Will Bachman 0:01
Hello, and welcome to Unleashed the show that explores how to thrive as an independent professional. I’m your host Will Bachman. And I’m excited to be back again today with my friend Andrew McKee Umbrex. member and he leads the headland Strategy Group, a boutique consulting firm focused on life science industry. Andrew, welcome back to the show.
Andrew J. McKee 0:24
Thank you. Well, great to be here.
Will Bachman 0:27
Last time, Andrew, we talked about moral you know, kind of all the cool stuff you do around like personal and professional development and had a great discussion we didn’t focus much on, you know, your your, your, your firm, and your consulting, but about your jazz and your writing, and all the other cool stuff. So we’ll include a link to that episode in the show notes. But today, you had offered so kindly to give me a bit of a overview of the biotech industry, which I don’t know a ton about. So and we’re going to, I think, just distinguish that some of what’s different, the same versus pharma. What do people mean by pharma tech? Let’s start with that. What is biotech? Andrew?
Andrew J. McKee 1:09
Thank you. And before I answer your question, I just want to give you a shout out and Umbrex community it’s it’s such a great sign of a healthy community when we can really be ourselves and talk about that openly. Because as someone who has dabbled in all these different things, and self healing in different ways, it’s great to be able to talk about those things as well as professional realize there there many false boundaries we have in life, and it’s all part of our lives. So thank you, for for having great communityget to answer questions. So what is biotech?I generally think of it as it’s basically pharma. And one way to think was innovative pharma means biotechnology,as my team helpfully reminded me that there are these days emerging three categories of biotech. There’s the sort of therapeutics or medicines part of biotech, there’s agricultural, biotech. And then there’s also industrial biotech, and our firm and probably, hopefully, because I won’t be, I can only comment on the first of the three with with any credibility. We don’t work in the other two sectors too much, with the exception of industrial applications that are basically biotech, for making better medicines. So.
Will Bachman 2:25
So biotech generally means using living systems or biology, to make new medicines, I think, probably encompasses making new diagnostics, as well. But that’s the basic concept.
Andrew J. McKee 2:39
And it used to mean a certain class of companies that use these living systems to make new medicines, more or less exclusively. But that that changed roughly 10 to 20 years ago, when it became really mainstream. And basically, nowadays, every pharma company, we know of, does biotech. And so biotech, sort of, again, this is moving along, at the Adam logical answer to your question, but biotech now kind of has a connotation of being like a, an early stage innovative company, using these cutting edge tools. I’ll stop there, see if I answered your question. Or if I can explain more.
Will Bachman 3:19
That’s great. So with just a detour, we’ll focus on more the medicine type biotech, but what would agricultural biotech or industrial biotech be that would be something related to making some kind of additive to the soil or something for agriculture, or making some kind of textiles with biology for industrial? Like, what what are you talking about for those two things?
Andrew J. McKee 3:44
Exactly, yeah. So agricultural could be like looking at new types of pesticides, say that are more naturally sort of biological in origin, maybe, again, from the consumer perspective, people will be more comfortable with the idea of, say, you know, some kind of natural microbe that’s like killing something that would otherwise eat a plant rather than like having a genetically modified plant that they’re going to eat maybe the plants normal and organic, but again, maybe it doesn’t. Again, I’m a little out of my league, I don’t know if that would qualify for organic pudding, you know, this sort of like cutting edge ways to solve problems that you have with crops, you know, speak at my sort of, you know, for most important read in newspapers, right, but you’re talking about like the crop yield, you’re talking about crop susceptibility to pass like, things like these that are really important both in developing countries in and developed countries. So that’s my hand wavy way of saying that’s what’s going on in agriculturaluniverse and then on the industrial
Will Bachman 4:45
Yeah, like the example he gave was great on like, using, whether it’s bacteria, other types of cells, other living systems to produce materials in new ways could be like new kinds of plastics.
Andrew J. McKee 4:59
Yeah. All sorts of examples. But yeah, it could be plastics and textiles, like you mentioned, it could be like extruding to a thread could be other kinds of materials where there’s some kind of leg up that the biological system gives you either for the, again, for instance, the high sophistication of what’s being created or the high consistency.Just, you know, just a few examples.
