Thoughts From The Trenches

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Paul Biondi, Executive Partner at Flagship Pioneering and President of Pioneering Medicines, spoke with Biotechnology Analyst Yaron Werber about how internal alignment in a company’s innovation strategy is an under-appreciated driver of successful transactions in the Biotechnology space. Paul also offers insights into the need for appropriate risk-taking and disciplined spending for early and late-stage deals, the R&D challenges of navigating an ever-increasing number of validated modalities, and how biotech collaborations will evolve in the coming years.

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Transcript

Speaker 1:

Welcome to Cowen Insights, a space that brings leading thinkers together to share insights and ideas shaping the world around us. Join us as we converse with the top minds who are influencing our global sectors.

Yaron Werber:

Thank you for joining us for another exciting episode in our biotech deal makers podcast series I’m Yaron Werber, biotechnology analyst at Cowen. I’m super excited to be joined today by Paul Biondi in this episode, Thoughts from the Trenches, to discuss his key insights from the trenches on the future direction of business development and M and A in bio pharma, and fostering a new model for collaborations.

                Paul joined Flagship Pioneering in 2019 as executive partner and as president of Pioneering Medicines, Paul was involved in strategic and operational aspects of Flagship since the beginning, including working with portfolio companies to boost value creation. Previously, Paul served a senior vice president of strategy and business development where he ran BMSs strategy for external innovation. Prior to this role, Paul held a series of leadership roles within the company in R and D or we’re seeing strategy portfolio and project management, and clinical and business operations. Paul, always great to see you and thank you for joining us.

Paul Biondi:

Great to be here. Thanks, Yaron, for inviting me.

Yaron Werber:

You know, there’s so much that we can talk about with you, Paul, and I kind of want to bridge the gap in your career, or I should say the lifespan of your career, from your last year’s tenure at Bristol, and obviously doing business development, to what you’re doing now at Flagship Pioneering and Pioneering Medicines as well.

                So let me start with an obvious question, what do you think made you successful at BMS, and what was the secret sauce to really stringing along and building a pipeline through external innovation?

Paul Biondi:

Great. Well, thanks, Yaron, yeah. And no, it’s fun to think back on that era. I really enjoyed, obviously my, my time at BMS, particularly not only on the R and D side when I was there, but the BD side. I think that I’ll start there.

                I think part of it was actually an insight that Charlie Bancroft, who was our CFO at the time had, when he approached me to say, “Hey, Paul, I think you’d be a really,” I was working in R and D, and under that time, Francis Cuss, but had worked with Elliot Siegel, both the heads of R and D before that, and he really had the insight to say, “Hey, this is always about an alignment and an extension of an R and D strategy,” and said, “you’ve got such, because of your role, and the history and all that, you have such a great insight into that into the R and D Ps, and what we’re trying to achieve, that it really would make sense for you to have come in and run this.”

                He was running at that time directly. And so I think that’s the number one thing in my mind, which was a clear, I think at BMS, starting back, even with the string of pearls strategy, when Jeremy had come in, Jeremy Levin, who we obviously know well, and he had worked on that strategy with Elliot, that was part of R and D, he reported into Elliot and part of the R and D organization at that time later on, he moved BD up to reporting to the CEO, but, it always started with a very tight alignment. And I think Elliot’s early insight saying, “Hey, we should always have an internal and external strategy,” which seems somewhat obvious now, but it was at the time, not everybody was doing that because there’s so much innovation exploding on the outside, and you could compliment that with the inside.

                So the first piece was, I think, just having that clarity and alignment internally, what is the role of BD? Like, what are we trying to achieve? Even at the most macro level, like we saw ourselves as an extension of our innovation strategy, in a complimentary way to work with R and D, and I think that was one of it. Anybody, I think that does BD and I’m sure in some of your other podcasts, like it’s so much harder to get internal alignment to get these things done than it is to strike a deal externally.

                That is the fundamental key to this job. And to get deals done is how to get the internal alignment to do them, because there’s such a plethora of choices. So I think having the relationships I had the history of the strategy and both on the R and D side, but into the corporate side as well, that was key.

