Founder Stories: Edwin Moses, Former CEO of Ablynx

Great to have you here. So you have been chairman and CEO of Ablynx since 2006, and I have a little picture. It works?

Almost?

That's what you're doing? So you're building a platform company around alpaca antibodies, so nanobodies. And so you're based in Ghent, have 450 employees now. And so in January, you announced you would be acquired by Sanofi. So that's why we are also here. It was a perfect, perfect excuse for €3.9 billion. So it's the largest, one of the largest acquisitions in Europe with Actelion, which is a great thing for the European biotech ecosystem as well. And you just told me that the M&A process is closed, so I can ask any question on that. So that's great. But I wanted to start more with your technology. So you— sorry, I had actually pictures of your office, which is almost working. The office in the center of his office. But yeah, so about your technology, I mean, you're using nanobodies which have some obvious properties like very small, easy to manufacture, you can target in-cell, I mean, intracellular targets. You can have also different ways of administration. So a lot of obvious examples on paper, but no one besides you made it work in the clinics. So why is that?

Well, the technology was originally discovered here in Belgium. So in the 1990s, a man called Professor Hammers made the observation that you just mentioned, which is that the, the camelid group of animals— the camels, llamas, alpacas, vicunas, and guanacos, um, all 5 of those— all produce heavy chain only stabilized antibodies in response to antigen response. So if you, if you give us an antigen, we produce antibodies, normal antibodies. They produce smaller ones, basically. And he made that observation, looked in the whole animal kingdom, and found that only 2 other animals, or 2 2 species of shark produce the same thing, the, the fish. And what he made, the big jump he made was that he realized it could be industrially applicable. So we originally licensed this technology from the, the VUB here in Belgium, the technology transfer arm of the Free University of Brussels, and we licensed exclusivity to healthcare applications. So that gave us the start. That meant that when the company started in 2001, we had exclusivity to do that. And we've been able to use the last 17 years to build up that knowledge and capability in the use of those heavy chain only antibodies.

That's great. And on the intracellular targets, like, does it— I mean, it's kind of the holy grail and the untapped potential. Does it really work?

So what they can do, and it's not specifically intracellular, you can link antibodies together in multi-specific forms. So 2, 3, 4, 5, 6 antibodies can be linked together to hit multiple targets, very important in, for example, oncology. They're also very small but very stable, so you can deliver them by new routes. So, for example, you can inhale the nanobodies, which you can't do with other biologics. You can also deliver them into the gut orally, so you can treat gut-based diseases. They won't be absorbed across the gut in large quantities, but they can be used to treat the, the gut itself because they can survive low pHs. So there are lots of things they can do that that the typical antibodies can't do.

That's amazing. And so your most advanced candidate, I think past phase 3, has successful data and you're waiting for approval? Can you expand on that?

Yes, so that's called Caplacizumab and it's to treat a very rare blood disease called acquired thrombotic thrombocytopenic purpura, which is a blood clotting disease. There is no drug treatment for this disease currently, so patients who have it, which it's an autoimmune-based disease, which just hits them acutely, comes out of the blue, no prior warning,, and then they have to undergo plasma exchange for many days. It has quite a high mortality rate, about 20% currently. So we've had excellent phase 3 data, which were published at ASH, which is the big American Society for Hematology meeting last year in December. Um, and so we're waiting for a CHMP opinion here in Europe. Um, we're just submitting a BLA in the US in this month.

Okay. So I guess Sanofi will be happy with that one as well.

Absolutely.

Um, all right, and so, and what's, what's the rest of the pipeline look like?

So the, the product coming after that is an anti-RSV product. So this is a product using this ability to deliver a nanobody to this virus directly into the lungs. It's a virus that's very dangerous for the very young and the very old and immune suppressed. And there again is, there's no therapeutic for that now. So if you're a young child, a baby, 6-month-old baby gets it. Then about 15— 10 to 15% of the children who get infected end up hospitalized and have to go very intensive care to support them until they recover. This is being developed as a therapeutic. So we're able to get the drug directly into the lung where the virus is. And we're currently performing a phase 2B study where we've just announced that we finished recruitment of 180 infants and analyzing those data now.

