Shea Murtaugh is the founder and president of Hoffmann Murtaugh, the largest media-only agency in Pittsburgh.
Shea started her company in 2004 with no capital and now leads a team of 30 people. Prior to funding Hoffman Murtaugh, Shea broke into media via broadcast sales. She’s sold every major form of media over her decorated career and blends that experience into a cocktail that delivers wins for clients.
In this conversation, Shea and Aaron discuss how she got her start, when to hire vs train new talent, and the degree to which she has to be the “banker” of marketing.
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Shea Murtaugh’s Challenge; Journal for 5 minutes each day your ideal day one year in the future.
Connect with Shea Murtaugh
If you liked this interview, check out episode 418 with Marco Marandiz where we discuss how to market in the modern age, what makes an authentic brand, and the future of commerce.
Dr. Dietrich Stephan is a geneticist, entrepreneur, and CEO of NeuBase Therapeutics. Neubase is biotech startup focused on developing precision genetic medicines.
Dietrich previously founded or co-founded 14 biotechnology companies, was the chair of the Human Genetics department at the University of Pittsburgh, and was the CEO of LifeX Labs, a biotechnology incubator.
Neubase, his latest company, is developing technology spun out of Carnegie Mellon University that aims to address genetic diseases at the DNA or RNA level by combining the highly targeted approach of traditional genetic therapies with the broad organ distribution capabilities of small molecules.
In April 2021 Neubase went public, trading under the ticker symbol NBSE, and has raised over $100 million in less than three years.
In this conversation, Dietrich and Aaron discuss why Neubase went public earlier than most biotech startups, the vicious diseases they are fighting against, and the impact of the Human Genome Project on society.
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Dietrich Stephan’s Challenge; If there is someone out there in the world that your admire, find a way to reach out and connect with them.
Connect with Dietrich Stephan
If you liked this interview, check out episode 340 with Craig Markovitz where we discuss business building, university technology transfer, and life after a successful startup.
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Aaron Watson: Thanks for coming on the podcast, man.
Dietrich Stephan: It's my pleasure. Thanks for having me.
Aaron Watson: So I wanted to start off, I figured that you were someone who could, I've heard of the human genome project. I'm, I'm aware kind of like, you know, through maybe like an NPR report or something of like what it is, but as I was reflecting on it coming to this conversation it seems like one of those things that is hard to appreciate the significance in terms of moving the potential to move an industry forward. And it's a project that at least to some degree is part of the origin story of your company, Neubase. So I wanted to start there to see if you could just contextualize for people maybe at the very basic, just what the human genome project was and why it was so transformational.
So in order to answer that question. I need to provide some context and so I'll start there. So first point is every human disease is genetic. Either you acquire some genes from mom or dad that are misbehaving in some way, or there's an environmental insult that changes your genes, then. And gives rise to disease, but it's like a pollutant entering and then the genes are altered in some exactly.
Dietrich Stephan: But sort of 0.1 is every single disease is driven either entirely or in part by a change in your genome or changes in your genome. Now the way people have been treating disease historically, Is not at the genetic level you know, genes code for proteins, which do all the work in cells. And so because we didn't understand the human genome and all 6 billion letters of it that every cell in your body has and how it goes awry to cause disease.
The way we would try and treat diseases is just take disease cells and start pouring random chemicals on them. Yeah, millions of different random chemicals and hope that a couple of them stick. And a couple of those might have the activity you want in terms of making that protein behave better, total random screening.
So this is actually called high throughput screening, but it's more random. And then once you have a couple of those chemicals that do what you hope they do on those proteins and. Make the cells worse. Then you engage generally in a decade long multi-billion dollar chemical engineering effort, that results in one drug and oh, by the way, nine out of 10 of those efforts fail.
So drug development has been extremely slow, extremely expensive, and it's why drugs are so expensive out in the world today is because these big pharma companies have to recoup all of that money and it all comes down to the fact that we had no idea which chemical was going to stick to which protein we couldn't model that we couldn't understand that in.
So we had to go abroad. So the dream of the human genome project was to actually first sequence, the 6 billion letter genetic code in a healthy individual as the reference sequence or the blueprint of life, four letters, a C G T arranged in different combinations, across 6 billion letters in every single one of the trillions of cells in your body.
So a lot of information, but think of it as nature's digital information and coding system. And so we finally in 2001, after billions of dollars of investment by the public and private sector got that sequence. What people don't really understand is what's happened in the intervening 20 years, which is it wasn't enough to just have the hard drive with a 6 billion letter sequence on it.
What you really want to understand is how that sequence differs in people with various diseases. Right. We're fine. We're trying to understand which genes drive disease. And so there was a massive global effort to sift through the genetic blueprints of people with, and without diseases find out what was systematically different and put those in databases.
