FDA Trials And Tribulations With Connect Biopharma's Barry Quart

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On this week's episode, Barry Quart, CEO of Connect Biopharma, weighs in on the current state of engagement between drug developers and the FDA, and how that key relationship continues to evolve under new leadership. Barry also discusses moving the company from China to San Diego, why a U.S. financial reporting structure helps attract investors, and how Connect is finding the white spaces in respiratory disease -- the company's lead candidate is a biologic drug targeting acute asthma and COPD exacerbations. 

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Episode Transcript

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(00:43):
Welcome back to the Business ofBiotech.
I'm your host, ben Comer, chiefEditor at LifeScienceLeader,
and today we're speaking withBarry Cord, ceo at Connect
Biopharma, originally a Chinesebiotech that has now moved to
San Diego.
I'm excited to speak with Barryabout ConnectBio, which is
developing an intriguing productcandidate an antibody targeting

(01:07):
acute asthma and COPDexacerbations, and to learn
about the challenges andbenefits of moving ConnectBio to
California.
We'll also delve into Barry'spast experiences as a leader of
regulatory affairs at BMS andPfizer and get his take on the
inner workings of the FDA.
Past and present.

(01:27):
Barry is a biotech founder andCEO as well.
He co-founded and led ArdiaBiosciences and invented a drug
for gout, before selling thecompany to AstraZeneca for over
a billion dollars.
All told, barry has overseenthe FDA approval of nine drugs
to date and hopes to make it to10 at Connect Biopharma.

(01:50):
Barry, thanks so much for beinghere.

Barry Quart (01:52):
Yeah, my pleasure Thank you for that great
introduction.

Ben Comer (01:55):
What led you into the biopharmaceutical industry?
Initially, I think you startedout as regulatory affairs
manager at BMS.

Barry Quart (02:05):
Yeah, actually when I started it was still just
Bristol-Myers, so I hate to datemyself and it was in clinical
research.
So I've had the opportunityacross my career to be involved
in many aspects of the drugdiscovery development area, went
into regulatory affairs andreally was a tremendous

(02:30):
experience in terms ofunderstanding really the nuts
and bolts of drug developmentand how to maneuver products
through the FDA, although I willsay the FDA of the early 80s
and 90s is definitely differentthan the FDA that we have today,

(02:51):
both on the good side and thebad side.
It took forever to get drugsthrough the FDA process in the
70s and 80s, before PDUFA, wherethey had a time limit on how
long they could take.
It would literally take themover a year to open the boxes

(03:14):
before they started evenreviewing the application.
So it's been a very interestingprocess to see how the FDA has
evolved over those years and Ithink one of the things that's
unfortunate in the current erais that the pharmaceutical

(03:34):
companies, biotech companies,don't have the opportunity of
relatively frequent interactionwith the actual reviewers In.
You know, in my early days youcould pick up the phone and call
the reviewer and ask them aquestion so that when you're
designing a study or you have anissue, you had relatively quick

(03:56):
response and could make surethat you're doing things that
will ultimately be successfulfor the product.
Now, now everything has to gothrough their bureaucracy.
You have to go through aproject manager.
You're lucky if you get aresponse.
You're constantly pinging themtrying to get a response.

(04:17):
So you know, while there's atime limit on how long they can
take, the whole process hasreally been changed in what I
would say not necessarily apositive fashion, and now
obviously, we're going throughan even more dramatic change
where you know all I could do ishope that ultimately we get to

(04:40):
a better place.
But you know it's hard to tellright now.

Ben Comer (04:44):
Yeah, you know I want to get back into the FDA in
just a minute, but I'm reallycurious to ask you about, you
know, your departure from bigpharma and into biotech.
You've worked at severalcompanies.
I won't name all of them, butone thing that stuck out to me
on your resume, barry, was yourco-founding and leading Ardia

(05:10):
and your invention of a goutdrug, xerampic.
Is there a story to tell thereabout how that happened?

Barry Quart (05:19):
Yeah, there is a story to tell, so I take a step
back was at a biotech.
My first biotech foray in SanDiego was a company called
Agaron Pharmaceuticals which wasjust drug discovery.
At the time I joined joined wefortunately had a very

(05:43):
interesting HIV proteaseinhibitor that had been designed
by the chemists and the X-raycrystallographers and decided to
develop it ourselves and wetook it from the lab bench to a
US approval in the late 90s andjust over three years, because

(06:03):
we actually had remarkablecollaboration with the FDA who
was working hard to get drugsout to HIV patients, and you
know that was a tremendouslysuccessful, rewarding period of
time.
Unfortunately, what happens isthat then that company got

(06:24):
swallowed up by Warren Lambert.
Warren Lambert got swallowed upby a bigger fish, pfizer,
stayed on to run the La JollaLaboratories for Pfizer, which
basically was my old labs atAgaron, and then it's hard to go
from a small biotech or even amidsize biotech back to large

(06:45):
pharma.
They're just so slow and somany processes.
So I essentially kind ofretired and took a break from
pharma and then had theopportunity to take over a
public shell with my co-founderand bring some technology into

(07:09):
it, and the goal of that whatbecame Ardea was to bring in
some HIV assets, kind ofcontinue on from what I had been
doing at Agaron and bring insome products specifically
focused on resistance.

