About Tales from the Trenches™
MATTER’s signature Tales from the Trenches series is an opportunity to hear the early stories of some of the global businesses we read about in the news — straight from the founders who led them to greatness. This series invites seasoned healthcare entrepreneurs to the MATTER stage to share learnings, stories and key takeaways from their journeys. Tales from the Trenches is free and open to the public.
Dr. Roy Smythe, CEO of SomaLogic, is an internationally recognized surgeon, biomedical scientist, academician, health system administrator and healthcare business entrepreneur. Dr. Smythe joined SomaLogic in 2018 and has led the company in creating sustainable and scalable growth eventually leading to the company’s initial public offering in 2021.
Prior to his work at SomaLogic, he served as chief medical officer at Valence Health and AVIA. Dr. Smythe trained in general surgery, surgical oncology and thoracic surgery and completed a postdoctoral research fellowship in molecular therapeutics while in medical school. As a medical and scientific thought leader, Dr. Smythe has authored more than 300 papers, abstracts and essays in academic, literary and humanities publications.
On January 26, Roy joined us for a conversation moderated by Dr. Timothy Cunniff, executive vice president of research and development and chief scientific officer of Paragon Biosciences, to discuss his entrepreneurial journey, lessons he’s learned along the way and his vision for the future of SomaLogic.
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Steven Collens, CEO of MATTER (00:13):
Welcome to MATTER's first Tales from the Trenches program of 2023, which we are delighted to produce together with Paragon Biosciences. I'm Steven Collens. I'm the CEO of MATTER. We are a healthcare technology incubator and innovation hub with a mission to accelerate the pace of change of healthcare. And we do three things in service of our mission. First, we incubate startups. We launched in 2015, and since then we've worked with more than 700 companies, ranging from very early to growth stage startups, and we have a suite of services that help them at every stage of development. Second, we work with large organizations, health systems, life sciences companies, payers, to strengthen their innovation capacity. We help them find value in emerging technology solutions and empower internal innovators to unlock the value of their ideas and create a more human-centered healthcare experience through system level collaborations. Third, we're a nexus for people who are passionate about healthcare innovation.
We bring people together to be inspired and learn and connect with each other, and we produce a lot of programs, including large scale events for the broader community, as well as small forums that are exclusively for our members. Tales From the Trenches is our longest-standing series here at MATTER, where accomplished entrepreneurs share their journeys about how they got started to what they've learned all along the way. And today we're joined by Roy Smythe, who's the CEO of SomaLogic. Um, Roy is an internationally recognized surgeon. He's a biomedical scientist, an academician, a health system administrator, and currently a healthcare business entrepreneur. Roy will be interviewed by Dr. Tim Keff, who is Executive Vice President of Research and Development, and the Chief Scientific Officer at Paragon Biosciences. Tim has more than 30 years of experience in clinical development, pharmaco vigilance and quality assurance and regulatory affairs, and has built numerous companies in his roles at Paragon, uh, and Pryor. Roy and Tim, please join us. Thank you so much for being, uh, part of this conversation today. Uh, we are very much looking forward to it.
Dr. Timothy Cunniff, Paragon Biosciences (02:29):
Thank you, Steve. Uh, good afternoon, everyone. Uh, I'm Tim and I'm gonna be interviewing Roy about his, uh, remarkable career. And, and, uh, Roy, I was, you know, when I was researching you, uh, you be, you began your career as a, in, as a biologist and got your medical degree, uh, became a surgeon, uh, and then had numerous, uh, positions in, uh, the, in pharmaceutical industry and device industry, ultimately becoming a Chief Executive Officer. Uh, so I wonder for everyone listening today, could you sort of walk us through maybe that career, career arc and some, uh, major, uh, points of inflection in that, uh, really broad and, and storied, uh, career so far?
Roy Smythe, CEO of SomaLogic (03:12):
Sure, Tim, thanks. Uh, and before I talk about the fact that I've had to change jobs repeatedly to try to find something I'm good at, uh, I'd like to tell this a little quick story about Steven. I was actually in Chicago when Steven and his team were starting MATTER, and, uh, I just want to congratulate both he and the team on all the success they've had over the last many years. It's just really impressive. Uh, I remember when it was an, when it was a really good idea. So, uh, congratulations. Yeah. So, uh, you know, you're right. I did start out as a, with a relatively traditional career path for a physician scientist. Um, however, I had this really seminal, uh, experience in medical school that's to blame for everything that has followed since then. And that was, uh, when I was in medical school, the Robert Wood Johnson Scholars Program, which you may be familiar with, uh, initiated, uh, a program for medical students.
It was basically their RWJ program for medical students. And at Penn, they put five cohorts of medical students through this 18 month training period at Wharton and at the medical school on healthcare economics, healthcare policy, delivery science. Uh, and so in the middle of medical school, I got acquainted with these guys at the Leonard Davis Institute at Wharton that we're saying, you know, healthcare is, delivery is flawed, the funding is flawed, innovation's being directed at the wrong things. And I, I can remember, I, you know, I'd wanted to be a doc since I was seven years old. And, uh, the first few times I heard this, I thought these guys were heretics. Um, but then by the time I left, I'm like, I'm pretty sure they're right, uh, about all those things. And then during my career, basically what I, what I saw repeatedly were all the things that they said that I would see.
I did feel sometimes, uh, like that kid on the show that, uh, could, you know, was the only one that could see dead people. I felt like that fairly often. But, um, you know, so relatively traditional academic career, uh, you know, ran a big n NIH funded lab and was very busy clinically, got academic tenure and a couple of medical school university systems. Ended up a medical school department chair, but I couldn't stop thinking about the things those guys at Wharton said that I should be working on. And I wasn't working on any of them. Right. Um, yeah, sure. And so, uh, um, in my late forties, I sort of hit this point at which I'm like, I'm either gonna do this thing forever because medical school department chairs, uh, it's sort of like a former president said, you know, you, you, you have to walk and he could walk out on, on Fifth Avenue and shoot someone and still be president.