Will Bachman 5:21
Okay. Or I imagine you sometimes hear about, you know, the bacteria that they released that eat up the oil slick, or whatever, I guess
Andrew J. McKee 5:29
exactly, yep. Yeah, yeah, like this bio remediation is a great example.And, of course, I can’t think of a great, I’m blanking on the time, I have a good example of it, I won’t mention the company name. But there was a company that recently went public, claiming to reinvent a lot of manufacturing, with bio systems, but then they had a lot of negative press recently. So give them a hard time publicly, but it’s definitely in the news is like, it’s the same same thing. Again, give a historical aside how pharma has evolved. It used to be, we found cool medicines, largely for nature, isolated from plants, and or learned about through Native Americans and other traditional cultures that there was a medicinal promise in in molecule. And then then we brought this in, I’m generalizing a lot, but in the 20th century brought the manufacturing skills to bear to say, Okay, well, and chemists chemistry know how to say, How can we optimize this molecule, so maybe it lasts longer, or it doesn’t have as many side effects, this kind of thing. And then the next revolution, again, I’m hand wavy here, but roughly in the 1980s, is when the biotech stuff came along and said, Well, we could instead of building the molecule or the drug in, you know, in reactors and doing a chemical reaction, what if we had biology do it for us, so maybe we have a kind of bacteria that can actually make the medicine in their cells, and then spit it out? And then we collect that and put it into the, you know, the VAT and make the drug? That’s kind of the the crux and can be very simplistic. So the crux, again, is like, how can we use the elements of bacteria,for instance, didn’t have any bacteria to make new things? That’s,again, I mean, 30,000 foot view, but that’s my understanding.
Will Bachman 7:14
Alright, cool.Could you go through and do a bit of a side by side, compare and contrast of the kind of a biotech company and the functions that it does versus a more traditional pharma type product? And maybe we think about the different dimensions like, you know, initial drug discovery, or clinical trials or the approval process are the marketing? You know, I don’t know if there’s some areas that are pretty similar, or some areas that are, you know, very different in terms of how that function happens, and so forth, like, I’ve heard, but you know, that generics in the biotech world are very different thing, because it’s actually much harder maybe to, you know, kind of just copy some something if it’s produced by a biological system, but just kind of walk us through that framework of compare and contrast.
Andrew J. McKee 8:09
Sure, yeah. Thanks. We’ll, I’ll do my best. I think the critical difference between biotech and pharma is one of scale, because they’re basically,company company’s doing the same thing with a different scale. So, and again, because these are, these are words sort of being used with context and connotation. So generally speaking, a biotech firm is going to be smaller, it could cover anything from a startup,all the way to a company with let’s say, a few drugs and clinical trials.And to put some rough numbers around it, generally speaking, you know, your small to medium size, or mid cap company. And investment bankers may slightly disagree, but I usually think of is like mid cap gets you to round, you’re in the sort of three to $10 billion market cap range is sort of a mid cap, and then you get any bigger than that. Again, I’m not being overly precise here, but you start to get into pharma size territory.And so the pharmas are basically also so they’re both inventing medicines to compare contrast, we’re talking about companies. And I’m going to speak generally I’ll answer your question about generics and biosimilars, but first, maybe we’ll we’ll scope it into talking about the premium pharma space or the branded pharma. So these are companies whose whole mission is to invent new medicines that don’t exist, or never existed before us marketed products. And so, in that context, biotech and pharma are doing the same thing. They’re both doing r&d research and development, to invent and bring to market new drugs. And then they’re actually doing the marketing of those drugs. with the caveat as well, some differences. So biotechs generally don’t have the scale to do it.Few things that pharma companies do. One is manufacturing at large scale. The second would be commercial, like marketing and sales, and working with the the perfect distribution partners to do that.And then let’s see, yeah, those are the two main functions that generally are a big reason why there’s so many deals in our industry.And I can talk about more like that. But you have deals at a single drug, or sometimes it’s called an asset level. Because the biotechs are often innovating but they don’t have again, the the either the human capital, the physical capital, like actual factories, are in sometimes know how to, to further manufacturing commercialize. And there’s no hard and fast rule. But, you know, generally as drugs, and we’ll probably go into this in a moment, but as drugs advanced in the clinical trial progression towards getting a regulatory approval, you know, usually when they get to phase two, or phase three is when small companies either start to look for a large pharma partner for all the reasons I mentioned, or they look to get bought out, because maybe they don’t want to do it on a single, they just they want to exit and get acquired, you know.So that’s the the premium space in a nutshell is basically in biotech, a smaller companies pharma or larger ones. One other nuance I want to point out is that it’s still the case that a lot of medicines are traditional, I shouldn’t say traditional, but like, their chemistry, they’re like small molecules, as we’d say, the chemists would say, meaning that they’re things that you can manufacture at scale with, with a traditional large scale chemical synthesis in a big factory, and not with any biology necessarily. But even those companies today are called biotech because they’re using all sorts of cool tools in in their research labs, and to understand how the drugs would work, even if it’s a traditional small molecule. And so I’ll stop there and see if I answer your question that will come to generics and biosimilars,
Will Bachman 12:05
yeah, that’s helpful. So it sounds like the definitions have shifted a bit, so that it’s more about almost the sale, the scale and size of the company, and how innovative it is. So smaller, more innovative companies using more cutting edge technology, we call those a biotech, regardless of the size of molecule that they’re working on.