                And the last piece I would say for me was the ability to really build just a terrific team that just explicitly fit that strategy. And I was lucky in some of the people that were there, folks like Graham Brazier, for example, and others, that had a depth of experience, and [inaudible 00:04:48] McGrath, others that have done this, and the ability for us to basically, I think, be very integrated with the R and D and commercial side and to bring that along.

Yaron Werber:

Yeah. So that’s critical. So you’re already starting by mentioning what made the strategy successful and that’s the alignment; how did that work? Was there a mapping, external assets and programs that you were interested in, between you and obviously R and D, and then, what happened on the R and D side? Did they have a list of what they’re doing internal versus external, and how does objectivity run when you’re looking at programs, which are essentially competitive with what you’re developing internally, but might actually better externally?

Paul Biondi:

Yeah. So that’s a great question. And it happened kind of in two ways. I think the kind of more standard way was what we would have is joint teams, disease strategy teams. So we did it by disease area and essentially what was brought up, that was a multifunctional team that was usually, obviously led by the R and D side, both research and development.

                And then typically somebody from the global commercial team, as the kind of core piece, and then BD was the fourth kind of component to that. And so, it would start with the internals team’s kind of view of where they wanted to go with unmet need and typically kind of like, what is the biology, that they were excited about, and how can we get at that? And it would be okay, here’s our shots on goal internally to get at that.

                And then there was a discussion of like, “Hey, we would love to get at this.” At that time, we had obviously robust small molecule capability of BMS, and had built out an antibody capability, but, beyond that, there really wasn’t any other modalities until we did Celgene. For the most part, it was also thinking about, “Hey, these are certain biologies. We can’t get at doing it internally, or we want multiple shots on goal at it.”

                And that was kind of a key piece. So I think that was a very well process and it really helped the BD side, though the one extra piece that I think that over time was clear to me was, we would often see things right just through our interactions, as I went out and met with various VC teams or various companies, and you start to see, I would say, often themes of innovation coming out, that our team wasn’t thinking about.

                So we would often bring that back saying, “Hey guys, we’re seeing a lot of activity in this space.” It seems like in our search and evaluation people again, we’re very attuned to, “Hey, this might not be something we’re thinking about directly,” but we would often introduce ideas to say, “Hey, we think this fits well.” And that’s where it is key for like your team. The BD team really didn’t know what that internal strategy is. So you can suggest those kinds of things versus just saying, “Hey, here’s some opportunistic thing. I think we could get this deal done,” and try and, you know, I hear about those type of approaches. And I think that’s just never a good idea.

Yaron Werber:

Right, you want to marry who you want to marry and not who you can.

Paul Biondi:

Yeah. I mean, the best deals we always did where we had a lot of conviction around the biology already, and then somebody just had a better mousetrap, I think that those often worked the best in terms of, again, getting to that internal alignment, and our excitement about doing these things.

Yaron Werber:

Yeah. So what separates, as you think, historically successful transactions from those that didn’t really work out?

Paul Biondi:

Yeah, I mean, some of it is there. To me, it’s always having that conviction around typically the underlying biology of the program itself, that, and sometimes just like in normal drug development, just because you had that conviction doesn’t mean it always works out, right?

                But I think that to me was always the key to those, versus, like I said, sometimes it was sort of like, ah, well, somebody’s running a process, we think, “oh, we probably should, we’re worried,” we did it more from, I would say, a defensive perspective, versus sort of like a strong conviction of just independently, “Hey, we want to have this thing” versus, “Hey, let’s protect this other thing.” That understanding of like, that this really fits well into our strategy and is why we want to do it.

                The other thing I would say, which is where you built up multiple things against a particular therapeutic strategy. Just like in all things, it’s very hard to predict which one of these are going to work, and you don’t want to, I think be overly feeling like, “Hey, the deal, we have to make this work because look how much we paid for it.”

