Biotech Company Building, Partnering, Investing Towards Better Medicines with Vikas Goyal

Welcome to the Axial Podcast. Axial is an early-stage investment firm based in San Francisco. We partner with great founders and inventors investing in early-stage life science companies, often when they are no more than an idea. Axial is fanatical about helping the rare inventor who is compelled to build their own enduring business. Okay, Vikas, well, great chatting for the first 15 minutes. I always do that, and maybe I should just record that intro background conversation because maybe there's some tidbits that are interesting. But great to have you on this podcast and, you know, really walk through your really fascinating story from my perspective, ranging from VC to operations and just a whole gamut of biotech experiences. But maybe let's start off, do a brief introduction.

Yeah, happy to. Yeah, so I'd say, you know, my career really boils down to me like making the best of the opportunities in front of me. Right. And so I grew up in a family of physicians. Both my parents immigrated from India and they were both doctors. And I grew up in a house where there were medical journals all over and everyone was interested in science. I had two older brothers. We all, all three of us did the Westinghouse competition, which was still called the Westinghouse competition at the time. And And when I was in college, I, you know, I started working in research labs in high school and I was a biology, neurobiology major in college. I was working in research labs and I just kind of thought I'd be heading towards some sort of MD or MD-PhD path and went through that whole, you know, school application process. And it was really in my like senior year of college where a couple of things kind of came to my mind and realization. So one, I realized I was actually really bad at doing experiments. So for my senior thesis, I had to, you know, I had to do an experimental thesis for my, for my major. And I was only able to complete one successful run of my experimental model. And so it became a methods paper. Basically, I spent the whole time I was working in this lab for like 2 and a half years, and the whole time was just like tweaking and optimizing the experimental setup, which wasn't even like that complicated, right? So I was just, it was just like not something I was really good at, right? But all through college, I was also doing all kinds of like student activities and organizations. And so some friends were like, hey, why don't you do business stuff and like go to McKinsey, right? And so I was like, okay, fine, why don't I do— I'll defer, you know, I got accepted into an MD-PhD program, I deferred, went to McKinsey. And then I was suddenly, I was like, wait, this is easy. Like I know how to do analysis, right? I know how to, I know how to put together slides. I know how to think through on a team structure. And so, you know, goodbye, you know, scientific and medical career. Hello, business career. But then about a year and a half into McKinsey, where I was primarily working with big pharma clients, I kind of was missing the science, right? And so this was 2002 was when I first heard the term biotech industry.. And, and then I don't know how I came to this second realization, which was I need to move to Boston and work in biotech. Yeah. So I started, um, just kind of networking, talking to people, and I got introduced to what would eventually become Extera Partners. And so, uh, Johnny Rice and Joseph Baron were two, you know, really compelling entrepreneurs and business development guys. They had teamed up with what was pure tech to kind of let's do strategy consulting for early-stage biotech companies and early-stage medical device companies because nobody else is able to serve those. Like, why don't we figure out a business that can do this work for those kinds of companies? Um, and, and so they wanted like an analyst from McKinsey to help do that, right? And, um, and I wanted to work in biotech in Boston. And so, you know, I show up for my first day of work and Johnny pulls me into his office and he's like, hey, Vikas, just so you know I'm paying your salary out of my personal savings this year and I can't afford to do it next year. And, and so we were like, okay, like, let's make it work. Right. And so what we really quickly realized was that these companies actually don't need corporate strategy help. They need corporate financing and corporate transactions. What they need is business development help. And to the extent that we're doing work around the product differentiation or the competitive opportunity, It's in support of closing that financing or partnership, right? And so that evolved into Johnny and Joseph and eventually some other partners who joined jumping into companies as interim management team members, often as the chief business officer, the head of sales, or in some other very important C-level role. And I was like the analyst on the team who was doing all the other grunt work, right? I was making the target lists and the pitch decks and putting together the memorandums and tracking who we were talking to and who we were not talking to, models to the extent we needed them. Um, that was where I wrote my first M&A deal memorandum, right? And just like learned all this like nitty-gritty stuff about business development, working with very small, challenging company situations, right? Um, and that was a ton of fun. I learned a lot. Biotech was awesome. And so after about 3, 4 years of that, I was like, what do I do now? Right? And so they were like, hey, it's time for you to either like stay here forever or like go off into the wild. Right? And they had both gone to business school and I, you know, and I, I thought that their business school experiences had been very helpful. So I ended up going to Wharton. There's a really strong healthcare program. I highly recommend it to anybody who's interested in a career in biotech, you know, by far the best MBA program for this industry. And there I, you know, just kind of got lucky. Like, I happened to be there at a time when SR1 was asked— at the time, SR1 was GlaxoSmithKline's corporate venture unit, and GSK asked the SR1 team to help spin out a couple of business units from GSK. And these were very small, kind of focused biotech-y kind of businesses that the GSK BD team didn't