Tales from the Trenches™ with Sheila Mikhail, Co-founder and CEO of AskBio

Speaker 1: (00:12)
Hello everyone. And welcome to tales from the trenches. I am Steven Collins. I'm the CEO of matter matters, a healthcare technology incubator and innovation hub built on a belief that collaboration between entrepreneurs and industry leaders is the best way to develop healthcare solutions. Today's program is part of our tales from the trenches series, which features accomplished healthcare entrepreneurs, sharing their learnings and stories, and the key takeaways from their journeys. And our guest today is Sheila Michale, founder and CEO of ask bio Sheila is a fascinating entrepreneur who has started and sold biotech companies to Baxter and Pfizer and buyer. Uh, she started her own law firm and we'll see if you agree at the end, but has arguably done as much or more to advance the promise of gene therapy than anyone other than her ask bio co-founders? Uh, I think you'll hear three themes coming through in this conversation that are particularly fascinating.

Speaker 1: (01:15)
One is how do you build a biotech company with no money? Uh, two, how do you build a biotech company? If you're a woman and a minority, uh, and three, how do you build a company when you can't adopt an existing business model? Um, if you have questions you'd like to ask Shela, please use the chat function of zoom and I will weave them into the conversation as appropriate. And if you opted into the post event, virtual networking, you'll receive an email shortly from KKO with a separate zoom link at the conclusion of the main program. Please use that link to join us for the, uh, networking. Uh, thanks everyone for joining us. Thank you, particularly Sheila, uh, for spending your time with us. Uh, so let's get started. You, um, started your career as a consultant. You went to law school, you clerked for an appellate court judge. You worked for a prestigious, uh, law firm. None of that is really the typical pedigree we see when we are envisioning or talking to biotech entrepreneurs. Um, so I wanna start first with, um, how did you become an entrepreneur, which I believe  your first for was starting your own law firm.

Speaker 2: (02:26)
Yeah. Well thank you first, all and foremost. Thank you, Stephen for inviting me. Uh, I I'm welcome, uh, very much the opportunity to tell you a few stories from my experiences. And I think what matter does is really incredible, uh, entrepreneurship is a very lonely and sometimes scary road and having, uh, groups like matter provide support is really just invaluable. Uh, so, uh, how did I become an entrepreneur? Well, it was an unintended, uh, journey. I actually worked for, um, another law firm. Uh, I was trained up at ropes and gray in Boston and my, uh, ex-husband got recruited to, uh, do. And so I came to North Carolina and worked for a local law firm where I, uh, faced some hardships and, uh, in particular, uh, a little bit of discrimination. Uh, I was told that, uh, was a woman of color, um, that perhaps clients would not feel comfortable getting complex business advice from me.

Speaker 2: (03:25)
And so I was asked to sort of stay in the background and support other male colleagues who then would interface with clients. And of course that was incredibly, uh, hurtful and demoralizing. Um, and I sort of, you know, had the opportunity to go back to my old law firm and commute, uh, long distance. Uh, but I decided, I said, well, if these folks have done this and established a successful law practice in North Carolina, then maybe I should just give it a try. Uh, and so I sort of, uh, just embarked naively. I didn't know all of the obstacles associated with starting a law firm, but decided just to go on my own and see what would happen. And, uh, it actually was a very successful venture. I was fortunate enough to have clients, uh, big pharmaceutical, uh, companies like bear and GSK and Gilead Inventus.

Speaker 2: (04:21)
So I built a great practice, uh, and it also gave me the opportunity, uh, to work with, uh, smaller companies that were spending out of, uh, local universities. Uh, and it just so happened that in the first week when I started my law practice, uh, I was a guest lecture. I was asked to stand in at the last minute as a guest lecture at the university of North Carolina in a class that was being taught by Ted zer called launching the company. And the purpose of the course was to, uh, instruct professors and how to start up companies that, uh, basically developed and commercialized their technologies. Uh, sorry, I'm turning off the heater in the background. And so, uh, when I presented at that course, uh, there was a professor Dr. Richard Jude Samsky, who was sitting in the audience and after I gave my little spiel an hour long session and how to work with the tech transfer office and how to start a C corporation, he came up to me and said, could you help me said I have technology, uh, in the, uh, gene therapy area.

Speaker 2: (05:31)
And he mentioned to me that, uh, gene therapy was not in Vogue at the time, and that it would be very difficult, uh, to get funding, cuz there was a lot of skepticism about whether or not it was safe, but he said, if we're successful, we will change the world. And that was almost 20 years ago and we have, uh, been working together ever since. And so that was sort of the background of how I started in gene therapy, uh, which was I think pretty, uh, a pretty surprising way of getting into biotech. And um, it's been a successful venture, uh, between the two of us ever since.

Speaker 1: (06:11)
Um, surprising indeed. I think every, um, interesting career has these sort of serendipitous moments that occur and they, they help, they change the trajectory of whoever's on the journey. And in this case, um, you just described a couple of them, one, uh, unfortunate situation to say the least, uh, um, but I love that your response was well good. I'm gonna go start my own law firm  um, which is fantastic.

Speaker 2: (06:42)
Well, interestingly, interestingly, like, I don't know, 10 years after I started my own law practice, they called me up and asked me if I would come back and run their life sciences practice  and I was out in Arizona at the time. So I actually, I think I probably said the smartest and wittiest thing I've ever said in my life. I said, well, it's really hot out here. So I don't think hell has quite frozen over yet.  anyway, I'm sure. You know, I think a lot of people of my generation have faced similar obstacles. Unfortunately I don't think it's unique to me. I think the difference is I had the opportunity to take something that was really disadvantageous and sort of turn it on its head and uh, get a lot of opportunities from it.

