogram, right, so
that could be, you know, doingthe math.
(21:44):
I mean one times 10 to the 16thtotal vector genome particles,
right, or more.
That's a lot of vector tomanufacture and the cost of
doing that is very high and andthese are rare diseases.
So it's justifiable to chargehigh prices because you're
(22:04):
having a huge impact on thepatient's um, you know, health
and outcomes and lifespan, andso all you know, whether it's a
gene therapy or protein therapy,rare disease medications are
more expensive, right.
But when you are looking,thinking about bringing this
forward to a very common disease, you face a totally different
(22:25):
pricing.
You can't charge three milliondollars for a product and you
wouldn't want to be completelyeconomically infeasible.
And so the idea is OK, if we,if we want to charge something
that's a five figure price taginstead of a six or seven figure
price tag, how do we go aboutdoing that?
Well, one of the things is thatthe cost of goods needs to be.
(22:47):
You know, in order to be abusiness, the cost of goods
needs to be much lower of goodsneeds to be much lower.
So you know, thinking aboutthat, systemic doses and common
diseases are currently, you know, not workable because the
systemic dose costs six figuresto make.
You can't sell for five figures, that's not a business.
But you know, the diseases thatwe've worked on, whether
(23:10):
they're ocular or whetherthey're intra-articular
injection, are far lower doses,like 10,000-fold lower, than a
systemic administration and thatmeans that cost of goods are
very approachable if we scale inthe right way that we can get
it down to the four figures ormaybe the high three figures in
terms of the cost of makingthese therapies.
(23:31):
So at the same time I think werun into other sort of new
challenges, right?
So when you're charging a veryhigh price for a drug, you know
the way that these companies forrare diseases currently think
about distribution is they workthrough distributors to kind of
take orders, but oftentimes theyship directly, you know, on dry
(23:52):
ice or on liquid nitrogen, to atertiary academic medical
center who has all the hospital,pharmacy and facilities to be
able to receive that, to storeit for as long as they need and
then to administer it to thepatient, and the several
thousand dollar cost of doingthat shipment is inconsequential
right to the price and theoverall cost of the medicine.
(24:15):
I think in common diseases, youknow, we're facing a very
different kind of a dynamicwhere, if we're trying to make
it and deliver it to the patientfor, you know, $1,000, a $2,000
shipping cost is completelyimpossible and infeasible, right
?
So what that means is that youknow we need to do this through
(24:35):
sort of a traditionaldistribution pathway, like
biologics, you know, likeLucetis, which I worked on in
Genentech, are distributed todayand the cost of doing that is,
you know, much more to the uniteconomics.
But that being said, we don'texpect that every single, just
as an example, every singleclinic will have a minus 80
degree freezer, and so, you know, generating the kind of
(25:09):
stability data that will let us,you know that's compatible with
, you know, are overcoming orhave overcome on the way to, you
know, delivering on the promisefor gene therapy for common
diseases.
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On the business of biotech, theregulatory paradigm occurs.
(26:26):
It occurs to me that there'sgot to be a challenge there too.
Like regulatory bodies that are, you know, that are evaluating
or prosecuting genetic therapiesfor rare disease, ultra rare
disease, disease, ultra-raredisease, I'm assuming tend to be
a little bit more liberal thansomeone who comes along and says
(26:47):
, hey, we're developing a genetherapy, uh, that for an
indication that has a giantpatient population.
I can imagine the agencieswould be like all right, let's
pump the brakes here a littlebit like.
This is a modality that we, youknow we haven't necessarily
seen a lot of broad patientpopulation applicability Also.
Speaker 3 (27:04):
I mean yes and no, so I mean you think about rare
diseases and the bar is, youknow, I don't want to say
necessarily lower, but certainlyit's infeasible to run multiple
large trials in rare diseasesbecause there aren't enough
patients to recruit or find ortreat, and so certain, and you
know, the risk of mass exposureto huge populations isn't there,
(27:27):
right?
And so the idea of a raresafety event, you know, becoming
a major public health problemjust doesn't really exist.
And so that framework for rarediseases is, you know, sort of
over here.
Right, the framework for commondiseases has existed for a long
time, you know, with smallmolecules, with biologics, et
cetera, and it is feasible to do.
(27:49):
You know large studies and itis certainly, you know, going to
be used in large populations.
So, yes, fda and EMA and otherregulatory agencies want you to
characterize those.