really have the capacity to to deal with it, right? And so now SR1 was like, hey, we need somebody to help like write the business plans and deal with the BD stuff. And, and I happen to be the intern who could do that, right? And so that internship turned into about a 10-year career at SR1, um, where I eventually grew into a member of the management of the investment team managing portfolio. And, um, and, and that Eventually led to me investing in Pandion Therapeutics, which where I worked most recently. You know, SR1 has traditionally been a very active supporter of early-stage drug discovery and drug development companies, ranging everywhere from concepts all the way through early clinical, a range of platforms and programs. And, you know, one of the things that I really liked doing was investing in experienced drug developers coming from industry. And so the Pandion team was, you know, really dynamite, right? And, um, and so, you know, about a year and a half into that investment, you know, the company went through just like a very pivotal period, like just a very critical time. Um, you know, we had to recruit a new CEO. There was some significant other business issues that we were dealing with. And then in the middle of that, Astellas wanted to do a transaction. And partner with us and, and the company just didn't have any deal experience inside the company, right? There was just not enough of that. And so the board tried to help and, you know, we had Alan Crane on the board who's a very experienced BD executive, we had Nancy Savellano on the board who's a very experienced BD executive, and we had me on the board. And so we were all trying to help and then it just wasn't working, right? So I ended up joining the company full-time in the summer of 2019. We closed the Astellas transaction, we brought in a new CEO, we figured out some of the other critical business issues. And while we were doing all that, suddenly we're a clinical stage company with a really differentiated IL-2 program for autoimmune disease. And so that was a really compelling situation to be in. About like a month before starting our clinical study when Syntherecs got acquired by Sanofi, right? And so these just great things are happening around the company. And then, you know, we did a nice Series B with some very good new investors like Tavistock and Access. And we already had like Polaris and Versant and SR1 and Roche and lots of great investors, right? And now we had even more great investors and we also were able to leverage series B and go public. And so we brought in even more new good investors. Um, and then, and then the stock just crashed, right? So kind of like the, you know, we went public in July of 2020 at $18 a share. And like come the fall, we hit a low of $10 and change. And, and there was a couple of different reasons why that was happening. You know, there was, um, one major investor in the IPO who decided to sell. There was also, I think, a real crossover dynamic happening that was particularly working for oncology, gene therapy, and certain other kinds of companies, and we were not that. Now we're in a terrible situation, but the whole time this is happening, Merck has been following us. And other pharma companies as well. And so, and we're pushing our clinical program forward, right? And so by the end of the year, we were now sitting on clinical data and we announced it publicly the first week of January. And, you know, a few weeks later, Merck came in with an M&A offer, right? And, you know, I think that kind of experience for me was, kind of after that really spent a lot of time thinking about kind of what do I want to do, right? And, um, I had been an investor, I had been a deal person, I had been an operator. I've worked with companies across many different stages of development. And, you know, one of the things that I always really struggled with at SR1 was, did I make that decision correctly? Was this a good investment or not? You know, and you just don't know the answer to that question until time passes and you see what happens. And if it was a good investment financially, was it a good investment for the reasons you thought it would be a good investment? And if it was a bad investment financially, was it because of the reasons you were worried about? Like, did you— so not only was it a good or bad call on that investment, were you evaluating the issues correctly, right? Um, and then, you know, I think what I enjoyed and what I was actually pretty good at was, as the company's growing, like, being supportive and helping, right? And, and being in a position to support the growth of the company. And, um, and, and, you know, and so after Pandion, I, I thought it would be really important for me to continue working on that piece of, like, being better and better and better at making the investment decisions and building a good portfolio and managing that portfolio and delivering financial returns. And so I also ended up getting quite lucky. So when I had left SR1, one of my very close colleagues for many years, Brian Gallagher, who had also been a senior partner at SR1, he left Abingworth, right? And so now I'm free from Pandion, Abingworth got acquired by Carlos, Brian's free from Abingworth, and then our third partner, Steve Hoffman, was also available. And so, you know, I think we were just able to like all find ourselves with this shared vision of let's support innovative biotech companies in a way that helps them build and, and let's keep delivering, you know, financial returns for investors so that they keep supporting innovative biotech companies also.

Cool. Well, that's a lot. Maybe we can backtrack, maybe from this whole— so because one of the things you're most unique for, like going back and forth between operations and VC, pretty hard. Like, what are— did you have any challenges there? Maybe a better question would be like, how do you think yourself, yourself, do you think yourself as an operator, as an investor, some sort of hybrid, an analyst? Like, when you think about And has that changed since your McKinsey days till now? Like in terms of like, do you feel like you've acquired different skill sets and you've grown your repertoire, or is there some sort of common— is there some core driver, some skill set like you, you look like being an analyst, or how do you, how do you think you define yourself?