I mean, medical school department chairs tend to stay, can stay in those jobs usually a long time. And I'm like, I don't really know if this is what I want to do forever. So I spent some time at MIT Sloan studying, uh, you know, some, some business strategy and things like that. And then, and then moved out, uh, took a 75% pay cut <laugh>, moved my family to another city, uh, on my former colleagues and on the clinical side, thought I'd lost my mind. Um, but I did it because I thought that actually the best place to make an impact on a broader scale in healthcare. And I looked at a bunch of things, and I looked at consulting opportunities and health system, other executive positions and deans jobs, and, but I decided, you know, that the real place where an impact's gonna be made is where capital is being deployed, um, you know, follow the money. And, uh, it struck me that, you know, if you can put yourself in a position such that the capital that's being deployed for what you're working on can be transformational for healthcare on a large scale, then what a great, you know, job to have. So, um, so that's, that's why I moved over. Uh, well, I wasn't burned out. I loved clinical medicine, but I thought that, you know, on this side of the fence, it was a better opportunity to make a bigger impact.
Dr. Timothy Cunniff, Paragon Biosciences (07:26):
Okay. I think even as a surgical resident, you were, you were, um, the first offer on the, uh, the very first paper describing, uh, anal, uh, adenoviral gene, uh, uh, based gene therapy. And, um, so, uh, could you maybe describe how that interest in translational research, uh, sort of has informed, uh, you know, even the, uh, commercial, uh, aspects of your BIU at SomaLogic?
Roy Smythe, CEO of SomaLogic (07:52):
Sure. Well, um, <laugh>, it's informed it in a lot of ways. Uh, the first, the first is, and I wrote something about this in Forbes a few years ago. The first is that, um, the biggest lesson I learned probably from that experience was that hype is really dangerous in healthcare. Um, because at the, at the dawn of gene therapy work in the early nineties, people were saying, you know, within five years we're gonna cure all these diseases, and it's, you know, gonna be this panacea for all these things. And, uh, I was working in a lab that was a bit more pragmatic, and we're like, no, it's gonna be 30 years <laugh>. Right? But, you know, and then you had all this hype. Uh, there were two, three people that lost their lives in clinical trials, you know, a couple of them, relatively famous cases. And then the spigot got turned off, right?
The NIH stopped funding it, um, investors stopped investing in it. And it was a real cautionary tale that while it's okay to establish a sense of momentum with the market and with your customers, and, and, you know, with the press, uh, don't hype, because at some point it's really dangerous. And the difference between, I would say, if you're hyping Bitcoin versus hyping biomedical products is that, you know, people can lose money, but they probably won't die, uh, if, if the hype around Bitcoin is wrong. Uh, but if, you know, if you're hyping things that people actually need, uh, and then you set those things back a decade, then, uh, you know, then they could, then people can lose their lives, uh, uh, um, you know, uh, in, in ways that could have potentially been avoided. So certainly that was a huge lesson for me. And then, but then, you know, also, I think, uh, the fact that really impactful medical innovation sometimes takes a long time.
Uh, you know, uh, it, it, this is actually one of the lessons that I talk to young entrepreneurs about, uh, is that one of the worst things you can have is presence, right? So the ability to know what's going to happen in the future, uh, sounds like a great thing. But, uh, the problem with most people in this business of, you know, biomedical, uh, commercial activities is that, uh, when you, even though you can see, you know, this is gonna be in inevitable. So, for example, it was inevitable that at some point, gene and cell therapy was going to be effective. And now we're beginning to see that 30 years later. Um, but the timelines we have in our mind are usually wrong, right? So, um, and, uh, being too early to market, uh, can be a killer. Um, so another, another big lesson then, of course, just, you know, in my, in my role at SomaLogic and in other jobs I've had, understanding the science, uh, has been beneficial, right? Because, um, uh, you know, I think it's really important for, for leaders, especially if you're working with somebody else's money, <laugh>, to, to have a really good idea about, you know, what the real potential is and is there potential there, uh, because there's a lot of great ideas that, um, seem, you know, at face value to be potentially impactful, but when you look at the science underneath him, you're like, oh, that's not gonna work. So understanding science at that level has been helpful to me as well.
Dr. Timothy Cunniff, Paragon Biosciences (11:21):
Yeah. Great. I, I do want to go back and touch about, uh, I've, I always find it fascinating when people make big transitions in their career. So, like, you know, when you were, when you were in, uh, a, a physician and the surgeon in, in academia, you were at the top of your game, right? Top doctors in America every year, I think since 2003. And, and then you had that itch to make a big career change. You know, I know even on a smaller basis, when I pivoted from big pharma companies to like small biotechs, it was a really hard decision for me. And I, you know, my, I was comfortable in my position. I was, you know, my job was secure. I worked, you know, I then I was working for Pfizer, the largest drug company in the world, and all of a sudden I made a decision to go to a, I think eight person company, uh, in biotech. So I'm always really interested in what was your thinking? Did you have a safety net? You, you know, you had a wife and four kids, um, you know, describe sort of your, your thought process and what your backup plan was, and, and, uh, and, uh, if you have any, uh, advice for people contemplating such a big career move?