And so now on your laptop at home, you can go into the human genome mutational database and figure out what mutations in that code cause cystic fibrosis or muscular dystrophy or whatever disease, your interest. And then what we had to do was build the national infrastructure to be able to take a sample for me or you send it somewhere and have that place report back to us what change we have in which gene that might be triggering our disease. It's not enough to know in the abstract that some mutation causes some disease. You have to personalize it so that you've now connected the loop. So if I have some symptoms, let's say I've got a cardiac arrhythmia. I can take a saliva sample, send it out to a San Francisco based diagnostics company.
And a week later they'll give me a piece of paper or it'll pop up in my email and say, you have this mutation in this.
Aaron Watson: And that's an accessible fee, which is also just in and of itself talk macro for a second, the first human genome project and enormous cost. And I, I believe I've seen that it could be wrong, but the rate at which that cost has fallen is actually faster than Moore's law, which is about the acceleration of computing power, which is just staggeringly fast. But making it accessible.
Dietrich Stephan: Absolutely. So I mean, literally that first sequence costs billions of dollars and close to a decade to unravel. And now in less than a day and a half, you can sequence an entire human genome for less than a thousand dollars, much less than a thousand dollars and have all of that information ported right back to you.
So yes, the cost curve is exceeding Moore's Law. But just to sort of reconnect the dots to your initial question. So retrospectively we had no idea what the genome sequence was or how it related to diseases.
Aaron Watson: Would it be safe to say then basically that like what you just said, every disease is genetic before that we wouldn't have even been able to say that.
Dietrich Stephan: Exactly, I think that's correct. Well, we, we could say that diseases were hereditary, meaning, you know, the kids of people with diseases had a higher probability of having that disease. And those measures of heritability pointed to genetic underpinnings. Sorry if that's too technical, but we had no idea what the genes were that caused those diseases.
Aaron Watson: Gotcha.
Dietrich Stephan: So, and we've had that information and now we can give it to individual patients. And so the promise now on a go-forward basis and why we invested so much in sequencing that genome and finding all of those disease causing variants and building the infrastructure to deliver that information.
The promise is now that we can develop genetic medicines that actually target the sequence that's changed in a person with the disease directly, as opposed to trying to fiddle with high throughput, random screening at the protein level, we just go in tame that misbehaving gene forms a normal protein forms, a normal cell forms, a normal person.
And that's the era that we're in right now that promises truly scalable and efficient solutions for people that are suffering.
Aaron Watson: Wow. So I want to kind of take this back to the Neubase story and even to your story specifically. So if the LinkedIn profile is to be trusted you were the chair of the pits department of human genomics, and there is a kind of correlation point with you giving up that chair ship and starting Neubase.
So that sounds. Like the, the kind of stew of a catalyzing event. Can you put a little bit more color on that picture?
Dietrich Stephan: Sure. I feel like I've had two separate careers that have somehow at one point become entangled and most recently become disentangled again. And so I started life as a academic researcher.
So writing grants to fund my academic labs and publishing papers on what we observed out there in the world. I mean, that's what scientists do they try and understand the world around them and communicate that to build a foundation of knowledge. Next to an in parallel to that have always had a passion for then taking those new insights and trying to drive them into the marketplace to actually help people put another way.
We would find a broken gene that caused you name it Alzheimer's disease, and we'd write a paper on it. And then it would just sort of float out into the ether. And there was no downstream connectivity to the real world. And so at some point, I'd like to say, I had my first existential crisis where it was like, why am I doing this?
You know? And it, and it came back to the fact that I was doing it so that I could offer that information to someone who was suffering from Alzheimer's disease to get a diagnosis. Or to be able to take advantage of a new therapy built on that new information. And so while sort of running academic programs would always actively push this information out into the marketplace by trying to partner with big pharma companies and say, Hey, you got to look at this.
You know, this is important, put it into your drug development pipeline or by spinning out a new company that was focused on building a new diagnostic or therapeutic in that area. And, and eventually. You know, I came back to Pittsburgh to build the infrastructure here in Pittsburgh to support that translation and commercialization.
And we can talk about what that infrastructure is, but took a holding position as chair of genetics here at the university while I was building that infrastructure. And eventually when that job was done, jumped back into the private sector and I'm focused now on, on building Neubase,
Aaron Watson: Delineate the infrastructure that you're talking about, and then also, new base almost like seems like its own form of infrastructure for this type of development. So can you just help delineate those two for me?
Dietrich Stephan: Yeah. So if you go to places like Boston and San Francisco and now San Diego, what you see are incredible universities. I mean, think of Boston, Harvard, and MIT sort of smushed up together in Cambridge.