Yeah, I, so I think of myself as a biotech deal guy, right? I'm not a scientist. I'm actually really bad at running experiments, but I'm really good at negotiating deals, right? And I'm really good at closing deals, and I'm really good at doing those two activities in a way where people all like each other afterwards, right? Almost always. So, you know, that is, I think, where I can be most helpful to a company, right? So if the science is working and the program is at a stage where it would benefit from additional capital or the expertise or capabilities of a large pharma, you know, then I can go find out if such a partnership is available, and if it is, close it., right? And I think that expertise can be helpful along the life cycle of a biotech company, but it's helpful at very specific moments in time, right, over that life cycle. And I also think that that is a, you know, that is a perspective that can help as an investor, right? Seeing the path forward to whether those collaborations and subsequent financings can happen and how they would happen and when they would happen is really helpful to me as an investor when I'm thinking about, well, what's the business plan here? Where are we going to get to and how are we going to get from point A to point B? And is point B an exit? Is point B a partnership? Is point B another financing? How do we get from point B to point C? And building that into your financial plan, your investor base, gives you, I think, some resiliency. For example, when public markets implode and the leading provider of commercial banking disappears, right? Um, which in drug development, the timelines are such that things are going to happen in the world. Interesting.

So then you just— some concept like the honest broker. I read some blog from some jazz musician. I can send you articles, a really incredible article about the honest broker. He just writes this piece about like how every ecosystem needs honest brokers, people who both sides trust and feel like they're gonna look out for both interests and mediate deals. And that's very, it's very hard to be that in that position. It takes a lot of skill. Like, did you as a kid, did you have like, were you into trading cards as a kid, or did you have like a side business in college, or like, you know, like, or is it just something you just, or is this something you realize you were good at maybe at McKinsey, etc.?

You know, I, I think what I, what I, where I really learned this stuff was Xterra, right? I mean, Xterra, I, I, very few people like are familiar with Xterra, but you know, so I came out of Xterra and then like Abbas Kazemi, who just did the $4 billion Nimbus Takeda Tech2 deal, came out of Xterra. And you know, Joseph and Johnny have done all kinds of cool deals. So like, I, you know, I, I have, I really, very figure a lot of this stuff out at, at Xterra, um, watching those guys. And then I think some of it is also just, you know, it's just the work, right? It's, you know, like everyone has to do it. If you're gonna go and find a partner, well, then you're running a sales process. And what is a sales process? It's a lot of work is what it is, right?

So maybe at Xterra, was like a key moment where you realized, hey, I'm pretty good at this business stuff, BD stuff? Or is it like a deal you did, or is it like a a meeting you had, or like maybe a moment where you just like, oh, you just had a spark in your head, like maybe I should do this instead of MD-PhD, you know?

Um, I, I, you know, I think, I, I think it was, wasn't like a specific moment per se. It was more just like when I, when I worked on my first set of projects, it just like, it made sense, you know?

Was it, was it just easy, or was it like, not easy in the way of like like, did it— like, was it solvable in terms of the work you did? And so it's just, I can handle all this, or, or is it just something you were excited?

Maybe both. Yeah, it's definitely both. And I think it's, it's not so much that it was easy, but it was like, as I was learning how to do things, it was making sense, you know. It was just like the logic of it and the direction of it. It just like— and if I did something wrong and I was given feedback, I just— I was like, oh, I get it now. Right. And so I think it's more just the—

yeah, that makes sense. Yeah. I mean, there's also some things of like, you know, you know, you probably— you're probably— you are a master at BD deals. Now. And so there's probably things that are more implicit or less— you can't really— more— what's this type of knowledge? Explicit knowledge. And the other type of knowledge, not implicit, it's some other word, but knowledge is hard to be explained. You have to just kind of watch it be done. And so how did you— you went to business school at Penn. Were you a Vagelos Fellow? Or I know they have this Vagelos program there for math. The original Merck, one of the old Merck CEOs.

Yeah, I think that program is for undergrads. So some of my classmates actually were Vagelos Fellows, like Prashant Jayaram was a Vagelos Fellow. But I was just a regular old MBA student at Wharton focused on healthcare.

People usually go to MBA programs to, all of my friends, to pivot their careers. Like, oh, I'm going to business school and I don't wanna be a consultant anymore, I wanna be a VC. Did you do, did you go to MBA for that reason or maybe, or did you have some other, like why go to business school when you probably just could be on a job after, et cetera? Like, you know what I mean? Like business school is usually a pivot option, but for you it seemed to be more, you had a different, you used it a different way.