(07:30):
This was a period of time whereHIV resistance was a significant
issue and so we had theopportunity of in-licensing some
NNRTIs for resistant virus, andan RTI is for resistant virus.
The only issue was is that thedata that was provided us at the

(07:50):
time that we brought it in itlooked like it should be a once
a day or maybe even longerhalf-life, and that's, you know,
the first drugs approved forHIV.
We pushed them through asquickly as we could because you
had 50,000 people dying a yearat that point and the fact that

(08:11):
it might be three times a day,you know, that's OK as long as
it actually, you know, had asignificant benefit to the
patient.
But once those drugs were outand successfully getting
patients, you know, changing afatal disease into a chronic
disease now patients wantedsomething that was less frequent

(08:32):
, easier to take, less sideeffects, and so that's kind of
where the focus was and we werelooking for something that was
definitely once a day, put itinto a phase one study, healthy
volunteers, and unfortunately itwas going to be another at
least twice a day product, andso it was disappointing.

(08:55):
And, to be honest, at thatpoint it was a question of you
know, do we just pack up?
And you know close shop,because you know our primary
opportunity certainly didn'tlook like it was very exciting.
But as I was going through thedata in this Healthy Volunteer
Study, I noted that every personwho got the drug saw a dramatic

(09:18):
decrease in uric acid levels,and uric acid is the underlying
cause of gout.
So that led me to think well,maybe there's clearly some
pharmacology going on here.
Ultimately, figured out, it wasa metabolite of the HIV drug
that was producing this effectof lowering uric acid and we

(09:50):
turned that metabolite intoxerampic.
And it was a period of timewhere it was great, I think,
because it shed light on apretty much forgotten disease.
There hadn't been really a lotof attention on gout, even
though it affects millions ofpatients.
It's just one of those diseaseswhere I think clinicians felt
like this is a self-inflicteddisease.

(10:12):
I'm going to spend my time, youknow, trying to help patients
with you know other kinds ofproblems, even though a lot of
them were self-inflicted at theend of the day.
But with Gowd it was alwaysfelt like you know if you just
followed the right diet youwouldn't have a problem.
But so it was a greatopportunity to develop something

(10:35):
to help a very large populationof patients.

Ben Comer (10:40):
Yeah, I mean, and that's a big pivot you said you
noticed this benefit in a studyof healthy volunteers who I
guess you know had said as partof intake, you know that they
had gout and this was justsomething that kind of popped
out, or that investigators wereraising their hands and saying
you know, yeah, you know, we'renoticing that it's having this

(11:01):
effect.

Barry Quart (11:03):
Actually no, these were healthy volunteers so they
didn't have gout.
But so every, every person hasuric acid.
Uric acid is just a byproductof a breakdown of in the body
and normally in people who havenormal levels of uric acid

(11:26):
people who you know have normallevels of uric acid it gets
excreted through the urine andit's never a problem.
And in people who have gouttheir levels go up too high and
so once you get to a certainconcentration in the blood it
starts to crystallize out in thejoints and basically is a white
powder that is now floatingaround in the joint space and at

(11:52):
certain periods of time duringthe year that produces a very
dramatic inflammatory response.
In that joint Tends to be thebig toe Interesting.
It's kind of colder environment, less solubility of the uric
acid sitting out there at theend of the foot, and it can be

(12:16):
very startling to people becauseit's intensely painful and it's
like I don't remember stubbingmy toe, but it hurts like hell.
And that's the first time.
Usually they get diagnosed withgout, because not that many
people even monitor uric acid.
It's, you know, it's just amarker that ultimately, if you

(12:40):
have gout, you're going toconcentrate on, but otherwise
people pretty much ignore it,and so, since everyone has it,
it was an opportunity to see achange even in the healthy
volunteers, because it was aprofound change.
This wasn't just a modestdecline.
It went down over 50% fromtheir baseline, and that's

(13:04):
something that's noticeable.

Ben Comer (13:10):
Yeah, absolutely.
And so you discovered thiseffect.
You pivoted to developing thisgout drug.
What did you have to dooperations-wise?
Did you have to hire new peoplethat were experts in this
therapeutic area?
Did you have to change, kind ofyou know, your manufacturing
strategy?
What did you have to do?

Barry Quart (13:30):
Well, at this stage of the organization it was
still pretty early and we had,you know, a pretty small group,
so, definitely, from that pointon, any hiring we did was people
who had more inflammatory, morerheumatology experience, so
gouts generally treated byrheumatologists or internists,

(13:55):
and so, yeah, definitely kind ofclosed down the virology group
and, you know, built up theinflammation side of the
organization.
But it was, you know, this wasa pretty small group at the time
, so it wasn't a huge overall.
It was really more of changingfocus, moving word, but, uh,

(14:20):
yeah, definitely, uh, adefinitely a significant pivot.
We went from an HIV-focusedcompany to a gout-focused
company and that was, you know,the challenging part of that was
telling the story to theinvestment community because,
you know, they made a decisionto invest in the company based

(14:42):
on, you know, hiv and the AIDSmarket at the time clearly was
very robust, and now I have togo out and explain.
Well, that was a great idea, butwe have an even better idea now
.
Here's a completely untappedopportunity and with millions
and millions of patients, and wewere successful in raising the

(15:08):
money to develop the product.
Ultimately, you know, toregistration.
As you noted, we actually soldArdia to AstraZeneca while it
was still in phase three.
So they took the bet that thephase three studies would be
successful and wanted to getinvolved early before launch

(15:32):
planning and so they could get asignificant head start and
making sure it had a successfullaunch.
That in and of itself wasinteresting because very shortly
after they made that decisionthey changed CEOs who then he
changed the focus of the companyto and decided primary care and

(15:56):
not that exciting anymore.