Andrew J. McKee 12:28
Right. Yeah. And yes, and maybe it might be helpful also definitionally to talk about, like when we talk about kinds of drugs that we would consider biotech and might be helpful to, since I mentioned small molecules, there are a lot ofcategories of drugs that can fall into what we call biotech and summer. antibodies are these are like, engineered versions of what we use in our immune system, but designed to attack usually bad things in our body, but not always, sometimes they’re, they’re designed to specifically,you know, push on something, so to speak, that makes something go better in a biological system, with their antibodies.There can be increasing their cell therapies where these are, you know, cells that are given to a patient to to treat their disease.They’re also vaccines are usually counted within the biologicals. So those are just a few examples. And then sorry, gene therapy would be another one, which sometimes is done in concert with modifying cells. So you might modify cells, say outside of patient’s body, and then with gene therapy and other types of genetic tools, and then give it to the patient. And also, there’s gene therapy as its own category, where you would just increasingly give it as a therapy and expect to do to modify and improve something in the patient’s cells directly.
Will Bachman 13:55
So a lot of us have circulating in our bodies, the Madonna, back Pfizer, Madonna, Vic, would would darna be countered as a biotech company and
Andrew J. McKee 14:07
yes, absolutely. So yeah, that’s another sort of potential include that within gene therapy, the mRNA therapeutics, so yes, so that’s a great example where in the case of Madonna and the Pfizer violin tech vaccines they have, the patient is getting mRNA that’s, and it’s protected in a lipid nanoparticle, to make sure it lives live, so to speak, or last long enough in your bloodstream to have impact, and then it will get into cells and the cells will produce from the mRNA, which is like one of the key instructions, and you know, also to back up so you know, as a mini lesson, how proteins are created. We have DNA, which provides the instructions that gets transcribed into RNA, and then the messenger RNA and then the MRNA gets translated into proteins in the cell. So you basically have cells getting, you know, a new mRNA strand that’s that then they use and they start to convert that into protein that’s going to produce proteins from parts of the Coronavirus. That’ll then be recognized by our immune system. And as we’ve seen in the fortunately, in these cases, then your body will create a very robust response to those triggers. So yeah, that’s in a nutshell, what’s going on, obviously, skipping over, hopefully not making the scientists in your audience grown too much, but skipping over a lot of details there.
Will Bachman 15:38
Okay. What are some of the differences in manufacturing between a one of these biotech type of drugs, whether antibodies, cell therapies, vaccines, gene therapy, manufacturing those versus manufacturing the more traditional small molecule, is it with a much different set of capabilities or set of equipment or set of, you know, expertise?
Andrew J. McKee 16:04
Yeah, great question it Yeah, all the above.So, it takes something like antibodies, for instance, which is an easy one to start with. It those are typically produced through bacterial cells that have been modified to essentially have each bacterial cell become its own little antibody factory. So there, your your common Dearing are going to talk about that same machinery of RNA can be made in a protein, your come during that machinery to basically force the cells to pump out a ton of extra protein that they normally would not do, and have it ideally be almost exclusively antibody material. So you can also they also, there’s some mammalian cells that are used to the Chinese hamster ovary cells that are also really commonly used to produce antibodies. So yes, so you have, you have to have the know how to know how to build up again, like, you might have a large VAT, basically, of bacteria that are pumping out protein, and then you have downstream manufacturing processes to give to take the protein that’s in its in solution, take it downstream. And then you filter out any impurities. Because again, these are like biological systems, that could be other proteins, that the bacteria spitting out, you don’t want. The proteins themselves could be breaking. Hopefully, this doesn’t happen a lot, but they could break or they could glom on to each other in a way that is not good. So you have basically a lot of high high specificity filtration methods later, to get out only the active ingredient, which would be the antibody you’re trying to make, and make sure you’re not getting all these weird variants that could be could be very, you know, at the least just be impurities, but the worst could actually have a really awful consequence to the to the patient. So. So yeah, I’m not sure. But basically, so when you’re looking at like, say, doing projects in manufacturing, you need to have people who have expertise that doing that kind of manufacturing, rather than the small molecule chemistry type of manufacturing.