Yeah. Yeah. So, you know, look, in hindsight, going to Wharton had like huge benefit for me in life, right? So I ended up working at SR1, for almost 10 years. I met my wife. Like, there's all kinds of great stuff that happened for me. Yeah. Um, and, and, you know, the reason I went there was really twofold. So one, I had reached a stage at Dextera where, like, I knew now that I was going to be a business person, but I had never even taken, like, economics or marketing or any of these basic business classes because I was a neurobiology major, right? And so, um, so I just got to a state where like, you know, maybe I should learn the basics of business and, and like get an education in that. And then for me, the second, the second piece was I knew I wanted to keep working biotech, but I didn't know if I wanted to be a consultant or something else. And if something else, what is something else, right? And frankly, I didn't even think about venture, right? Because I was not a scientist. So just, you know, my experience with the biotech venture capital community had been that everyone's an MD or PhD. Yeah. And so I was really, you know, focused on the biotech industry and Wharton, as I said, has a very good healthcare program, but it was more like what would I do in that industry? What jobs would I do?

Right. Interesting. So then probably one of the most important questions, and I get this a lot from my friends, is how do you break into biotech, regular VC, and maybe executive roles without a PhD? So, yeah, did you— was it around business school you figured that out? And while at Penn, how did you break into SR1?

No, it was just taking advantage of opportunities presented to me, right? So SR1, which stands for Schuylkill River One, has historically been a Philadelphia-focused organization. So I started at Wharton in 2008. And at the time, the vast majority of the SR1 team was sitting outside Philadelphia in a town called Conshohocken. And they had historically taken interns from the Wharton healthcare program on a pretty regular basis, along with, you know, people from other schools. And so it just so happened that that year they needed some interns to work on helping spin out these businesses from GSK and like write pitch decks and write business memos and business plans. And, and like, I just spent 5 years doing that at Extera, right? And so, and then, and then that project, and like at the time the president of SR1 was Russell Gregg, who, you know, he'd been a longtime senior executive at GSK. I think he just thought I was a good writer, like he just liked the memos that I wrote. He was like, hey, you should just stay and like keep doing stuff with us, right? Um, and then when I'd show up at the office, I would like insert myself into deal reviews, and I would like ask for pitch decks, and I would send my comments on it, and I would try to ask good questions. When we were meeting with companies, I would be helpful, right? And, and then, and then that turned into an internship. And then, you know, the second thing that was really just completely fluky was When I graduated business school, I moved back to Boston and I was working in Infinity Pharmaceuticals in business development. And, and, you know, GSK bought Surtris. And when GSK bought Surtris, after a couple of years, they asked Christoph to run SR1. And Christoph asked his chief business officer, Brian Gallagher, to come and build an SR1 Boston office. And so Brian got inundated with deal flow. This was like 2011, which was like not a great time in the biotech venture environment. And so SR1 was open for business. And so he very quickly needed an associate. And so the SR1 team was like, well, this guy Vikas had just finished an internship and he's up in Boston. Why don't you guys meet? Right. And, you know, and so we like, we grabbed a drink at the Friendly Toast that used to be in, you know, in One Kendall.. And now we're building Trek together, right?

So it's just, you know, that's awesome.

For context, Christoph is Christoph Westphal. Yes, Christoph Westphal. Yeah, that's right.

Yeah. Look it up and, you know, kind of know the history of all this biotech stuff because definitely is very— Boston is very such a small world. And I think you're saying it's just like requires being useful. Kind of insert yourself and be useful somewhere, and then you build relationships over time, and they usually come back to you a decade later, in this case, uh, with Brian.

And, and look, you know, opportunities come up and you just, you know, you make the most of them.

And so I think business school seems to be a big pivot point in your career. How did you— what's your— Infinity? Infinity is awesome. Uh, it was an old Schreiber company, and I think Was Steve Holtzman CEO at the time?

So when I joined, Steve had just transitioned to chairman of the board and Adeline was the CEO. And so we were just kind of like, we had just done the IntelliKine, right? They brought in the PI3 kinase from IntelliKine and Jeff Tong had moved on to Nora Therapeutics, right, and to be back on the West Coast. And so it was, you know, it was really just for, for Adeline to kind of start rebuilding the business development team, right, when Jeff left. Um, and, and again, you know, it's a great company. Um, I think, you know, I just spent almost 2 years interning with SR1 while I was in business school, and so the opera, you know opportunity to just kind of go back and, and continue building that experience was just a great opportunity.

That makes a lot of sense. I mean, Infinity is some— Infinity was the first biotech company I got exposed to. Uh, I was in college as a freshman, and I was going for a jog on Memorial Drive, and I see Infinity Pharmaceuticals, this big sign. I'm like, what is this company?

You know?

So I just Google it. I'm like, oh, okay. I read about the history of this company, like, okay, it's like 2011, probably when you were there. I was just jogging down Balmoral Drive looking at Infinity and be like, this is a pretty cool office.