All of those smart science, academic scientists are shouting Eureka all day long every day. And what is arisen next to them are people with money ie venture capitalists. And so the scientists will run across the street and say, Hey, I have a new idea for new, a drug or a new diagnostic. Give me some money, and we'll start a new company and then help me hire people that know how to build a company and that whole ecosystem of startup in biotech has really been, and it was birthed in Boston here in the U S and then migrated to San Francisco. And it's reached to a sophisticated state in Pittsburgh. We have, we have that exact constellation of universities where people are shouting Eureka every day. There's little investment capital in the biotech area and little expertise in building companies.
And so I worked for about five years to set up a place, which is here in the south side that young scientists can, or any scientists can go and say, Hey, I've got an idea. Help me figure out if it's a good idea. Get me the capital, get me the expertise and let's start a new company. And I've, I've sort of released that back to the university and hopefully that will flourish here.
But that wasn't my life's, you know, passion to build that infrastructure. It was I think just a necessary piece of infrastructure to unlock real solutions for patients here in Pittsburgh. So NeuBase. Was one of those companies that was spun out of a scientist's lab at Carnegie Mellon University who had a good idea.
And we came around it got the capital. So we've raised about a hundred million in financing and built a team around it, which you see around you here in the office to basically take that idea and turn it into real medicines. One other aside, and I'm sorry if I'm being too, long-winded here.
Aaron Watson: The beauty of the podcast is that it is a medium that lends itself to high context, long form storytelling. So you are doing a fantastic job.
Dietrich Stephan: Thank you. Thank you. I had the pleasure and honor of sitting down with the president of the national academy of engineering down in Washington, DC. And you know, there are various national academies.
There's a national academy of medicine of science, of engineering. And. I forget how I talked my way in to see him, but he had a very simple message for me and I, I'm not sure how we got to that part in the conversation, but it's always stuck with me and is I think really telling of why. academic research is different than commercialization.
It's scientists, looking at the world around them, try and understand it and communicate it. Engineers and artists and entrepreneurs create something that the world has never seen before. And it's an absolutely different endeavor, fundamentally different. In many ways you see universities try and facilitate commercialization, but they can never really do it because it's not their core business.
Aaron Watson: It's a different muscle.
Dietrich Stephan: Totally different muscle, different people, different language, different incentives. What universities need to do better is to let the technology flow out. They can't think everything's the crown jewels and lock it down and they have to just be open about it.
I remember when I was a scientist that was all the dark side industries, the dark side, all those people are bad people bad. Exactly. It's like, no, you know They're trying to do something different. It's as simple as that, that's the part that we've been missing here in Pittsburgh and what I've always focused on in terms of infrastructure building.
And now what I'm trying to do by way of example here in our region.
Aaron Watson: So we've spoken with Craig Markovitz at CMU about university technology transfer. So it sounds like getting to Neubase here found this researcher who developed or uncovered the underpinning technology. And then in some way, shape or form university technology transfer allows that to come out of an academic setting and start to be commercialized.
Is that accurate so far?
Dietrich Stephan: That's correct. Yes.
Aaron Watson: So take me through not only what you saw, but what the market now sees as a publicly traded company that makes this such a compelling opportunity.
Dietrich Stephan: Within the university, there was a scientist who has been working on this core chemistry for quite a while. It was his core focus area.
There is a lot of early research that he did that promised that these could be used to treat genetic diseases. And so over the course of interacting with that scientist and learning about the theoretical potential of these I got quite excited about it. And so ultimately what we did is together went to the university's technology transfer office and said, Hey, what would it take to get a license to the inventions from this investigator's lab?
And so they outlined sort of a set of terms, financial terms that a company would need to meet in order to get an exclusive license to that intellectual property. And so we said, okay sounds good. Booted up a company. Took a license, an exclusive license. And on the back of that, we're able to finance the company.
Now a key point here is that the theoretical potential of a technology is very different than the application of that technology in the marketplace. And that's where the risk comes in and risk capital and everything else.
Aaron Watson: So what you're saying is in one of these like Boston, like environments is if you have a base of investors who are finally attuned to specifically buy it, technology investments, the number one, they're going to have the best tool set of anyone to understand those risks potentially work with you to de-risk.
Cause that's really actually, when you're working through a startup you're, de-risking step-by-step as you go through the process and in addition to help you actually navigate the regulatory challenges and the hiring challenges that come along.
Dietrich Stephan: Absolutely well said, and, and it's a different type of investor than an investor who likes tech or whatever it is, retail goods.
So there there's a different arc in a different set of de-risking activities, for lack of a better word that needs to come around to biotech. And so it's a finely honed skill to be a biotech investor and understand how across a portfolio you can actually make money. I mean, what we're talking about is you know, one of the hardest things to do is like take the commotion complex machine we've ever encountered in the universe, the human body and say, okay, well that's broken, I'm going to fabricate something. That's going to fix that. I'm going to go in. And there's a whole regulatory oversight that you alluded to to make sure that not only do you not.