You know the safety profile, inother words those adverse
events, and you know the safetyprofile, in other words those
adverse events, and you know,but to say that products like
this haven't been used in thosepopulations, I mean that's not
(28:10):
quite right.
When we think about what was thefirst gene therapy, you know it
was probably the polio vaccine,right Back, you know, and this
is given to millions of healthypeople, including kids, and so
the bar for vaccines being verybroadly distributed and healthy
(28:31):
people rather than sick patientsis very, very high.
Right, probably rightly so, yeah, and so I think probably the
gene therapy for common diseasesis somewhere in between.
These are sick patients, butit's a large population, so of
course we have to gocharacterize them, I think you
know, of course it's.
You know the office of OTPwithin CBER, you know, has their
(28:56):
own way of doing things that'sseparate from the device
division and separate from thedrugs division, and so you know
we're in the process, the genus,of going to talk to the agency
this year about phase two designand sort of future development
program, and so I think we'lllearn more.
There are phase three programsthat are, you know, in large
indications, for example formacular degeneration, and we're
(29:19):
entering phase two.
So we're going to learn moreand more about how regulatory
agencies are thinking aboutthese uncommon diseases.
But the framework is sort of,you know already laid out by
vaccines and by other majorindications.
You know where biologics andsmall molecules have come before
us, yeah.
Speaker 1 (29:34):
Do you have a sense of how large your phase two will
?
Speaker 3 (29:37):
be.
So we, the phase two in youknow for for genisants is really
going to be designed to provideclinical proof of concept, so
that's a pain and function study.
We'll also look at structuralendpoints, so we'll look at MRIs
of how the joints are doing,and so we think that's going to
be about 250 patients in thisphase two.
So certainly not tiny, butcertainly not huge either.
(30:00):
I think you certainly can studyin a well-designed pain trial.
You can certainly see clinicalsymptom improvement in
osteoarthritis patients with OAof the knee.
Speaker 1 (30:14):
As you're talking to investors and you're gearing up
to launch a clinical trial whatdo you see in terms of the
financing environment?
And I guess, what questions doyou get from investors when
you're telling them we'redeveloping a gene therapy for an
indication like osteoarthritisfor the knee?
Speaker 3 (30:33):
Well, certainly from an investment perspective, these
last two to three years havenot been what the previous seven
or eight years were, right, andI think everybody recognizes
that the investors are becomingmore selective.
The market's been down,interest rates have been high,
whatever the sort of you know,drivers of the market have been.
You know it's been moredifficult to finance companies
(30:56):
privately, it's been moredifficult to do IPOs and prices,
you know, and valuations aredown right.
And so I see that as aninvestor and, of course, you
know, as an operator andentrepreneur as well.
I think you know investmentgroups are different, right, and
they all have different theseson, and that's wonderful because
they have different ideas ofwhat the future holds.
(31:17):
Some investors are going to say,you know, osteoarthritis, not
for me, it's a very difficultarea.
And some are going to say,osteoarthritis, not for me, it's
a very difficult area.
And some are going to say, wow,this is the biggest opportunity
in all of biotech.
Why?
Because when you're puttingtogether a huge patient
population 32 million Americanswith osteoarthritis, 1.2 million
(31:38):
new cases of kneeosteoarthritis every year, huge
patient population together witha massive unmet need there are
no therapies, right.
All we have is pain control andsort of temporary
symptomatology, nothing reallytreats the underlying disease,
and so these two things togetherreally drive an enormous
(31:59):
opportunity space, and so that'swhat got us excited.
Hey, people have been trying toblock this target for a long
time.
No one's been successful.
We think we can do this withgene therapy, and now, with the
latest clinical data, we'veshown we can express this at the
target levels in thesepatients' joints for the long
term.
So what's next?
Okay, we need to run a properphase two to really show the
(32:22):
value of it.
Speaker 1 (32:24):
From your seat as a CEO, and then also from an
investment and investorperspective.
Are you optimistic this yearabout public markets, about cash
coming into biotech?
What's your, what's your readon 2025?
Speaker 3 (32:39):
I think it's too soon to tell.
I mean, obviously there's beena lot of chatter in the hallways
, you know, this week JP MorganHealthcare Week in San Francisco
about.
You know, is 2025 looking moreoptimistic?
I think that was the headlinethis morning.
You know that sort of dealannouncements have driven sort
of a more upbeat tenor.