What—

I didn't know what biotech really was until like maybe a year later. So I was like, oh. So just Infinity is always this company that like, uh, it, it's imprinted on my mind as the first company I ever was exposed to in this industry. Uh, but how did you make the choice to finally jump into venture capital? You had done all these operational roles, BD, and then why not just do that more? Why not just go be a BD person at Novartis? Why not go, you know, join a Third Rock company? That was like, you know, a golden era for Third Rock companies. Why do VC? You 'cause at this point in time you've built this whole experience set around business development. What made you say I'm gonna go to SR1?

Yeah, I have to say this was when I started interning at SR1, I was a first year at Wharton. It was 2008 when I first started talking to them and I started interning in '09 and then I joined full-time in '11 and I don't think I knew what VC was, honestly.

Just honestly, that's so awesome. You've been in this industry for like over 10 years, you're like, I have no clue what venture capital is.

That's like very cool. Yeah. And, and I think it was more just, hey, like, if a venture fund wants to bring me on board, I should do it.

Yeah.

Um, right. Um, and I think it was only from the work I was doing at SR1 that I really appreciated that what we're doing is taking risky bets on innovative ideas in as thoughtful a way as we can, and then adding value by either managing the financial risk of those investments or helping the companies grow in the right trajectories. Um, and, and that is sometimes easy and sometimes really, really hard and sometimes like, you know, gut-wrenchingly difficult, right? And it just depends on the portfolio company and the dynamics and what's happening. Um, and, and it's, it's like, that is the work. It's— you are tasked by your limited partners to deliver financial performance Yeah, and you are tasked by your portfolio companies to help them build, and then you're tasked by your co-investors to be a good partner. Yeah, right. And you're tasked by the ecosystem to help build the ecosystem as well, right? So, so it is, it is all these different pieces that we need to do, um, and, and, and I think you do that well if you can manage financial risks and you can help build companies.

So you joined SR1, 2010, '11, or something around that time. What was the first deal you worked on? And not the first deal that you got through, right? Maybe the first deal you were working on deeply, maybe you didn't pass that Monday meeting investment committee, But like, what was that kind of the— you join SR1 and now you hire as an associate, you usually get a first deal. Yeah. How was that?

How was that like? So, so SR1 was surprisingly collaborative. I did not realize how surprisingly collaborative they were, but they are and were one of the most welcoming collaborative investment teams that I think is out there in the industry. So my, my first vivid memory is, um, so one of our partners at the time, Ken Gossett, who unfortunately he passed away many years ago, he got really excited about a company called Arpilex that Jonathan Montague was incubating at Atlas. And Atlas had put in, um, their initial seed, and, and Jonathan had been getting a lot of interest from Atlas on a second company he was working on called Nimbus. And so Rosanna Capeller was also helping on Nimbus and Arpa-Lab. And, and Kent really liked Arpa-Lab and Atlas really liked Nimbus. And, and, you know, Christoph had just joined as the president of SR1. Brian had just come in to open the Boston office. So Kent came up to Boston to meet with the Atlas guys and Jonathan. And then we all went out and like JF Formella took us out to, to what was a really nice French restaurant that used to be in the Charles Hotel. Anyway, he took us out to like a really nice dinner where he like brought out the good wine and everything. And you know, and JF is like, he's got great taste in wine. And, and so we're having this conversation and, and I just remember this, this moment where Brian was like, hey guys, like Could the Schrödinger platform for Nimbus help for the ARPA-X target? And Jonathan was like, yes, it could absolutely help. And so we were just like, why don't we just put the two companies together? You know, and so, so, so like that kind of experience, you know, I was just sitting in, I was like the brand associate and I didn't know anything about these companies because they'd already been doing diligence on them for months. Right. And I think that approach of just building relationships, thinking about how to make things work for all the parties involved, thinking about what's the right thing for the company as well. So Nimbus and Arpa Labs both benefited from putting things together. And so I think that just, I think is where all that stuff made sense to me because I was coming from this kind of like, let's close deals perspective, right? Like, I, you know, and so like what I was seeing is in this dinner we were closing a deal and I was like, yeah, this makes sense, let's close this deal.

Yeah, yeah, interesting. Okay, that's like fascinating. Like, in terms of like, I've had that experience too. I remember being in a room with Deerfield and I'm like, some company they were incubating, I was a consultant, I was like, this is pretty cool just to be in this room and they're all wearing suits and They're just talking about like, okay, we're going to have that CEO and then we're going to put this money in and license IP. And it just seems so like not easy, but it just seemed like this is how demystifying almost, where it's like, wow, this is how these companies are actually formed. And it's in a French restaurant, it's in an office, and people just have discussions and plan things out together. And I think you alluded to this a lot, just building that trust, reinforced trust. And so maybe we could speed it up and you've— you're SR1, you're doing deals, you're helping out. What was the, like, the first deal you championed and you did yourself? How many years was that between starting to the deal? And what was the prerequisites in terms of networking, knowledge, just experience to be able to do a deal yourself? Which is kind of challenging, or not challenging, but just like, it seems so intimidating when you join a VC fund to say, do a deal yourself, because it requires so much networking to actually do it. So yeah, what was that kind of that first deal you actually, what was your deal?