Roy Smythe, CEO of SomaLogic (12:25):
Yeah. Well, uh, I didn't really have a safety net as it turns out. I didn't have a big war chest of money that I had accumulated over time. You know, academic physicians, uh, don't usually make a killing. So, um, to me it was less important to have a plan B than it was to be as prepared as possible for the new plan A. Yeah. Uh, so as I said, I spent time, uh, you know, I, I tell people that I didn't, and there's no disrespect. I know him, he's a nice guy, but I tell people I didn't have the Ben Carson syndrome. I didn't think just because I was a smart doctor that I knew anything about business. I knew that healthcare wasn't a real business <laugh>, right? I mean, people show up, uh, almost no matter what you do, <laugh>. And so, um, so I did spend time, you know, uh, in a business school taking classes in areas where I knew I was deficient.
Um, and, uh, and so to me, it was more about putting as much, you know, capabilities into my tool set as possible so that I didn't have to think too much about a plan B. But, you know, there's, there's risk. I mean, right? I mean, that's one of the things that's, that's really true about, uh, frankly, both high stakes medical care. Uh, I was a thoracic surgeon who did complex thoracic cancer operations. If you're not willing to take risks, you and the patient agree to those risks, uh, you know, then people don't get better. And it's, that's the same thing on the business side, right? If you're not willing to take risks, uh, then, uh, then it's never gonna be a big deal. Um, so, uh, I thought the risk was worth it.
Dr. Timothy Cunniff, Paragon Biosciences (14:14):
Right. Let's, let's talk about your current business, SomaLogic. Uh, so I think the vision for SomaLogic is to use protein data to make human health and healthcare, uh, better in this country. How, how might that, how might that look like in, in, in your, um, as you roll out that vision?
Roy Smythe, CEO of SomaLogic (14:32):
Sure. Well, not just in this country, but, uh, around the world, we think, um, I was just having this conversation with somebody last night about, uh, the only thing we really share is human beings really share, um, you know, we don't share the same languages. We don't share the same, we don't wear the same clothes, but our biology is the same everywhere. As it turns out, uh, it's, the only thing that that is, is, uh, you know, that's global. Um, so, uh, Somalogic is the most powerful proteomics platform, um, on the globe. And, uh, we really do two things. Um, we provide the ability to biopharma investigators and academic investigators around the world to measure and identify more proteins, um, than any, anyone other company can, uh, at scale. So, um, the way to think about proteomics is that we're on the same path that genomics went down, um, just using a different omic.
And the, the path that genomics went down at a very simple level is measure a few things. When I was a post, you could only measure a few genes, then you found yourself at a point where you could measure many things, you know, when we were on the way to a full genome sequence. And then to get to the point at which you can measure all things. And, uh, so proteomics is doing the same thing. We measure about half of the body's pro, and that's two and a half times more than anybody else in the world can. But we haven't been able to measure it all, uh, shockingly. Um, but in genomics, when you were halfway down that path, when you had gone from measuring a few things to measuring many things, uh, what, what, what became evident is the data being generated from those measurements, uh, had other value, right?
Um, and so, you know, you saw companies spring up like foundation and, and, and vita and others that could take that genetic information and create, you know, clinical diagnostics and so forth of value. Uh, and so the same thing's happening in proteomics too. Um, most of our revenue, almost all of our revenue is generated from that first thing I just mentioned around giving investigators around the world a capability to measure proteins for their own purposes. It's usually for trying to understand human biology better, um, or to try to understand human biology better to make new therapeutics. Um, so almost all of our revenue comes from that. We call that our life sciences tools business, but we've also developed a new set of diagnostics, um, because we're the only company that's halfway down the path, um, in generating enough data to do that. And, uh, we have created these diagnostics that use what, what's called protein pattern recognition.
So, uh, based on measuring thousands of proteins at a time, every time we see patterns of protein expression, that means something. And, uh, it's not like going to the doct and getting a single protein measured like creatinine. It's not like what we've done over the last 25 years where you say, Hey, I think these five proteins are important. Let's make an algorithm that we can fit them into to tell us something. We measure 7,000 things, 10,000 by the end of this year, and we ask the machine learning platform to tell us which proteins are important. And, uh, and so it's a novel approach, very powerful. I can tell you what your percent body fat is, your VO two max, your risk of a heart attack or stroke, your risk of developing certain cancers in the future before you have them from, uh, blood draw.
Dr. Timothy Cunniff, Paragon Biosciences (18:15):
Roy Smythe, CEO of SomaLogic (18:16):
Yeah. So that's on the come, uh, as a matter of fact, we're currently thinking about spinning that business out just so that it can, uh, be unfettered, um, and be fully funded. And we won't have to worry, you know, in the public company context, uh, where every quarter's revenue is counted, uh, by every person in the world. Um, we can spin this potentially into a private format and, and fund it fully, and, you know, keep it connected to the parent company. We're working on that project right now.
Dr. Timothy Cunniff, Paragon Biosciences (18:44):
Okay. Just to get folks a sense of how, how impressive that is. You know, we have a protein engineering company in Lincoln Park here called Eva Design. So I was talking to some of the scientists there, and they said there's about 20,000, uh, proteins. So you guys, uh, uh, mapping, uh, 10,000, now it's, that's about half of it. And, um, that's an amazing number of, um, uh, and and how many years did it take to, to, to get to that, uh,
Roy Smythe, CEO of SomaLogic (19:11):
Dr. Timothy Cunniff, Paragon Biosciences (19:12):
Roy Smythe, CEO of SomaLogic (19:14):
Um, yeah. And, and the in, in a, why is it important? Uh, it's important because human biology is, is highly networked, right? And we've learned this from genetics. We've, we've, we've seen this movie before that actually measuring everything and then figuring out how genes work with other genes and genes, work with proteins in networks, is what we have to unravel. Uh, and proteins are, are a, a huge part of that. Proteins are what genes make. So it's actually 20,000 canonical structures, but then to make it more complex, proteins get modified. So we think actually the, the total number of unique proteins in the body generated from that 20,000 is probably somewhere around a million. Um, uh, so stay tuned. Hopefully it won't take another 20 years to, to get there.