Ben Comer (15:58):
We want to be in oncology, we want to be in
immuno oncology, we want to bein immuno-oncology, and so that
whole company pivoted and wewere kind of left with we're not
sure who's going to sell thisproduct.

(16:20):
On therapeutics as CEO andoversaw the approval of four
drugs there, I believe.
I think they were mostlyanti-emetics Is that right?
Maybe an anesthetic as well?
Yeah, so.

Barry Quart (16:31):
I moved out of again once we got taken over by
a large pharma.
Not quite as interesting to runthe company.
We were a wholly ownedsubsidiary.
So I continued to run our DAfor a year but definitely was
not nearly as rewarding asrunning an independent company.

(16:54):
So moved to what was a smallcompany called AP Pharma that
had had several failures ingetting their one drug approved,
which was a long-actinganti-emetic for
chemotherapy-induced nausea andvomiting, and decided to see if

(17:17):
I could help them.
Took over the company, ended upkind of rebranding it to Heron
Therapeutics, ended up kind ofrebranding it to Heron
Therapeutics and ultimately gotthat product approved, that
second one in the same area ofchemotherapy-induced nausea and
vomiting.
And then the first drug, whatwas called Sustol, was based on

(17:42):
their in-house polymertechnology.
So AP Pharma was a polymertechnology company that saw the
pharma companies around it inSouth San Francisco and Redwood
City getting swallowed up forlarge amounts of money and felt
like we'd rather be in thatbusiness than making polymers.

(18:06):
So they, you know, can we takeone of our polymers and turn it
into a drug delivery device?
And one of their polymers wasquite good at releasing drug
over an extended period.
So that first drug, sustol.
They took a short-acting, veryeffective agent and turned it

(18:26):
into a much longer-acting agentfor chemotherapy-induced nausea
and vomiting.
And that was valuable becausethat nausea and vomiting can
last up to five days and in factthere's an initial period and
then there's a delayed period,and so if you just take

(18:47):
something that's going to workfor a day, you can have severe
nausea and vomiting, you know,day three, day four.
So it's important to have thatextended release of the drug.
As I said, we ultimately gotthat approved, which was
challenging because it was a newpolymer, complicated to make.

(19:08):
We had to go through a lot ofhurdles with the FDA.
But once we were getting itapproved, my view was what else
can we do with it?
We've already had to set upmanufacturing.
We've got the FDA to approve it.
The next drug that we put intoit's not going to take anywhere
near as long, hopefully.

(19:29):
And so you know what else canwe do with it.
And we thought you know whydon't we put a local anesthetic
and use it for post-operativepain, where you could put this
polymer into the incision and itwould be like using Novocaine
with a dental procedure blockthe pain at the site of where

(19:54):
it's being generated, but dothat over an extended period,
and most severe pain with asurgical procedure usually lasts
around three days, and if youcan get people past that
three-day period, you know, thentheir pain usually can get
controlled by, you know, tylenol, advil.

(20:15):
You don't have to takenarcotics, and so that was
really the goal.
Can we extend the benefit of avery, you know, commonly used
local anesthetic, bupivacaine?
Make it last long enough to getthe patient past where they
need to take opiates?
Big issue with opiates at thatperiod was really becoming to

(20:39):
the forefront as more peopledying than back in the AIDS
epidemic period, and so thatseemed like a great opportunity
to benefit patients.
If you don't take an opiate,you can't get addicted to it,
and let's see if we can avoidthe need for opiates after

(21:01):
surgery.
And so we took that through thedevelopment process, very
challenging and, I will say,very disappointing in terms of
the FDA's participation, let'ssay, in that development process
and with HIV drugs.

(21:32):
They were very open tocollaborating and giving input
on a very frequent basis, makingsure that we delivered to them
drugs that could get approvedand get approved quickly In
those days the first few HIVprotease inhibitors, which were
the cornerstone of the AIDScocktail HIV protease inhibitors
, which were the cornerstone ofthe AIDS cocktail.

(21:54):
They went through the reviewprocess in just a matter of a
few months because there was somuch pressure on the FDA to get
these drugs out.
So I went to them and said, hey, why don't we work together
again?
That was highly successful.
These drugs obviously savedmillions of lives.
Opiates are killing more peoplethan HIV at the worst period of

(22:19):
the AIDS epidemic.
Let's collaborate and get adrug out there so patients don't
have to take opiates.
And their response at that timewas not interesting, which was
unfortunate, because I think wecould have gotten our drug out
to patients sooner and thatwould have been very beneficial

(22:42):
for patients.
It would have also been morebeneficial for shareholders
because unfortunately, with thedelays at the FDA and you know
manufacturing difficulties, weended up launching that product
right during COVID and launchinga hospital product when

(23:03):
hospitals are basically closeddown to you know elective
surgeries or you know justopening up but you can't get
your reps in because of HIV.
You know prohibitions.
It was problematic and you knowthe product never really got
the best shot at beingsuccessful because of the timing

(23:26):
of launch was just terrible.

Ben Comer (23:34):
And you credit that.
You know the kind of unwillingand granted COVID was going on
and I assume a lot of the agencywas very focused on COVID.
You know treatments but therewasn't the same amount of
clamoring patient groups, others, media really pushing for you
know, a non-opioid analgesic atthat point and as a result maybe

(23:55):
the FDA wasn't acting asquickly on it.