People, but you actually help them. It's hugely expensive. It's it takes a long time, but the benefits it's are enormous. These companies don't make money for the first 10 years of their existence generaly. So, how do you value them? I mean, it's just a different skill.
Aaron Watson: So you've basically, it's funny cause we just recorded with Jonathan so the listeners will be a week apart, but for me it's hours and use that exact same metaphor of the most complex system or the most complex structure you can put together. And it just clicked for me. It's obviously so plainly obvious to you, but for me, you know, someone who might have the skills as an auto mechanic or the skills of constructing a building, that's still something that has been designed conceived of from the human mind. And so its starting point is within the bounds of the human mind, whereas we didn't design our bodies. It was not something that we kind of had an active role in, in shaping to a significant degree. So it is to some degree unbounded by that otherwise mental constraints.
Dietrich Stephan: So well said, I used to use that exact analogy, which is we didn't come with an owner's manual or a schematic diagram. And in fact, in many ways the human genome project was the first step in that direction. Okay. Now we've got a, a sequence that encodes for the instructions for how to build it, but we still don't know how to build it from the instruction manual. It's just the first step.
Aaron Watson: That makes sense.
Dietrich Stephan: I mean, you couldn't take a genetic sequence and ever extrapolate all of the steps that had to go from that to a living, breathing human. Yeah. We're just correlating the sequence to a person that has a disease that's as far as we've gotten.
Aaron Watson: So I want to change lanes a little bit. We're still talking about Neubase, but like you said, these companies don't make money for a long period of time. 10 years. Sometimes, often you, a Neubase just went public in April. Of 2021, despite the fact that this company was brought together in the beginning of 2018 or approximately in 2018, we've had a number of other preclinical biotechnology startups on their show before, and they are all still in some way, shape or form private enterprises.
Can you help me to understand number one, just it's a decision to even try to go public, but it's also a, a marker of the appetite from. Some segment of investors out there to potentially participate there. There's a reason that multi-billion dollar asset under management, hedge funds, don't go investing in like the seed stage of tangential consumer app companies.
There just isn't the right kind of trade-offs based off of the incentives of their structure. So can you help me understand why NeuBase is a publicly traded company. Whereas similar aged preclinical biotechnology firms might not be.
Dietrich Stephan: I've had a lot of experience building companies out in the San Francisco bay area, Silicon valley and Boston, that traditional path has been.
A founder, usually at an academic institution walk across the street to a venture capital firm, pitches it in a minority of cases. They'll get a check and a company will be founded and that VC will bring the money, but they will also essentially take control of the company for the purposes of de-risking it.
As we talked about before. So they'll seat the board. They'll seat the management. They'll keep the reins pretty tight and maximize for a liquidity event at some point in the future. And usually their fund life is 10 years. And so they want to get their money back out within that 10 year timeframe at most so, and that's all geared to a founder. That's never done it before and recognizing it's a different skill as we just discussed. And so it makes sense for first time founders now, after having done it a dozen plus times, you learn the boiler plate of how to build a biotech company and de-risk it. You don't need that skill set that the VC brings anyway.
And thus you question, well, why would I give them control over the company? Then if, if, if I know how to do this, essentially you're injecting more risk because they don't know the substance of what you're building as well as you do. So if you bring both the management expertise and all of the tricks of the trade to company, building with the scientific expertise, it's actually more risk to take VC money.
And by the way, every time, every traunch of money you take from venture capitalist comes with a massively dilute of event. So by the time. You ever sell that company or take it public, the people that founded it or are putting their blood, sweat and tears into it, have a fraction of what the VCs have collectively.
So in this instance, I wasn't willing to do that again. And so we decided actually right at founding to take the company public and let me take a half step back. So how do the VCs get their money? The primary routes are either sell the company to another bigger company and get a check and return your fund or take the company public.
And once the stock is liquid, it can be freely traded on the open market and they can take their money back. So the game, and it really is a game that has emerged is build these companies up. And then you the VCs apply what I call purple haze, which is basically a brand halo, which says, oh my gosh, if Sequoia Capital thinks that's a good company, it must be a good company.
And then, you know, the IPO balloons, the VCs generally take their money out. And then management is left to support the stock in the, in the aftermarket.
Aaron Watson: even a hype cycle there where like some certain firms are like, well, if they invested, then we'll invest. So like in terms of sequential rounds, you don't want to over-simplify, but can be like part of the basis of too.
