Nicholas Hertz, Ph.D - Founder & CEO, Montara Therapeutics

Welcome to another Founder Wisdom Podcast. We have Nicholas Hertz with us today. He's a PhD founder and CEO at Montera Therapeutics. Interesting guy. Spoke with him, what, 2, 3 weeks ago and was very impressed. Already had an exit and he's quite the ambitious guy in SF of all places. So Nick, welcome to the pods. Tell us a bit more about yourself, what you're up to.

Yeah, no, thanks for having me, Charles. It was great connecting with you as well. Yeah, I live in SF, been here since I did my PhD, about almost 20 years. You know, have 3 kids going through, you know, teenage years now. And, you know, really, yeah, scientist, you know, founder, entrepreneur driven by a fundamental goal to translate science into treatments. into therapies that actually help patients improve their lives. And that's, that's really where, you know, where I see myself.

You've probably seen some of your peers stay in academics. What had you get the fuck out of there and launch your own stuff?

Well, you know, sometimes it's hard to see the forest for the trees. And I was, I definitely was considering doing academic sort of, you know, route. My family had a lot of academics in it. My dad was a professor, my grandfather, all these people in my family. But I don't know, I guess I was just— I was struck by the amount of bureaucracy you have to deal with in academia. And ultimately, it looked like it was a good decision because right now I talk to a lot of professors who are really having a tough time right now in terms of getting, you know, funding for the research, et cetera. And so It's really like the superstars are getting it and everyone else is not. So, for me, it also was— I guess I was talking to my wife about this last night. I'm not someone who's all hype. I feel like there's a lot of— I know a lot of people who want to hype up their science or talk about how AI is going to change biotechnology and we're going to create all these drugs. And, for me, it's really about the proof is in the pudding. Put a treatment forward, show that it works, share it with people, And it's not about the hype, it's about actually making a difference. So for me, I think there's a lot of hype in academia too. And I think in some ways that was, that was a good fit for me.

Tell me about like your first entrepreneurial experience, right? Because you are PhD at U of Cal San Francisco for 6 years, then Rockefeller University, then CSO at Mito Kinin. I guess ODF sort of changed your trajectory. That's when you started founding your own stuff. But MyTokenin, you— so what happened there? You're CSO at MyTokenin, and then you became founder at MyTokenin, like these, and it's not the same company. What happened there?

Oh, I don't know. That's probably just an abstract on LinkedIn. I, you know, I'll give my wife a lot of credit here. We met actually back when I was at UCLA and she was at USC. And this is back in like 2007. And we met and she ended up blowing me off. I invited her out to this really awesome event and she blew me off. You know, she's still really hot. She was hot then and she was really brilliant. And, you know, I ended up starting my PhD at that point. And then it was really like 4 years later, I was in New York for a meeting with Michael J. Fox Foundation. I was trying to trying to develop these drugs for Parkinson's. And we met again and we've been together ever since, really the last 16 years. And she is super entrepreneurial. She's actually CEO of a tech company right now. It just got announced on LinkedIn the other day. And as I was going through and doing my PhD, she never said, hey, think about starting a company, these kind of things. But as the opportunities came up and I kind of was able to position that. Kayvon had an exit. His first company, IntelliKind, had sold for up to like $300 million. And we had this cool technology. She asked the question, like, what do you want to do? How are you going to translate this technology? And that was the time when I said, yeah, how are we going to translate this technology? How do we move it out of academia into the place where it can actually help patients? So I want to give her a lot of credit and say that she definitely pushed me, but in a gentle way of saying, hey, well, why don't we think about really translating this outside of that? And so I actually ended up working with my brother-in-law on the first company on mitokinin, and we pushed it out, we got some seed funding. And, at that point, I still felt like I didn't have the necessary repertoire of skills to really create a treatment for Parkinson's. I'd really been working in the molecular pharmacology space. So, I did a postdoc with Mark Teftel Levine at the time, and he was then president of Rockefeller University, became president of Stanford, now he's CEO of another biotech company. And so, working with him, I really learned sort of more about how do you translate treatments from the bench into the clinic and how do you translate your pharmacology platform into something that could actually work in neuroscience. And so, it was while I was in Mark's lab at Stanford that we spun out and fully went into Mitokynin. And, it was really an opportunity that came up because being in Silicon Valley, VCs came by and had basically offered us the lifeline to start that company. And, I took the leap. And, it was a crazy time, to be honest. My wife was starting a company. We had 2 kids, 2 young kids. I was working half-time at Stanford trying to finish out the paper with Marc and then driving up to San Francisco every couple days or every other day to go work on Mitokinin. And, I had gotten an agreement together with Stanford that I could to take that time off. But it was really, really intense time and it was really a formative, like, sort of learning experience for how do you start that up? How do you translate these things? How do you make, you know, processes more robust, et cetera? So that was really the beginning of that company. So that's why there's like 2 foundational pieces in Mitekynin where it was earlier at the smaller level, just the seed funding. And then we actually launched it as like a Series A company and went on and tried to, you know, try to push into patients.