Dr. Timothy Cunniff, Paragon Biosciences (20:05):
Uh, in addition to, to diagnostics, do you see a role for proteomics and disease management and, uh, uh, and or drug discovery?
Roy Smythe, CEO of SomaLogic (20:14):
Yeah. So most of, uh, most of our customers now on the life sciences tool side use proteomics as a, as a drug discovery tool. So, you know, 90 more than 90% of drug targets are proteins. And so, uh, the ability to measure thousands of proteins from a clinical trial sample and to be able to say, uh, you know, uh, this drug, uh, you know, manipulated the expression of this set of proteins, and we saw this result. Um, and maybe that gives us information about how to change the drug. Maybe we look at the proteins that it's hitting. We don't want it to hit, you know, off-target effects. So a lot, a lot of what our customers do, uh, even those that are working to, you know, in academic settings just to understand human biology better, it's, most of it's pointed eventually at developing better therapeutics and more therapeutics.
It'll ha it'll have a, it's having a role now, and it's gonna have a bigger and bigger role. And then on the diagnostic side around disease management, the thing that proteins give you that genes don't, and it's a crucial thing, is realtime information. So, uh, let's take that test I mentioned earlier that predicts your risk of a heart attack or stroke. That test actually fluctuates based on your risk. So if you, uh, go to see the doctor and you've got a higher risk than you thought you had, and he starts a new medication, or you lose 30 pounds, you can repeat that test and see if you're a biologic. Risk has decreased. And so this pattern recognition, protein diagnostics platform over time, you know, that can give you real-time information about where your risk is, uh, and whether or not therapeutics are working, will have a, I think, a huge role in disease management, um, in the future.
Dr. Timothy Cunniff, Paragon Biosciences (22:07):
Great. Uh, proteomics is also driving the, uh, the trend towards, uh, more effective, uh, disease management, individualized, personalized medicine. So I wanted to get your, your thoughts as a, as a physician, how do you view that, uh, you know, the patients taking more of an active role in their healthcare, um, their interactions with an informed intermediate, you know, so maybe your thoughts about how that, um, it will develop over time?
Roy Smythe, CEO of SomaLogic (22:35):
I think that's the, that's the biggest opportunity actually. Um, what I, I always tell people that there's a huge difference. So when I was a clinician, let's say I didn't treat breast cancer, but I was a surgical oncologist, so I would talk to my female patients, you know, to make sure that they were getting breast screening and so forth. Um, so I had these conversations a lot. And so the average female patient walk into my office, sit down, and let's say she wasn't a smoker, she wasn't obese, she was an obese, she had no family history, she wasn't a heavy drinker. And they would say, what do you think my risk is? And I'd say, I, you know, it's probably one in eight or one in nine statistically. Um, so you still need to, you know, self-exam and, and get your mammograms because it's not zero.
Uh, but then another patient would come into my office who was a little older obese smoker drinker, and they'd say, what's my risk for breast cancer? And I would say, um, maybe it's one in five <laugh>. But to be honest, I had no idea. Um, actually the first patient's risk have been one in five, and the second patient's risk could have been one in eight or nine. And, um, and what's happened, and of course the problem with that is that when, this is just human nature, uh, we're all like this. If we think we have a potential out, we, we pursue that, right? So, you know, well, he said it's one in eight, he said it's one in five, but he doesn't really know, right? He's guessing, I think I'm different. It's the whole thing that, you know, my granddad smoked till he was 150 and never got lung cancer, so I'm not gonna get lung cancer.
We have this ability to rationalize our risk. And, but there's been a recent example of how that's changed dramatically. So, uh, you know, if you get a B R c A one gene mutation test result from a genomics panel, and you're a woman, uh, you know, there's a super high likelihood you're gonna act on that information and you're gonna act on it because of two things. One, it's from your body and the results sort of immutable, right? I mean, it's like, it's in black and white. This is what this result means. Uh, and you can't wiggle out of that fact. Um, and so proteomics, uh, what we're beginning to see is a similar thing that when you give patients proteomic information about risk, um, rather than blowing it off and saying, you know, well, uh, my doc's really just guessing, telling them that this is information from your body, that means this black and white thing.
Uh, we see patients 40 to 45% of the time in some smaller trials, changing their behaviors, um, which is huge. Um, you know, it's usually in the single digits, you know, that people actually change their behaviors based on medical advice, unfortunately. So I do think giving this information to patients, um, and in the future, giving this type of information to patients and then letting them see what their own interventions do to their risk, uh, is gonna be super important. Imagine, uh, getting a test, a blood test when you're 35, that says that your risk of developing, uh, a certain cancer is five times higher than normal. And, and let's say, you know, you're obese and you've got a bad diet, and you know you're gonna act on that, right? You're gonna try to change what you can change. You're gonna go back and take the test again.
And if those things didn't work, the test didn't change, you're gonna try something else. And so, I think, and we know that this is ha you know, in digital medicine, we've seen this where people, uh, are looking at, you know, various, um, there's a famous story about a, about a cycler, uh, who was in the Olympics who, uh, um, in his thirties sort of gained weight and wasn't, uh, you know, he wasn't competing anymore and he didn't feel good, and he thought he wasn't sleeping well. And he went to his doctor, and the doctor said, here's some sleeping pills. And he took those, didn't feel any better. Uh, then he went and got, uh, a sleep, uh, a quality monitor, uh, and picked, picked, I don't remember which one it was, but pick which one you want, the ones that you wear on your wrist or whatever will work fine.