I guess, John, it's a good example of your comment, really doing stuff and curing people without any alternatives. That's amazing. And so obviously to build such a company, you also need a lot of finances, a lot of, let's say, a lot of cash to build it. So I believe I looked up that you waste, that you invested over €1 billion to date.

That was the wrong word.

Like spend?

We raised, exactly. So we—

no, you spend it. No, it's a 550.

Not yet, not yet. No, so we still got something in the bank. Yeah, otherwise I wouldn't be here. Um, so half of it came from equity. So that's half it comes— we raised equity 9 times, um, over the last year. So only the— I was talking before to Christian about it— you feel like you're raising equity all the time. Um, we raised $100 million from a convertible bond, but we also raised $500 million from partners. So we we partnered our technology extensively, also with Sanofi, and we were able to use those partnerships to generate cash. So in total, that was €1 billion, half it from equity, half it from deals.

Nice ringtone, by the way. All right. And so, and in October, you, you decide, you decide to go on the NASDAQ to raise, I think, €150 million. Can you share about your experience on going in NASDAQ versus staying in Europe? I think you're listed in Euronext as well.

How was that? Yeah, we listed in Euronext in 2007. Before we listed on NASDAQ, we already had about 40% of investors were in the US already. But as you probably all know that until you list on NASDAQ, there are some funds in the US that still can't invest in you and so it opens up a broader group of investors in the US. Again, to under— Christian, I think the thing about the US which is very attractive for biotechs is that the investors are very well informed. In New York alone, you can probably find more specialist investors in biotech than you can in the whole of Europe. They are aggressive. They ask you everything under the sun. But they do their homework in advance. And if you tell them a story they like, they have very large funds to invest. So when we did the IPO in October, The biggest fund we've been talking to for years. None of these things happen overnight. They, they nearly invested, nearly invested, and then at the IPO, 45-minute presentation, and they put $75 million on the table. Now there again, there's nowhere else in Europe that you could ever dream that somebody could do that. So it just changes— so we raised in total $230 million in 4.5 days. Now it took 10 years of previous work to get there, but it's a very exhilarating audience to talk to. And I think that the difference, particularly as we're about to launch a product, is that here in Europe, when we were presenting to investors, the general view is, how can you mitigate risk? So launching a product, I'd be talking about hiring a sales force, and they said, well, make sure you hire it through a contract group so that you can fire them straight away if everything goes wrong. And the only question the US investors had were, are you hiring enough salespeople? Why don't you hire more? Why aren't you more aggressive in doing that? So it's really, they accept the binary nature of biotech and they want to plan for success. Here, everybody's a bit more cautious, which really is not the way to develop biotech.

I definitely agree. I mean, I spent one year in Boston and everyone looks at opportunity and not missing out the next big thing instead of here looking at the risk of a new technology and how can we— yeah, just, yeah, I guess it's helpful. And so I guess also in what you just said on, I guess the timing was right to go to US. I mean, you already had, I guess, pretty solid phase 3 data or pre-data. You knew—

I mean— Well, the way you had to do it was that we knew the Phase 3 data was coming out in October. You didn't know whether it was going to be good or bad, and we all had that experience of turning over the card and hoping it works. But in order to be prepared for that, 6 months before, you had to decide that you were going to do a US listing and get right to prospectus and everything else. And so you have to invest a huge amount of management time, but then just hope that the data are good. Now, we were lucky. They were good. And so as soon as we turned the card and the data were good, we were able to announce a US IPO immediately.

So you had 2 press releases ready and—

do it or not.