Speaker 1: (07:25)
And how did you, um, in that early, uh, you made a decision to focus on life sciences, which you didn't have a life sciences background per se it, so you, and I think that was a strategic decision on your part.

Speaker 2: (07:40)
Yeah, so I, uh, I guess I benefited a little bit from my days, uh, at the university of Chicago getting an MBA and I remember, uh, Porter's different strategies of approaching a market and one of them was well, uh, niche, right. Being a niche player. So I knew that as a small law firm, it would be very difficult to compete with larger law firms. So I decided to niche in a particular area and at the time, uh, there weren't, uh, any law firms focusing on the life sciences area as a specialty. And in fact, we were able to get the domain name, life sciences law, because it was such a unique concept  uh, and you know, and it worked out well because, uh, if you specialize then it's, you know, the area of law that you have to have an understanding, uh, is more narrow. And so we were able to be really expert at, uh, the needs of life sciences companies, which really focuses a lot on intellectual property and licensing issues and collaboration agreements. And so, uh, yeah, it was just an effective way of competing and positioning relative to other law firms.

Speaker 1: (08:50)
Yeah. I love that. Um, I, I love that you incorporated Porter's, uh, lessons into starting your law firm. Um, and then you had another serendipitous moment which you described, which is that Jude was Jude Soki professor MKI was in your, this first class. And, um, as I understand it, so you had like just started a law firm and he basically asked you to start a company with him and your response was sure, why let's,  why start one company when you can start two?

Speaker 2: (09:25)
Well, even though if you meet Jude, it wouldn't be so surprising. He's very persuasive and incredibly likable, uh, individual. Uh, he, he's just an amazing, uh, individual who gives you a big vision and, you know, he wanted to work on diseases like Duchenne's muscular dystrophy, uh, which if you know, any children who boys who have that disease, it's incredibly devastating. Uh, boys typically lose the ability to walk, uh, in their, um, you know, early teens and often face a death sentence by their, you know, mid twenties. And so, you know, when he was talking to me about what he wanted to achieve and he was incredibly passionate and just so giving right and painted this world where you could treat all these genetic diseases with a one time treatment and you would use a non pathogenic virus. I mean, first of all, I was really intrigued.

Speaker 2: (10:19)
Right. Cause it really changed the way that I had thought up to that point about medicine. Uh, you know, um, I also think I was very sympathetic because I had a daughter who had a lot of health issues and so I could relate to, uh, being a parent with a child. Right. And if you have a child with health issues, I mean, it, it, you would, you know, all the pain that your child suffers, you would take that in a second and so that you could take it away, uh, from, from your children. And so I could really empathize with the need and at least my daughter's health issues were not, you know, life threatening the way that their issues were an absolute, you know, there's no treatments available. So I was very sympathetic to the cause I was intrigued by the sign and then Jude is such a likable person. It's hard to turn away from from him. Right. And so it was all the magic combinations and, uh, clearly right, almost 20 years later, I'm still involved with the company and working with Jude. So it was a magical combination from the beginning.

Speaker 1: (11:21)
How did, um, so I, I understand, you know, you described why you said yes to him. What, why do you think that he asked you to,

Speaker 2: (11:31)
It was the last resort there was else

Speaker 1: (11:35)
.

Speaker 2: (11:36)
I mean, you know, most people, when they take on the CEO role, they wanna get paid and gene therapy, this was right after the death of Chelsea gal center in the late 19 9, 19 99. And so there was no funding going into the sector. I would go to different investor conferences and investors would like run away from me, like I had the playing . So, uh, you know, gene therapy today, there's such a Renaissance in the space and there's so much money going into the sector, but for a really long time. And in fact, as bio, it was 17 years after the company was started when we got our first funding, uh, you know, there was no funding available. It was such a, you know, a moonshot and people were really concerned that it was unsafe, that you would, uh, kill right patients. And unfortunately the event that shut down the field was this, uh, death of a young boy, Jesse Gelsinger, who was involved in a human clinical trial at the university of Penn at the end of 1999, but it was a different virus.

Speaker 2: (12:39)
It was an adenovirus. And unfortunately the virus we use as ano associated virus, they're completely different viruses, but they share the same one part of the same name. Uh, they operate differently. Ours is non pathogenic and, uh, den viruses are known to integrate in the chromosome and can cause cancer and other, you know, bad things. And so it was just unfortunate that, you know, there was a carryover, uh, from the death of Jessica Gelsinger into all these other areas. And it took a long time to advance the science on really like a shoestring budget so that we could prove that, um, that, you know, the science had validity. And now today there are approved products to treat blindness. Uh, and also there's a product, uh, for spinal muscular atrophy, SMA, uh, SMA is a death sentence for children who have it. Uh, and our technology is used in both and people who take, uh, the SMA therapeutic basically live a pretty healthy, uh, life relative, right. To not being treated. So, you know, it's a transformative technology with really, uh, incredible results for people suffering from genetic disease, but it took us a long time to get over the barriers.

Speaker 1: (13:55)
Yeah. And just for everyone who's not familiar, it's that AAV technology where Jude was really, I think, a pioneer in that

Speaker 2: (14:05)
He was the founder of the field. He, uh, was the first to clone AV for therapeutic purposes. And so, and he also, uh, developed the manufacturing process that, uh, most people in the industry used, uh, that, uh, it was revolutionary. Uh, and so he, he really is widely known as the father of the field.

Speaker 1: (14:26)
It's not a bad thing to be known for. So ,

Speaker 2: (14:30)
He's also a really genuinely nice guy, which is also a good thing to be known for.