And he said, I'm gonna start doing things in my own environment to see if I can figure out how to get better sleep. He tried like 10 things. And on the 10th thing, he found out that actually when the ambient temperature of his room was lower, he slept better. So he put a cooling pad on his bed, started sleeping, you know, eight hours a night, got back in shape, went back to the Olympics, and cycled on the Velodrome team in his thirties. And so, I think humans want to do this, right? Yeah. We want, the problem is we just haven't given them very good information. Um, we know that, we know that, uh, people are willing to use information because, you know, people are using it on these things now, um, to change behaviors and change activities. Uh, the problem that healthcare's had is that we just haven't given them very good information to act on, and proteomics is gonna unlock a lot of that over time.
Dr. Timothy Cunniff, Paragon Biosciences (28:01):
Great. I wanna talk a little bit about the, the soft skills in your career that have, uh, helped you become a leader and an executive, c e o in help forming new companies. And, you know, technology is great, you know, a as you're, as you're building these companies, you can have the best technology, but if you don't have a good culture, you don't have good people, you don't have a good mission to drive that forward. Uh, you know, it could, it could all be for not, and you know, I know you're an accomplished author. I think communication is probably one of the, your strong points as a leader. Uh, but what, uh, advice would you give our, our, uh, attendees today and, you know, as how you lead these organizations and, and ensure you have a healthy culture and, um, and great people in the key positions?
Roy Smythe, CEO of SomaLogic (28:45):
Well, you know, uh, there's nothing more important than this. Uh, and I think people tend to dismiss it, you know, when it's talked about. But, uh, I, inside of, uh, inside of, SomaLogic, what I tell the company all the time is that companies are nothing but the people that constitute them. And the things they agree to do together, it's nothing but that. Matter of fact, all institutions are nothing but that, right? Governments, if you don't believe that, think about January 6th, as it turns out, there's no like, invisible structure holding up institutions. It's just what people agree to do, uh, as groups. So, uh, there's nothing more important. I think, to me, it starts with empathy. Um, uh, don't forget what it's like to be a 25 year old employee in assay services and, you know, struggling to pay your every month. Don't forget what it's like to be a mid-career person who, uh, really wants to do more and better, you know, for themselves and their family.
Um, don't stop thinking about those things. Um, it's easy to, in the heat of battle <laugh>, right? Yeah. Market's been really bad the last year, uh, and it's been tempting at times to think a little less about that mid-career person, uh, at Soma Logic than it has been, uh, to think about, you know, whether or not the stock price is gonna come back up. But, uh, it's vitally important. Um, and you know, and related to that, again, people are the only, uh, things that make structure inside of a company. The second is that structure is underrated. Um, uh, I I, I, I began to learn this when I was a, when I was a medical school department chair, that, that actually think human beings, uh, want enough structure in which to be successful, right? Uh, and not a lot more than that. Um, but if it's less than that, then um, it doesn't feel good in the likelihood of being successful, it, you know, goes down.
So, you know, having an operating model for the business, uh, you know, is, and again, I don't gravitate to these things cuz um, you know, I was more of an idea guy than I was a structured guy. But as it turns out, having an operating model and, you know, the ability to, you know, to look at your most important task on a monthly basis, and to be honest with one another, and, and to have difficult conversations and to change course that requires structure, but people make the structure. Um, it do, you know, again, there's no invisible, uh, you know, uh, Legos holding up, um, these institutions. Um, so yeah, it, it's the most important thing. And, and actually, there's no substitute for, I always think about three things, talent, experience, and enthusiasm. And, uh, um, if you just have one of those three, uh, you know, you may not be effective.
Uh, most, most people that are effective have at least two. And the really effective people are the ones that have all three. Uh, and there's just no substitute for those things. So, you know, if you, and, and as your company matures, it's more and more important to find people with experience. Um, if, if you're a startup, it's okay, you know, to, um, to have people that are all multitasking, you know, the, the c o o is also, you know, making coffee and, and calling on customers. And the c e O might be in the lab, you know, putting things together. That's, that's great. Um, but at some point, when you get big enough and you have enough of other people's money, uh, it's sort of like the development of civilizations, right? Specialization becomes really important. And so that experience piece, as you get bigger, gets more and more important, uh, and frankly, the investors get less and less flexible around you not having that, those sort of competencies in your company. Um, so yeah, the people, you know, there's, there's, you know, the technology doesn't do anything by itself. The machines don't run themselves. Uh, even the AI programs have to be programmed. Um, uh, even chat, G p t was, was a program at one point that somebody had to write. And we know from some of the interesting experiments with that, that, uh, it's not necessarily spitting out everything that we want it to or think that it, it could without human intervention. So it's vitally important,
Dr. Timothy Cunniff, Paragon Biosciences (33:24):
Some really good advice. Thank you. Um, I wanna focus a little bit, tell me about, uh, taking SomaLogic from a private company, uh, to a public company. Uh, I think you went, uh, public via spac, uh, maybe the differences, uh, between a private company, a public company, c e o, uh, the thought that went, uh, behind, uh, the, you know, that the step in the evolution of the company, I think would be interesting for our attendees.
Roy Smythe, CEO of SomaLogic (33:49):
Sure. Well, my timing was exquisite because we went public right before the biotech market creator, okay,
Dr. Timothy Cunniff, Paragon Biosciences (33:57):
Roy Smythe, CEO of SomaLogic (33:59):
Um, but we, it was a very, uh, I think, um, well thought out decision. And I don't think, and I'll touch on this in a minute, I don't think all companies over the last few years have thought carefully about making this transition. And so one of the reasons the market is in a correction period is that, uh, you know, if your company has no product in the market and no revenue, probably not the time to go public as it turns out. But a lot of companies did. Over the last two years, we did have products and revenue and real customers. So it was okay. I think, you know, unless Bill Gates is gonna give you a half a billion dollars, and every now and then, you know, somebody gets a half a billion dollars from somebody like Bill Gates for, for a company to truly achieve all the things that's capable of achieving, uh, I think it's almost an imperative at some point to be on the public side.