And did you expect that exit in 2023? How did that happen?

I think we always built Mighty Kynin with the realization that a small biotech company has challenges in funding a large neurodegeneration trial. You basically, when you start one of those companies, you have to think, who am I either going to partner with or how am I going to raise $750 million over the course of this company? And so from the beginning, we were focused on finding the right partner and the right solution and the right way that we could get that into patients. And, you know, we had been talking with AbbVie for a number of years before we actually got into deeper discussions with them. And I think what we grew to, you know, to know about AbbVie was that they are just a first-class organization. They're a top group, people who want to make a difference for patients. You know, they actually say this publicly. They say, we want to be, you know, we don't want to be first in class, we want to be best in class. And that was really what we took away from all of our interactions with them. When the time came for us to move into the clinic and start partnering, it was pretty clear that they were going to be the top group to work with. And at that point, we did what a lot of small biotech companies do, and we shared the risk. We said, okay, we could go out and raise more VC money and kind of do this ourselves, or we can take an early deal, which caps our upside, caps the potential for the sale of the drug, but it lets us get into the clinic and lets us get through the development without having to take on a lot of additional dilution. So it's really always that, you know, the age-old, you know, story of like, do you take the, you know, take the early money, which is smaller but more guaranteed, or do you take the bigger risk and go further? And, you know, in that case, it paid off for us. I think there was an article the other day in Endpoints that talked about how only 30% of those kind of option deals actually go to fruition. And I think it's a testament to the strength of like our team. how we, you know, took this, took the science and pushed it first and worked really collaboratively with the AbbVie team to push that forward. And really, and I still have great friends at that company today. So I think, you know, it's about putting aside ego, putting aside, you know, what we wanted to do for the better, for, you know, just putting patients first and foremost and putting them, you know, beyond any of our, you know, financial goals or anything else that we're doing at the company.

Yeah. How do you go with that? Right. Because at one end there's Martin Shkreli, right? Like, doesn't give a fuck about people. Everyone just wants to make money. And on the other end, there's, I guess, nonprofits, but sometimes nonprofits are not so successful because they are disconnected from capitalism, which is this beautiful invention, right? So how much is enough for you, for the team, right? And when is the heart taking the lead, right? Or is the heart always like the base that's motivating you to get out of bed and do these very hard things? 'Cause let's face it, You're not in an easy field, right? Like, it's pretty challenging. So what's— how do you make these decisions between heart and brain?

I mean, Martin Shkreli is pretty much everything that I don't want to be, right? He's a person who, yeah, put his own monetary, you know, goals ahead of anyone else. And I mean, to be honest, there's a lot of disgusting people in the Bay Area. There's a lot of people here who don't give a shit. They don't care what they're trying to do or who they fuck over in the process of trying to get ahead. And that's just something that I'm unwilling to do. And, you know, I think for me, it's about putting a treatment forward that could, you know, that could help, you know, real patients that, you know, we always talked about at Mighty Kynon, putting a drug forward that you would give to your mom or your dad or someone you really cared about who had a disease. And that was always like our goal. Our North Star was not making money. Our North Star was making a difference and actually bringing forward a treatment that could help people. And so, you know, that's what we continue doing here at Montara. We push forward, you know, treatments that can help people. We try to push forward and make, you know, make drugs in the most, you know, sort of cost-effective way. Try to, you know, not put forward our own egos and, you know, try to do the right thing. And we try to carry that forward in every way that we go forward. And in the end, I think if you make a difference and you make a drug that's going to work, you're you're gonna be compensated for it. If you make something real, it's gonna go forward, it's gonna go into patients, and you're gonna be compensated for it. So you don't need to put the financial burden up front. You can, you can put that as a, you know, as a side note in terms of, you know, that if you bring this forward and help people, it will be— you will be taken care of.