Dietrich Stephan: It's the game, that's the game. And, and, and that is also predicated. On a concept that the venture capitalists somehow knows that that company is better than the person who founded it, which to meet us and make any sense because the person who founded it is the one who understands the theoretical potential of the company, much better than passive investor.
I would think maybe that's maybe that's a stretch, but the notion that a passive investor would credentialize me somehow in my judgment always rubbed me the wrong way. At NeuBase it was plain as day what the potential was, and we had no need for the expertise that those early stage investors brought.
And in fact, it seemed like an anchor in terms of giving up control, being buried under layers of profile. You know, financings and so forth. And quite frankly, it was demotivating to after five to seven to 10 years of work that our team would emerge with just a sliver of ownership. So we said, forget that model.
We're going to do something different.
Aaron Watson: But you still need capital to make this happen.
Dietrich Stephan: You have to get money to make this happen. And so what we strategically decided to do was at founding in essentially in July of 2019, we took the company public on NASDAQ, concurrent to raising a seed round of financing, roughly $20 million.
And we use that. I mean, it was nothing. We had no operating history, no offices, no nothing. We use that money to build the plane while we were flying in essentially sort of a design build process. So we got some incubator space. We hired a half dozen people. We set up a wet lab, produced our first data set and concurrently we socialize the story with all the public market investors. We've probably had three or 400 unique investor meetings over the last two or so years since we were founded and went public.
Aaron Watson: And what percentage of those are you?
Dietrich Stephan: All of them.
Aaron Watson: That's intense.
Dietrich Stephan: Yeah. You gotta be willing to put the work in. Right, so nothing comes for free.
Aaron Watson: Once again, the illegibility of a career like this, that's not something that I think is widely appreciated with the role that you play. If this company is public and you know, it's not like we just post it once. Here's the thesis. Hope you like it. It's repeated rounds of questioning, honing the pitch. In order to make this happen.
Dietrich Stephan: Absolutely. And then clawing our way to real progress in terms of data that build, conviction that we're going to get into the clinic with our first program. And then we're going to get into our next five programs. And then in 10 years, 20 programs or whatever, whatever the trajectory is like, there's a constant narrative that needs to be bolstered with data and real progress to build confidence in the public market investors. And, and it's a whole different dance than getting VCs into a company, which has its own unique skill set. And we can touch on that if you'd like, but there's a whole different dance there. That's fascinating as well.
Aaron Watson: So I want to get there, but I want to just make sure that by now I feel like we've, we've gone in so many interesting directions. I just want to make sure that it's completely legible for folks what NeuBase is doing right now, which is developing solutions aimed at Huntington's disease and myotonic dystrophy, which you can expand a little bit.
How that works and what that entails. And then that can kind of help us give an entree into where things are going, because like you said, there's kind of limited range of, of current treatments, but that aperture should be widening with the passage of time.
Dietrich Stephan: Yeah. No, thank you. So we're about to, we're a little less than two years old in terms of our operating history, we've raised about a hundred million dollars in the public markets.
We've got 30 people on our team. Now we just moved into some beautiful space here in Pittsburgh that we're very proud of. A beautiful view of the river and the city. I mean, world-class and we are working on three different disease programs, all of which are purely genetic diseases. First is a disease called Huntington's disease, which is one of those diseases you never want to get close to basically around midlife, if you have the misbehaving gene, your brain starts to die and you slowly begin to lose the ability to walk and then talk and then think, and then you die because your brain dies and there's nothing you can do about. And oh, by the way, half of your kids will carry the effected gene as well.
They know what's queued up for them. And there are these agonizing decisions about whether to get tested or not, and know the future and not being able to do anything about it. The second disease is myotonic dystrophy. It's a disease where effected individuals carry a gene that has a mutation in it.
They suffer from muscular issues like myotonia or an inability to relax after contraction, muscle weakness, and wasting, cardiac conduction defects, cognitive deficits, and they generally don't early. And then a form of cancer caused by an oncogene called K RAs. 30% of all cancers are caused by mutations in this gene.
And there are no effective therapies for the most common mutations in this gene. So think about pancreatic cancer as an example. I mean, you get pancreatic cancer, you're gonna die. And that's because this gene has historically been quote unquote undruggable. So those are the three to things we're working on.
Each of which has a misbehaving gene that we're targeting. And we make medicines that actually look like a tiny little gene. So if you think back to high school biology, you know, you've got the DNA double helix that looks like a, a ladder where the rungs of the ladder are A's C's G's and T's, and it's a double helix because there are two strands that mesh and form the rungs and then you twist it. And that's why, that's why it's a helix. So if you rip that DNA helix in half, think about sawing down the middle of the rungs of a ladder, pulling those two backbones apart and snipping them to be very short. What you have is a backbone with some A's C's G's and T's on it.