Will Bachman 18:15
And what about the delivery device or delivery mechanism? For the drug A few years ago, I had a project where I went to this convention of like pharma suppliers, and I was kind of amazed by the by the variety of companies that focus just on drug delivery, you know, methodologies, do those tend to be different between small molecule and these more complex molecules?
Andrew J. McKee 18:45
Yeah, great questions. Thanks. Well, um, let’s see, it does, there are a few variables involved. Part of it could be the type of molecule we can come back to that I try to give the high level first part of it could be the, the end organ or n cell type you’re trying to affect and, and how to get there. And then I guess, a third part might just be the disease process itself. And then the fourth consideration would be a patient. convenience, but also like meeting the patient’s needs the best. So if I take them in turn, so like, small molecules, they generally have the advantage that you can, you can take, not always, but you can usually take them like by mouth, like that’s why we like pills, and we’ll digest them and I’ll get into our blood system and get to every organ in the body through the bloodstream. Usually, that’s good, although there are some companies that will, yeah, I’ll come back to special cases, but that’s generally the situation whereas with biologics, like we’re talking about, let’s say mRNA. If you eat those that you had a pill, it your basically your stomach and your small intestine, we’re going to rip it to shreds into like basic building blocks and treat it like nutrition. So that’s and that’s what our bodies do. So that’s why you usually have to have a vaccine, or some of these other biologics injected either say, into the muscle, you know, kind of slowly spread out in your muscle and get into your system. And it’s like many vaccines are like that, or go straight into the like an IV, which intravenously, meaning that someone has to set up a needle into your vein, and get the medicine in that way. And a lot of, you know, cutting edge drugs for cancer require getting directly into your veins. So you bypass the digestive system. And then, you know, the other examples would be special cases, like for certain eye illnesses, where you want to either inject directly into the eye or in some cases there are drugs available that have he’s still injected, but would have like a long, long acting or long delivering element to it. So because because as you can imagine, like,you know, having getting your eye injected is not you know, it’s not comfortable. Right? And I mean, of course, the physician is naked couples.
Will Bachman 21:16
This is Episode 430. Something and that is the understatement of this entire podcast. That is uncomfortable. I have such a phobia about anything sharp getting close to my eyes. That would be like, my crazy.
Andrew J. McKee 21:33
Yeah, I’m glad I hope I glad I inadvertently gave you some good se good sound bites there. But uh, yeah, cuz I’m with you, too. I feel like I’m pretty comfortable with you. And I have an MD Jeannette practice, I went through a lot of medical training rounds, very comfortable with like, surgery, Gore, trauma, and I have a pretty high stress tolerance. It was like, getting mad. But when it came to myself around anything with my eyes, or teeth, I think it’s gradually after being meditating for like, almost 15 years, I’m gradually have developed skills to like deal with, with basic, terrifying. Yeah, so if you can imagine, yeah, the law and again, patients with sub tricky bots and these eye diseases. And it’s like, because macular degeneration, it just really kind of scary illnesses for for a person, right? where it’s like, they’re looking at blindness after a certain amount of time, if the disease. So there’s a trade off, you’re willing to make, right? It’s like, again, not to be too black or white. But it’s like, either I get blind eventually, or I take a drug that will help slow the progression, let me have my eye set longer. So you’re willing to make that trade off. But that is one reason why there’s a lot of drugs, incentives, diseases like AMD, acute macular degeneration, that the goal is to improve on the center of care by having less and less frequent injections. And there’s a number of approved drugs that are already doing that, say, every two months instead of once a month, etc. But yeah, so that’s an example. And again, gene therapies, as we talked about that. If you want to affect certain cells, but not affect other ones, you have to be pretty strategic. So you have to you’re kind of implied question, it’s like, someone’s a lot of kind of biomedical engineering, like, how do we get this thing to where it needs to go? Or do you need new devices. And then last is May I alluded to a bit conveniences, like, you know, no one likes to take drugs, and it’s hard to remember when to do them. And if you’ve ever, you know, and can’t quote stats, but it’s pretty striking, when you look at the sort of national statistics on how people do struggle to take medicines, even if they know it’s going to help them. We don’t adhere veterans. So it’s, it’s nice, if you could, you know, you take some you have a special device that maybe releases the drug over a long period of time just makes it better for everyone involved.