Speaker 1: (14:36)
So you start this company with him, um, you've got your law firm, this you've started this thing. Um, you're going to investor conferences and people are running away from you. Like you have, you know, COVID, I guess, or Ebola or whatever. Um, um, so how did, and you said you, you, uh, I think mentioned you, you, it was 17 years before you, you got an injection of capital into the company, so, um, you know, how did you fund the company? It's, it's not like it's not like the type of company where you can, uh, sort of grow it based on incremental revenues. It's it's nor is it the kind of company where you can, you know, sit in your basement at night and code something and get something out there. Like you mind a gene therapy company with novel technology and, and, and 20 years ago, nonetheless, I mean, so what happened? How did talk, walk me through the 17 years of it

Speaker 2: (15:38)
Was really hard to grow a company without money  if you're, if you're asking for the easy answer, like the recipe to do that in an easy way, I have to say there's no easy path. So, uh, what we did was we, uh, made as bio holding company. We knew that we had to protect, uh, the IP and today we have over 850 patents. We also knew that often, uh, venture capitalists, if they funded a company, they only gave that technology one shot on goal, right. To sort of prove itself. And if it wasn't successful, then often the technology would just be put on the shelf. And so we did not want that to happen. And so, uh, again, our mindset was, well, there's not a lot of funding available. We don't wanna take. And in fact, I think we had one term sheet for like a million dollar investment on a million pre.

Speaker 2: (16:27)
So right out the door, we were losing control the company. So we decided that what we would do is, uh, have as bio be a holding company and then spin out the technology to, uh, these companies that we created. Uh, and, uh, then only allow a slice of the technology to go to the spinout companies and take dilution at the, at the NewCo level. And so, for example, we created a company called Chatham therapeutics that used our platform for the development of treatments for hemophilia, uh, and, uh, it basically, uh, was just a license exclusive license to use the technology just for hemophilia a and B. Uh, we then got S B I R grants, um, to advance the technology into, uh, clinical trials. And we had some collaboration agreement, uh, funding, and that got sold, uh, to Baxter. Um, unfortunately Baxter became Balta became Takeda and then became Shire.

Speaker 2: (17:30)
And the program didn't advance quite as, as well as we would've liked, but the money that we got from selling, uh, the company we then brought back to as bio and then started another company, uh, called bamboo and bamboo used our technology developed a treatment for Duchenne's muscular dystrophy. Pfizer bought that in 20, uh, 16, and now that drug is in pivotal clinical trials. So hopefully soon, uh, Duchenne's boys will have a viable treatment. Uh, today there's no treatment available for, uh, Duchenne's, uh, that is life sustaining. So then again, we took the money back to the holding company. So that was one way that we created, uh, revenues back to the holding company in 2017. We finally decided that the funding environment was more attractive. So that's when we converted as bio from an IP holding company into an operating company. And I was employee number one today.

Speaker 2: (18:28)
Uh, the company is, you know, uh, home over 400 employees, uh, and is expected to be over a thousand employees in the next two years. So, uh, yeah, it's been a tremendous, uh, rate of growth. Uh, we have four, uh, programs in the clinic soon to be a fifth program. So it's, uh, incredible rate of acceleration. Uh, but, uh, you know, that's, that was basically how we, we dealt with it. We also did some other things, uh, creative funding strategies. Uh, we wrote a lot of grants which were important and raised, uh, you know, a lot of money through SBIRs and, uh, academic, uh, grants and collaborations. Uh, we, uh, took our manufacturing process, which we, uh, developed on an SBI grant and we decided to, uh, make revenues from it. So we built, uh, a CDMO business called bio. Uh, we use our, uh, state of the art, manufacturing, uh, capabilities.

Speaker 2: (19:28)
It's the pro 10 system, uh, to manufacture not only our products, but many of our competitors. And we generate significant revenues with pretty hefty profit margins, uh, from that business. Uh, we also, uh, surprisingly, uh, for some of our programs, the parents themselves of, uh, six children, uh, did a lot of the heavy lifting. Uh, they made donations, uh, to advance the programs. And some of them even did things as incredible as this may sound bake sales and relay for life, uh, fundraising events. Um, you know, it was really a grassroots effort from parents that wanted their children, uh, to get treated. And we saw this, uh, we got a lot of parent support in the Duchennes community and then for a neurological disease called, uh, go giant axon neuropathy. And so it really was, uh, very humble  ways of raising money, but, uh, you know, in particular, the parents were really committed, right? Because they had children with, uh, you know, devastating disease and only a specified period of time that we could treat them the disease got too advanced. Then there was, uh, no viability to our, uh, gene therapy treatments to actually stop the disease progression. And so, uh, they were racing against time and they were highly motivated

Speaker 1: (20:55)
Funding, a biotech company through bake sales.  something I ever thought I'd be talking about.  um, so if you, so you started Chatham, I think it was 2012.

Speaker 2: (21:08)
We sold it. Yeah. We started around 2012 and we sold it in 2014.

Speaker 1: (21:14)
So there were 10, 12, 13 years, something like that before the Chatham, um, sort of spin out and, and separate capitalization of that as a sub entity. Um, so mostly it was grant funding. And when did you create the, the CDMO?

Speaker 2: (21:34)
Yeah, it was mostly grant funding. And remember too, during that time, it was very difficult to advance therapeutics because the regulators were concerned. And so we actually, uh, during that time period took a therapeutic for Duchenne's muscular dystrophy into the clinic. Uh, you know, again, there were so many bars to advance a therapeutic gene therapy, uh, therapeutic. We had to go before a special committee called, uh, the rack, and it really did sound like you were gonna be put out in the bra, right. Scrutinized very thoroughly, but it was recombinant advisory committee. Uh, and that was in addition to the FDA review of your, uh, I N D. So there was just all these hurdles that slowed you down. And in addition, um, when we went finally into the clinic, the FDA would only let us inject into a muscle, uh, uh, the ver the therapeutic, uh, that was essentially like the, the size of eraser, very small amount of virus.