                You never want to kind of get into that cycle of having that dictate sort of what you’re doing. Sometimes I think the only other thing which was, I don’t want to put this the wrong way, where you feel like you’re in a particular leverage point, and you almost be too greedy in how you set it up, like too much control, too much final decision making, sometimes in the partnerships that we did, I found that, actually, it’s like going into a marriage, where you just sort of dictate all the rights; eventually the other party just gets disinterested, right? So I think sometimes it’s not good. It feels like you can drive a hard bargain and you feel good about it, but it’s not good for the long term.

                So that was one thing that I noticed over time that, a lot of times, while painful and difficult, sometimes the joint decision making on things, for example was a way better approach, or not trying to get every last dollar, because it just creates such a bad taste in the other side’s mouth, but they feel like they have to kind of take it.

Yaron Werber:

It’s got to be a win-win for both parties for it to really be sustainable.

Paul Biondi:

Yeah. Particularly on the partnership side. In some ways, it can be easier to just do the M and A side of things actually. I mean, other than kind of the risk profile, and all the putting up with the dollar amounts, but it’s so much simpler for partnerships; I was always amazed when I really got in and looked at these partnership contracts, they’d be 200 pages long, and versus the very, as you know, very simple M and a contract…

Yaron Werber:

Right. It’s a question of, yeah, it’s a marriage contract versus a rental contract. What a good deal for big pharma? How do you measure success? Do all deals have to be NPV positive, or it’s not considered to be a good deal? And what happens in situations where, to your point, you’re diversifying into a new area, you need to bring in new capabilities and they don’t often come with a 10 billion dollar product guaranteed at the end of it.

Paul Biondi:

Right. Yeah, I mean, to me, I think you have to think about it at kind of different stages. When you’re looking at, I think, a late stage deal that probably fits very clearly into a known market or a franchise that you have, they’re NPVs really do matter. And I think you have a good ability to actually try to estimate those within a range. I think the key, to me, which is like, Hey, that the potential upside is in a much greater ratio to the downside. And I think that’s, to me, always the way to look at it, and your view of the upside, in your hands, often, and this is why I think people look at some deals that get done by companies and just don’t get it.

                They’re like, “why are they paid that much for that?” Well, because you look at it in your hands and say, we think it could be worth this much from an upside perspective, that honestly the company alone, maybe, wouldn’t be able to unlock that value. And it’s not to say, “Hey, you shouldn’t take risk or downside,” I mean, we always used to joke, which is like, for all the ones that fail, it always feels like a bad deal, and for the ones that succeed, it looks like a good deal, but that’s really not the way to think about it. So I think that’s one key piece, which is, a good deal is where you’re preserving, I think, a big chunk of the upside, and that you can create a lot of that upside and doing that kind of retained value is a piece of it.

                I think in the earlier space, it’s really different. I think it’s almost impossible to sit there and forecast what these things are. I mean, you just see this time and time again, which is, in my experience, you introduce a new therapy, a dramatic therapy, into a space that it really hasn’t had one, you see this all the time, I remember way back in the day, people thought RA was this big, people, even recently with atopic dermatitis, because the therapy’s there, that introduced are not good, and it’s been that way for a while. Yeah, of course the category, sales is so small because no one’s ever introduced as something that’s been transformational.

                You really have to rely on sort of the scientific medical view that like, “Hey, if this profile really fits out, this will just dramatically unmask demand there.” And I think that’s the right way to think about those deals in the early space.

                Now, it’s hard. You have to put some parameters on like, how do you determine the value, but I do think it’s probably there, again, it’s back to that conviction piece of like, Hey, have focus and conviction in a few areas that really matter to you and it makes sense to go make those deals happen then.

Yaron Werber:

Yeah. Yeah. And it’s great to hear you say that, ’cause I think a lot of times there is a false precision and to what’s analyzable, what you can predict, and where’s the role of taking calculated risks in a way that’s not going to be linear, not everything is going to work, and there needs to be a culture, both internally, and frankly, equally if not more importantly, externally, that risk taking is okay, not everything’s going to work. And eventually over time you will deliver value, and the totality of the deal, is where you’re going to create value. It’s not each individual deal on its own.