Will Bachman 23:49
We talk about some about the organization of a pharma company, as well as a biotech company, in terms of the types of roles and I think there’s some functions that, you know, are somewhat specific to just life sciences. Like I hear the term, you know, medical affairs, right. And commercial may mean something very specific. Could you walk through like sort of the typical different roles that you see at a pharma company, you know, in a biotech company, and what those mean, some, some might be obvious, but but there’s some that I think are specific and be interesting to hear about, like, people that deal with reimbursement, for example, the medical affairs people that deal with physicians.
Andrew J. McKee 24:31
Sure, yeah. Yep. Sounds good. Yep. Let me I’ll start with the biotech. Hopefully, I don’t forget anything. But of course, you get a CEO and, and then you have different functions. Usually there’s a head of research. Then there’ll be somebody who’s in charge of clinical development. Usually that person’s called a chief medical officer.You often have a chief operating officer who, at least for the small companies has my opinion of a very heterogeneous job.Description, at least from company to company, that person could be doing any number of things. But usually it could be a small scale portfolio management function. Sometimes that person involved is involved in the deal making side, although other times that could be with a Chief Business Officer CBO, whose responsibility is to do good even for the small companies, they can do inbound deals, to bring in new assets. And then also be working on outbound deals like looking for Big Pharma partners, for instance, then you have some other important support functions like you have, which can be very strategic, especially so the CFO says finance department, and his legal department and an HR. Right, so that’s probably the main ones I’m gonna forgotten one or two. But so many of those are standard. I do know from working with a lot of folks who or excuse me, knowing a lot of folks like in other sectors, like cmo is not Chief Marketing Officer like it often is and tech companies, its chief medical officer. Yes, so let me think so. And then as large as the company gets larger, they as they prepare for commercializing, they’ll often then get a chief Commercial Officer csio. And yet to part of your question, and maybe talk about some things that are unique in pharma. Usually, you have the marketing and sales functions, and any sort of brand strategy type functions, reporting into the commercial branch, and then you have government affairs, or excuse me, yes, well, actually, we should talk about government affairs. But that was sort of a Freudian mix of medical affairs, which also reports commercial, we can come back to government affairs, which actually, usually in large company would also report to commercial, but medical affairs interesting, the history of that has evolved out of again, this is where, you know, I’m proud to say all of our clients are ethical, and it’s something we pride ourselves on is helping, I think, on the innovative side of pharma. But unfortunately, there have been some bad actors in pharma. And everyone can sort of Google the history of medical affairs, or I’m happy to share it. But basically, medical affairs didn’t really exist as a function until about I believe, 10 or 15 years ago, when they’re just the unsavory tactics of sales teams reached a tipping point where you’re going to hear I’m not a lawyer, but I think a mixture of laws and regulations were passed to say that, okay, salespeople cannot do these things. And that’s, but but there’s still a role to educate physicians and patients and other stakeholders. And that’s largely the function of medical affairs. The second function could zoom out again, but okay, going into the medical services niche, the second function medical affairs is to help. Also, it’s on a so called on the innovation side, but it’s where you have innovative clinicians, usually clinicians, but not always, at medical centers that want to do a trial, let’s see in a patient population. That is, it’s not been on the radar of the big pharma company. I think one kind of cool thing about medical affairs is it’s a way for pharma to collaborate with these enterprising investigators. So let’s say that, again, like a small patient population to the pharma company didn’t didn’t have the resources to study. Well, if you’re an investigator at a large academic medical center, you can basically make a proposal to the pharma company say, hey, I’d love to test your drug in these patients. And, you know, here’s the rationale. And there’s a way for meta fairs to basically supply the drug at cost with a little bit of guidance, and, you know, in collaboration, but it’s, it’s a collaboration with academia. And I generally am a fan of that it gives more patients more more shots on Goldust, so to speak, to see what might work for them. And of course, if something really works out, well, it could become a branded. Or it could be added to what the drug is marketed for, but at the very least, you’re amplifying the number of experiments to see what could work and help patients. So anyhow, that’s Medicare’s zooming out and government affairs. I can’t speak too much expertise there. But that’s generally I think it’s sort of lobbying in another in another word, basically, but that’s how to how, how big companies, I try to influence to their benefit with legislation so forth. I’ll stop there. What can I would guess that I fill in?