Speaker 2: (22:34)
They would let us inject. We knew that there was no treatment right benefit that was gonna be derived from that. The FDA just wanted to make sure, essentially that, um, safety, right, that this was not going to create a massive, uh, you know, system shutdown in the patients. And so, you know, we really didn't, it was almost like building a bridge to nowhere other than it appease the regulator's concern that, you know, adeno associated viruses we're gonna have the same kind of, uh, detrimental effect of ano viruses. Uh, and clearly there was no, uh, there was no detrimental effect. Uh, we were able to then move forward years later with a systematic delivery of our therapeutic, but it was just a different time. And, you know, the regulators were being very cautious and time just moved very slowly. Uh, so you know, it, it was not necessarily so much even the funding. It was regulatory constraints, science constraints. We had to scale up manufacturing. Right. There were just a lot of obstacles that got worked out during that decade. Um, yeah. And then now you look at it and things, I think there are like 400 different AV programs today in the clinic for a wide variety of different diseases, but it was a slow beginning.

Speaker 1: (23:54)
Was the FDAs, did the FDAs sort of, um, reticence or hesitancy extend into the preclinical work or was there, did it make the preclinical models more complicated or the work that you needed to do there more complex or more expensive as well?

Speaker 2: (24:12)
Yeah, and again, I think for, uh, all of us, right, we were going into the unknown and the FDA was being cautious because there had been a big red flag and they wanted to make sure, especially going into children that, uh, all of the precautions were taken. And so I don't wanna sound critical of the FDA in any way, cuz in actuality, they were very supportive in helping us think about how to design our therapeutics and viral loads and you know, manufacturing processes. And I would say in the early days, right, we hadn't had as an industry, uh, all of our manufacturing, uh, as fine tuned as today. So the product that we were making, uh, you know, a decade ago was nothing like the purity, uh, of the product that we had today. And I think the FDA, they were tolerant within reason, but many of these programs were coming from academic centers.

Speaker 2: (25:05)
They weren't coming from big pharma with all of the sophistication. These were academics who were saying, let me take my research project and advance it in the clinic. Uh, and that's how the field got developed. And so the FDA really had to work with academics to get them to understand all of the systems and regulatory requirements that are necessary, right. To protect, uh, patients. So in no way, do I wanna sound harsh, uh, to the FDA, it was just necessary growing pains, considering this was almost like coming out of, you know, small academic centers. It wasn't big pharma pushing through something, right. It was very unsophisticated drug developers.  saying I wanna get my, my products into, uh, the clinic. And so, uh, the field has matured a lot over the last 20 years.

Speaker 1: (25:56)
So with, um, Chatham, how did, how were you able to get, uh, capital at that point to create another company? Oh, you

Speaker 2: (26:04)
Weren't? Yeah, we weren't able to, so we literally leveraged a $5 million S B I R to, to get the technology into the clinic, uh, and then got some good clinical data in our factor nine program with two patients and Baxter bought it, uh, at that point in time. And it was, you know, it was a pretty attractive deal. Uh, I'm not sure if I can disclose, but it was, uh, significant enough that, you know, we were then able to put some money back into as bio and capitalize it and, uh, put more resources into our Duchennes program. Uh, when we, uh, spun out bamboo in 2016, we thought we were gonna be, we thought we caught the market. Right. And there was enough support from the venture community, uh, that we were gonna get bamboo funded. And I, I was really disappointing cuz I had, uh, dog data out, uh, nine years showing that we could correct, uh, the Duchennes model of, uh, golden retrievers.

Speaker 2: (26:59)
And uh, yet we, we couldn't get funding. Uh, but luckily, um, you know, I'm a good buffer and I convinced, uh, Pfizer that they, that, you know, they wanted to fire the program before. Uh, I did a deal with the venture capitalists and so they bought the program and uh, you know, good thing for patients there now advancing it, like I said through pivotal trials. And I think that was probably the right thing for, uh, the drug because, um, you know, bamboo is a company of 40 patients and uh, the manufacturing burden for, uh, the she's drug cause you have to deliver virus to every single muscle was, uh, very high bar. Uh, and so, you know, Pfizer took our manufacturing process, tweaked it and was able to get, uh, it to be even more efficient. And also there were some complications in the clinic that Pfizer with, you know, all of the tools and sophistication they have available to, they were able to design around. And so the drug is moving forward. So it was, uh, it was bittersweet cuz we really wanted to be able to get the drug ourselves over the finish line. But again, I think when you go into this business, you ultimately do it because you care about patients. And uh, we wanted to make sure that the drug had the best chance of success, uh, because these patients are waiting desperately

Speaker 1: (28:21)
You. So, you know, at matter we're always helping companies raise money and think about investors and, and their strategy and the kinds of investors they wanna work with. And I know with bamboo, you had some challenges with, um, a potential investor ,

Speaker 2: (28:40)
Um,

Speaker 1: (28:42)
Which are, um, particularly special. So I just, why don't you describe that process and what, what happened?

Speaker 2: (28:53)
Well, it's just clear that fundraising is not for the week of heart, right? This is can be a very, uh, difficult, uh, experience, uh, my particular experience in trying to raise, uh, money for bamboo. I always compared it to being in a roller Derby. I don't know if you remember those that show years ago, right? Where people going round and round, uh, the roller rink and they bump into each other and they hit each other  to try and not come off their skates. So it's like being in a roller Derby where people have baseball bats and nobody's wearing a helmet. It's a pretty rough game  it really is. Um, so we had gotten a term sheet from, uh, one of the big investors, uh, in the gene therapy space, like, you know, March of I'm trying to think what, uh, 20 of 2015, uh, and it was very attractive and you know, they said, oh, but before we finalized the deal, please go out and build a syndicate, go visit all our friends, which we did.