Yeah, I mean, there were sort of several that definitely felt like first deals for me. So, you know, I'd mentioned that our former partner, Kent Gossett, unfortunately had passed away. So when that happened, I took on one of his portfolio companies, and the first thing we had to do was decide whether to shut it down or to recap it. And, and so we ended up recapping it. The company is called Calsumetica. They had a very interesting chemistry approach to what had been historically a very challenging drug target called the Croc channel, which is involved with calcium signaling and calcium sensing. And the experience there was, it was really all about like that, those two issues, like adding value and managing risk, right? And I think, you know, that experience of like figuring out how to serve on a board in a collaborative way. Because like when I was— when I first came in, it was like, you know, alarm bells going off. I was super stressed out. I was often like losing my cool. And working, you know, pretty closely with Peter McWilliams, who was at Centering at the time, I'm like, I started learning like all these important skills about, you know, how to be a good board member and collaborative partner. Those were critical skills when, you know, then I led the investment in Sparrow Therapeutics. We had gotten interested in opportunities in infectious disease, in particular antibiotics, and Atlas also did, and I just got really excited about Sparrow. And, you know, that was, I think for me, a really important moment of understanding that, you know, one of the things I can do to add value is to really be like a champion for CEOs who are knocking it out of the park, right? And, and Ankit was knocking it out of the park. And I think he was right at this moment where he, like, he was trying to figure out, do I, do I do my first CEO gig? And can I do it? And am I going to do it well? And, and I just, like, I was thinking, like, Ankit, you're like, who's going to do this better than you, right? Like, you're killing it here, right? And you need to, you need to do this. Um, And, and then, you know, with Morphic, it was like very much this realization of like when good deals come, you just pounce, right? And so awesome team, great science, good drug idea, and, and just like get through your process as fast as possible and wire the money, right? And if that means like you pull the syndicate together, you pull the syndicate together, right? This is your job is to help these companies move as quickly as possible. Um, and, and then with, you know, with Pandion, it was, it was the same thing, right? It's, it's like a great company, and, and there I think the, you know, the lesson for me was, you know, manage our risk, right? So, so we launched our money in, and I'm really glad that we did it, and, and we were there to jump in and help close deals when that needed to be done.

That's awesome. So yeah, you've done a wide range of deals and you probably have more stories than we can talk about now. So I recommend Vikas has some awesome, we'll link it, awesome interviews of CEOs and CEOs he's partnered with, like Praveen from Morphic and a few others, and he kind of walks through these stories. But after 10 years at XR1, you come as a BD person, And then coming out, what did you feel you added to your repertoire in terms of like, you're a really good analyst, you can assess a business development deal 10 years later after SR1, all these experiences. What did you feel like, what kind of superpowers did you gain, or what kind of skills did you pick up that are so very valuable?

I think Pantheon has probably across the biotech industry, one of like the unique examples of just like all the different things in a biotech's life happening in such a short period of time, right? And so I think for me, a big learning from Pandion was some of the, the rules of thumb around the public markets. Um, and you know, every few years the markets go through changes, but there are certain rules of thumb, right? And understanding a lot about how you, how you think about what is a good return for public investors versus private investors and what are the different kinds of public investors that are out there and how do their funds work. And when you are building a biotech company, you don't have to go public, but it may be an option for you at some point, right? And I think understanding that I also really internalized that the public markets, the private markets, and the pharma industry, these are all competing with each other. And so at any moment in time, these are all places you can go to support your drug programs, right? And either raise capital or bring in partnerships. And, and they like different things. They have different motivations and they're looking for different criteria. Um, and a company should understand which of those audiences like you the most today and which of those audiences would like you the most tomorrow. And what's your strategy for winding and weaving your way through those different parties, right? And at some point along the way, you will be a cash flow generating drug launched company, but that's not where you are today. And like, you need these people to support you.

Interesting. Yeah, I totally agree. It's something I need to get better at. Just most people do is navigating the maze of biotech and be able to empathize and engage with every stakeholder because they all have different incentives, slightly different incentives. People that navigate that maze get to the end, which is an approved drug that helps patients. But maybe then to you, Esther, one, how did you make the decision to join Pandion? Were they begging you? Was it just like, oh, this is a really great company, should I just join that company, not be a VC anymore? But how did you— it's often like, I don't know, you don't really meet too many VCs who leave their job You know what I mean? Like, in terms of, you know what I mean? Like, usually VC is the last job you'll get. It's kind of— but how did you make the decision to not be a VC anymore and join Pandion?