                My question then has to do with, how much pressure is there to do late stage deals, which are considered to be less risky, less likely to blow up, let’s say, clinically, more likely to get approved, but perhaps less likely to meet their 14D9 projections depending which way breaks out. And it’s almost like when you’re holding onto a sinking ship, but you’re going to hold onto that ship even though you know, so you’re going to hold onto those predictions, even though you know those predictions might be a little stretched, versus going earlier stage, there’s no ship to even hold onto at that point, but you’ll really book all the upside at that point.

Paul Biondi:

Yeah, no, it’s a great point. And there is a tremendous amount of pressure, I mean, just because of exclusivity losses that just create challenge to that kind of top line trajectory of the company, and how do you maintain that? Because, it’s such a, not a deterministic process, and from your internal engine. And I do think part of BD is there to help smooth that out, which is, Hey, certain things you’re going to work, but they’re not going to always…

                In a particular franchise, if you have a large cardiovascular franchise, like, take BMS today with Eliquis, it’s hard. And part of it is, Hey, I can’t completely replace all that, but at least having enough there to say, Hey, could I smooth that out so that when we kind of re-baseline there we can come back to it and rebuild in that area and take advantage of the expertise, both commercially, medically and late stage development on that.

                So the challenge really is just, yeah, back to the retained value now. I mean, you just pay all the value out to somebody and that’s being really disciplined to say, “yeah, this would be great, but we’re not going to retain that.” I think the key though, is back to what I said earlier, that because you have those synergies that other people maybe can’t understand and see, like your willingness to pay because you see how much greater it could be, I think, is a key piece to what could allow those late deals to happen, but you just have to be, I think, really disciplined about that process.

                I think in the early space, yeah, it’s a much better way to play,, to do that. I mean, I was always super impressed with how Celgene had taken their strategy. I mean, I still to this day think that between Tom and George, and then later, Rob Hershberg and others, that how they developed that, and the productivity they got from that, I mean, they several approved products out of that strategy, with a very tiny research organization.

                So, I think the kind of playing the portfolio, the multiple shots and options is what you want, the challenge is just how to manage that from a R and D perspective. And that’s where, I think, we thought a lot about that, which is just, “Hey, how, how can you manage that?”

                And maybe this is something we can talk about a little bit too, which is, I think that what, I would say, the challenge today is, how do you play all these different new modalities? Because that’s the, it seems like, the existential challenge for the R and D groups today, which is, gosh, there’s so many validated modalities out there today, versus even when I was at BMS, we just had two, and then growing to maybe five, and now it’s probably 10, you know, so it’s hard to say, how are you going to try to play that and manage that from just a, Hey, how do you, and not only in R and D perspective, but a manufacturing perspective.

Yaron Werber:

Yeah. You know, what you mentioned in Eliquis always reminds me of the Incredibles, where Bob, the dad, was talking to Dash from the audience, when they were racing and he is telling Dash to go on the front, then go to the back, and he’s like, “just be second.”

                It’s like, you don’t want to have that mountain leading Everest, huge position with a big cliff, but of course that’s what happens with innovation. You’re successful. You can ever engineer it to be a smaller mountain range that kind of grows forever.

                But, so, to your point, as you think about multiple modalities, multiple different programs, different pathways in areas, how do you manage it all from an R D perspective? And then orchestrating also how much you’re going to spend internally and having the external bandwidth, the internal bandwidth to bring external programs?

Paul Biondi:

Yeah. I mean, I think that’s a key part of it. And actually that last bit that you brought up, I think is one of the critical things I probably should have mentioned earlier, which is just, for all pharma companies who are obviously rich with cash, but the classic, Hey, P and L poor, there’s a lot of treat to that, particularly in the research space, because, they’ve got, essentially, in the short term, a lot of fixed costs, they’ve got a lot of fixed infrastructure, fixed people. Yes, you can adjust it over time, but, their discretionary spend in any one year is, actually, is not that great because so much gets pulled into having to fund incremental clinical trials, on things that look like they’re going to be successful, and a huge development. So, managing that-

Yaron Werber:

[inaudible 00:19:11] and through the internal commercial products too.