And the reason I say that is that, um, on the public, in the public, the public markets are really the train tracks of reproducible funding. Um, now it's funding based on, uh, competence and performance. On the private side, you can twist people's arms and, you know, have collaborations, and people can have, you know, other reasons other than making money to give you money. Um, but on the public side, it's all about performance. And, but the beauty of the public markets, if you do well, uh, then you can be funded in perpetuity and you can, you know, you can get the company to a point at which it's really making its largest impact. And that's what we thought at SomaLogic. We thought, you know, we hadn't exhausted the private and strategic funding market, but we were sort of bumping up against this place where we really need two things.
We need a fundamental valuation, right? Because mm-hmm. <affirmative>, you get to be a certain size, and you really need the market to value you rather than yourself or your founder. Uh, and otherwise people will stop giving you money. So you need a fundamental valuation, and you sort of have to go to the public markets to get that. And then you need to have a reproducible source of funding, uh, um, that, that you can, um, you know, acquire based on performance. And so that, those were our, that was the reason we did it. Um, we used a spac, uh, you certain, you know, there's three different ways to, to go public. There's probably more than that, but you know, there's direct list, um, where you don't really care about raising money, and that's pretty rare. Uh, you can do an initial public offering or an I P O, uh, in sort of the traditional sense, or you can do, uh, an initial public offering as a spac.
And, um, a SPAC stands for a special purpose acquisition company. In the past years', it was called a reverse merger. It had sort of a bad reputation because basically, uh, in the past, companies that really weren't capable of, of doing a regular I P O that couldn't sort of generate the interest among the market would use this reverse merger, uh, strategy to go public. Um, and so of course, the failure rate for those companies was very high. There was a reason why they couldn't do a traditional I P O. Um, there was this window that opened last year where for about a year, um, and of course, the funders as well in that, in those past, in those past eras, you know, the, the shell companies that would create, um, uh, you know, a, a a, a pot of money in the Shell company, um, weren't always the best investors either, uh, in the distant past.
But this window opened up last year where actually really good investors decided that they wanted to use this method. Um, and there were some really good companies that wanted to use that method. And, and why did we do that? Uh, and then of course, toward the end of the year, <laugh> last year, um, more sort of in the middle of the year last year, if you sort of go between, uh, the middle of 2021 to the middle of 2022, then what happened is, you know, companies that weren't so great were getting into the SPAC market, and Shaquille O'Neill had a spac, and, you know, Jennifer Lawrence had a SPAC or something, and I don't think she did, but you, you know what I'm saying. And so the investors, the discernment wasn't great, and some of the companies weren't great, and then it sort of got a bad reputation, but there was a window open where there were good companies and good investors doing this.
Um, and the thing about a SPAC is you can raise a lot more money. Um, uh, there was really no limit to what you can raise in a SPAC as long as, uh, as long as you can convince the investors to, uh, to, you know, to invest in what's called a pipe, uh, alongside the trust that's in a SPAC already. So you got the money that's in the spac, so a bunch of investors that get together and put money into what's called a SPAC trust, uh, and then you can raise another, um, a tranche of money in what's called a public investment, uh, in a private enterprise, a pipe. Um, and there's really no limit to how much you can raise. Uh, as long as all those investors agreed that the company's worth it, we were concerned about two things. One is a bunch of companies had gone public over the previous two years that didn't have products and didn't have revenue.
And I'm like, I didn't grow up on Wall Street, but that doesn't seem like a durable thing. Um, and then the second is that, you know, the administration had just put a lot of money into circulation because of covid as they should have. Um, but, and again, I'm like, you know, again, I'm not a economics historian, but hasn't, every time that's happened, there have been inflationary pressure in the market. So we wanted to raise as much money as we could. And as it turns out, in retrospect, it was a good decision, um, because the balance sheet for the company is very healthy, uh, and healthy balance sheets allow you to traverse difficult times.
Dr. Timothy Cunniff, Paragon Biosciences (40:08):
Yeah. And great timing. As you mentioned. Uh, I've heard you mention, uh, uh, and refer to the influx of healthcare data as a global perpetual clinical trial. Uh, could you maybe describe what you mean by that and, and how do you think that clinical trials should evolve?
Roy Smythe, CEO of SomaLogic (40:26):
Well, the Global Perpetual clinical trial is, uh, is an idea. Um, and so this gets back to the thing I said earlier about sort of knowing what's inevitable, but then not really having a good idea what the timeline's gonna be. So I think what I'm talking about is a, is a possibility. It's not an inevitability, but it, I like to think about it. And when I talk about perpetual global trial, what I mean is, what would happen if people all over the world agreed across geographies, across borders, to pool, um, biological and health data? What, what would, what could that mean? Um, well, you know, what it could mean, right? I mean, the insights that would be derived from that would be profound. Um, now why is it a possibility rather than an inevitability? Because we can't even pull data between health systems or companies now, uh, because of all the financial and regulatory, um, imperatives.
But what if we could overcome those? What if in 30 years we had a global pool of data where people put in their genomic information, they, you know, intermittently put proteomic information in, uh, their healthcare, uh, touches, and their digital monitoring data also went into this pool. Think about the real time benefits to every human being. If that could be created, um, it would be profound in a medical sense. Uh, I have this, I used to give this talk, or I would show a picture of an Alexa, and I said, you know, what you're gonna do, uh, if, if this comes to fruition, is you're gonna get up in the morning and you're gonna say, Hey, Alexa, um, what should my diet be today? Um, what, how much activity should I get, um, based on other people like me around the world? Uh, and you'd get an answer that would actually change your health and extend your life.