Will Bachman 29:38
Yeah, so one question would be that, you know, on the figuring out what sort of clinical trials a company wants to do, you know, as a naive person who never had been in the industry, I might have thought, well, just, they have some drug and they want to see if it cures some disease. So it’s sort of straightforward But, you know, having just done a little bit of work in pharma A long time ago, I kind of heard, they got a better sense that there’ll be much more strategic about that about designing the trials specifically. So they can make some claim and either figuring out what competitive drug they want to be, you know, compared against or, you know, what’s the end point? Or, you know, sort of how do they want to position themselves in the market? So talk a little bit about that whole strategy for clinical trials and how, how companies, you know, approach that. So the, you know, thinking about the what’s the market size, what’s the population size? What’s the reimbursement environment for that particular indication, etc? And how they use all that to shape and design the clinical trials that they conduct?
Andrew J. McKee 30:49
Mm hmm. Yeah, thanks. Well, yeah. Feel free to correct me if I could speak at length there, because this is something that our firm does a lot within our r&d and portfolio management strategy, practice, which is one of our three practice areas. Yeah, so at a high level, like any of these, again, we think of those investments doesn’t work. You know, I wouldn’t say that, you know, as patients, that doesn’t sound like the right words to use, but these companies have to make like choose their investments, like which drugs Should we take to market, and it’s a huge investment to go through all these clinical trials. So usually think at a meta level of think about four key parameters always for all these r&d investments, which are, what’s the commercial payoff or the reward, which, you know, again, has, so that’s one, the second is the risk, like the and this is a high risk industry. So roughly eight to nine out of 10, drugs that start the clinical trial process will fail. And that’s more or less held true, since the day researchers started telling those kinds of numbers of success rates. So risk is the second one, the third one would be cost. And the fourth would be timing. And so it’s a big level, it’s not rocket science. But this is where it gets fun and challenging interesting is sort of think through the strategy, backup, backup remote and just provide background. Typically, drugs go through a three phase process, they go through phase one, phase two, and phase three trials. And then they apply for regulatory approval in any country that they want to get marketed at market the future product. That’s the typical paradigm. So phase one is typically done in healthy patients to just confirm the drug is safe. phase two, then is typically in patients with a disease that the drug is intended to treat. Usually, it’s a small study small enough to excuse me big enough to figure out whether or not there was a benefit from the drug. And then the phase three is usually then designed to be a confirmatory from the phase two. That’s a simple paradigm that a lot of exceptions come into play when you when there are life threatening illnesses, where there’s a high mortality rate, or it’s also rare and life threatening or really awful disease, then you often can get some special permissions from regulatory agencies to go faster through the paradigm. For instance, you might skip phase two, you might maybe only do the bare minimum of phase one in healthy patients, and mostly do a phase one in diseased patients, and even determine some kind of efficacy metrics in phase one, and then skip right to phase three, all sorts of the bunch of variants on that theme, so begins zooming out, a lot of it comes down to the client’s preferences and the commercial or business context they’re operating in. So again, I’ll give you a lot of bookend answers to your question on mill. So it’s like, let’s say, on one hand, if you have a highly competitive market, you might, you might have to think very carefully about when you design the trials, what are you going to initially always want to get to phase two and phase three, these are going to be randomized against some kind of comparateur intervention. I should say almost always, for most situations, the exceptions abuse, there are no approved drugs, it’s really awful disease, you might get by on that requirement. But anyhow, you have to think through Okay, what are we going to compare our drug against, let’s say a call our drug, the experimental one, because it will matter when it gets out to the market. So if we pick let’s say the number one competitor that’s already approved, and we go head, what’s called an a head to head design where every patient is getting randomly assigned to either the best drug out there for this disease or our new drug. If, if you do that trial, and you defeat this standard, we have this number one standard care drug, of course, it’s going to be awesome. You get a lot of patients and market share, switching to that new drug because it’s going to be the most efficacious Hopefully, you know, it’s gonna be the best on on these key prayers. But of course that enriches you for more risk, because that’s like, again, speaking of baseball, that’s like swinging for the fences, when maybe, maybe get to market with a single or a double instead. So there’s often a lot of calculus that comes down to, again, I’m gonna sound like a consultant, because I’m one, but it’s like, looking through your options, and then helping our clients decide what’s the best, what’s their risk tolerance? Again, do they want to go really aggressively? And? Or do they want to be more conservative? Again, timing is another thing where you could, there are ways to in a fast moving market, to get to the market faster by doing a less complex trial. But again, you there are always trade offs.