Speaker 2: (29:50)
Uh, so we talked to, you know, uh, good half dozen, uh, probably more like a dozen, but, uh, they, uh, wanted us to talk with this group and build a syndicate of about a dozen or so, uh, different investors. So we did that and everybody was all enthusiastic, but time is going by we're spending money. Right. And the money that we had was, uh, the proceeds from, uh, Chatham, uh, and of course, you know, some proceeds from dis uh, Duchenne's parents, uh, who wanted to see the therapeutic, uh, go forward. Um, they, uh, knew that we had a significant payment due. Uh, we were buying a factor core from the university of North Carolina vector core is just a production facility. Uh, and that payment a very significant payment was due on January 4th. And so, um, in the fall, uh, you know, they said, well, you know, it looks like you built the syndicate.

Speaker 2: (30:47)
That's great, but valuations have changed. And so now we're gonna cut your pre-money valuation in half. Right. And we were like, oh, this is not good. So we decided that what we would do instead, since we talked with all these venture funds is we would go ahead and, uh, have them submit term sheets. So everybody's been in our, you know, diligence room doing diligence on us, our data room, doing diligence on us. And we're expecting, uh, you know, the middle of December to get all these term sheets. Well, we start getting these calls one by one from these different, uh, investors saying they were, weren't going to submit a term sheet and we couldn't understand cuz they were all very enthusiastic. And then all of a sudden they're saying they're not submitting term sheets. So finally we heard from one of them that the investor that asked us to create the syndicate told all of these, uh, investors that if they gave us a term sheet, they would be excluded, punished, right.

Speaker 2: (31:42)
Excluded from their deals for a time period or something like that. And so nobody wanted to go across hairs with this particular, uh, investor. And so nobody was going to submit a term sheet, um, which was a real problem. And so I had, uh, started, uh, discussions with Pfizer at the time and basically really pushed them. Right. Which is a very difficult time between Christmas and new year's and said, well, you know, you need to get me a term sheet right away, or else I'm gonna close the, the round with the investors. And so they came back with a term sheet, so it's bluffing, right. And the investor hasn't totally pulled out, so it's not lying, but it's, , it's really positioning things the best you can. But, um, again, I'm coming up on this January 4th deadline and I think the investor thought I would just fold right.

Speaker 2: (32:31)
And get, take any valuations they want. Luckily I had a very good friend who I never asked for anything, but he has significant resources and, and a plea of desperation. I called him up and said, I needed a cash infusion in the company of several million dollars, which to my surprise, he wired it overnight. Uh, and we did the paperwork later and he made a very nice return, but you know, he was, uh, very, he has a child with a genetic defect. So I think he could relate and he did not want the Duchennes drug, uh, to be put on the shelf or something bad to happen. And I think he just didn't think it was a very fair situation. So he was coming to my help and, uh, we were able to buy the vector Chlo clothes on that, close on, uh, the, uh, deal with, uh, Pfizer.

Speaker 2: (33:20)
And then this investor wanted me to meet with them at JP Morgan. Right. And they set up an appointment. They don't know that all this has happened in the background. And it was so funny because I basically told them, right. It's like I made the appointment and then two hours before I canceled. Cause  because we had already done a deal, but it was so gratifying because you knew what was coming. They were just gonna cram us down cuz they thought I was totally outta money on the verge of bankruptcy, but yet I had sold the company. And so I think, you know, the key lesson is always have alternatives cuz it deals not done until the deal is absolutely done. And you just, you gotta like, you can't let no people know you're sweating. Right. , that's really the key. But that was, that was uh, you know, it made me really gun shy of investors.

Speaker 2: (34:08)
Uh, and I've been, you know, very sort of anxious because it, they're not, I mean, there's our investors that we got, uh, subsequently TPG and DDA, uh, which we took an investment from them, uh, in 2018 were incredible. So not all investors are, you know, wanting to cram you down, get the best valuation, you know, especially as founders. Right. It, I think it can be tough. Uh, there are fair, uh, investors who want to be collaborative and equitable. And we were very fortunate that we found that with TPG, uh, in Vita. But uh, yeah, we had some rough and you know, some very rough times and I think the worst thing is, you know, I get really upset and emotional about it because, um, you know, people are waiting for these drugs, right? Their kids are dying. And so you just are sort of like, you know, I don't know, maybe it was very judgemental, but it's like, why would you take away an opportunity for people, right.

Speaker 2: (35:08)
To have the chance to save their kids. I mean, it's not all about dollars and cents at the end of the day. I think you are in this space because you fundamentally wanna have a big impact right. On people's lives. And um, yeah. And probably in some ways I think that's the thing that drives me, keeps me going 20 years, despite all the obstacles, but it's also a thing sometimes where it gets me, uh, very frustrated because when other people just see this as an opportunity to maximize, you know, ROIs, you're just sort of like really it it's, you know, it's, I can't understand how you just wake up every day saying I'm gonna get another dollar today. It seems like you have to have a bigger motive. And I think, you know, the work that, uh, that we did in bamboo and work we do in as bio is really the truest of purposes, right?