And there's traction in SF, obviously, for biotechs or pharma tech, for example, but there's also hubs like Boston, right? Like in which pharma gets a lot of traction. Why did you choose the Bay Area?

Is it like intersection of AI Yeah, no, that's a good question. I looked at going to Boston for my PhD. I looked at, you know, all the institutions out there. I found some great people. I guess I felt like, you know, just my personality, I'm very optimistic. I come in and I see the glass half full, you know, and I really, I look at situations and think about how we can make it work for everybody, how we can push it forward. And so for me, I felt like Boston didn't have that. I felt like everyone I met in Boston was, you know, yeah, I guess in that time, I don't want to throw shade on Boston, but just, you know, much more, I guess, realistic versus optimistic. And I had that California optimism. And so when I left, I knew I didn't want to be in LA anymore. I knew that that was not my people. But when I came up and I met Kayvon Shokat, who at the time, Kayvon was someone who had, you know, He had discovered this really cool approach to identifying substrates of kinases. He had developed some mTOR inhibitors. He had developed some other drugs, but he wasn't as famous as he is now. I mean, he was just given a giant highlight piece in the New York Times. I mean, he's the foundational scientist of Revolution Medicines, which has just basically doubled the lifespan for people who have pancreatic cancer. I mean, he's a genius. And, I met him and I knew that that was someone I wanted to work with. And, it was not just that he did incredible science, but that he's a moral and a good human being. And he's just such an incredible role model for me. And I've just, I've known him for 20 years. We founded now 2 companies together. I see him every month at our SAB meetings. So that for me was like, that was really why I came to San Francisco, was for the openness, the optimism, you know, the crazy parties that we had at UCSF. And that openness was really what drew me there versus Boston. So I used to go out to Boston, you know, 4 times a year to meet with everybody out there. They have great clinical development people. They have great biotech scene out there. But for me, like, you know, San Francisco remains a place of like sort of unbridled optimism and the potential for all the things you can do in the future. And it continues forward as we raise money for the company now.

Lots of traction as well. There's been folks like Sam Altman that invested a lot in, I think it was RetroBio, right? Like, and longevity as well. So are you seeing like a revival in that space of things? Are you getting getting funded by more, I don't know, ultra-high net worths that have personal interest in this because they don't want to die, or that they, they had like family members with, for example, neurological disease? Are you seeing some traction in that space of things?

Um, I'm not. That's that again, it goes back to my like, you know, substance before style kind of mentality of like, I would rather just do the hard work, get the strictly biotech VCs involved, work with the groups that want to work with me that are, you know, really a strict no-asshole policy. Like, what we're trying to do is already so hard. Do I really want to be working with people who are sort of unilaterally going to make decisions and, and then either close down funding or startup funding or do whatever the hell they want to do? So no, I haven't raised any money from, from people like that, really just strictly, you know, professional VCs, people that want to make a difference in the, in this space. And I, I'll go to, you know, the earliest investors that committed to Montara was actually the Dolby Family Ventures Fund. So Dave Dolby's dad died of Alzheimer's, and they put significant work and money into that, building out a great network of academics that come forward with great ideas. And I shook Dave's hand and I said, look, I'm going to— we're going to put a drug in the clinic for Parkinson's. And my mom was diagnosed with dementia, and I want to put a drug forward that's going to help people that have dementia. And he said, okay, let's do this. And he came in and he stayed committed ever since. And I consider him a good friend. And other investors, KDT Ventures, this is a group that is all physician scientists, all MD-PhDs, all people who have spent the time learning their craft and learning how to make a difference. And they came in and they said, look, we wanna do this with you. And then going from there, we identified SV Health Investors, which is a VC that's been around for 36 years. And they came forward and said, Yeah, let's build this with you. Let's put this together. Let's put a good syndicate together. But their dementia discovery fund is focused on creating cures for dementia. So really, it's a group that really wanted to push those forward. And then that was the first 3. And then we brought in Two Bear Capital. And I love Two Bear Capital because their founder, Mike Goguen, said, let's go out there and solve the hardest, the biggest unmet need. What's the biggest unmet need? It's neurodegeneration. There's no drugs. There's nothing that exists there. So really getting them on board, and Seth Stratton, who's our investor director representative from them, was really a huge piece of the puzzle to put together to say, these guys are going to help us to put a drug forward into the clinic to help people that have this disease. It's not about flash. It's not about raising innumerable sums of money and getting some crazy valuation. It's about doing the hard work day after day, putting one foot in front of the other to put a drug in the clinic that's going to help people. And that's what we still do now. And then, you know, bringing on board our other advisors, you know, world-class advisory board. We have chairman of the board that just sold the company for whatever, $9 billion, is currently CEO of a multi-billion dollar company. We have another, you know, invest— uh, independent director, uh, Andrew Miller, who started a 2-drug combination company that sold for $14 billion. He's the founder, you know, inventor of that technology. So just bringing people in, bringing world-class people and showing them what we can get accomplished if we set our minds to it and do it together. and do it in a capital-efficient way. I mean, I think you can take a look at a lot of different companies that have raised huge rounds. Where have they gone? Where are the drugs that came out of those organizations? Like, I'm not gonna— again, not trying to throw shade on Calico, but how many billions of dollars have they put forward? And they have, I think, just a few clinical assets that are actually running through AbbVie. We actually beat them, you know, with spending about $11 million in VC money to the clinic, and we're able to do that same thing with AbbVie. And that's an organization that spent billions of dollars. So I think time and time again, we see with small companies, constraints make the company make the hard decisions, right? It's not just, I'm gonna do every experiment. I'm gonna do the value-inflecting experiment. What is the key experiment where the juice is worth the squeeze? Every experiment is hard. If I do that experiment, will it add value to the company or not? And if you have infinite money, you don't give a shit. You just do all the fucking experiments. And if you have constrained capital, then you do the key experiments. And you hopefully make the right decisions that'll drive value and actually bring, bring, you know, drugs forward to people.