So if you go fast to market, you may have curtailed parts of your your your clinical trials that doctors and patients would be looking at. So you could get to market faster, of course, in an ethical, regulatory approved manner, but maybe you didn’t. Maybe you skip that randomized trial against the best drug out there. So maybe doctors don’t know where to slot you in the paradigm because it’s like, well, you know, because as it turns out, trials are, you know, usually, if trials are designed the same way, as you mentioned, endpoints like the same endpoints, same kind of trial design of who gets what drug and for how long, you can kind of compare, but with a lot of caveats, but usually there’s a lot of noise, like the trials are not done the same way. Or maybe they’re done the same way with a patient. You know, there’s like older patients in one trial and younger patients, it’s like all are more severe disease, less severe it is all these like variables that make it hard to compare, nonetheless, physicians and patients and advocacy groups will do their best to try because that’s the only information I have. So anyhow, again, again, this, if I had to summarize, those are the four dimensions we look at. And a lot of it gets into the fun of thinking about how, how aggressively you want to get to market, how bold you want to be versus more conservative, and they’re different, of course, different reasons to go either direction.
Will Bachman 36:59
That’s fascinating. Let’s talk a little bit more about the kind of work that your firm does. Can you give us sort of just an overview of First of all, just your firm? You know, I know, it’s it’s you have several members of the team and maybe the types of projects you do. Maybe we do a case a case study or two?
Andrew J. McKee 37:17
Sure, yeah, thanks. Well, so we’re hedland Strategy Group. We aspire to thrive by helping by enabling growth strategy for therapeutics and diagnostics firms, particularly disruptive ones that are really trying to change the game. And as a personal aside, but also for speaking on behalf of our staff, this is what gets me up every day. This is what motivates our staff is to work on cutting edge groundbreaking medical innovations that are really having real impact in patients lives. So that’s, that’s our, that’s what we do. We have three service areas. One is commercial strategy, where we’re basically helping our clients think through how to commercialize. The second is corporate development, including BD in m&a, where we’re helping our clients grow through deal making, and increasingly grow through fundraising, and storytelling around the fundraising. We’ve had a lot of interest in that in our service offerings. And then the last would be r&d and portfolio strategy, which is how to grow through investing in a smart way to invest in your r&d pipeline. So those are the three areas. Yeah, what would you like to hear? I’m happy to give some kind of off the cuff examples. Would you like to hear?
Will Bachman 38:36
Yeah, maybe you can walk us through a sanitized case example of a, you know, type of project that you do.
Andrew J. McKee 38:43
Sure, yeah. Thanks. Well, so one that’s that’s quite common we’re in demand for is portfolio prioritization projects. And so one example would be a company. And there’s more more good jargon to share with you, let’s say a platform company, which means biotech that has a really cutting edge, cool way to make new medicines. I mean, actually, moderna would be an example this, like the, for many years been focused on mRNA and other branching out, as you may have seen in the news, to other approaches, but we’ll have a general approach that’s proprietary, and they’ve got the IP around that. And then their questions will, what what drugs should we make and for which diseases? And how should we prioritize those. So that’s a common project we help with. And typically, it looks like it walked through the phases, there’s a identifying where you could go kind of phase where sometimes our clients may already have the list of let’s say, the top 20 or so diseases they think they could have, they could invest in in their r&d pipeline. In other cases, they don’t know or would look to us to help complement what they’ve come up with. So do our own research, and thinking to come up with additional ideas. And then the next step would be, we then go into evaluating all those diseases. Is, and usually it’s a rule of thumb, but we’d like to try to get it down to like, the top 10 to 15 most exciting ones. And so we might do a kind of filter, if it’s a really long list to get down to a shorter list that we can tend to be very custom. And from there, we’d like to build a custom prioritization framework. Usually, it’s kind of like a balanced scorecard. And as an aside, we a number of us have done a lot of advanced training on all sorts of like, decision parametric type tools, and found that at the end of the day, I’d say 90% of strategic decisions and prioritization are really about getting the right set, and going through in a consistent manner with the right parameters, not necessarily all the parameters, just the ones that are going to differentiate. That’s always a key, very hard thing to learn. And then from there getting the answer and usually don’t have to use any fancy ranking or waiting. But occasionally we do if necessary. So yeah, so then as far as the evaluation itself, there, we will be evaluating these investments in basically the four dimensions I mentioned earlier. So which were the sort of commercial value, the risk, the cost and the time. So and again, depending