Episode 158: Rethinking Biotech Fundraising and Innovation in Women’s Healthcare

From identifying unmet needs to navigating public fundraising, today we're getting a founder's perspective on building biotech for the long haul. You're listening to BIO from the Bayou, empowering biotech leaders with the tools, assets, and expertise to improve healthcare outcomes.

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Serving the entire Gulf South, but recorded in the heart of New Orleans. Welcome back to BIO from the Bayou. I'm your host, Dr. Elaine Hamm, the Executive in Residence at Tulane School of Medicine. And today's guest is Sabrina Martucci Johnson. She is the founder, president, and CEO of Dari Biosciences, which is a female-led biotech company accelerating innovation to address the overlooked and underfunded gaps in women's healthcare. Welcome to the show, Sabrina.

Thank you. I'm excited to be here.

All right, well, let's talk a little bit about your career journey and what led you specifically to Dari.

So I am a biochemical engineer by training, and I've spent my entire professional career in healthcare and specifically in biotech and pharmaceutical companies developing therapeutic products. And I've had the privilege of working in a lot of therapeutic areas, but several years ago now, I really started thinking more about women's health. And I decided that I really wanted to spend more time working on therapeutic innovations for women's health. A couple of products I'd worked on were conditions primarily affecting women, fibromyalgia, rheumatoid arthritis.

Sure.

And I really enjoyed those programs. I enjoyed working on those products. So long story short, I was not intending to start a company. I really simply wanted to get a job with a company,

right,

that was innovating in women's health. And as I started looking for that opportunity, and this is going back now to 2011, 2012, I was super disappointed that You know, where I was excited about leaning in, the pharmaceutical industry was leaning out.

Way out. Way out.

Way out. And so ultimately, it took a few years to kind of get up the courage and the gumption. But finally, in 2015, I don't know, kind of got bored of looking around and wondering who was going to do this and said, well, I'm somebody. I can start a company. I can do this. So—

How hard is it? Yeah.

Well, little did I know, but—

Yeah, right. Famous last words. Always. Well, that's incredible. Yeah. I mean, you know, when you're looking for a job, why not just make it yourself? And when you're looking to solve a problem, why not just do it yourself? So, I mean, there's so many people out there that have done that. Why not you? So,

exactly. Exactly. But, but it takes a while to kind of come to that and realize, no, I can do this.

I have had those very same thoughts. If you told me I was going to be doing what I was doing, it's like, no, I would never. That's not who I am as a person. And You just do, you kind of get a little fed up of just like, no, this has to be done. And by golly.

Exactly.

Well, great. So what gaps in particular, women's health, that's actually pretty broad. And you kind of addressed it a little bit in talking about there's lots of conditions that disproportionately impact women. Exactly. But then there's also the ones that are women-centric. So talk to me a little bit, because you have a bit of a spectrum at Dari.

We do. So once I made that decision that I was going to start the company and start Dari Bioscience, I also made the decision early on that at least initially, it could change at some point, But at least initially, we wanted to focus on where the gap is most pronounced, and that really is on conditions that solely affect women. Conditions that solely affect women only receives about 1% of private healthcare investment, and private healthcare investment is really what funds therapeutics getting to market. A lot of early research is funded by NIH, but, you know, you really need that private investment. So we made a decision early on that we were gonna focus on conditions solely affecting women. We also made the decision early on that we wanted to be broad. And rather than say, oh, we're, we're only gonna focus on contraception, or we're only gonna focus on menopause. Right. Instead, we said, what we're gonna do is focus on where there are clear therapeutic gaps. So no me-too products. This is really where there's a problem to be solved. There, they, Clear therapeutic gap, but importantly, there's proof of concept science on how to solve the problem because we want to get solutions in the hands of women as quickly as we can. Right. And so as a result, as you said, the portfolio is broad. So I really think of Dara Bioscience as a purpose-driven biotech company with that sole goal of closing those therapeutic gaps in care, but from contraception through to menopause and everything in between.