Yeah, I mean, look, these decisions are always like fear and greed, right? And so we were in a very fortunate situation that as an early-stage biotech company, Astellus Pharmaceuticals was really interested in the work we were doing, and they had expressed high interest in doing a research collaboration with us on a program where I think we really could have used their help. Right. So, so we partnered in type 1 diabetes, and Pandion had very good expertise in immunology, but we didn't have cell therapy. We didn't have experience in those clinical populations, and Astellas did. And, and so like everyone around the table was like, we should do this deal. Like, this is a great deal. Let's do this deal.

Right.

Um, and we just had to like negotiate and close it and, and it like, it wasn't gonna happen.

Right.

So like, you know, I'm, I'm from the fear side. I'm like, like, if we don't do this deal, like bad things could happen. Like we really need to close this deal.

Right.

And then on the greed side, you know, I was like, hey, this company Pantheon could be amazing, right? And but if we don't close this deal, it won't be, right? And so the greed side was, if I close this deal, this company is gonna keep going and doing great stuff, right? Um, and then look, I, I didn't know that, you know, it would turn into like a 2-year run and that we would go on to achieve all these great things. But I knew that this collaboration with the sellers had to be closed. And I also knew that the only way that was gonna happen, or at least the fastest way for that to happen, was for me to join the company full-time.

Interesting. Okay, so out of necessity, you had to just help Pandion. And so Pandion's a great story.

Oh, and help my own deal sheet too. The company isn't successful, it's my track record, right?

Yeah, I totally agree. And so, uh, you jumped in, uh, you know, I, you know, from the public filings, Merck had, like you said, alluded to always been interested in conversation. And I think some of the public filings said that they had made offers previously that were rejected or something like, uh, Maybe you could talk more about Pandion as a company going public, reporting clinical data in January. They can acquire like a month or two later. Maybe Pandion, frame it from how did you think about the interface between the clinical data and Merck? And how did you maybe think about engaging Merck? Did you have to figure out when to talk to Merck? Was that a big consideration?

Timing?

Like, oh, let's talk to them after January, after this clinical data. Yeah. Things like that. How was the gamesmanship of interacting with a big biopharma ultimately get acquired?

Yeah, I don't think there was a lot of gamesmanship. I think there's a lot of— I mean, what was the phrase you used? Honest brokering. And so the first conversation I ever had with Merck was— so I joined the company in the summer of '19. We announced the Astellas deal at the end of October. And so the first week of November, we started reaching out to both investors and pharmas to set up meetings for JP Morgan 2020. And so, you know, the first conversation I had with, it was Albert Shaw at Merck who was our business development person. I was like walking my kid to daycare and on my cell phone and I'm giving Albert an update and saying, hey, you know, we should catch up at JP Morgan. And he's like, why don't you guys come to MRL sooner? Right. And I'm like, okay, fine. Like, let's go meet in Boston. Right. And, and then we're sitting in a room with like all these people who seem to know a lot about IL-2, right? Um, several of them who had been prior colleagues of senior executives at Pandion, right? Um, and so that was interesting, right? Um, and they asked some good questions, and, you know, they were very excited about how close we were to entering the clinic. So then we did meet again at JP Morgan, and then, like you said, this is all publicly disclosed in our Schedule 14D-9s. You know, they sent us proposal for a collaboration in January of 2020. Um, and I think it was, you know, it was— that was one of the experiences where I appreciated this importance of balancing your different stakeholders, right? Because in January 2020, we also received our first term sheet for the Series B, and the term sheets just spoke for themselves, right? And the Series B was the better path forward for the company and for our shareholders, right? Um, but, but after that, it was, it was just an ongoing set of conversations and information sharing. Um, we would always share our updates with Merck, and to the extent that other pharmas were interested, with other pharmas as well. And I would say with Merck and with others, we would get to conversations where nobody knew the answer, right? We were getting to the level of scientific complexity and uncertainty where not only did we not have the data, we couldn't even think of the experiment that would answer the question. And if we could think of the experiment that answered the question, neither we nor Merck could figure out how one could actually execute that experiment. Experiment, right? So just like true inherent risk, and it was just openly laid out with honesty, right? And, um, and those conversations helped build a lot of trust, right? And, you know, and we were doing other very important things in addition to pushing the clinical program forward. We did really important work on manufacturing. We completed our long-term GLP talks. We pushed our other pipeline programs forward, um, These were all updates that we were sharing with people. We were also a public company at this point, so none of these things were necessarily secrets. I think that is really what then led to later on in 2020, they had proposed another collaboration structure. Um, you know, again, it was a very— I think it would have been a very interesting structure, but it would have just been not— I, I just don't think it would have been a good thing for us to pursue for our shareholders. I think, I think it would have not been a great outcome for our shareholders. And, um, and, and then, look, you know, we just kept pushing forward, right? Um, we were, you know, a very fortunate position of having what, you know, continues to look like a really high-quality IL-2 program. We had a good balance sheet so we could keep doing our development. We recruited great people, so we already had great scientists when we invested in the Series A, but by the time that we had the acquisition by Merck, we had already built an even stronger scientific organization and a clinical organization. So, you know, I think we were just We were always in a position to like what we have to do in the next 6 months, we could keep doing that.