on the client’s urgency, and where they are sort of skill wise, we may go deeper or less deep in certain areas. But yeah, we’ll use secondary research combined with our expertise, and are also layer on primary market research. Especially we we typically add that if there’s a lot of uncertainty, so it’s about the new market. So it’s it’s one of the cool things about working with innovative medical companies, they’re often like, breaking one or more paradigms. So the thing about a drug that’s going to maybe change dramatically change clinical practice. If they’re major uncertainties, we usually recommend doing some primary market research even really early on just to sanity check that we’re, we’re confirming, usually, it’s a few key things. One is like, are the patients we think we build a treat truly, do they really exist? ended up being halfway through but something else? Is the technology that the client can be really competitive compared to things that are not necessarily on market, but in pipelines already? And those are two examples. And sometimes there’s a pricing question to which I didn’t tell him topic, but we might look at early pricing strategy just to get a sanity check about what’s going to be, you know, acceptable and in the future market. So and then we’ll go through those evaluations, and then come up with a recommendation. So at the end of the day, you have a really clear recommendation of the most attractive again, it could be diseases to go into, or it could be diseases plus their specific molecules. And you have the rationale like you know, these types of you’re attractive for these reasons that we can hark back to the hearkening back to those four parameters I mentioned. Again, value risk, cost and time. Get so what’s up there, see if you have questions about that, now it’s helpful.
Will Bachman 43:04
You stay current and you know with industry news, obviously you need to when you’re serving these innovative clients, talk to me about the source of information of how you stay up to date either podcasts on the industry that you like or websites or newsletters or any kind of any other sources of info that that you pay attention to.
Andrew J. McKee 43:27
Sure things will say with the caveat and maybe per last podcast, I have a news diet so I try not to go overboard with definitely the shortlist for me would be endpoints. That’s a great website. There’s fear switches is sort of sister sites fears biotech and fears pharma as well as some med device and other kind of sub sites within their overall brand. There’s um, stats, it’s like all caps sta t, which is great. And yeah, actually related to stat, they have a podcast called the read out loud, that I think it was probably the best biotech podcast I’ve listened to. And they do a lot of original reporting, as well. So they’ll like break stories. I really like really like that crew over there. So those are the shortlist. I personally, because I have a medical and science background. I started It’s fun. It’s nice to then I’d like to say if there’s an interesting topic, like there was in the news, some cool new gene editing report out from from Fang Zhang at MIT, just like earlier this week. And so I just pulled the original paper through PubMed or through various subscriptions to actually just sit down and read it and I find that sticks with me better if I actually kind of old school but I’ll print it out and read the article. So like to go to pubmed.gov for free people new to the sector, it’s it takes a bit of learning curve to like navigate how To find like a good enough article to read, sometimes for people who are new, I also recommend Google Scholar because you can send those just just get kind of upvoted like the three most relevant articles, and that’s a good, good enough place to start. But that’s where I start. My staff has been more Muse junkies, nice. I know they’d recommend other sources. Oh, yeah, I like Seeking Alpha two. That’s great for publicly covered companies. And there’s a freemium version of that. So you can read about publicly traded companies and what’s happening there and get earnings call data and stuff like that seem kind of see, again, we were joking earlier. No podcast and biotech would be complete without mentioning Edu helmets, like you could pull up Biogen on Seeking Alpha and just read through what investors are asking Biogen about autohelm on their earnings calls. So it’s quite interesting. I’m glad you brought that up. So we’re a fourth podcast.
Will Bachman 45:57
This has been fantastic. Andrew, where can folks find out more about your firm online, I’m going to share a link, we’ll include it in the show notes if you want to, if we want to give any ways for people to follow up with you, individually.
Andrew J. McKee 46:11
Great, thanks. Well, yeah, we’re Hedlund strategy Comm. on LinkedIn, I believe it’s LinkedIn slash hasn’t strategy. I should know that off the top of my head, but we’ve got a pretty strong presence on LinkedIn. And actually, and then you can email me directly, Andrew at headland. strategy.com.
Will Bachman 46:30
And, yes, and we will, we’re gonna upload the link if I’ve got the URL. Yeah, that will include the links in the show notes. Well, check it out. Make sure we got it right. Andrew, this has been fantastic. Thank you for taking the time to walk me through kind of pharma versus biotech and the work that your firm does. It’s great speaking with you. Welcome. Thanks so much. Well, thanks for your time and look forward to answering your questions and again from audience and yeah, have a great day.
Transcribed by https://otter.ai