Speaker 2: (35:55)
We, we are advancing scientific innovation so that we can bring transformative treatments to patients with devastating disease, which today have no treatment options. So anyway, that was a very frustrating time. And to this day I still get really mad about it because, you know, why should these people with those value sets, control, which technologies get advanced and which ones don't and which, you know, uh, which CEOs right. Get advanced and don't and what the profile of that CEO should look like, should it be a man or a woman, should it be black or what I mean, it's, they have a lot of control at their disposal. And it just seems like you would hope that the people that have all of that, uh, power would be motivated by something more than, you know, short term vaccination of province. , that's all

Speaker 1: (36:49)
We, uh, when we started matter, we called it matter because we wanted to work with people who are passionate about doing something that matters. And so I, I can, uh, uh, relate quite nicely to, um, you know, dream driven by a passion to help, uh, patients and your frustration comes through, um, uh, very clearly in that, uh, with those investors.

Speaker 2: (37:10)
Yeah. And I just wanna say, I mean, you know, especially like children that suffer from JAG disease, it's always been so amazing to me and also incredibly inspiring how brave they are. I, I, you know, I got to know quite a few of the Chen's patients, uh, over the years and for many years, although disintegrated at one point where I just couldn't even, you know, keep it any longer. I had a note from a little boy who Achens boy who since passed. And he said to me very early, he gave him this note and he said like, I know this is gonna be very difficult. And he probably won't have a treatment in time for me, but I'll be looking down from heaven and I know you'll help other boys behind me. Right. They're just, so

Speaker 1: (37:52)
Give me the chills.

Speaker 2: (37:54)
Yeah. But it's amazing. Like a lot of the children that I've met with genetic diseases, they know they're facing life sentences, but they're incredibly brave and they're unanimous and the parents, right. Uh, our investor, uh, one of our investors, uh, who invested primarily because he had a Duchenne's boy, his boy was way too, uh, old by the time he approached us and he knew that the therapeutic wouldn't work, but he said, Sheila, you know, in my situation, I've been to India, I've had magic stones put over. Uh, my son, I went to Mexico, we drank magical potions. We've been to other parts of the world and had mud bass. Right. I, he said, I've done everything cause I'm so desperate. And I don't want other parents to be in the same place. I am, I want other people to have a better outcome. So, you know, people are so incredibly, um, giving, right.

Speaker 2: (38:45)
And so unselfish that it's, you know, it's easy to be motivated, right? When you have people like that, it's like, oh, this is a worthwhile, cause this is something you wanna devote your life to. And, um, you wake up with the spirit of, I've gotta, I've got to be successful. Somehow I have to overcome these obstacles cuz people are accounting on it. And uh, while bamboo wasn't able to get financed, we got the drug into the hands of a group that is advancing it and hopefully again, will bring it, you know, to patients so they can benefit.

Speaker 1: (39:17)
So I, by the way that you're, um, describing, um, everything, you know, take me, take us back to the first five to seven years of the company when you, I don't think have, uh, drugs that are, you know, they're certainly not in clinic. They're probably not even really close to that. Um, you're, you're sort of in this like, wow, this technology could really change the world, but nobody, you know, it's a, the, FDA's got a lot of questions. The investors aren't really interested, I've got a law firm that's doing really well. And  like, how much, you know, like how much of your time were you spending on ask bio at that point? And what kept you going in those early years when there wasn't a lot of that, you know, you probably weren't in interacting with the Duchenne's, um, people at that point.

Speaker 2: (40:18)
Yeah. And in fact, I would say, um, it was interesting. It was a really hard time. So it was a slow time because the science was still evolving. It wasn't baked. Right. And the few attempts that people had to get it into the clinic, uh, they failed, right? So there are other groups working on similar technologies, they win the clinic and they failed miserably. So it was even worse. It wasn't that , you know, and, and so the hurdles kept getting, uh, the hurdles kept getting higher because the technology was improve. The FDA was concerned. Uh, there's a death. And then the, a few attempts that, uh, similar technologies, uh, when they win the clinic, they failed miserably in investors, lost money. So it was, it was even worse than you could imagine. And I think, uh, at that point in time, uh, I was working two full-time jobs.

Speaker 2: (41:11)
I was working my law firm job and I was working in the company. So it was two full-time jobs. The benefit was I was an entrepreneur in each. So I had a lot of flexibility. I think it's much worse, uh, trying to start a company if you work for somebody, you know, 40 hours a week. And then you're trying to do something on the side. I think that's really hard, but I had flexibility to be able to work both things in, if that makes sense. I just worked really long hours. Um, I just kept doing it. I honestly believe because, you know, my co-founder and I, we had this vision, uh, and we were committed to it. And we did have in the early days, uh, several Duchenne's PA uh, parents, uh, and other parents, right. Who kept rooting on who kept rooting us on.

Speaker 2: (41:57)
And we knew the stories of their children. So it was almost like you couldn't quit because if you quit, you were going to basically tell them, right. That you gave up on their children became very personal . So it wasn't so simple, right. Just to say, well, I'm tired of this. I haven't made any money. I'm gonna go on to something else. You felt this moral obligation. Uh, and again, these were really incredible people who were so selfish, right? Uh iself. They, uh, they were focused on the people that came behind them. And so I don't know, it really became more of a mission right. Than a career or a job. It just became like, sort of, I was meant to do this, uh, the hardships, uh, we will get over them. It's just a matter of, you know, sort of just keep chipping away.

Speaker 2: (42:49)
And so, uh, yeah, and you know, and in the early days, everything was a win, right. If you got anything at all, if you got a little collaboration agreement with a company and they paid you, you know, $250,000, it was a big celebration. And I remember we had gotten a, uh, a collaboration agreement with a big pharmaceutical company and they paid us a million up front and it was like a major to do , you know, it was like cloud nine. So, you know, it was just one of those things. You didn't, you didn't have high expectations and you just kept working at it because, you know, if you could just get through the barrier, you knew that the other side had so many incredible things to offer, uh, patients. And, um, and again, we're talking about, you know, potentially cures, right? The gene therapy provides a one time treatment to correct the underlying, uh, genetic defect.