I've heard other people saythis feels a lot like 2023 and
(33:01):
2024.
So I don't know, I won't lookinto my crystal ball too hard.
I'm sort of certainly hopefulthat inflation coming down,
perhaps interest rates comingdown and the market's sort of
back to normalizing andrewarding innovation Certainly
hope for that on all our behalf.
Right in the biotech industry,that 2025 will be a great year.
Speaker 2 (33:25):
You mentioned the.
You know you're talking aboutthe investment community and the
.
You know different appetitesamong different investors just a
few minutes ago, and it seemsto me that when things are tight
and tough, like the company youkeep, becomes all the more
important Finding thoseinvestors who do get excited
about an opportunity like this.
(33:46):
So this is a broad question,but what advice would you give a
biotech builder on, you know,turning over the right rocks to
find an investment partner,tough times or otherwise?
Right, because you don't wantthe wrong investors either, when
things are flush, when there'smoney to be had.
So what advice do you offeraround finding the right
(34:07):
investor for your specificapproach?
Speaker 3 (34:12):
I guess you know this is a great question.
There's a few things I'd sayyou know.
One is that you never reallyknow who your investors are
going to be and you canhypothesize that this is a great
strategic fit for this fund orthis company.
And I find that you know veryrarely are you, is that have a
strong predictive value, right?
What you think someone shouldbe interested in, you know
(34:34):
doesn't necessarily correlate towhat their internal discussions
you know are mapping out thestrategy for that company or
that fund.
So you know, therefore youreally don't know what meetings
are going to be useful.
So take meetings, because youmay learn something, you may get
an introduction, you maysomething may surprise you.
Another thing is that you knowit's easier if investors declare
(34:58):
themselves, right, and sogetting out there at academic
conferences to talk about yourscience, putting press releases
out to say you know, here'swhere we are Sort of being open
about, and broadcasting, youknow this is where we are and
kind of what we're working on,what we hope to do, actually
will help investors who areinterested declare themselves,
and that's easier than reachingout to, you know, hundreds or
(35:21):
thousands of different funds,and so sometimes that's a, you
know a good strategy.
I'd say you know, in terms ofyou know who are the right
investor partners.
In my experience it's very hardto predict.
You know, going in and sort ofjust by the tenor of you know
the conversations, what thoserelationships are going to be
(35:41):
like.
You know four years down theroad, when things get tough
right.
That's actually quite hard topredict, but it is possible to
align incentives to some extentand sort of pick investors who
are going to share incentives.
So if you have a long-termstrategy and you need investors
that are going to be there for awhile, pick someone who has
(36:03):
that long-term mindset that canbe patient capital that's not
going to want you to.
You know, do an IPO in sixmonths, right, I think it's.
I think it's possible to sortof align those incentives.
Um, obviously you know people'sreputation.
Talk to other companies thatthey've worked with in the past
and sort of get a read on.
You know what was?
What was this investor likewhen things were going great?
(36:25):
What were they like when thingswere going not so great?
How helpful were they in termsof, you know, helping you
overcome your challenges?
And so you know, certainly thoseare all helpful and you know,
look, it's kind of fancy toprognosticate and say, oh, this
is exactly the type of investorthat I want to have in this
(36:46):
company, but at the end of theday, like you have to eat the
food that's on the table and soyou know, if every company we're
so lucky that you know we have,you know 20 different.
You know sets of opportunitiesto choose from and you can
optimize who you want to workwith, like, wow, amazing, that's
wonderful.
In my experience that's notevery time.
Yeah Right, that's that's alittle bit of a rare moment, um,
(37:07):
or a rare company, and so youknow often a deal's available
and that's the one you're goingto do, and I think you know most
entrepreneurs will realize youknow that's that's kind of the
real policy of you know, uh, youknow biotech, entrepreneurship
and and, and you know, earlystage um stage, raising capital.
Speaker 2 (37:25):
I like the use of the word fancy there.
Speaker 3 (37:28):
It's kind of fancy.
Speaker 2 (37:29):
Let's not get too fancy right.
Speaker 1 (37:31):
I have a similarly broad question that I wanted to
ask based on something you saidearlier.
I think you got to know theBoston area ecosystem through
Unchorus and you mentioned youwanted to come back to San
Francisco.
What do you like or dislike?
I guess?
How would you compare Bostonand California for a biotech
(37:53):
company that's looking forfunding or that's doing science?