Yeah.

Right? Sexual health, fertility, vaginal health, infectious disease, right? Where is there a solvable problem that we can tackle?

A lot of solvable problems in that spectrum. And it's, you know, having looked for assets myself in women's health, it, they're hard to find, to be honest. I mean, I, and I can only imagine how hard it was when you first started the company and the NIH. I mean, that has funded some things, but that's one of the smaller divisions within the NIH and it's been so overlooked. And so how did you even begin to look for things in this space?

Yeah, I love that question. So with anything in life, sometimes you do have to start by narrowing the problem, right? To your point, right, that the universe is so broad in terms of the problems in women's health that need solving and how one might go about trying to find solutions. So we also made a decision early on that we were going to Primarily focus on already known active pharmaceutical ingredients, right? Hmm. So where is there a pharmaceutical ingredient that is already well known and well understood that if simply utilized in a different way, whether that's how we deliver it or even what we expect to do with it, could solve a problem in women's health? And so when we use that lens, it really kind of then narrowed it down. So that it was a little more palatable of how are we gonna go out and find these solutions. And so literally our process was a little bit opposite of how we often think about drug development. So we literally started with conversations with healthcare providers, with women, with insurance companies, just around to understand where do you see therapeutic gaps in care? If you were going to blue sky for me how you would solve it, how would you solve that problem?

Yeah.

And what we often got out of those blue sky exercises was really great directional information. I'll give you 2 really concrete examples, which, which will also help answer the question, how do we find our products or how do we, right, do that work? So one example is one theme we heard consistently from women and healthcare providers was around bacterial vaginosis, which is a vaginal infection, right? That women can get. And we kept hearing, oh my gosh, I wish that I just had something. I wish I had something I could just do one time.

Yeah.

I wish I didn't have to take an oral antibiotic. I wish, I will only use a vaginal product, but it's so messy and leaky. I wish it wasn't messy and leaky. Right. So then we would take those sort of wishes and we would come up with a, a target product profile. Okay. It needs to be one-time vaginal administration. It needs to be clean and clear. Yeah.

Yeah.

And, you know, not messy. It can't be leaky. And then you start to paint a picture. And ultimately for that particular product, we turned to wound healing and veterinary Those are 2 places where you sometimes need a technology that gets more viscous after you apply it to the body, so it stays in the dog's ear or it stays in the wound. Yeah. And that's where we ultimately found the gel technology. And then we took an antibiotic that has been used for a long time, has been very rigorously studied to show it kills the bacteria that are culprits in bacterial vaginosis, and we just put that in the gels. Love it. And did the studies. Or for arousal in women, Pfizer. Did the studies way back when with Viagra to show that it works in women. The problem is you have to use a much higher dose than in men because women have fewer receptors for the active drug, the active pharmaceutical ingredient that's in that product. And so oral isn't the way to dose it.

Yeah.

So there we just took that same active pharmaceutical ingredient, and I make it sound simple. It actually was not very simple at all, but then we formulated it into a cream. That could be used on demand.

Wow.

That's a whole other story. Ended up being really hard, 'cause really—

I was gonna say, like, the formulation.

That's not trivial. So that's how we look at, so we start with kind of, and so in that case, once we decided we needed a cream, and once we did our research and realized, yikes, sildenafil is actually really hard to formulate into a cream that will actually get into the skin.

Mm-hmm.

'Cause it's a highly charged molecule, makes it really hard to form. Yeah. So with that one, then we started looking for formulators that had expertise in difficult to formulate into topical products. So, we found a company that had done work with ibuprofen, which is difficult, and had done some proof of concept work also with sildenafil. So, those are just somewhat concrete examples. So, that's how we started. So, we start with like, we created our list of medical problems.

Yeah.

And then we created our list of like people dreaming about what would be a great solution. And then we just tried to connect the dots.