And is AI bringing all of these costs down? Does— can also— can you have a better methodology at choosing what experiment is statistically more likely to be proven right? Like, how do you go with that process?

Yeah, I— we're doing a Series A raise right now. So I always tell the investors, like, I'm not gonna sit here and lie to you and tell you we're an AI-first company and everybody, you know, LLM and blah, blah, blah. I'm like, no, 'cause that's not, that would be lying to you. That'd be not truthful. But do we use AI in everything we do? Yes, of course. You know, and we've been using first OpenAI for, you know, a year and a half or so. And then we switched over to Claude and haven't looked back. And we spend significant money on Claude to do exactly what you said, to go in and analyze the previous data, go through all the worksheets, try to help. Like we design the experiments, we say, this is the question we wanna answer. What's the best experimental method to get us there based on the previous results? What's likely to be statistically significant? What's likely to give us the, you know, the sort of avenue forward? And then when we need to go back and analyze the data from the new experiment, we put that in, you know, back in, and we help to write reports. We help to generate, you know, uh, you know, conclusions. We help to do that and then read those things over. But all the raw data processing, the most important thing is just the raw data from the machine, from the experiment, from the animal, from whatever you did. into a graph that shows the statistical significance, that's all done manually. But the analysis and other things can be done with AI to help to streamline that process. And yes, we do do some diffusion models to predict molecular structures. We hired someone who just finished their PhD at UCSF in a great lab to do that sort of work. So we do incorporate AI in every aspect, but it's not like we don't use AI to solve all the problems. We use it to augment our team's capabilities and ability. to push drugs forward and again, help patients.

And how close are we to solving dementia? Granted, the cycle to bring a potent drug to market is reducing, and I guess FDA is like untightening their measures for the best. Like, is it 5, 10 years from now, or?