Which do you like better andwhy?
Speaker 2 (38:00):
I'm going to jump in before he responds.
He's a native Californian.
He's a Menlo Park guy.
So he's probably going to giveyou a biased response.
Just like just like you had towork University of Florida into
your question earlier, Ben's anOrlando guy.
He was getting a shout out tothe home state there.
Speaker 3 (38:16):
Well, I mean, so you're, of course, you're
absolutely right.
So I'm from California, I'mfrom Menlo Park originally and
you know sort of companies thathad grown all the way up from
(38:40):
startups to commercial.
You know large pharma,commercial entities, right, and
that was certainly true, youknow, 10, 15 years ago, probably
more true here than it was inBoston when we were kind of
getting around the time, we weregetting out in Coruscant.
But look, the Boston ecosystemhas just grown so enormously
(39:03):
with big pharma setting up shopthere, with university
collaborations, and one of thedelights about being in Boston
is that it's all extremelyconcentrated in kind of Kendall
Square area.
And then of course you have youknow other businesses that are
out in, you know Waltham andother areas, but there is such a
vibrant biotech community, youknow in Boston tech community.
(39:29):
You know in Boston Um, at thesame time I, you know Palo Alto
still has such an amazingentrepreneurial uh, ecosystem
and vibe, and I think you knowone of the um.
I was asking you, you know inthe in the elevator right up, if
you watch the HBO show SiliconValley, because it's this just
incredible um sort of, you knowart imitating a life parody of
Silicon Valley, and you watchthat show.
You know living here and yourecognize all these patterns
(39:52):
right, and there's a real joy tobeing an entrepreneur in this
area because the ecosystem is sorich in terms of all the
supporting elements, but alsobecause I think, you know,
people are really um sort of,you know, culturally rewarded
for taking risks and rewardedfor thinking big and thinking
(40:13):
bold and being brave, and sothat's, that's a you know we're
we're incredibly lucky righthere in in in the Bay area and
Silicon Valley, to um be part ofa culture that says, yeah,
that's possible.
Let's, let's dream about aworld where that could be true.
Speaker 2 (40:30):
Does Silicon Valley have the tech bio leg up on
biotech in Boston?
Do you see a differentiationthere in terms of the approach I
mean?
Speaker 3 (40:38):
perhaps because there's so much technology and
AI and so many engineers hereand so many tech investors are,
you know, in this area.
So you do see a lot of thingshappening here and every wave of
the newest thing sort of seemsto always be in San Francisco
and Silicon Valley At the sametime.
I mean, of course, you have,you know, incredible, you know
(41:00):
computer scientists you knowcoming to MIT and Harvard and in
Boston as well, and so I do seea lot of you know kind of
research and platform companiesyou know coming out of the
Boston area that are just youknow, just absolutely
tremendously innovative.
Speaker 1 (41:16):
Yeah, I haven't seen the statistics for 2024, but I
know for a number of yearsrunning, Boston has held the top
title for NIH grants.
So the NIH science grants youknow for, yeah, you have MIT,
you have.
Speaker 3 (41:29):
Harvard.
You have all the hospitalsthere as well.
So it's, I mean, it's atremendous ecosystem and you
know, in the Bay Area it's bigbut it's awfully spread out.
So I think that's.
You know, if you talk toemployees, they're probably
frustrated by the long commutesin the Bay Area versus jumping
on the red line, you know, to goto Kendall Square.
Speaker 1 (41:45):
I noticed coming up 101 from the airport and I
didn't remember this and maybeit was cloudy the last few times
I've been through.
But there are a ton of bigpharma buildings right there in
South San Francisco.
Is that newer, or have they hadshops there for a?
Speaker 3 (42:01):
while Well, genentech certainly has for a long time,
and then, I think, throughacquisitions, others have built
presences there.
Speaker 1 (42:09):
I mean big name companies with their names on
top of big buildings along 101there.
Speaker 2 (42:15):
Yeah, let's reel it back into Genesance and get a
little bit of a sense for whereyou are right now and what the
next significant inflectionpoints might look like.
Speaker 3 (42:26):
Sure, so, um, so Jansons, uh, you know, as I
mentioned, is developing aproduct for osteoarthritis that
blocks interleukin one, which isthe major bad actor.
Um, and this is a response forpain and inflammation, but also
for cartilage degeneration.