Um, so that's a huge benefit. We all know about that. But I'd like to think about it on another level. And that level gets back to this thing I said earlier about the only thing that we share as human beings is our biology. You know, we, we've, uh, we've, we've taken our, our cardiovascular risk test models that have been developed in Europeans and Americans, uh, to Japan. And we were concerned that Japan is a geographically, genetically and dietary isolated place. And we're like, yeah, maybe these tests won't work there. They worked beautifully on the first try. So, um, what if we created this sort of a structure? How would we begin to think about other people around the world? Might we think less about our differences, um, our religious differences, our political differences? If you knew, um, if your children's health was being augmented <laugh> and improved, and their lives being extended, because people in Iraq and Russia, uh, and Egypt and you know, and Indonesia, were all putting data into the system, might you think differently about those people?
Um, and, you know, and sort of gather around this only thing that we share, uh, but our biology and our mortality. So that's the idea. It's a, you know, listen, it's a, it sounds ridiculous to some people, um, but I keep talking about it and keep encouraging it because I think it's a possibility. Um, clinical trials, uh, is a different topic. Um, I was just reading this week a Deloitte report on, on how clinical trials have changed during Covid. Um, I think it was fascinating. Uh, COVID has taught us two things that we already suspected were <laugh>. The first is that virtual healthcare works really well. Um, um, you don't always have to be sitting physically in front of another human being to get healthcare. It can be helpful, uh, and in certain contexts it can be essential, but there's a lot of care that can be delivered in this method that we're using right now.
And the second thing we learned is that clinical trials really can be, um, uh, uh, promoted and executed in a remote fashion, uh, letting people enter their own data, having these sorts of visits, uh, you know, having people wearing and monitoring things themselves. Human beings are really, uh, capable. You know, the thing I I say all the time is, if, you know someone with a eighth grade education can take a 2000 pound piece of metal onto a piece of asphalt and, you know, propel it 120 kilometers an hour safely, well then why can't they measure some things <laugh> in their own body and enter that data, you know, into a system that, that, that where they can get benefit from it. So I think that, uh, clinical trials will continue to evolve this way, and we need it to, because there are way more drugs and pipelines around the world. Then there are people entering clinical trials to evaluate the effectiveness of those drugs. Uh, the old method has, you know, has more or less failed. Uh, not at all efficient, so, gotta change.
Dr. Timothy Cunniff, Paragon Biosciences (46:04):
All right. La last question, cause I do wanna leave some time for Q and a. So to our audience, if you, I do have any, uh, questions, please put 'em in the chat box. Um, uh, I also noted that, um, you were a Southwest conference, uh, champion when you played at Baylor, uh, in college football. So maybe, you know, well, actually two questions relate on this. Fein. I wanna know how competitive sports has maybe, uh, shaped your influence and leadership skills, uh, as, as your leading companies. Uh, and also your son's a tight end for the Miami Dolphins and can maybe illustrate the application of, of, uh, SomaLogic's, uh, um, um, vi uh, diagnostics. Uh, maybe tell the audience why he wanted to bring the VO two blood tests, uh, the training camp, and
Roy Smythe, CEO of SomaLogic (46:48):
Yeah. So my oldest son, I have four children, you know, all accomplished in their, you know, own ways. And then a couple of younger ones who are still trying to figure out if they want to be accomplished. Um, but my oldest son plays N F L, uh, I was telling him three years ago about, you know, we have a test that can measure VO two max or aerobic fitness from a blood draw. And he's like, what <laugh>? He said, when we go to off-season training activities, they make us get on the bike and, and then we have to put this mask on our face and exercise literally until we throw up into the mask. Uh, he said, you're telling me I can do that with a blood draw <laugh>? And I said, yeah. He goes, I don't care how much it costs, I'll pay for it. And he goes, and all my teammates will pay for it too, <laugh>.
So, um, they don't have it yet, but we're, we're on the cusp of, uh, offering that to people like, like my son. Um, that's great. Yeah. The competitive athletics, I just actually wrote something recently about this, but to me, excuse me. There are all sorts of things to learn. You know, we've all heard, we've all heard the rhetoric, right? That teamwork, individual effort in the team repetition. But there, the thing I actually learn the most from athletics is something very different. And that is how to recover from failure. How to recover from failure. I, I tell this story that when, when I played at Baylor, uh, the first televised game that I got to play in, it was a regionally televised game on a, b, C against Arkansas. And, uh, Lou Holtz was the Arkansas coach. I can still see him screaming at me from the sideline on the other side.
And, and, uh, we, we beat him 43 to seven or something. Uh, but in the first, we went down our first drive, we're going down the field and they had this skinny freshman kid that on the scouting report, I mean, he's like a freshman defensive lineman. I'm like, who cares? He's some freshman kid. He weighs 10 or 10 pounds. He turned out to be a guy named Billy Ray Smith. It was an all pro in the n f l 12 years in a row or something. So we drive down, we were run blocking and pushing me off the ball cause he was skinny and not very strong. And then we, we, we decided to throw our first pass on like the 20 yard line. And I just remembered this flash of white and red going past me, and I lunged and didn't touch anything and my face mask literally hit the AstroTurf.
And they hear the crowd go, roar. And I look back over my shoulder and he's laying on top of our quarterback. Um, and, uh, my friends told me that they showed it on a, b, c four times <laugh>, and they kept showing it over and over again. And in that, I remember that moment, right? I remember that moment thinking that maybe I should fake an injury <laugh>. And she had carried off the field, but I didn't, you know, because 35 seconds later there was another play. And then 35 seconds after that, there was another play. Um, and you know, what I learned from athletics is that, um, you fail all the time, right? I mean, even Tom Brady throws bad passes. And, uh, and in surgery, you know, we would have failures as well. You know, we would make mistakes on occasion, or the disease was just bigger than us, even if we made no mistakes, uh, such that, you know, the, the patients and, and, and I, you know, didn't get the result we wanted.