I love that. I mean, honestly, you did everything that we preach to people wanting to be entrepreneurs or that are entrepreneurs is to go to the customer, figure out what the problem is, and help provide a solution. I mean, you're, you're kind of checking all those boxes. And on top of that, especially in such a, an area that's difficult, you look for things that were maybe a little less risky at the time to start out with. Exactly. Things that had a safety profile. It made it a little, a little more palatable, I'm sure, for those initial investors or people looking to fund this, that like, look, we already have XYZ, we're just helping reformulate it and re-envisioning this. That's, that's genius. I

love that. Beautifully said. Beautifully said. Because to your point, right, when you're innovating in an area where the investment has not been profound, you have to take some of the risk off the table. So that was part of our strategy of saying, we're going to start with pharmaceuticals that have been rigorously studied. So there's no safety question. There's, we're not going to, you know, that's where, where a large percentage of concepts die. Yeah. Is in those early, like, human studies and the safety. So we're going to take that risk off the table so that then we're only having to deal with the How do we get it to market? What is the commercial opportunity?

The easier, quote unquote easier. Yeah, sure. But I love that you were thinking about it. You know, the solution makes sense, but it's challenging as you think about taking something, sounds simple, put an ampule, have it release a specific medicine, one and done. It's not. I mean, and the complaints are palpable. I mean, they're, that's a real challenge. And I love that you looked to vet med and were appealing to it.

I know.

Isn't that funny? Incredible. I love it. I love it. Well, switching gears a little bit, as you've started to build this, and this is how I actually heard about what you guys were doing. So I was at the Women's Health Investor Conference that was hosted by the, the incredible Jessica Federer. You were on a panel and you were offering a mini IPO of sorts of a way to get people, specifically women, to be able to join you on this journey. And one, as a woman, as someone passionate about women's health, I love being able to be a part of that. So I'm literally trying to, you know, as you were talking, trying to log in and And set up my profile and buy stock. But also as an entrepreneur, and fundraising is hard. It's so hard. Um, it's probably the hardest environment I've seen in many, many years. And what an ingenious way to be able to sort of offer an opportunity to get the everyday person, the everywoman to be involved, but also find a way to fund your company in a very different way. So talk a little bit about that because I'm sure we have entrepreneurs that their ears perked up at this concept. So. Where did you think about that and how difficult was it to implement?

Yeah, I love that question and I'll tell you where it came from. So, and Jessica Federer is, is one of the people that got me thinking about it also. So I would have lots of conversations like we were just talking about with healthcare providers, with women about what we're doing and ideas for what we're doing. And consistently I would hear back, oh my gosh, I love what you're doing. I wish I could support it some way. And what I used to say to people, because we are publicly traded, we're— because they would say, oh, I'd love to invest. And I'd say, oh, well, you know, we're a publicly traded company. And what I was trying to say to them is like, oh, there's not a way for you to invest directly. It's not like a private company where I can just sell you stuff, like we're public. Right. But not kind of totally appreciating it. Sometimes people, which I don't expect everyone to understand kind of how it works. So what would happen was, what happened, I was at a medical conference. And a clinician came up and said, oh my gosh, I'm so excited. I'm funding some of your research. I just bought your stock. And just so everyone understands how it works, that's great. Like, I want people to buy our stock. That's wonderful because that's an investment you can be making and hopefully it'll be, go up in value and it'll be rewarding for you. But when someone buys our stock on the open market through their trading account, it's really an investment vehicle that those dollars don't actually come to us. Those are shares that are already out there and you're just literally kind of buying them from someone else, right? Right, right. Yeah. Those dollars are going into someone else's pocket. They're not getting— and I thought, wow, but this person like went and she bought like $10,000 worth of stock and thinking that it was going to literally come into our bank account so that we could fund the work that she appreciates that we're doing. But then it got me thinking about, well, wouldn't that be amazing if people could do that? So I went to our legal counsel and I was like, how do we do that? You know, first he's kind of like—

How was that conversation?