That's good. Um, that's nice. And so, uh, I guess now with the— now I can talk about the Sanofi acquisition. Uh, I mean, your stock price in the past months, I guess, was, was pretty crazy for you as well, uh, just before the acquisition. Um, just in— I looked at your stock price, it's pretty crazy. From basically in November, October, November, you were at 10 and then just before the question, went up to €30 per share, and then you acquired for €45. I mean, it's just a massive, massive jump, both in terms— I mean, in your valuation as well. You went from €900 million valuation up to like almost €4 billion. I mean, it's pretty, um, it's pretty crazy. Like, how, like, how much of it was your impact versus I know. How much of it was, yeah, was luck, your impact, slash luck, slash market condition?

It was entirely my impact. You've got to be in the right place at the right time. I think what we, what all biotechs do is you build up a portfolio of projects. And one of the challenges you have is that when the markets look at those projects, they tend to only take one and look at it. We have 45 programs. But they looked at one or two and valued that. When we went onto the US stock exchange, as you said, if we look at the beginning of 2017 were about €10. By the time you got to the end of the year, we're about €20. And that was partly a result of the Phase 3 data, but also being exposed to the US market where they were evaluating our portfolio more broadly. But then Nova announced a potential bid for the company, and that then brought investor interest in a possible acquisition. And that changes the whole game when you look at the price for taking total control of the company. And I think what people looked at then was not just what we had, but the potential of what we could have in the future. And what you talked about at the beginning, power of that, the nanobody platform, the things that can do. Um, and looking at it in the hands of a large pharma company, Sanofi, um, with their huge disease knowledge across a range and how they can apply that in lots of places, that then brings a lot of value.

That makes sort of sense. I will open for question at the next question, so you can already think about some, some nice questions to ask. Um, I guess about the partnering, so I remember in 2015, basically when we just started Labiotech, and then at some point you announced like new partnership with big pharma, like just every 2 months, you're like, okay, you're just signing them all, like Merck, like Novo, like many others. It's pretty crazy. And actually was a lot of alpaca photos on the website, which was interesting too. But how did you manage to attract that many big partners? Was it also really your strategy to attract them all? Like, let's take the top 20 and let's try to get them all? Or how was it behind?

No, I think the quality of partnerships are very important. And I think you mentioned we had Merck Co., we had Novo, and then we had Sanofi in a few years. And I think we thought they were excellent potential partners and proved to be the case. And what you— what this was about was a number of years of validating the technology and then getting people to understand how this could solve problems that they couldn't solve with any other platform, other technology they had. So it took— it takes years when you first— when I came in 2006, we had lots of bright ideas, but we hadn't proven the technology could really work. And then a few years later, you could really show people this can do very special things, and that was what made it relatively easy to attract the hugely high-class partners. That's great. I think it's often thought, and you're quite right, that it limits your strategic optionality, basically who you can be bought by. In practice, if you're careful with the way in which you draft the agreements, then it doesn't provide that sort of impediment at all, and it didn't in this discussion. I think partnerships bring a lot of good things. The cash was really important. The validation you mentioned. Learning from big pharma. They've got a lot to teach biotech thinking about the way that they can use the technology. I think probably one of the biggest challenges, particularly when you're a younger biotech and you get into partnerships, is that the partner can dominate you. So you've got your own programs, the partner programs. You're going to put your very best people on the partner programs, and if the partner stamps their foot and says, I need this now, you will often switch resources from your programs to them. And I think that's— you need to get bigger, which we eventually came, when you can have a more balanced approach. But when you're small and young, that can be quite dominating. So it's a challenge, but we're very pleased with all the partnerships we entered into.

And you kept always the most advanced program proprietary?