Speaker 2: (43:41)
So if you have a genetic defect, that means you have a gene that's not working properly. We use a non pathogenic virus to put a good gene into the body to essentially overcome, uh, the, you know, defective gene and do the work that it couldn't do. And so it truly is I think almost a revolution in the way we treat patients right today, we really are just treating symptoms. We're not going to the molecular level and fixing the disease. So this whole concept of, you know, if you have, uh, something wrong, we can correct it. And as bios is, uh, one of the few companies who's taken those principles in genetic disease and which there are 9,000 different rare diseases that have in genetic, uh, you know, defect associated with them. And we're now going after diseases. So today we're in the clinic in Parkinson's and we're seeing some incredible results.

Speaker 2: (44:36)
And of course Parkinson's much more difficult to treat, cuz there's could be lots of different genes and different factors contributing to the disease. But, you know, we went into the clinic and we're getting some very promising results using gene therapy, we're in the clinic for heart failure. So we basically said, yes, we know we can treat monogenetic diseases and we we're continue to, uh, tackle many of them. Um, but we also want to treat, you know, diseases that affect the population more generally. And again, not a pill that you take, you know, or an injection that you take many times a week, uh, we're saying a one time treatment, right. That basically resolves the problem forever in an ideal world.

Speaker 1: (45:22)
Um, talk a little bit about what that one shot cure versus the standard business model of a therapeutic is more of an ongoing management of a chronic condition or a, it just is different. It's not it's there, there hadn't been, uh, a template for this. And so you've got regulatory challenges, you've got financing challenges. Uh, but then how did you, how have the conversations gone with the payers in, in terms of reimbursing something like this, where there really wasn't a template?

Speaker 2: (46:06)
So, Steven, that's a really good question. In fact, you know, you talk about those first 10 years where it seems like we were just in stasis, right? Not able to get as many things done as we would've liked to. Uh, during that time, we actually had a negotiated a deal with the pharmaceutical company, uh, and, uh, you know, it was gonna be a big deal. But when we sat down with the business development person, uh, and they were trying to figure out the appropriate value right. Of the deal, uh, he kept asking me how, how often does the patient get treated? And I said, once, and he goes, oh, once a day. And I go, no once, once a week, no, once he goes once a month and I go, no, it's a one time treatment. It basically hopefully right. With one time treatment, it's a cure.

Speaker 2: (46:49)
The patient won't have to be retreated. And he came back to me and he said, well, we can't work that into our model because our model is expecting a recurring revenue stream. And so the deal cratered, unfortunately we had buy in from the scientists we had buy in from, you know, the strategic component of the company. Uh, but we couldn't get the business case because, uh, nobody could understand how the payers would pay for this right. A one time treatment. And I think that was the other obstacle, unfortunately for the advanced gene therapy in the early days. Um, people wanted those recurring revenue streams, right. It was almost like, I hate to say it almost like a, an addict, right? Uh, they wanted you to keep taking the pills or the injections and a one time treatment. Uh, there was a concern that, you know, payers and insurance companies wouldn't pay high enough of the price to offset, uh, the, uh, you know, the revenue streams from a more recurring treatment.

Speaker 2: (47:49)
And in fact, uh, you know, the product that I just mentioned, that we couldn't get the deal for a for would've canalized that company's ongoing, right. They had a product that you injected in patients, uh, several times a week, and we would've displaced that. And so that wasn't in their interest to do that. And so I think it was only after, uh, and we have Dr. Kathy high who's part of our company. Now she was the co-founder of spark and she was at spark. She got the first, uh, FDA approved, uh, drug on the market for, uh, in the us for, um, gene AV gene therapies, Lena for inherited blindness. And she overcame a lot of these obstacles, uh, and had to meet with the payers, uh, and you know, the insurance companies. And, uh, then after that, the drug for SMA by, uh, Veis now Novartis, uh, got approved, these drugs have high prices associated with them.

Speaker 2: (48:47)
And sometimes I really don't like that because I want our drugs right. To go to as many patients as necessary. So I want them to be affordable and accessible, and I spend a lot of time trying to drive down the cost of goods and thinking about different formulations so they can be shipped all over the world, uh, without worrying about, uh, cold chain supply, uh, cold, uh, chain, cold storage, supply issues. There you go. Uh, and so anyway, uh, but it's necessary because without those, uh, higher prices, I don't think you would see as much money and innovation in the sector, uh, today, you know, you see a lot of money going into it because there is a path for payers and insurance companies to reimburse, right. The price of drug, uh, the price of gene therapy, drugs, uh, at a level that, uh, is a, you know, appropriate or adequate, uh, from a investor's perspective, return on investment made. So yeah, that all had to be worked out and then it took a while it took a while  for everything to sort of settle.

Speaker 1: (49:54)
Um, how do you think being a Hispanic woman has affected your, um, your career since you, you talked about the one, you know, particularly egregious, um, like very overt moment with the law firm. Um, but what, how do you think it's affected your career since, and, and do you have any advice for, uh, women or minorities who are, um, either in or aspiring to be in leadership, uh, positions in life sciences?