Well, 'cause the first kind of reaction is, well, that's not really done in public companies. Like when you're doing any kind of public offering, it's to large institutional funds and they have to be an accredited investor. And so I said, well, there has to be a way. There must be a way. Like, can we crowdfund? Can we whatever? Like, there must be a way. So long story short, there is a way. It's actually a lot easier if you're a private company. It's actually super easy to set one of these up. As a public company, it was a little more complicated.

A little challenging. Yeah, for sure.

A little more challenging, but it's called a Regulation A offering. And it's a kind of, it's an opportunity to sell shares to the public, to whoever wants to participate, and the money comes directly to you and they don't have to be an accredited investor, which is what would be required if like they wanted to participate in a big initial public offering or those kind of vehicles. So it can be open to everybody and you can set a price at whatever minimum amount they have to invest. So we had set it very low relatively, and then it can be open to anybody, whoever. It did take a long time. So once we figured out how to do it, it took us months to navigate. And because we're public, we had to like

do

stuff with the Securities and Exchange Commission. It was super complicated, but we ultimately got there. And, and I do think it's important And I think it can be used. I think a lot of entrepreneurs could be using this, and especially when you're still private. Yeah. It's a lot easier to do when you're still private, and especially if you're working in an area where there's a large community of motivated people, whether it's patients, whether it's healthcare providers, whether it's consumers, your customers, to give them an opportunity to say, yes, I want to help. I want to like vote with my checkbook about what's important to me. Exactly.

So it's very empowering. And the amount of money— I mean, that's what's always so shocking about why women's health has not been invested in when they realize how much money we're willing to spend on things. And I'm a scientist, I have bought ridiculous things off the internet in the hopes of fixing my endometriosis, for example. And yeah, sure, slap some pink on it and give us a hope and we'll Buy it. Even multi-level marketing probably existed because women were sick of not finding answers in the healthcare community. So it's great that you're offering this opportunity for women to make a tangible, scientifically led investment and have that control again a little bit to be able to, like you said, put your money where your checkbook is and feel like you're involved in something bigger.

Exactly. And we don't get that opportunity a lot, right? So I just felt it was really important for a company like ours to find a way to do that. And to your point, Women are very motivated healthcare consumers, which is also why we have to be careful. We are sold to a lot, right? Kind of to your point, right? We can be super smart women, but we're very motivated. We wanna solve things for ourselves. So we will try.

Well, and thinking about that, when you have your private company and you have investors and they're institutional or even angels, that they're usually high net worth individuals, there's an obligation. I always think about that. I mean, that's When you're the head of a company, you have a fiduciary responsibility. That's what keeps me up at night. I mean, not just science, but also what if this fails and I let them down, especially if they're angels. And how does that affect you when you're now offering it to a lot more people?

Oh, every day. And so I always, whenever we talk about anyone looking to make an investment in the company directly or buy stock, I always have a disclaimer. Right? Like this is a speculative investment.

It is. Yeah. Always.

Yeah. It is biotech. It is high risk. There is no assurance, right? Yeah. Even for a company like ours, even like we talked about, we take pharmaceutical ingredients that have already been studied and tried. That, yes, that removes some risk, but there's still risk. There's still risk that we still have to show that it works ultimately well enough in the condition that we want it to work in. Or We might show that and it might not be a commercial success for reasons outside of our control. So it's still risky. So yeah, I always say it's not a donation, it's a speculative investment and make sure that you look at it that way.

Look at it and take the time. Yeah. To research it. And disclaimer, I'm also an investor because as I mentioned, I was in the audience trying to figure out how to do this and it was an incredible opportunity, but that's just, you have to be transparent about it. So.

Exactly.