We just identified things where, as you said, things where we could either manage the trials ourselves with a higher medical need. So the first program that we talked about, capilizumab, that was in an orphan disease area so we could develop the trials through to phase 3 ourselves. We could realistically commercialize ourselves. Whereas in other areas, in immune-mediated disease, RA and so forth, then partnerships made sense because we were never going to be able to carry out the big clinical trials ourselves. I think the big change is now we're part of one of the biggest pharmaceutical companies in the world with knowledge and resources way beyond that which we had. And I think that the thing that we're working on with the Sanofi management team is to take advantage of all of that and and all their infrastructure that they have, which for example, if I give you an example, with our drug for the rare disease that I mentioned, we would have focused on selling that into Europe and the United States as a small company. They have outreach for hundreds of countries worldwide, so they can do things we couldn't have dreamed, get it to patients we couldn't have dreamed of getting it to. I think then within the next weeks, years, and so forth, it's a question of retaining some of that Ablynx identity, retaining some of that culture, which brings the good things, the speed of movement of biotech, the innovation, the creativity, and that's what we're talking to our colleagues about so that we can maintain that while taking advantage of their skills and, and resources. So, so the brand Ablinx will stay, the name Ablinx will stay for the foreseeable future, like Contractura Ablinx, and, and then it will be Ablinx, uh, um, a Sanofi company, and then the, the logo will develop and so forth. But, um, the first thing is really just to begin to work together closely. We already have been working for over 6 months in this collaboration we, we had with them. So it's, it's carrying on getting to know each other, know each other more broadly and use each other's skills and experience. I think what biotechs generally would claim, and again I was talking to Christian about this, is that we have a can-do attitude. We're going out of business every day as biotech. We're spending more money than we make, so there's an urgency about that. We have no momentum. We don't have products on the market. And so it changes— it has a special attitude about it. I think that combined with the resources, experience of a very large company can be extremely powerful. Straightforward to make sure that you maintain the best of both worlds, but that's what we will be focused on doing. But I, I think it's a, a spirit that, um, is important to, to maintain, to believe that you can really make a difference, and you can make a difference today or tomorrow, not in 3 years' time.

Can you expand a bit on your, on your culture inside, culture of Adblings compared to, I know, what was it, Actelion?

Um, yeah, we, we Something we invest a lot is in— and we don't just say it, we mean it— is people. So the people make a difference. The way they think about things makes a difference. So that means that at Glauco, people work very hard. They're committed. I think one of the things the collaborators found with us, if I can give you an example not to do with Snowview but with Merck, after we've been working with Merck and Co. for a while, their number 2 in research asked me for dinner, and I didn't really know what it's all about. And then halfway through dinner, he basically said, But how do you get them to be so productive? How do you get them to do so much? How can you, with 45 programs, have just 500 people? Because we would have a multiple of that. And it isn't by hitting them with a stick or a whip. It's because they love it. They love it. They— you will hit them with a stick and a whip if they don't do what you say, but normally they'll do it for their own regard. They absolutely love it. They're committed to it. They really believe in the programs and projects themselves. So it's working with a group of people who self-motivate. But we do a lot in terms of the social side. So we invest in— it sounds very old-fashioned— personnel clubs. So these are people who themselves are completely motivated to organize all sorts of events which bring people together and the company together in different ways, whether it be running, cycling, tenpin bowling, fantastic parties. Those are all things that we take extremely seriously. It sounds a bit odd, but doing that makes the whole heart of the company tick. People get to know each other in different ways, get to know each other outside the lab bench or the business development work, whatever it may be. And they remember them, they talk about that as being important. So that will be an important thing we want to maintain as part of the culture.

And also a good way to make people work is to share stocks, I guess. You had a stock option program?

Yeah, the warrant program. Yeah, I mean, in that sort of sense, yeah, they get— they feel part of the company. It's important.

Okay, that's good. So a lot of new millionaires from the Uplink Salon.