Speaker 2: (50:24)
Yeah, I mean, I look at my company, I think extremely beneficial because my, uh, company looks like, you know, almost the United nations. We have people from every place around the world. Right. And I love it. It's a very diverse, uh, group of people from representing lots of different nationalities, uh, religions, uh, sexual orientations, right. It's just, it's wonderful. I love it. And I embrace all, every aspect of that. Right. Diversity, uh, is a really big issue, uh, here at, as bio. And, you know, I look at the senior, uh, management ranks, uh, we're over, you know, 57%, uh, close to 60% women in leadership positions. And when you look at the company overall, uh, in, uh, Europe, uh, our manufacturing facility, most people can't believe this. Uh, we have, we're approaching 280 people there. We're growing, uh, basically tripling, uh, per year, our growth, 75% women.

Speaker 2: (51:24)
Right. So when I add those into the statistics, they're even more, uh, advantageous, uh, to women. So we, uh, you know, we don't, I think we don't have, I hope a lot of issues that maybe companies that are less diverse have, and I think that there are huge, uh, strategic advantages to being a diverse company and celebrating right that diversity, if nothing else, we have a lot of fun. We celebrate everything here.  and I just, I think it just makes the environment employee, uh, engagement much higher. Um, but I think in general, look, if you just look at the number of, uh, companies that are venture back that are run by women CEOs, uh, you know, it's not a very high number. I think I saw it's like less, like it's five to 7%. It's not high at all. And then when you look at, uh, companies where, uh, the CEO comes from an underrepresented background, it's less than 3%.

Speaker 2: (52:23)
So the statistics are not in your favor.  and I think, you know, my personal experience was it's hard. Uh, sometimes to get the credibility. A lot of times my statements, I would say something and then they would often be attributed to like a male counterpart. And I saw that happen a lot. Um, but I think, you know, we just have to be persistent as a group and we have to demonstrate our capabilities and those of us who get the opportunity, right. Have to bring others along. It's just that simple. So I try to, you know, help other women, entrepreneurs, other, um, people of color through, um, you know, basically mentorship I've been involved in a lot of formal programs, informal programs, sponsoring, uh, diversity, uh, initiatives, uh, both in the company and more broadly. And so there's a burden on the very few lucky ones of us who have gotten opportunities.

Speaker 2: (53:21)
Right. And, um, we just have to make sure we provide other opportunities to the extent we can, right. To other similarly situated, but it's not easy. And my word of advice would be you gotta be really tough, really tough, and you can't care what people think about you cuz a lot of times when you're successful and you're a woman or you're, uh, an underrepresented individual, I think, um, people always tend to, you know, they tend to think, oh, maybe you didn't work as hard or you got some breaks or there's a lot of crap that's thrown at you. Right. Uh, and women always, if you are tough and, and you know, sort of very focused, I think sometimes you get a lot of sexist, uh, ideas thrown at you too, but you know, the, you know, yes, you actually do work 10 times harder. I'm looking at, somebody's gone 10 times harder and longer and smarter and everything else. It, it's not easy. And I wish I could say it's an even playing field, but I don't, I don't think it is today. And hopefully, you know, for our children, uh, it will be different. But I think today for those of us, right, who are trying to be, uh, trailblazers, it's hard. Um, but we're trying to make it easier for the people coming behind.

Speaker 1: (54:37)
So on a lighter note, um, who does the naming of your technologies, um, and your companies you've got bamboo and Chatham and as bio is after the God of, um, medicine and, and most interestingly, I thought one of your technologies is called like doggy bone  thing. Like who does that?

Speaker 2: (54:58)
It looks like a doggy bone  it's, uh, it's sort of like, it's always been, uh, Jude and me at various points in time coming up with things. And I think there's no, uh, there's never been any pattern or any logic. It's just sort of what we're thinking about the time bamboo, for example, was named because his grandson saw a kangaroo on TV, on a cartoon. He kept saying bamboo bamboo and ju goes, that sounds like a good name. And then he comes back to me with this. Right. And I have to figure out a logic behind it. So I go, well, bamboo is like a weed, right. It grows fast and it's really resilient.  so, you know, it makes sense. Right. And it's good luck. So now unfortunately when, uh, Pfizer, uh, bought us, they called it project, uh, Pam, uh, Panda and, you know, Panda bears eat bamboo.

Speaker 2: (55:51)
Right. So we were like, oh, this might not be a good thing.  but otherwise ASLE is, uh, so the company's official name is a sleeps biopharmaceuticals. I could never get the hat over the E cuz it's Greek and you have to put this little hat thing on, I couldn't figure out how to do that on my computer. So we shortened it to ask bio, but ESCAP is of course is, uh, the Greek, uh, God of medicine that cures in curable diseases. So it was very fitting Jude, you know, flips from being very, you know, sort of flippant about things, uh, when his grandson named bamboo, uh, too very thoughtful when he named Aus and other times, I, I really don't know. We'll just be thinking about something and we'll come up with a name, not always a lot of logic to it.

Speaker 1: (56:40)
Um, Sheia thank you so much for sharing your journey with us, with our community. Um, it is truly remarkable. Uh, and really, um, there's so much that I know you must be so proud of, uh, that you've accomplished over the last 20 years in advancing a field of gene therapy that is used. So, uh, kind of eloquently described, holds, um, really just, uh, tremendous potential for addressing some of the most intractable, uh, diseases that we face as a species. Um, thank you to all of the rest of you for, uh, spending part of your day with us. Um, we have our final program as matter of the year on Thursday as part of our healthcare 2040 series. Uh, we'll have leaders from brain lab Hillrom and Parkview health talking about, um, innovation and operating rooms, um, in the register for that at matter, do health slash events. I hope to see you there. Um, I hope, uh, Sheila, that you and everyone else, uh, who's listening, uh, enjoy the rest of your day. Uh, thank

Speaker 2: (57:45)
You, Steven so much for letting me be part of this and, you know, happy holidays to everybody, right. And a joyous new year.

Speaker 1: (57:53)
Thanks everyone.