It's just like, yeah, I mean, just being honest first and foremost, but also it seems like doing what you said you're gonna do. Merck would talk to you, you do something and then, oh, they can update and then continue to make enough progress where they get so compelling that they made an offer you couldn't refuse this time. Um, and maybe that seems to be so Maybe, so you got Pandion, Pandion gets acquired, congratulations. You join Merck to do the integration. Maybe we can talk more about what you do now. So you leave Merck Pandion, I think over the summer of 2022, and what was your thought process? You probably had a lot of options. Become CEO of a startup, be a VC, join a VC fund. You come full circle with Brian. And start Trek? And then what was the kind of the thought process to start your own VC fund? And what are you doing now? Doing incubations, doing investing, maybe a little bit of both? What's kind of the core premise of Trek?

Yeah, I think the core premise really goes back to the lessons that Brian, Steve, and I all learned in our prior investing experience, right? I really believe that The, the path forward for medicines from discovery through approval and launch generally requires partnerships. Yeah. And, and I think that is kind of now baked into like my ethos of how I think about how this industry works. Right. And I'm obviously biased because I'm a BD guy, but like, I just, I really think that these partnerships you just have to be thinking about them, right? And, and so especially working at SR1, which was a corporate venture fund, right, for GSK, I think we learned a lot of rules of thumb for like, well, what are the kinds of things that partners want, right? And, and how do you, um, build companies in a way where that option is available to do partnerships, but you're not dependent on it, right? Um, and so I think that is really feeding into what we do at Trek because that's also something Steve really internalized, right? And, and he has a long track record as an early-stage biotech investor as well. And, and so for us, I think the focus is really, you know, companies that are like a pivotal risk point where a Series A or Series B could make a huge difference for their trajectory, where if things work, we could see the path to some meaningful partnerships in the future of this company, and where we see a team that really wants to deliver medicines. Products that I can like go to CVS and just get a prescription filled. And these are like magic, these medicines, right? When they work. And I think that that benefit for society for medicines is just immeasurable, right? And so that's, I think, where we are really kind of excited about the work that we do in this industry and where I think then we can help, right? Because as we are building these companies, then at some point the partnership opportunity will hopefully emerge and then we can help, right?

I totally agree. Founders have nobody better than you to help them with partnerships based on your track record. So if you build a biotech company, yeah, it makes total sense to partner up with you. Especially on the partnering side, because that's, from my perspective, partners are really good not only to accelerate development, but also to use dilution and try to control your own destiny in some ways. Maybe a follow-up thing we do is just like the nuance of partnerships in biotech, because it's difficult to not hand off a valuable asset to somebody else, or something that ends up valuable. Something I think a lot about is the Agios deal, Celgene. That's one of the better BD deals ever. They had an option to choose the program. And, you know, there's a very— there's this BD deal. Maybe we can walk through the best BD deals in biotech one day. That'd be exciting because there are a few that are really— the Nimbus deal is one of them too, you know, that are standouts in terms of as the company not giving up too much value or all the value for a little bit of money up front. So you're the expert here. So maybe a follow-up call, but thanks for doing this. This is really awesome. Any final lessons? We had this conversation about your whole story and how I would characterize you is the honest broker in biotech, something that's really needed and essential. But from your whole story and career, any kind of key lessons that maybe are useful to somebody who is in your, who is in the same position you were 20 years ago?

Yeah. I think there's just so many sick patients who, who need medicines and building a medicine is super hard and like full of risk and requires a a plethora of experiences and skills and just like grunt work of rolling up your sleeves and doing it, right? And, and so I, to the extent that, you know, one can be flexible about how you help, you know, and I think that's, there's going to be places where, you know, the value add is to make compounds. There's going to be another place where the value add is to negotiate deals. Another place where the value add is literally just pounding the pavement and pitching a bunch of people, right? There's all kinds of different things that we have to do to get to these medicines, and they're all like, they're all going to help the world, and, and they can all be kind of fun, right? And so I don't, you know, I don't know that you have to be coming from this background or that background. It's just like, do you really like medicines? Right. If you like medicines and you want to help patients, there's so many cool things you can do. Um, and, and, and that's, I think, over time gonna turn into a great career.

Awesome. Thanks to do this because we'll do this like 2 years from now and maybe walk through the updates on track and all the companies you're gonna invest in. Uh, but I really appreciate doing this. I know you're super busy, but thanks again.

Yeah, thank you, Josh. It was a lot of fun and, um, it's going to be fun to keep working together.

Absolutely. So thank you.