Paul Biondi:

Yeah. Exactly. And people don’t even look at that, because a lot of times that quote unquote “phase four spend” doesn’t even get categorized right, and then [inaudible 00:19:22] so…

Yaron Werber:

It’s always on some of the parts for Wall Street.

[inaudible 00:19:26]

zero though in reality.

Paul Biondi:

And I think when I was at BMS, particularly Elliot and Francis, working with Lombardo [inaudible 00:19:33] in the whole leadership team and Charlie, as the CFO, really disciplined about saying, “Hey, we have to preserve a way to make sure that we can budget for these things,” because what you don’t want get in is that situation where the internal R and D team feels like, “oh, if I take this in, I’m going to trade it off for something else.” You know? And that’s not the position you want to be in, because that’ll just lead to kind of killing external innovation just to preserve internal projects. So there has to be some trade off there, but you have to keep it in a way that the teams themselves, don’t self select for that.

                The key piece on the modality thing, I think, is to try to play, right now, you play multiple options around the biology that you’re interested in, and people are, I think, are smart and starting to see, okay, wait until a certain time until you think that these modalities really from a true scaling perspective, have been kind of sorted out. And I think there’s a greater willingness, and I see it in the Flagship companies, we spend a lot of time and thought about investing, and how to create very robust manufacturing approaches, for these novel modalities, which is, often the bulk of what we’re innovating on because we see that as almost as fundamental as the core R and D strategy, that is a source of even, huge competitive advantage to get that right.

                So part of it is then co-opting the manufacturing group to be in on, okay, we’ve got to get more comfortable in being externalized on some of these assets. And if it also becomes a huge drug and is great, you’ll do what it takes, and you’ll have the wherewithal to invest, alongside the company to make sure it’s there.

                But I think the willingness to kind of, Hey, just don’t assume that the biotech couldn’t deliver, I think, is just how you have to play it. Because I think the opportunity cost of not playing in these spaces, just look at all the vaccine players at mRNA. You can’t cover everything. But I think that there are things to say, boy, at least those have conviction about some of these things and figure out a way to be involved in them.

Yaron Werber:

Yeah. So as you think, in hindsight and, given what the way things have transpired, what are the key learnings in the Celgene acquisition for you?

Paul Biondi:

I’m glad to see now, that I think there’s more, recognition in the value of the company for what that’s brought to them. It was a big decision, and I think it was really doing the strategic work to really look at sort of like, Hey, we’re looking at our trajectory, the potential risks of doing, just on our own where there were a lot of people that thought, “Hey, you guys are on a good trajectory.” And I think we looked at and said, “yeah, we could,” and that could be one scenario, but there are other scenarios that maybe we’re more, worried about and should we not start to both expand out from the modality perspective and get into areas?

                I mean, what was so amazing, I think, about that deal is just from the get go, it just, it had such an obvious complementary to the strategy. And I think that’s key, ’cause it was just so easy to look and find ways in which it was going to create value for us. Not that it didn’t have risk, but it also wasn’t like it was all dependent on one product, and how it’s going to work.

                So I think that ultimately is the key. Looking back, I think, trying to think about, Hey, and that story is just being played now of like, “Hey, how do you use that as an opportunity to reshape the company?” And I think that Giovanni and the current team have done a nice job in using this as a catalyst to say, “Hey, we’ve got to pivot and move in a different direction.”

                And that was a key going into it, part of it, I mean, it is hard to do these big transaction, and it just takes a tremendous amount of courage to do it. And that alignment just, and the fortitude internally, like “Hey, no, we know this is the right thing, we’re aligned with the board that is it.” And so that, in the face of what turned out to be in the beginning, I think, a lot of concern from various shareholders about it, you got to have the conviction to say, “this is why we think it’s the right thing,” and just keep going at it.