And that's what our medicines look. Period. Now the chemistry is what makes them special, but we can let them loose. And we've shown we can do this in animal models of each of those three diseases, you know, simple subcutaneous injection. And they get into every cell and every tissue and they're like heat seeking missiles.
They sorta query the genome, find their perfect match, and then they stick. And when they stick, they stick really tightly and they only like to stick to the broken gene.
Aaron Watson: So that you literally, just now as the exact question that I was excited to ask, so it basically can identify where that is inappropriate and then the cell or the, the, the genes itself are also sophisticated enough to be like, actually I'd prefer to have the one that's not broken as opposed to this broken.
Dietrich Stephan: Exactly. So what happens is, you know, there's a concept called complimentary based pairing. And again, digging deep back into high school biology, A's liked to hydrogen bond to T's. G's like to hydrogen bond to C's. And so based on the sequence that you plug into the drug, there was only one place in the 6 billion letter genome that that drug will stick perfectly.
And so, I mean, it just brings. Unbelievable questions. Like how does a query every location in the genome and find where it's supposed to stick. And what if it's nine out of 10 positions? How does it rip itself back off again? But somehow it does. So all of that sort of stuff that has to happen before you get perfect target engagement happens.
And then you've got a lock on the misbehaving gene, essentially. So that gene. Is taken out of action, meaning it can't be copied into what's called a messenger RNA, and that can't be translated into a disease causing protein. But remember, you also have a second copy of that gene from your other parent, and hopefully that one's still functioning well and can do what it's supposed to do to maintain normal function.
So you've gotten rid of the insult, but you still have,
Aaron Watson: I'm glad people like you were working on stuff like that sounds basically like magic also alluded to, if you've done the venture back to path, a couple of times there is a thumbprint for the development of a biotechnology company. I think the most valuable thing for the audience generally would be a summary of that notion just in terms of, you know, to use I'm more tuned to like a B2B SAS type of company.
So you need the technical lead who can actually build the software product. You need a business function. That number one can sales and market its way into actually getting into the other company's workflows. And you need a support, a venture that can both help those customers work through their problems and identify the bugs so that those can be passed on over to the engineering arm to get the things solved.
That's a gross oversimplification, but that's. Basically what we're aiming for here. And if you can build B2B SAS platform with those three functions and they continue to leverage each other up, you're in a great spot. So if we could attempt to paint a similar picture for these biotechnology companies, generally, they have another game-changing technology seems like it would be the presupposition for any of this to work, but once that kind of breakthrough or potential breakthrough has been identified, what are those type of building blocks that are needed to assemble?
Dietrich Stephan: It's a hard question to answer because in many ways, There are multiple flavors of these types of companies.
If I would try to get to some commonalities, the first is the technical lead or scientist who has developed hopefully a new platform technology that can output medicines that can address diseases in a different way and promise solutions where there was no solution before.
Aaron Watson: I think an interesting nuance here is often with other companies. They're really like a big thing could just be, we can do it for cheaper. And while that's still the case In bio, it seems like that's much less the issue and it's more, we can get a better result, even if it costs more. Now, even if it's way more expensive, there's a means of covering this. It's very much oriented around similar outcomes with less side effects or drastically better outcomes are the primary bellwether.
Dietrich Stephan: I think that's right. I mean, there are so many diseases that we can't do anything about. And so even some incremental benefit or clinical improvement. Can be a multi-billion dollar drug. And then really the cost engineering happens when those solutions come off patent and a generics company comes in and basically just copies the molecule and offers it for cheaper.
So, so it's less about cost on the front end. And it's more about, you know, how much better can you do at reducing suffering and death. So you need the technical lead. You need a source of capital, obviously, because this stuff is hugely expensive. When we go on our tour, you'll see. A chemistry laboratory and a biology laboratory and big, huge million-dollar machines that sequence genes and, you know, make molecules.
And that's very different than a capital efficient build out a for example, a tech company where you need a laptop, a couple of cups of coffee, coffee, and a laptop. Exactly food ad libitum coffee. And you're you're set. And really it's focused around sort of the, the laboratory based activity until you hit a point where you begin to become a clinical stage company, and then you need a chief medical officer, you need regulatory experts, and it turns into a whole nother type of build-out where you're ensuring that it's safe and human beings.
In what's called a phase one trial. If it passes that gate, you have to show it's efficacious in humans in a small number of humans, that's called a phase two trial. If it passes that gate, you do a phase three trial. If it, if it's safe and effective in, and now a larger set of human beings, you might get approved.
And then there's phase four or post-market surveillance where you make sure that no one out there in the world keels over for some unknown reason. And actually there's a famous story. The drug Vioxx got pulled from market because of the phase four surveillance work. There were some cardiovascular issues.
