53. Steve Gullans on Biotech Boards

In this episode Steve Gullans talks about the board's role for life biotech startups and IPOs, Scientific Advisory Boards, how therapeutic drug companies are different and orphan drugs – and everything life science.

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Steve Gullans Bio

Metis Minds

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Background - Steve's network and expertise extend from academia to Wall Street. He has managed teams through successful financings, scale up of operations, clinical trials, deal negotiations, IPOs and M&As. He has also served as board director for more than a dozen companies, currently including Orionis Biosciences, Alexis Bio, iSpecimen, and Navigation Sciences. Steve began his career as a professor at Harvard Medical School, has co-authored over 130 scientific papers and is a fellow of the American Academy of Arts and Sciences as well as the American Heart Association. Steve has also as CEO of a public biotech company and co-founder and Managing Director of Excel Ventures, a life sciences venture capital firm and he is currently the CEO of Metis Minds, a digital wellness company addressing ADHD.

On Scientific Advisory Boards - "Scientific advisory boards generally, as the name implies, involve scientists giving advice to a company, or it could be to an institution ... helping them with their innovations or with a large number of companies as they try to figure out how to maneuver their way through the technical challenges of the scientific process."

BioNtech had no plans to go into vaccines, but if you have the right community of people, you can actually pivot when you need to. But on top of that, it's really about giving sage advice and critical advice that often the board cannot provide.

"Joe: One scientific advisory board that I'm very familiar with is the one that we have on St. Jude Children's Research Hospital … For some of the deep dives, they'll bring in outsiders, not members of the ongoing SAB, for very specific expertise, but I think it's fair to say that for the board, that three, four, five hours that we spend with them each year is some of the best time that we have all year."

Metis Minds – "I just decided to come out of retirement because I've been focusing the last few years in learning about the digital technologies that will allow us to retrain the human mind.

"Metis Minds is was developed by a team in Boston in collaboration with others around the world. It's simply an EEG device that sits on the forehead of a child or it could be an adult, and it controls through Bluetooth a video game on an iPad or other pad. It looks identical to the games that my grandkids play today, like Subway Surfer. It's an adventure avatar game, and the speed at which the game operates is determined by how much you focus and concentrate. Eight human trials have shown it actually works."

Therapeutic Drug Companies – "an early stage biotech therapeutic drug company, it really needs a lot of capital. The path is well worn, and at the same time there is capital available, but you have to check certain boxes in order to access it."

"In general, you have a preclinical development period. It could be in academia, it could be in a private company, or you use the best available animal model to show the compound you have, whether it's a biologic, a small molecule, a peptide, it could be a natural product, it could be anything that shows benefits and safety in small animals."

"A fundamental difference in terms of operating therapeutic drug companies is you never have revenue."

"There are two hallmarks. If it gets a 90% failure rate, why would anybody invest? The answer is because you don't actually have to ever have a sale. By the time you finish phase two clinical trials, the pharma companies line up because they prefer to run the phase three trial themselves and they buy that company."

On Theranos – "I am one of many scientists who looked at the Theranos' slide deck during its multiple financings. My partners say, "Why can't we invest at this round, Steve? Because look, the valuation is now 3 billion, it used to be only 1 billion." The answer was because people who knew the science knew that it defied the laws of both chemistry and physics at the same time they didn't use a drop of blood to find a bacterium. If there was only one bacterial cell per 10 milliliters, you're going to miss it. That's a very simple concept."

On Diversity of Perspective on a Board – "What you often need to do is you need to reach outside your network because there is such a demand for highly talented people that the shortlist of obvious people already have appointments at Pfizer and the big companies."

"One of our life science companies had somebody from Wayfair on the board, , but her understanding of IT technology and how you actually create marketplaces online was instrumental in pointing the company to the right partnerships, the right people, and all sorts of things.

Arkayli and Orphan Drugs – "Hemangiomas, is the red tumor-like spot on a new infant, just born; it happens to tens of thousands of kids. Often they disappear on their own, but the founder identified a way to treat it with a cream, but she didn't have the wherewithal or the understanding how to do it, and at a conference, she met some people who were experts in drug formulation and making creams with absorbable medications. It's an approved drug."

You and Your Urine – "When I was at Harvard Med, there was a course called You and Your Urine, where the students had to come to class and had to pee into a vial …You got to have a little fun while educating. I guarantee the students remember that lecture."

Board's Role for Biotech IPO – "Yeah, there are several roles for boards. In many cases you'll have a board member who's from a crossover fund like RA Capital or ComREIT or Deerfield, and I did a couple of crossover deals myself, where you invest right before they go public. You jump on the board and then you help with the S-1 and the filings and everything else.

If you're a crossover investor, they know all the public investors and they sort of are on the bellwether of whether it's a good deal, so ideally a board member helps recruit a crossover investor to be an investor in the round before the IPO."

"It's about this is going to be a blockbuster because it's a once a month injectable, not twice a week. That is bullet point number one, gang. I know you have love all your science, but it's these kinds of understandings that really trigger the public. Both retail and institutional investors want to do it."