Perhaps they're all millionaires. Yeah, so Nova Nordisk went public with an offer of €28 plus a €2.5 CBR. I think the big difference with Nova was that they were particularly interested in our lead compound. They were a little bit interested in the platform itself, but not entirely sure what to do with a number of the other programs. I think one of the exciting things about Sanofi, um, was they looked at the platform in great detail before that, and, and they're very interested in an awful lot of what we're doing. So they were able to look across the whole range of our, our pipeline and get really, um, excited about all of that and the potential of doing other things in the future. It was a big thing that we'd already worked together for since the middle of last year, um, because there was already a trust that built up with the partners in terms of what we could deliver and what we could do. But it's It's a great home for the company because I think Sanofi likes a broad range of what we do rather than just one of our assets. Yeah, I think it's a competitive area. One of the things that you saw was when Novo put out the offer. So just to give you— and this is all in the public domain— we were about €20, our stock price. Novo put out the offer that was €28. Our stock price went out to €35. And what that said to everybody was the stock market believes that €28 was way too low. So it already said that they thought a minimum, their starting point was $35. So the shareholders spoke. So the shareholders around the world basically said, this is where you need to even start thinking about any company who wants to buy this company should start at minimum at that level. So they created the discussion in the market which set the price at that level. Extremely importantly, I think if we take the disease that— well, most advanced products acquired TTP, we got very involved with patient groups. We got patients to come and talk to the company itself. It was an amazing experience having— we waited till the product was real and it was in advanced phase 2, early phase 3, because I think when it's still just a lab idea, it's premature. But once we're at the point when you could really see the potential of this getting to market, we invited people in, patients with this disease, and they were able to describe to all our colleagues what we could really do, what the difference we could make to them. And it was a very emotional event for everybody because it suddenly brought home all these theoretical things on paper and things that you touch. What it mattered to people. And it mattered to them tremendously. And the, the words that the patients were able to give was tremendously motivating, not just the people who worked on that project, but it brought it home on all the other projects. This is, this is affecting people's lives. It's not just another business. And it's why we're lucky to be in the biotechnology and pharmaceutical business, because it's, it really does affect how people live their, the way their lives.

Remember the Genentech office where they have the pictures of, of like patients, like thousands of pictures of patients that they cured? When you enter, it's pretty impressive.

Well, also the RSV program we do, the trial that we've just done, we're trialing that on children under 2 years of age. And we've had talks then again from doctors and so forth who are treating these children. It's a hugely emotional thing to even carry out the trials for these because the parents rather have to give you consent to test this, because that's what you're doing, testing this drug on their children. Now you're hoping to make a difference for all children. And saving children's lives in the future. But it's a huge and generous gift of them to let you— you do your utmost to protect the safety of these children, but it's still a test that you're doing. I think the thing is most good things take longer to do than you think they will do. There's nothing wrong with that. You know, you think— I actually looked at a business plan we wrote for Capitalism Map when I started. In 2006, so that's 11, 12 years ago, and I predicted then that it would be launched in 2013, so I was only 5 years wrong. But you have to be optimistic. I think the advice I would give is be patient, think about things, listen to people's counsel, but then as a CEO of a company, you have to make the decision. Again, I was talking to Kristin about boards and advisors. Everybody wants to tell you how to do things, everybody wants to give you advice. You should listen, but then you're the one who carries the can. You should— you'll get patted on the back when things when things go well. You'll get hit on the head when things don't go well. So you have to be quite strong and plan a way forward. I think hiring people, if I could do that again, I would do better. I would have hired lots of good people. But we were talking, one of the very big challenges as you begin to grow as a company is helping— is getting that super experience from big pharma companies into the organization, but without necessarily changing the biotech culture. So bringing people across who can make that leap.. And that's— that can be tough to find. And that's something I would invest even more in. And I think early on in a biotech experience, you can often look at people and say, well, I like that guy, but he's too expensive, or that lady, she's too expensive. They're never too expensive. When you get really great people, they change your company for the better. And I think hiring the very best you can, wherever they are in the world, would be something I would advise the the person from 15 years ago. A big focus on the transition now as we move to be part of the Sanofi family. I think that we, we want to make this work really, really well. And working with our colleagues, we're in the middle of doing that now. The, um, the key part of the deal happened on Friday, so Sanofi now own more than 95%, and that's allowed the teams to come in and start just speaking to each other in a very clear way. So let's focus on making that happen. And then I'd like to do it again.