                I mean, it’s interesting, I’ve enjoyed working with Noubar Afeyan, and Flagship, and just his philosophy around having a long term perspective in iterating. What he did with Moderna, what they do with all the companies, which is, and I think that is one of my takeaways from this as well, which is, you can see the fundamental aspects of it; it might not work out right away, but there was so much substrate there to say, Hey, there’s so many sources of value that if one thing doesn’t quite work out, you have other places that you can pivot to both short term and long term. And I think that’s the only way to do that kind of deal, honestly.

Yaron Werber:

Yeah. You know, even with that in mind, and just everything that you’ve done in your career, how would the partnering collaboration model, how will that change in the next five to 10 years?

Paul Biondi:

I mean, right now, I think just given where the market values are, there’s probably a lot to justify, while going in and acquiring something, if you can figure out a way to manage the risk of it, could make some sense, and I can see why people would go down that strategy. I mean, I do believe particularly in this era of, you have this explosion of modalities, that partnering with multiple companies, and multiple approaches, again, not all over the place with no coherence, but in a few areas in which you feel really strongly, and that could be like around a target or a set of areas that you want to go after. I think it’s going to vote itself to want to do the partnerships, that the format of those, I think will probably, increasingly around platforms, I think it makes sense to sort of say, “Hey, let’s think about how this platform really could transform a number of areas, and making the investment to know that and go after it.

                So I could see that happening, wanting to think more about kind of how the manufacturing strategy of your overall company needs to evolve. For a while there was two modalities, and it just evolved into a cost minimization because these were tried and true, and you could actually just optimize them and bring the cost down to now, you have to think about, okay, how can I have a network strategy with multiple players that, what is it that manufacturing team’s going to do, to be able to allow for a greater innovation approach?

                And so I think that how people partner on that will be one of the things that, you know, also comes forward. And then some of these things, the nature of the modalities really changes the game. For example, just in the whole gene editing space, the value of non-human primate data is actually quite predictive, and reminds me of virology where like, gosh, you had these great abilities to know that the drug worked very early on, you just had to figure out if you can kind of do it safely and deliver it in the right way.

                And so, I also think looking out for modalities that are going to change the nature of drug development in the paradigm, is another piece and then structuring deals differently because of that.

Yaron Werber:

Mm. Okay. And are technological deals, they’re mostly going to be collaborations? Are they going to be sort of disease or asset based or are they going to be acquisitions?

Paul Biondi:

Well, that’s a great question. I mean, I would see where people would start down the path more of either the classic, “Hey, let’s do a couple targets on this platform.” And because I think through that process, both sides actually learn a lot. The smaller platform company gets to know more of the expertise and the thought process around kind of the drug development side of the, and the biology that probably the larger company is bringing, and vice versa, like the companies, as they get closer to it, realize the real potential, what Hey, this platform can do, which is hard to just know, purely from diligence. So I do think that is a piece that will benefit both sides as they get to do those, and doing those kind of multi target deals.

                You know, one of the things that we’re doing is, and this is one of the efforts that I’m leading, is trying to make it easier for larger companies to actually go earlier and interact with our technologies. And partly it’s because of the way that Flagship structures us, we do our own IP, we have a large ownership position in our companies, and take a long perspective, so, as part of that, what we can do is have an ability to offer access to multiple technologies as one, rather than just, Hey, you have to have, as much as we would love to have people have conviction, and one of our platform companies, we recognize that won’t always happen, so allowing people to get some exposure to it, some of that benefit and what we established as a unit that I’ve built, which is really kind of world class pharma, drug, product thinking, folks that can more or less interface with the pharma company and also help our companies in operating in a partnership that way.

                So I think that’s going to bear a lot of fruit. I think that everybody’s trying to figure out an answer for, “Hey, I don’t want to be left out of some technology, but I can’t possibly cover everything,” but trying to come up with structures like this, we think, will allow people to be willing to take more risk essentially, and get the upside of more exposure to what these technologies can offer.