Barry Quart (23:58):
Yeah, there's no question, and this was actually
pre-COVID that you know becauseof the development process went
on for quite a few years.
And yeah, I went to talk to themwell before COVID and you know
it wasn't just us there was.
You can find pictures on theInternet of people who had lost

(24:21):
children or relatives to opiatesbringing a giant heroin spoon
to the FDA and protesting thefact the agency was doing so
little to really deal with theopiate issue except approving

(24:41):
opiates faster than they wereapproving drugs to avoid opiates
faster than they were approvingdrugs to avoid opiates.

Ben Comer (24:52):
Yeah, you know, that's a good point, because
it's not like no one was talkingabout the opioid crisis at that
point in time.
Maybe it hadn't reached itsabsolute height yet, but it was
going in that direction, noquestion.

Barry Quart (25:02):
No question, you know, I think obviously there's,
you know, different internalpolitics at the agency and I'm
sure it's not that theindividuals that work there
didn't care.
Yeah, unfortunately, I thinkwe're going to go even further

(25:27):
with the current administrationtrying to completely
disassociate the FDA from anypotential entanglements with
pharma collaborative effort.
Whether they're obviously theregulator and we're obviously,
you know, working to developdrugs, it's still in the best

(25:56):
interest of patients for us tocommunicate in a collaborative
fashion so that they can tell ushey, we need you to do X, y, z,
and if you don't do that, thenthe likelihood of you're getting
this product approved goes down.
You don't have to follow ourinstructions or guidance, but
that's obviously in the bestinterest of moving the product

(26:17):
along.
But if you don't have that kindof back and forth communication
, then we're just trying to dothe best we can and guess as to
what they're ultimately going toaccept.

Ben Comer (26:33):
Which doesn't benefit anyone patients, businesses or
agency.

Barry Quart (26:38):
Exactly so.
It's a lot of money that youspend answering questions
already, and answering questionsthat you don't need to is, you
know, an additional waste of alot of resource.

Ben Comer (26:52):
I want to come back to the FDA a little bit further
into our conversation, but let'stalk about Connect Biopharma a
little bit First.
You know what, barry.
What convinced you to joinConnect Biopharma as CEO and
what was your due diligenceprocess like?
What kinds of questions did youask before taking the CEO role?

Barry Quart (27:16):
This was an interesting project because I
wasn't really looking fornecessarily going back into
running a public biotech.
At the time the companyapproached me.
They were looking to change themanagement, bring people in
with more development experience, more experience working with

(27:39):
the investment community, and,you know, would I take a look
and I spent three months goingthrough their data, you know,
under CDA and basically kind ofreanalyze their primary trial,
you know, looking at their rawdata and I, you know I've I at
the end of that, felt like thiswas an incredibly undervalued

(28:03):
asset, asset that worked muchbetter than people perceived and
had a unique opportunity tofill a void that really hadn't
been focused on.
And you know I love those kindsof opportunities where you can,

(28:24):
you know, truly change howpatients are treated and, you
know, and produce some verysignificant clinical benefit
across, you know, a largepopulation of patients.
And in this case there's anumber of biologics that have
been developed for asthma andmany that are in development for

(28:45):
COPD, and all of those drugsare solely focused on trying to
reduce the number of asthmaattacks.
We call them exacerbations, butbasically where a patient can be
stable over a period of timeand then all of a sudden has a
hard time breathing and they goto the medicine cabinet, they

(29:09):
get their inhaler.
They use their inhaler and it'snot helping.
And you get to the point whereyou know when you can't breathe,
breathe well, that produces alot of anxiety.
Yeah, and you can die from anasthma attack.
So what happens is you haveover a million people a year

(29:32):
that go to the emergency roomfor an asthma attack.
They're treated the same waythat they were treated 20 years
ago they get a dose of steroidand they get more bronchodilator
a dose of steroid and they getmore bronchodilator.
I'm trying to overwhelm thesystem.

(29:54):
Until they get the relaxationin the lungs and the muscles in
the lungs relax, get air intothe lungs.
Most of those people gettreated at the ER and set home.
People get treated at the ERand set home.
And what we found was is youhave all these biologics that
are being used, but none of themhad ever really been focused on

(30:16):
that acute episode Biologicspeople tend to think they take
days, weeks, maybe months towork Right, maybe months to work
Right.
You're trying to target theimmune system, inflammatory
processes, and that can take awhile.
And so you know, nobody reallytargeted the acute use of a

(30:39):
biologic.
But what I found in the datathat Connect had generated was
one of the things they didreally well was to start looking
early when they startedtreating these chronic patients,
and it showed that the drugworked rapidly.
In fact, as I delved into theirdata, I found that the majority

(31:03):
of the benefit was derived thenext morning after a dose.
So less than 24 hours you sawmultiple hundreds of mil
improvement in airway function,or FEV1, as we call it, which is
a very dramatic improvement inairway function very, very

(31:26):
quickly in airway function very,very quickly.
And that led us to say you know, this is a unique opportunity,
a complete white space.
Nobody's evaluating biologics inthis area.
No biologics are approved andin fact all of the biologics
that are approved for asthma sayexplicitly don't use to treat

(31:51):
an exacerbation.
So it's like, okay, I've gotthe drug that looks like it can
work immediately with dramaticimprovements in what you're
trying to do for an asthmapatient having an exacerbation,
asthma patient having anexacerbation and let's, let's
see if we can't develop this forthat population and it.