So what's next on the horizon for you then? You have a nice spectrum, a nice portfolio. You've done an incredible job at thinking creatively, not just about your products, but how you financed your companies. What's next?

Yeah, well, along those lines, we're also starting to think creatively about how we get our products in the hands of women. And so one of the things that we did this year, which is really a first for us as a company, is rethink what we need to do before we start making the products available. What I mean specifically by that is I've grown up professionally in the biotech and pharmaceutical industry, and you take your products through rigorous clinical randomized controlled studies. You do a lot of safety work, you do a lot of work, and then you ultimately go through the FDA. But we are often working with drugs and working in areas where maybe that isn't necessary. Hmm. And isn't required by the consumer or the healthcare provider. What they're looking for is an evidence-based tested solution. But FDA approval isn't the only standard.

That's not, yeah, that's not the only checkmark.

Right. And it's not the only checkmark. And so for the first time this year, we just launched a vaginal probiotic. So women can have disruption in the vaginal microbiome, just like you have disruption in your gut. Absolutely. Your gut has microbiome. Yep. And we've done a lot of work in that space developing a product for bacterial vaginosis. Sure.

Yeah.

We understand that very well, and we were really dismayed to see how many Probiotics are being sold to women.

Yeah.

Purporting—

As a solution. And they're not great probiotics or they don't get there. No. They're not gonna stay there when they are there. I mean, thanks Activia. However, it's not as easy as eating yogurt and calling it a day.

No. And so we've launched our first like non-prescription product. So we just launched our vaginal probiotic. It has the same, it's manufactured to pharmaceutical manufacturing standards. Sure. It's not required to. It's got a randomized controlled published clinical trial. It's not required to, but so we've come to terms with like, the goal is to improve outcomes for women. We can do that lots of different ways. So, so that's new for us. It's a big year for us with that. And we're launching also our product, our Dare to Play product for arousal in women, which is prescription.

Yeah.

But we're launching it before it's FDA approved. Like we've been doing the clinical work. Mm-hmm. We've published the studies. There's nothing else actually tested. And studied for women. And so we're answering the call of healthcare providers to make it available. So we're making it available this year.

Wow.

So that's new for us. It's different and it's kind of putting us, but it's really forcing us to rethink what is our goal in the end? Our goal is to make sure women have solutions that they can find the published studies, right? They've been studied, the data are published, they're peer reviewed. It's real.

Yeah.

And get their hands on it.

I love that. As we wrap up, I just think through it like you've had, as you look forward, you see these roadblocks and you're just knocking them outta the way. And I love that.

That's the goal. That's the goal.

It's, it's hard. And I think that's so incredible of just taking that first leap of like, why not me? And then expanding that beyond as you build your company, fund your company, and then launch products of Ah, here's a roadblock. You're undeterred, and I love that.

Gotta be. Gotta be.

Yeah, you kind of have to be. Yeah, yeah, absolutely. It's a tough business, so you can't let them— the bastard keeps you down.

And we have— we say all the time, women's health is not niche, it's non-negotiable. And if you have that mindset, you just gotta go.

Yeah. Well, even our own Dr. Hedren Brooks at Tulane, she said menopause affects everyone, and that's absolutely true. Anything that affects women, it It will affect men too. So one way or the other.

Yes. Yes. 100%.

I take that as a scientific statement, not necessarily a threat, but maybe a little bit of a threat. So I want people to understand that women's health is everyone's health. And hopefully one day we won't have to qualify it and say that it's its own category because it is.

That's exactly right.

We're not there yet, but yeah, it is just healthcare. We got, we got more convincing to do, but that's all right. And, and with, with you helping lead the charge, I think we'll be okay. So thank you so much for joining us today. We so appreciate it. Yeah, obviously we'll put all the information about Sabrina, about your company, and all of the informational links will be posted in our show notes. Make sure you check them out to learn more. And thank you once again for joining us for Bio from the Bayou.

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This podcast was edited by Resonate Recordings.