Yaron Werber:

Yeah. So you started touching on this a little bit, but what are you doing differently when you’re doing partnering at Flagship Pioneering and at Pioneering Medicines? And then also, maybe, tell us a little bit about what is Pioneering Medicines, which you’re running?

Paul Biondi:

Yeah. So, I think the key thing, we think of it in these three buckets, there’s a classic sort of asset based partnering, and that’s where one of our companies independently comes up with what they think is an interesting asset, and kind of progresses it. And I think that those will always be there, and are very traditional in the approach, there’s, I think, some movement along people getting more comfortable with, Hey, how do you deal with, sharing commercialization rights and things that are important to smaller companies, and, I think the big pharma companies actually done a nice job in accommodating that in a way that’s realistic and feasible to do, and that works for both sides.

                I think on our side, around the platform pieces, I think we are increasingly trying to help people understand that there’s a lot of promise and potential in these, that, as the company’s come in earlier, they have an ability to shape and make happen in the diseases that they want, and that can be really quite, value added to the company. And I think we’re seeing how people are more comfortable with that over time. I just take, for example, Foghorn, in our network, I think that they did a nice job. They did kind of a smaller deal, I think, with Merck that had a real interest in a particular target, they kind of started there, think that helped others see, get comfort with it.

                They made some progress on their later assets and then did a larger deal with Lilly, for kind of a mid tier set of assets. So I think that, in their portfolio, and I think that kind of piece is such a win-win for both sides of people to kind of see and help shape how that platform gets developed, get access to, real assets and very helpful to the company.

                The last piece, yeah, I did Pioneering Medicines. So this was what we built, this is not a separate company, this is a capability within Flagship itself. And our core strategy is to say, Hey, that we have these broad based platform, that we develop and they could be applied in multiple areas, when we form the companies themselves, they have to have a focus.

                And often we focus on a lot of diseases where we can get to patients quickly, because that helps drive validation to the platform itself, you know, oncology, rare disease, are often areas that focus on, but we don’t need to be confined to these small specialty diseases.

                So one of the insights that Noubar and other partners had was like, Hey, what if we, they originally used to come to me and other large pharma companies saying, “well, why don’t you guys want to do that?” And of course our risk aversion and reticence to jump in on a novel, new platform, we recognize that it’s hard to necessarily get everybody there.

                So, the thought was, well, what if we established our own unit to basically do like kind of a parallel effort? People that have world class drug development and discovery expertise, that where we could conceive, we sort of take a disease and think agnostically about all the technologies in our portfolio and say, Hey, here’s a real medical need that’s been there for a long time, or a very interesting target that no one’s been able to get at, I think are one of our technologies could uniquely unlock that.

                So we conceive of these new medicine products, and then what we do is develop individual asset companies. So subs, similar, if you’re familiar with like the Nimbus model or even to some extent, I think, BridgeBio’s done, but in this case, we’re just doing it within our technologies, and applying these concepts. So it’s not an operating company, each of these subs is really just an ability for us to both fund that entity, and ultimately transact on it.

                So we’ll my team, as the operating unit within Flagship, will advance these, working with our platform companies, trying to lower the opportunity costs and make it as easy as possible for to do an incremental program. But they’ll get the benefit of showing that the platform works in an entirely new area, and without having to make all the investments into that new area, because my team can do that. So I think that we’re just starting this out, but it’s really starting to get some traction and that the other piece is, we do think it’ll be an enabler for a new type of strategic partnership with pharma, as I mentioned, to give access to multiple technologies.

Yaron Werber:

And you need to sign sort of a separate collaboration with each company as you license technology, and it’s a near traditional vertical unit that’s actually, it’s on public empathy than the [inaudible 00:33:40]

Paul Biondi:

Yeah. So we create these subs, and within that, have a formal relationship between us and the platform companies, because ultimately what will happen, which is, I think the goal is to say, “Hey, we want to get this into the hands of a late stage development and commercialization partner,” so that’s how to bring it to human proof of concept.