I think we're closer. I think what we saw at the AIC this year— this is the Alzheimer's Association meeting, and it was in London. And I was there with one of our investor directors, Dirk Langgraf, also founding investor in Montara. And we saw that presentation. I think we were all really excited about what it brought. And Dirk was actually cited a couple of times in an Endpoint article about that. It was really incredible because what they saw is that tau has been known for years to be driving, you know, this early biomarker for Alzheimer's, something that comes up along with A-beta. And what they saw is that if you just slow down the translation of tau, so you slow down the production of tau, It would actually drive the clearance of the pathogenic, so-called pathogenic species. So, what it suggested is that the natural processes in the brain were able to get turned on to clear as long as you could stop the tau coming in from this direction. And, I think that really spoke to us because I'm not going to say that we have the silver bullet that's going to cure this, but I think we have a damn good idea at Mantara and a damn good mechanism that we think would actually work there. So, I think now that we saw that data with the tau clearance, which is, we believe, driven by autophagy, we believe driven by that self-eating, that's where the cells are able to break down that protein and get rid of it. We think that by turning on that process more, we can leverage the Biogen tau data to say in patients, they saw when they slowed down the translation, that autophagy process, which clearly in our minds must have been, was able to clear that, and we could see the patients were getting better. So, what if we can stimulate that process further and only clear the bad proteins away? And that's what our mechanism does. And we were just given a grant by Michael J. Fox Foundation, which is one of the preeminent sources of funding for this. And they're actually really focused now on doing work where you look at copathologies between Parkinson's and Alzheimer's. And we were given a grant there to investigate our mechanism which is to inhibit mTOR specifically in the brain. And so, the reason we're so excited about that is that this mechanism has been known for many, many years, and yet nobody has been able to therapeutically validate it because if you inhibit mTOR across the body, you generate severe adverse events in patients. And so, when people have tried to do studies with those compounds in dementia, they haven't been able to dose high enough to see efficacy in the brain. But, our approach, we believe, would allow us to to dose higher to get that mTOR inhibition in the brain that would drive autophagy clearance but not cause those side effects. That's what I'm really excited about at Montara, and we have, you know, 2 different programs based on that technology.

Is that Brain Only and BrainTac? Tell me more about these.

That's right. That's what they're calling the brain-only technology. So, we have 2 different programs based on that. One program is going into a rare, severely debilitating childhood epilepsy. Called TSC, tuberous sclerosis complex. And we're working very closely with the TSC, uh, you know, basically there's like TSC advisory board, TSC clinical advisory board, and really these patient advocacy groups. And we're working closely with them, and we've gotten a lot of patient, you know, clinician feedback that they like our approach because we're taking an approved drug in that indication, which is an mTOR inhibitor, and making it brain selective. We don't call it brain only in that, in that case because we actually want some non-brain inhibitory effects. And, we're pushing that forward and we're going to be dosing. We actually just got news today that we finished making the capsules for dosing in January in patients or in healthy volunteers first, then subsequently patients. That'll be the first program we put in the clinic. And then, behind that, that we're doing another brain-only approach that would be then used for neurodegeneration. In that case, we'd actually use a slightly different combination, but that's the next step.

Sorry, go on.

No worries.

I am—

no, I— yeah, so I mean, for me, I, you know, I led a company before. We pushed the compound into the clinic, but someone else took the clinical step. So I'm really excited this time about actually putting that drug forward, putting into humans, and seeing, you know, seeing what the effects are there. And we have some incredibly compelling data in preclinical species showing basically, if we can replicate that data in humans, that we will have the desired effect downstream and will help people. And, I think going back to your point about Retro and other approaches for longevity, et cetera, the drug that we're using is one of the major drugs that people use for longevity. So, Bryan Johnson was on rapamycin for many years. And, in the end, he stopped taking it because he was having these side effects. He was having immune suppressive side effects, higher cholesterol levels, et cetera. And, our approach would basically allow us to use that drug, which we know increases lifespan in preclinical species and we know has beneficial effects in humans, but we make it brain-selective. So, we make it that those beneficial anti-aging effects would really be localized to the brain. And again, I'm not sitting out here saying I'm going to go talk to Sam Altman or these other people to go try to sell them shares in Montara. I want to work with the people that want to push this forward. And, that's why I'm really excited about some work that we're doing. We're actually running an MTA, which is a material transfer agreement, with a major pharma company right now, where we've transferred our material to them and they're testing it in their model of neurodegeneration. And we think that's the, that's the best approach to build confidence within a large organization that could run a clinical trial, and for us to build those relationships with them so that they trust the science and the data that we're putting forward. So I'm really excited about the future, and I'm really excited about what 2027 is going to bring for the, for the Montara platform.

Love it. Where can people find out more about you, Nick?

So we have actually some really great videos on the Montara website. So it's montaratx.com, and they can read all about the platform. They can read about, you know, you know, new news events, like as we raise more money, as we dose our first patients, etc. And, you know, they can find me in SF if you go surfing at Ocean Beach. I'll start surfing there again soon. The summer's been pretty miserable. And like I said, every morning I run sort of a diagonal path from my house to my work across all of SF. So if you see me, yell on the street and we can chat.