(32:13):
You know, we now, just in thislast week, announced that we've
initiated two phase two trials,one in asthma patients, one in
COPD patients, looking at theuse of the drug and in the acute
setting of people having anexacerbation, a goal of showing,
you know, improved airwayfunction, hopefully showing

(32:35):
fewer people that get the drugin the ER, get hospitalized.
If they get hospitalized,hopefully we can show they stay
there less days and then, justas important, we've also found
that people who have had anexacerbation have a pretty high

(32:56):
risk of having another one inthe following weeks.
And that's a key issue from ahealth economic point of view.
Because if there's anything Ilearned from trying to sell
drugs in the hospital is thatit's not always how much you're
benefiting the patient.
It's you have to show thehospital why it benefits them.

(33:18):
Yeah, they're the ones payingfor that drug.
It gets covered under theirsingle bundled payment and if
you can't show them why there'svalue to the hospital, it almost
doesn't matter that you'rebenefiting the patient.
So showing a health economicimprovement is really critical

(33:41):
and we found that quiteinteresting.
That patient goes into the ER,they get treated, the hospital
gets a single bundled paymentfor that visit.
So it covers everything coversthe drugs they get, the doctor
et cetera and that covers thatpatient for a month.

(34:02):
So if the patient comes back intwo weeks, three weeks, with
another exacerbation, hospitaldoesn't get paid again.
So they actually have a vestedinterest beyond just good health
care to not have that patientcome back.
And if you have almost 50% ofpatients having either a

(34:24):
worsening of that indexexacerbation or a second
exacerbation during thatfour-week period, you have a
great opportunity of showing ahealth economic benefit that
will help convince the hospitalthat oh yeah, I'm going to use
this drug because it benefits me.
Yeah, it's good for the patient, but it benefits us too, and

(34:48):
that's really important.

Ben Comer (34:50):
Yeah, and this is ratamicobart that we're talking
about.
That has just entered two phasetwo trials.
It's targeting acute asthma andCOPD exacerbations, but it's
not competing with somethinglike albuterol, a rescue inhaler
.
But can they be used togetherand you alluded to the fact that

(35:12):
those don't always work whensomeone's struggling to breathe
Can they be used together?
But I guess clarify first thatthey're not competing with one
another, correct?

Barry Quart (35:51):
Correct.
So you know definitelysomething I've learned over the
years the fastest, mostexpedient way to develop a drug
and get it approved and get itused is to add it to standard of
care, as practice doesn'tchange that fast and it's a
pretty high hurdle to get it tochange.
So if you can show, hey, here'sstandard of care, here's adding
our drug, a dramaticimprovement for that patient,
that's the best way to get drugsout to patients and get them
used.
So yeah, our our approach isyou have patients coming into
the ER that they get thestandard of care, they'll get

(36:14):
that steroid, they'll get moreinhaler.
But we even know with thatstandard of care, half of them
are going to get either worse assoon as they leave the ER or
have another episode within afew weeks.
So our approach is thesestudies are blinded, randomized

(36:37):
trials.
Patients will get ratamicobaror placebo on top of standard of
care and we'll be able to lookat improvements in airway.
How many people have arecurrence?
Do we get them out sooner?
So we're benefiting the patient, hopefully, and the facility,

(36:58):
and that will help ultimatelyjustify approval and use of the
product.
But definitely the standard ofcare is the backdrop.
No problem using it along withinhalers and truthfully we think
there's a good rationale forthe fact that it'll make the
inhaler work better, thatthere's some potential kind of

(37:19):
synergy there.
So you know, we hope to be ableto show that as well.
But just to also point out thatthe drug's already been in a
chronic asthma study.
You know, 24-week study showedvery good improvements in airway
, very good reduction ofexacerbations, the endpoint that

(37:42):
you use for chronic studies.
So the drug can clearly be usedchronically and it's not to say
that we're not interested inthat market.
But our target right now isthis complete white space where
nobody has developed a drug todate, and that is for the acute

(38:04):
exacerbation.
Ultimately, down the road Icould easily foresee this drug
being used acutely and thenpatient does well, clinician
keeps along.

Ben Comer (38:17):
I think it was an important point that you made
that I just want to underscoreabout the time it takes to
change the standard of care.
I mean particularly when youhave a generically available
inhaler and it goes back toopioids as well for pain.
When you have a very cheap andeffective drug as the standard

(38:38):
of care, it makes it that muchmore difficult, despite the kind
of benefits profile of a newproduct sometimes.

Barry Quart (38:49):
No, you're absolutely right.
I mean, going back to theopiate issue, we demonstrated
that our drug, which ultimatelywas launched and called Zinrolef
, that that product producesmuch greater pain reduction than
opiates.
You can take as much opiate asyou know under the you know

(39:10):
prescription.
Can take as much opiate asyou're you know, under the you
know prescription guidelines onhow much opiate you're allowed
to take in a day.
You can max out and you stillwon't get the same level of pain
benefit as you got from ourdrug.
But getting surgeons to use itwas challenging because they're

(39:31):
used to using opiates.
It's like, well, I mean,patients do fine, I just give
them a short course, nobody getsaddicted and everybody's fine.
It's like, well, here's thedata that shows.
You know that we produce farbetter pain management and if
patients have better painmanagement they can do more
physical therapy.

(39:52):
They, you know, heal better itwas.
It's an uphill battle to changehow people do their job and in
that, in that area because youknow, the surgeon has been doing
a particular surgery for 20years.
He thinks his patients aredoing great.
Particular surgery for 20 years.

(40:13):
Um, he thinks his patients aredoing great.
He's not about to say, oh yeah,I definitely I need to to
change what I'm doing, causeobviously it's, you know, hasn't
been that good for 20 years.
It's kind of a mindset that, uh, you know I'm, everything I'm
doing is just fine yeah.