                So ultimately what will remain will be the relationship of the pharma company, hopefully that we do a partnership or sale to, and on that particular, and it’s a narrow defined asset, it’s a single program, it’s a target and modality, a PD1 antibody type of thing. I mean, obviously not, just to make the point, but it’ll be in a much more novel area, like a novel target against, maybe Lauren’s circular RNA as an example. But then that relationship will exist long term between the platform company and the pharma company.

Yaron Werber:

Yeah. So it’s a win-win pretty much for everybody, as you said. Well, terrific, Paul, let’s move to the lightning round, my favorite part of these podcasts, and it’s a little personal touch, and has to do getting to know the person a little bit more, and then a little touch of humor too.

                What is your favorite TV show?

Paul Biondi:

You know, I have to tell you, one of my favorite shows of all time is Star Trek, and this is what you love about the streaming era, right? That you can get access to these things, but partly because it just, actually, my dad was a physician, but loved science fiction, and I think at the time, really just saw just all the, not only the kind of fun human drama of that show and how forward thinking it was, but just sort of the classic kind of allegory and metaphors that it was trying to make. I just have such fond memories of trying to understand, because when I was younger, I didn’t-

Yaron Werber:

Didn’t follow the plot.

Paul Biondi:

Yeah, you didn’t really understand the higher allegory that was going on there, and he would explain that to me. So I’ve always had a soft spot for that. And they’re so funny and campy, but yet the themes are, still highly relevant, which is, I think kind of amazing today.

Yaron Werber:

Yeah. I was actually just reading recently a book about Einstein, and he got to how we founded cosmology, essentially, and the four dimensional universe. And I remember just following this and for the first day I could explain all of it, and then a week later my wife asked me a few questions, I couldn’t explain any of it. So I totally know what you mean.

                What’s your favorite place to go to? To travel to?

Paul Biondi:

Yeah, so I love to sail, and every year I sail from New Jersey, where I keep my sailboat, usually I go with my sons and another friend, and we sail up to Martha’s Vineyard. So [inaudible 00:36:28] to the east coast, to me, is just one of my favorite things to do. And just because you go through, and you go through New York Harbor up the East River, the unique view of the city from that point, and fun to take advantage of the currents there. And you open up into Long Island Sound, where you can just hit, every year, we can hit a different harbor, either on the north side of Long Island or on the Connecticut side. And then typically we’ll go to like a Newport and then Block Island, the Vineyard, and it’s such a beautiful kind of unique, I think, stretch of sailing and, so anyway, that’s my all time favorite thing to do.

Yaron Werber:

I’m sure with lots of IPA and lobster and seafood.

Paul Biondi:

Yes, exactly. Like you could just pull into these little harbors, like in Norwich, and they’ve got these, just, little lobster shacks, and every night is a fun adventure to find, okay, what are we going to do for dinner? What’s the interesting local eatery that we can find there.

Yaron Werber:

Yeah. I went to med school up in Massachusetts, and we did a couple few of our rotations up in Maine, where back in those days, a couple lobsters was like really not much, and even being totally broke med students, you can indulge. And then of course you go back to Boston, you’re like, “how much is a lobster?”

Paul Biondi:

Yeah, no.

Yaron Werber:

“Oh, I can’t afford this.”

Paul Biondi:

We had family up in Nova Scotia when I was a kid,, and we used to go up there and yeah, you would just go down to these lobster places where they just, truly just bringing them right in, off the boat, and it was like a buck or two a lobster, and they would just, they had these massive pots that sat on four burners, they just drop it in and just give it to you, and you can still do that, like the Vineyard and those places, that you still do that kind of thing. Of course you’re paying not a dollar lobster [inaudible 00:38:10] fortune.

Yaron Werber:

With inflation.

                Great, Paul, always great to see you. This was really wonderful. Really appreciate your time.

Paul Biondi:

Thanks Yaron, thanks for the opportunity.

Speaker 1:

Thanks for joining us. Stay tuned for the next episode of Cowen Insights.


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