Multi-billion dollar drug got pulled. So hugely expensive, hugely time consuming, different skillsets than which you just articulated.
Aaron Watson: And I would love to just hang on the chief medical officer a little bit more because that's one that has up until this moment I've remained, but federal, I think you might be able to help me.
So there there's the technical lead. That's much more about engineering of the drug and my interpretation of the chief medical officer is they're doing some form of translation from a laboratory setting and academic setting into the clinic, which is where the doctors have their own whole wonderfully complex mode of operating. And where would this actually fit within their context of evaluation, recommendation, ongoing care? Is that, is that kind of accurate or?
Dietrich Stephan: Yeah, absolutely. And so we, for example, we have this wonderful chief medical officer, Dr. Saundra Rojas Caro. She reaches back into the science shop and looks at our molecule.
To say, okay. Does that molecule perform from a pharmacologic perspective? Meaning if you give it at this dose via this route of administration, it has this effect get comfortable that that would translate forward into humans. And then similarly say, well, is it safe in this animal model? At some higher dose.
And what does the toxicology profile look like once she gets comfortable? All of that gets packaged up into what's called an ind application that goes to the FDA. And there were meetings with the FDA to run them through this data, literally at, at the, at the, at the level of sort of experiments and data elements and everything.
And, and then they'll say, I mean, we're talking about people, right? Putting weird new things into people is what we're talking about. So this is very sophisticated and disciplined work. And then once the FDA reviews that ind application has the meeting, they'll say, okay, we feel comfortable. You can go into a dozen patients or a dozen healthy volunteers at some low dose. Maybe it's a dose escalation study and we just want to make sure that nothing bad happens. And so that CMO will oversee all of that work. That will also be responsible for enrolling the patients at various sites. Once that gate is finished, there's another meeting.
There's another application. It goes to the phase two trial and there there's usually multiple clinical sites enrolling patients with the disease. And you've got to be able to communicate to those people why we think this is going to work, why it's not dangerous, and sometimes they'll have other options of trials to, to go into all of that gets led by the chief medical officer culminating in approval to go to market a new drug approval NDA.
Aaron Watson: Yeah. I feel like I could ask you questions to infinity, but I don't. I want to be respectful of your time. So my last. Question before we ask our, our last sequence of questions is around a concept that maybe I tangentially was aware of. I first, like, first of all, clarity to me associated with the whole COVID thing and this record setting development and approval of vaccines to be deployed in mass to people.
One of the narratives that I saw come up was the concept of challenge trials basically meaning short-circuiting that multi-phase approach to the approval of vaccine. And if there were a contingent of willing, in fact, formed volunteers who said, I understand that this has not been as rigorously tested as most of the vaccines that we'd be willing to put our body, but because of the stakes at a societal level, I'm willing to take that risk eyes wide open as a usually a young, healthy person.
Test this vaccine on me and let's see what happens. Short circuiting, that multiple phase process basically. Can you just articulate the kind of spectrum of the folks that will be the first humans on the front lines for trialing anything? Assuming this is not child trials, maybe that's like one kind of extreme end of the spectrum.
Can you just talk about the folks who are, between a rock and a hard place where, you know, we're talking about treating Huntington's, they're already looking down the barrel of a really, really nasty thing. And you're able to come to sit, come to them and say, there's no guarantee that this will solve everything, but in the absence of other viable medical solutions, this is, is one of the alternative attempts. Is that, is that a fair?
Dietrich Stephan: It's a great question. In these devastatingly severe diseases where there's literally nothing else. Available think about again, pancreatic cancer. I mean, you know, there's nothing you can do generally there, I think is an interest on the part of patients, maybe a heightened interest in exploring more experimental therapies and engaging in those conversations.
And of course there's an interest on the part of the manufacturers of these medicines to help those people and the tension, the appropriate tension is still making sure that you're not ever doing any harm. Right. So how does that manifest? I think you begin to get into an area where you really need to be thoughtful partner with the agencies and just be hyper communicative.
So for example, our hope as we get into our myotonic dystrophy type one and Huntington's trials is that we can do what's called a combined phase one, two trial, where rather than enrolling. All healthy individuals, there's all, or part of the humans actually have the disease. And so we hope fully concurrently or very quickly thereafter, both show safety and efficacy.
To try and get hints of whether we can double down and move quickly into sort of a larger phase two or a phase three trial.
Aaron Watson: And it makes sense or regulatory body would be likely to approve something like that because of the stakes. It's not, there should be kind of almost like a different bar for, Hey, you know, people that their eyebrows grow too fast or something that's like not so devastatingly high stakes, where if we can accelerate this in any way, alleviate any sort of suffering, it intuitively makes sense that there would be a somewhat different bar for how that's actually tested and brought to market.