Ben Comer (40:28):
Um.
Going back to ratamikabart,this drug, I believe, was
discovered in China whereConnect Bio was located.
It's now moved the headquartersto San Diego.
What precipitated that move andwhat kinds of challenges had to
be overcome in bringing thecompany to California?

Barry Quart (40:50):
Yeah, it's been an interesting process.
It was one of the things that Idiscussed with the board before
joining and they had alreadycome to the conclusion that it
was time to make that transition.
So this is a company that wasstarted quite a few years ago in

(41:10):
China at a period of time whenthere was a lot of biotechs
forming in China.
There's great chemists there,great biologists, a highly
educated population.
So, you know, certainly madesense at the time.
A lot of companies you knowstarted labs there.

(41:36):
But over the years, you know, aswhat happens in the US biotech
market, you kind of have peaksand troughs and it's been a
pretty difficult period of timelast several years in China to
raise funds and so there wasn'tthe kind of financial support.
And biotech is a business thatyou basically have to keep

(42:00):
putting money into it until youget the drug out on the market
and then it takes money tolaunch the drug.
So it's a capital intensebusiness.
China was clearly not the placeto raise that kind of money any
longer.
So you have to go to the UShealthcare investors and US

(42:23):
healthcare investors are prettyreluctant to invest in a Chinese
company in a Chinese company,to a large part because the
information flow is not quitethe same as it is with a
US-based company.
So in the case of Connect it'straded on the NASDAQ but the

(42:50):
investors didn't have access tothe normal kinds of information
that a US-based company tradedon the NASDAQ would be providing
.
So, as you know, at Heron, atArdea, you know we put out what
are called 10-Ks and 10-Qs.
So every quarter put out whatare called 10 Ks and 10 Qs.

(43:16):
So every quarter you put outyour financial information, you
put out an update on what'shappening with your development
activities and it keeps theinvestment community up to date
and they feel like they can usethat as a guide in terms of
what's going on.
As a foreign filer, you're notobligated to file any of those.
You file a much moreabbreviated report every six

(43:38):
months and so the information inthat document is really dated,
because it was a quarter behindalready when it was filed and
now there's not another onecoming out for six months.
So as an investor, this ispretty stale information and I

(44:03):
know I'm not going to get thenormal updates.
I'm just less inclined to thinkabout investing in a company
where there's not the usual dataflow and you're held to
different accounting standards.
The investment community wasjust not getting the kind of

(44:27):
information that they're used to, so we made a decision that you
know.
We still have an office outsideof Shanghai.
They're doing great work interms of mostly it's on the
chemistry manufacturing side ofmaking red and micklebart.
They identified a way to makeit much less expensively, so

(44:52):
we're optimizing that in ourmanufacturing lab.
That'll get transferred to a USmanufacturer that we currently
have.
That's making it the olderprocess.
So we still have activitiesgoing on in China, but we moved
the headquarters to San Diego.
Basically, this was a Chinesebiotech with a little outpost in

(45:16):
San Diego.
It's now, for all intents andpurposes, a San Diego-based
biotech with a small outpost inChina, and we've now put out our
first 10K, put out our 10Q aweek or so ago and we will
continue to put out normalfilings that investors look for
from here on out.

Ben Comer (45:38):
Was that a heavy lift to convert ConnectBio to a US
filer, you know, to a GAAPreporting structure?

Barry Quart (45:47):
No question, this was not a trivial undertaking.
No question, this was not atrivial undertaking.

(46:07):
We had to get another,different accounting firm.
That accounting firm had tobasically go back and redo
previous audits so they could befamiliar with what's going on
in the company.
So very heavy lift by thefinance team.
I'm very fortunate that we wereable to bring in most of the
finance team from the lastcompany and that finance team
had come from the previouscompany.
So people that I've worked withfor many years who are
incredibly competent and theymade that heavy lift look easy.

(46:30):
But I know how much work ittook to get done and you know,
and working very closely withthe new auditing firm, we were
able to get it done on time andeverything went very smoothly

(46:54):
piece of Radha Micobart that Iwanted to ask you about, barry.

Ben Comer (46:57):
In late 2023, connectbio outlicensed it to
Cemsir, a large Chinese-based orChina-based company, for
late-stage trials registrationcommercialization in China.
Can you, I guess, explain thestrategy behind that transaction
?
And really, I guess what I'mcurious about is whether that

(47:19):
helps with your approach to theFDA, engagement with the FDA,
ultimately approval in the US.

Barry Quart (47:27):
Yeah, so this was a transaction that was finalized
before I joined.
But what I can certainly say isis that Simseer are great
partners.
I've met with that company manytimes.
We have a joint steeringcommittee every quarter.

(47:47):
They're taking a very activeapproach towards finishing up
development in China and youknow, and we anticipate, that
they will file first in atopicdermatitis and then in asthma,
you know, a year or two afterthat.
But they're working very hardto get the drug on the market as

(48:08):
quickly as they can.
Dupixent is doing extremely well.
So one thing that probablyshould let people know we have a
Radimicobar is a secondgeneration Dupixent going after
the same target.
And you know our goal is, youknow, in clinical development,

(48:29):
to show the benefits of you knowwhy Radimicobarc versus
Dupixent.
And they're trying to do thesame thing in China, where
Dupixent has done a phenomenaljob and has launched and it
hasn't been on the market therevery long.
So they're working veryactively, you know.