Uh, but you had to go back to clinic the next day because there were people, you know, wanting to be seen and needing to be seen in, in, in that, in that depended on you. So listen, in commercial life, you fail all the time, right? You lose a deal, uh, you make a bad pitch, um, you lose a customer. Um, but you don't, you don't fake an injury <laugh>, you know, you get back up the next morning and you do it again because people need what you have to offer. So that, that's the biggest lesson I learned from athletics by far.
Dr. Timothy Cunniff, Paragon Biosciences (50:38):
Okay. Thank you. So we do, we have a do uh, we do have a few questions from the audience. Uh, so let me get to those. Uh, one of our attendees says she has a daughter in high school. She's interested in biology, chemistry, and neuroscience. Do you have any predictions about the career opportunities, uh, that will be the most exciting and offer the highest growth for, uh, these kids in the next 10, 20 years?
Roy Smythe, CEO of SomaLogic (51:05):
Well, the first thing I'm fond of saying is that, uh, I am envious of your daughter <laugh>. I'm envious of people that are entering this field now because during their lifetimes problems that we have struggled with for 500 years in organized medicine are going to be solved. So, first of all, encourage the interest because it's gonna be a really exciting time over the next 25, 30, 40 years. Um, more exciting than it ever has been, uh, in medicine and in biology, uh, and in life sciences. So, uh, and I don't think it, I I think there'll be opportunities across the spectrum of things. Um, neuroscience is definitely, uh, probably has the largest, uh, open vista. Uh, we, we know less about the brain than we do about the gallbladder. Um, uh, and a lot more will be known over the next, uh, 30 or 40 years. So if she's interested in neuroscience, uh, I would say that's gonna be a very exciting thing for the, for, for her life, uh, time and that she'll have the opportunity to, to be involved in or to make, uh, impact some ways that we have struggled with for a long time.
Dr. Timothy Cunniff, Paragon Biosciences (52:24):
Yeah, certainly. I agree. We have another question about the, what do you think the role of digital twins is gonna be in the healthcare field?
Roy Smythe, CEO of SomaLogic (52:32):
That's a great question. I think, uh, it will be the ability to, um, and this is, this is another way to make clinical trials more efficient, right? The ability to, to understand in silico what's going to happen and not actually have to always, um, perturb actual human biology in real time. We'll have huge benefits. I think it'll be a long time before we can do things completely in silco. And the reason I say that is that I think our understanding of biology is infantile. Um, I mean, listen, we're only measuring half of the canonical prote. How much can we really know about human biology if we can't even measure and identify half of the basic proteins yet? Um, think about all the things we still don't know about genetics. Uh, you know, the, the, uh, the genetic, you know, the, the, when I was in medical school, we thought 98% of the DNA n was junk. D n a. It never really made sense to me. I'm like, I don't think evolution is that messy. Uh, and now we know that that 98% regulates the 2% that's coding for the things that we need. So, um, I do think the ability to use ins, silico methods to replace actual, you know, giving things to humans and monitoring humans will be increasingly important over time. I just think it's gonna be a long time before it approximates, uh, that, because we don't know very much.
Dr. Timothy Cunniff, Paragon Biosciences (53:56):
Yeah. All right. So I've been told we got time for one more question and one is, um, have you started to use, uh, chat G P t?
Roy Smythe, CEO of SomaLogic (54:06):
That's a great question. So we have experimented with that a little bit. Um, uh, what we're interested in currently when we make diagnostics, so if I wanna make a diagnostic, let's say I wanna make a diagnostic using protein pattern recognition, uh, that predicts, uh, exacerbations of asthma. So a pattern that, uh, a couple of weeks before an asthma exacerbation would maybe make you get treated beforehand and not have to end up in the emergency room. So we have to take samples from 5,000, 10,000 people with asthma, people with an exacerbation, people with without an exacerbation. We have to plow through machine learning models to find one that correlates the protein pattern expression with risk and level of risk. It's laborious. It can take us a few months. Uh, so we're interested in knowing if, uh, self-learning computing platforms can do that much more quickly, from much fewer pieces of information. Could we give a chat g p t self-learning type platform data from a hundred patients? And could it extrapolate from all the other things, things that it knows, uh, to get us a result in a day? Um, the answer's not yet. Um, but we have experimented with that song for sure.
Dr. Timothy Cunniff, Paragon Biosciences (55:33):
Okay, so I think that's all we have time for. There's a few questions we didn't get to. I'm, I'm sorry. There was also, uh, a, a comment Roy, about, uh, an admirer of your communication skills and a longtime reader of, of your publication. So just wanted to pass that along
Roy Smythe, CEO of SomaLogic (55:48):
Too. People are actually reading that stuff.
Dr. Timothy Cunniff, Paragon Biosciences (55:50):
Steven Collens, CEO of MATTER (55:53):
Much to admire. Thanks to both of you, Roy and Tim, uh, for that discussion. Um, really, uh, fascinating thanks to all of you for joining. Um, if you enjoyed our program today, you might wanna tune in to the next, next month for our next Tales from the Trenches program featuring Shar Martin, Shar Martin, sorry, who's, uh, the CEO of Cordis. That's on February 21st. Um, you can learn more about that program, uh, on our website, uh, matter.health/events, as well as the other programs that we have coming up. Uh, thanks to all of you and I hope that you enjoy the rest of your day.