Is that, is that a fair assessment or maybe not so much?
Dietrich Stephan: You know, it's, I think from, from an intuitive and patient-centric perspective, I understand that mindset. I think from a, from the perspective of a company, that's trying to always make sure that we're safe and then efficacious and probably, and I can't obviously speak for any, any anyone besides me and the company, but I could imagine that they also want to make sure that they're not harming people first. And, and also then on top of that, ensuring that there's some modicum of benefit. And so there's a, there's a natural and I think a very healthy tension where, where everyone's really is trying to do the right thing, maybe coming at it from slightly different perspectives.
Is it ever optimized? I don't know. It's probably never optimized in every single scenario. The parties are aligned and in getting to the end goal, maybe the only, the only folks in that triad. Perhaps would be willing to take excessive risk would be those patients who have no other solutions. And, you know, I've seen that personally, but at the same time, could you imagine that the damage that could come from doing things incorrectly?
So, yeah. Yeah.
Aaron Watson: Dietrich. This has been awesome. I have learned so much and I really hope that at some point in the future, we can do it for a second time and you can teach me even more before we ask our standard last two questions to wrap up. Is there anything else you were hoping to share today that I just didn't give you the chance to.
Dietrich Stephan: Now I would just say thank you for the honor of being on your podcast and also for, for what you do. As we talked about previously, I think the world is a really complicated place and giving young people exposure to various different areas so that they can find their passion more effectively. Is it's amazing.
Aaron Watson: So that's very kind, but the, the honor's all mine and I hope that listeners will continue to follow along with everything you guys are doing. What digital coordinates can we provide for people that want to learn more?
Dietrich Stephan: NeuBaseTherapeutics.com and then feel free to also reach out to me on LinkedIn personally, and happy to continue the conversation with folks.
Aaron Watson: Awesome. We're going to link that in the show notes. You can find it in the podcast app. You're probably listening to this right now goingdeep.com/podcast for every single episode of the show before I let you go Dietrich. I want to give you the mic one final time so you can issue an actionable personal challenge to the audio.
Dietrich Stephan: So my challenge would be, and this is a real life skill that I have to employ every single day. And I'd say it's the most important skill is if there is someone out there in the world that you admire, or you want to talk to, for some reason, figure out how to do it. They're just people.
Aaron Watson: You could not, that that should be like the, you know, front of, not that I'll ever write a book, but on the front of my book, that's literally the whole strategy is the world is so much smaller than you realize it's so much more accessible than you realize.
And there is even just something to the realization that they are just people, the deification of another human is. Cause all sorts of issues. And when you realize they're just, you know, live and breathe and think, and try to get to make their way through the day, even LeBron we're all humans.
Dietrich Stephan: Absolutely beautiful. This has been fantastic.
Jonathan Steckbeck is the founder of Peptilogics, a biotechnology platform company that develops best-in-class novel peptide drugs for unmet medical needs. He also has a PhD in Biochemistry and Molecular Genetics from the University of Pittsburgh’s School of Medicine.
Amongst other problems, his company Peptilogics is focused on developing a new category of antibiotics. It has been 20 years since there was a genuinely new class of antibiotics, yet bacterial cells have continued to evolve and develop into drug-resistant infections.
In this interview, Jonathan and Aaron discuss the founding of Peptilogics, why they’re focused on this new modality of medication, and the FDA approval process.
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Jonathan Steckbeck’s Challenge; If there’s something that you want to do that doesn’t exist, go do it.
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If you liked this interview, check out episode 456 with Pete DeComo where we discuss the long, arduous process of developing a medical device and episode 443 with Blake Dube where we talk about better oxygen tanks.
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Euan Guttridge has spent the last 7 years working in the self-driving car divisions for some of the world's largest technology companies.
Between these two roles, Euan developed an angel investing syndicate under the banner Reinforced Ventures. The syndicate differentiates itself for the technical proficiency of its limited partners, bringing a fresh perspective to the companies it invests in.
Euan’s portfolio includes a number of past Going Deep podcast guests including; Gridwise, Locomation, UpContent, Fifth Season, Edge Case Research, and Honeycomb Credit. While not geographically exclusive, Reinforced does focus on Pittsburgh because of its over $10 billion of academic research funded and $6.6 billion of private funding in technology over the past decade.
In this conversation, Euan and Aaron discuss a career developing autonomous vehicle technology, how an AngelList syndicate works, and how to do thorough due diligence.
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Euan Guttridge’s Challenge; Follow your curiosity.
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Reinforced Ventures Website
If you liked this interview, check out some of Euan’s portfolio companies like Locomation’s Çetin Meriçli, Edge Case Research’s Mike Wagner, and Gridwise’s Ryan Green.