(48:49):
Going back to the question ofwhat's the benefit?
Well, number one, last year thecompany received over $25
million in upfront and milestonepayments.
So for a small biotech,significant revenue coming in.
Non-dilutive financing is kinkin this business in.

(49:13):
Non-dilutive financing is kinkin this business.
You don't want to have to keepon selling shares and diluting
current investors and employees,so the ability to get
non-dilutive dollars coming inof that magnitude is incredibly
valuable.
And then they're doing largetrials in AD and asthma.
Now if we want to use that data, we will have to provide a

(49:39):
pretty strong rationale to theFDA as to why the patients in
China are applicable to USpatients.
Do they have the same druglevels, Same safety profile?
Is the information useful?
Is the disease treated the sameway?
Now it turns out in this casethere is remarkable similarities

(50:05):
.
Asthma is one of those diseasesthat has kind of international
guidelines the GINA guidelinesthat everybody has adopted, and
it's the Bible in terms oftreating patients, so patient.
The asthma data that will comeout of China, you know, we

(50:25):
believe will be extremely usefulin terms of ultimately getting
radimicobar approved in the USand hopefully will allow us to
maybe only do one phase threestudy here, which is a
significant cost benefit.

Ben Comer (50:43):
And that would, of course, require some engagement
and some collaboration with theFDA, and I promise to bring the
conversation back here.
I want to just add given yourdepth of experience in this area
, barry, working with the FDAover, hopefully, 10 approved

(51:03):
products with ConnectBio, Iwanted to ask you what some of
the mistakes are that companiesmake, especially startups, early
stage biotechs with respect toFDA engagement.

Barry Quart (51:19):
Yeah, you know, I think probably the one that
comes to mind in that regard isthat the agency generally
doesn't give you number one,really clear instructions.
They provide guidance.
So you have to ask a lot ofquestions.

(51:39):
When you go into a pre-IND orend of phase two, whatever the
meeting is, you got to make sureyou ask every possible question
you can think of, because it'syour one opportunity to actually
get written responses from themon a timely basis.
And then you know, and thenwhen you hopefully, if you have

(52:00):
a follow-up at you know,face-to-face meeting after their
written responses, you know yougotta, you gotta really drill
into any outstanding questions.
And then, most importantly, youknow what will happen
frequently is they'll say wedon't recommend you do that.
But of course it's up to youbecause they don't have really

(52:23):
that many tools to makecompanies do what they want.
They basically have the abilityto say, yes, you're free to
initiate your program.
So you know, open your IND.
So that's one period that theyhave kind of more control than
usual, or they can put you onclinical hold.

(52:45):
It's not like they can justtell you, hey, we don't think
you're ready.
You know, hold on it's either,you know, a clinical hold, which
is, you know, nobody wants tosee that.
Or it's hey, we can give youguidance, but you can take it or
leave it.
And so when they're givingcompanies guidance, you know, a

(53:06):
lot of times they tend to ignoreit, you know, because they
think that they might knowbetter, and which is fine,
because the agency is not always100% right.
But you just have to listencarefully to what they're saying
.
And when they're telling you,we don't recommend this, you got

(53:27):
to at least sit back and thinkabout, well, what does that mean
?
And you know what are theytrying to tell us?
Because they're not 100%transparent, yeah, but what are
they really trying to tell usand I think that will help in
most cases is you know, the factthat they say, yeah, you're

(53:48):
free to proceed is not a seal ofapproval that they agree, it's
just that what you're doing issufficiently safe.
We can't stop you, but we'retelling you we don't think
that's the right approach.

Ben Comer (54:05):
Right, right.
We mentioned at the top thatthe FDA is going through
something of a shakeup currentlyunder the Trump administration.
Are there any specific changes,Barry, that you would like to
see implemented with respect toFDA's kind of standard operating
procedures for drug review andapproval?

Barry Quart (54:27):
Well, you know, I think, as I mentioned, you know
over the years that I've workedwith them and seen a lot of
evolution.
I think the one thing that wasthe most beneficial for patients
and for, you know, thecompanies and, truthfully, the
FDA too was having anappropriate collaborative effort

(54:49):
in terms of drug development.
Our goal is to get drugs out topatients and produce the desired
benefit for those patients.
The FDA's goal, theoretically,is to get good drugs out to
patients that provide a benefitto the patients.
We pretty much have the samegoal, kind of coming at it

(55:12):
obviously very differently, andthey are the regulator in a
highly regulated industry.
But I think that there can be agreat benefit to a more
collaborative effort.
The general approach that'sbeing taken in Washington today

(55:33):
is a belief that there's beentoo much collaboration, there's
been too much coziness betweenthe FDA and industry, which, I
got to tell you, I certainlyhaven't seen.
As I mentioned, it's been quitethe opposite, but nonetheless,
that seems to be the perception,and today's world perception is

(55:54):
100% of reality, and so I'mafraid that we're going to end
up with even more prohibitionson having that kind of
collaborative effort, which isnot going to serve anybody's
benefit.

Ben Comer (56:11):
Yeah, certainly there have been some kind of pot
shots taken on advisorycommittee meeting members.
You know to your point, do youin terms of improving
collaboration and let's hopethat there's not a retrenchment,
and you know a widening gulfbetween the FDA and industry.

(56:32):
But do you think that there isa new kind of formal meeting
structure needed, or is itsimply an issue of response time
and agency employees workingwithin the structure that exists
but being more responsive morequickly?
Which one would you like to seeNew formal meetings or just

(56:54):
better responsiveness?