And so, um, the initial firsthuman study was run by Chris
Evans at Mayo clinic and thiswas back in, you know,
(42:47):
approximately 2022.
And then we Genesance was, youknow spun that technology out
and completed our Series A, andthen we got a serum grant from
the California Institute ofRegenerative Medicine, and those
two you know financingstogether allowed us to progress
into the next stage, which was aPhase 1B clinical study.
So we call it Donatello, inkeeping keeping with the
(43:09):
renaissance theme of genasanceand the idea.
You know there were a coupleobjectives.
One was to it was dose rangingwith and without immune
conditioning, because so manygene therapy protocols have some
kind of immune conditioning,whether it's with steroids or
biologics, to see if you canimprove safety and efficacy of
(43:30):
the gene therapy by modulatingthe immune system.
So nobody had tried this in thejoint before.
So we were quite innovative,thinking about gee.
Is there a role here forimmunosuppression?
We didn't have any in the phaseone.
The first demand at Mayo Clinic, should we bring that forward
to the phase 1b and test whetherwe can get any insights?
And so we started that studylet's think about this in 2023
(43:57):
and began enrollment toward theend of 2023.
We completed enrollment and nowwe finished the six-month
follow-up.
We announced the data from thatfollow-up just last week
leading up to JP Morgan.
So that was six-month data andthe conclusions are really it
(44:19):
was safe across all doses testedand regardless with and without
the immune conditioning andwhether that immune conditioning
was a short course of oralsteroids or whether it was a
very brief course of oral withan interarticular injection of
steroids, and so it was welltolerated across all of those
(44:41):
cohorts.
An increase in the transgene,which is interleukin-1 receptor
antagonist to our target levels,in the synovial fluid, so
inside the knee joints of thesepatients.
So throughout we were samplingthe synovial fluid from the
patients to test that in aqualified clinical assay, are we
seeing levels of the transgene,the IL-1RA increase?
(45:06):
And the answer was yes, it wasgetting target levels and it's
lasting six months.
So that's terrific news.
So now we know we can have thepharmacodynamic effect that
we're looking for, and what'snext is to say, okay, we know we
can intervene in this pathway.
It's been a longstandinghypothesis that interleukin-1 is
(45:26):
important in OA symptoms anddisease progression.
Now can we bring that forwardinto a proper clinical proof of
concept study, looking at painand function and starting to
look at joint structure to seedo patients improve
symptomatically and can thatlast long-term following a
single injection?
And what's happening?
(45:49):
Start to ask the question as anexploratory implant what's
happening to the joints of thesepatients over time?
Are they actually improving interms of inflammation and are we
seeing a trend towardimprovement in cartilage and
other markers of diseaseprogression of mri?
Uh, so we're we launched aseries b to try to um fund that
(46:12):
study and so you know very, veryin the early stages of that and
so you know hopefully um we'llget some good feedback from
investors in the coming weeks.
Speaker 2 (46:21):
Uh, we also have a plan to to go talk to fda about
um, about what's next yeah, uh,that's a beautiful segue into
what you're doing here this week, like specifically what you're
doing here this week.
We all know what we're doinghere this week.
What are you doing specificallyhere this week to, uh, perhaps
contribute to that?
That uh series?
Speaker 3 (46:40):
B, certainly doing a lot of walking around, but at
least it's not raining orhailing this year, which is an
improvement.
Speaker 2 (46:47):
The sunshine has been more than welcome.
Speaker 3 (46:54):
So, you know, certainly spending time with
investors, but I would say youknow a lot of investors these
days tend to want to meetoutside of this week because
they're so busy with, you know,portfolio companies.
So most of our you knowinvestor meetings are sort of
next week and the following week.
We also like to use this weekas an opportunity to talk to
strategic partners that you knowmay be more diffuse in the
ecosystem, you know, coming fromEurope or coming from you know,
(47:16):
different parts of the U?
S, and also to catch up with,um, you know, folks who have
been following our story, tokind of give them an update.
So, um, a little bit ofeverything and more to come.
Speaker 2 (47:29):
Yeah, yeah, excellent .
Well, it's a great place to bedoing a little bit of everything
and and uh, working towardsthat more to come and I, like I
said I I know this is anincredibly busy week for you, so
I appreciate you spending atleast a small chunk of it with
us.
Speaker 1 (47:43):
Absolutely, it's great to be here.
Yeah, thanks a lot.
I appreciate it.
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