Barry Quart (56:55):
Yeah, from my personal opinion I think we had.
The meetings that are alreadyset up under PDUFA are fine.
You can utilize those and getthe, in terms of formal meetings
, the information you need.
I think that there needs to be,again, more ability to interact

(57:16):
in between meetings and, youknow, again, you can send them
questions, you can send themletters saying, hey, we have the
following issue can you provideassistance or input?
You may never get a response tothat or it could take months

(57:36):
and months if they get around toit.
So that's something where youknow a more speedy
responsiveness from the agencywould certainly be beneficial.
But you know, going back to yourcomment on advisory committees,
I guess it's all a matter ofperception, because people who

(58:01):
don't understand this processalways harp on oh, this person
on the committee got a waiver,but they were a consultant for
you know three companies.
Well, you know in this world,if you're an expert, if you're
an expert in asthma and reallyunderstand the use of drugs, how

(58:23):
did the?
You know the developmentprocess, what's best for the
patient from a treatment pointof view?
We're going to go out and seekyou.

Ben Comer (58:32):
Yeah, your expertise is in demand, right, right, I
mean because that's theinformation we need.

Barry Quart (58:37):
And so we're going to go out and hire you as a
consultant and say, hey, can youhelp us?
Here's this new drug.
First time there was an IL-4antibody, I'm sure they went to
the leading experts and said,hey, here's the biology.
What do you think?
Are we crazy or does this makesense?
And so those people would havesigned up and got a small

(59:00):
consulting fee, and you know so.
Then the FDA looking foradvisory board meeting members.
They should go after theleading experts in the world on
asthma and development of drugsand asthma and they'll take a
look and say, okay, this person,you know, did you know a month

(59:22):
of consulting for Pfizer.
You know we can give them awaiver.
It's not like they are beholdento Pfizer, they're not going to
vote yes.

Ben Comer (59:30):
They're not getting 20% of product sales.

Barry Quart (59:32):
Yeah, they're not going to vote yes just because
they received a few hundred or afew thousand dollars two years
ago from Pfizer.
So, yeah, they're independent,they work in an academic setting
, no problem.
That's the kind of people thatyou want on an ad board.
Unfortunately, because there'sthis perception that, oh, those
people are in the pocket ofpeople that you want on an ad
board.
Unfortunately, because there'sthis perception that, oh, those

(59:53):
people are in the pocket of theindustry.
We can only take people who havenever consulted for a
pharmaceutical company.
Chances are those probablyaren't the best experts, because
if they had been, are they goodones?
Somebody would have gone tosearch them out and said, hey,
you know, what do you think?

(01:00:14):
And then the other problem isis that if they've never been
involved in drug development,you know there's there's theory
and then there's practice, andthere's lots of people that have
great ideas about how todevelop a drug.
But the problem is it'simpossible to do that experiment

(01:00:35):
.
You can't find those patients,you can't get them enrolled, you
can't do that study, and sothere's got to be a certain
amount of balance between what'sthe perfect way to answer a
question and what's a practicalway of answering a question, and
one that also doesn't take 20years and $500 million, and so

(01:01:00):
there's got to be a balance andthe people that are on these
committees need to at least havea sense of that balance.
Sense of that balance.

(01:01:27):
And it's always you know, over30 years ago into advisory
committee meetings.
It's pretty easy to periodwhere everybody on the committee
is going to be completelydevoid of hands on experience of
being involved in drugdevelopment, because they're
going to be tainted somehow bythe evil pharma.

Ben Comer (01:01:47):
Right, right.
Well, barry, it's been anabsolute pleasure speaking with
you today.
I, before we wrap up, I want togive you a chance to share your
top priorities for ConnectBiopharma, kind of, in the short
to medium term, what's on deckfor you?
You know, what are you?
What are you most lookingforward to and aiming for with

(01:02:09):
the company right now?

Barry Quart (01:02:10):
Yeah, so our sole focus is the completion of these
two trials that we discussedpreviously, looking at the drug
and the treatment of an acuteexacerbation.
We believe that we can providereally a dramatic benefit to
patients that are having asignificant issue breathing, get

(01:02:33):
them to the point where they,you know, are stable much faster
and hopefully not come back,and so that's our sole goal at
this point, you know, get thatmessage out.
We're fortunate that we have thefinancial wherewithal to be
able to conduct those studiesstill have a runway into 2027.

(01:02:55):
So we're not out, you know, hatin hand and in a difficult
period for financing a biotechwhere you know we don't have to
worry about that.
It's all execution at thispoint and you know we're just
excited to get those studiesgoing and hopefully we'll have
the data first half of next yearand that will assist us in

(01:03:17):
being able to, you know, devisea very clear phase three program
.
But the great part about thisacute opportunity is usual
asthma or COPD studies takeyears to conduct and it's a year
follow-up.
This is a one-month endpointand so, as long as we can

(01:03:42):
recruit the right patients, it'sa short study.
Get the data early next yearand rock and roll.

Ben Comer (01:03:51):
Excellent, Barry.
Thanks again for being here.
I really appreciate it.
My pleasure, Thank you.
That is Barry Court, CEO ofConnect Biopharma.
I'm Ben Comer and you've justlistened to the Business of
Biotech.
Find us and subscribe anywhereyou listen to podcasts and be
sure to check out our new weeklyvideo casts of these
conversations every Monday underthe Business of Biotech tab at

(01:04:15):
lifescienceleadercom.
We'll see you next week andthank you for listening.