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Close to the Edge Episode 3: Going BIG: Daphne Zohar, PureTech Health CEO
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Close to the Edge Episode 3: Going BIG: Daphne Zohar, PureTech Health CEO
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KEN DAVIES: Hello, and welcome to Close to the Edge, the new series from GENEDGE where we invite chief executives and thought leaders from groundbreaking biotech and pharma companies to sit down with us to discuss their science, their technology, and their business strategy. I'm Kevin Davies, Editor at Large with GEN and the author of Editing Humanity.
ALEX PHILIPPIDIS: And I'm Alex Philippidis, Senior Business Editor with GEN, Genetic Engineering and Biotechnology News, the publication covering the biotech industry for 40 years. We have a great group of guests lined up for this series, which we'll preview at the end of today's show.
KEN DAVIES: Close to the Edge is an offshoot of GENEDGE, our new premium subscription channel from GEN, providing in-depth exclusive news, interviews, and analysis of key trends in the biotech industry, coupled with a range of multimedia offerings such as this one. More details of our free trial offer at www.genedgenews.com/genedge.
ALEX PHILIPPIDIS: On today's episode we welcome Daphne Zohar, the Founder and CEO of PureTech Health, a very interesting, arguably unique, biotech company headquartered in Boston. Daphne, welcome to Close to the Edge.
DAPHNE ZOHAR: Thank you. It's great to be here.
KEN DAVIES: Daphne, we're so glad you could join us. And before we dive in to really explore what you're doing with PureTech Health, would you mind just telling us first the and briefly just about your scientific and business background and some of the key milestones and experiences that led you to this position.
DAPHNE ZOHAR: Absolutely. I'm an entrepreneur. I've always been an entrepreneur. I started my first company when I was in high school. And I've always been really fascinated by the concept of taking and building something. When you're starting something from nothing, you're really pulling into place different pieces, including, in the case of biotech, technology, people, money. I've always been really fascinated by that, and I became interested in biotech.
DAPHNE ZOHAR: And in particular, I was interested in how new medicines get advanced from academia, so you have a breakthrough, and then how does that get advanced to making a difference for patients? And it seemed like there was some room to potentially look at this process and maybe do things a little bit differently. In the case of PureTech, what we really wanted to do was to look at a broad landscape of ideas that could be applied to solving specific disease issues and problems, and we came up with this sort of new model.
DAPHNE ZOHAR: But what really intrigued me was that often in biotech the way that these new innovations get advanced is that one person really drives forward a specific idea or technology and looks at the world through the lens of that specific idea or technology. What we wanted to do was really sort of flip it around and come with an unbiased modality agnostic approach. And that's sort of what led me to form PureTech Yeah, it's been a really interesting journey.
DAPHNE ZOHAR: And there have been a lot of milestones along the way that I'm happy to share.
KEN DAVIES: Yeah. Yeah. Yeah. We look forward to talking about those. Prior to launching PureTech Health, did you have previous chief executive or experience at other biotech companies that has proven fruitful in what you're doing now?
DAPHNE ZOHAR: Yeah, well, I've been doing this for a while. Before PureTech I was involved in starting a couple of companies that were in more of the consumer goods space. And while those were financially lucrative, it really struck me that I wanted to do something where I could make a difference, where I could feel like I was doing something good for the world. And that's sort of what led me to get into biotech. So those other ideas were really, I think, intriguing or interesting, but definitely not as interesting or important as the work that we all do in this industry.
KEN DAVIES: You're located in Boston. Boston, not Cambridge, in the Seaport District. What is the, before we peek under the hood, what is the structure of the company? How big? How many employees? And so on.
DAPHNE ZOHAR: We have about 100 employees. About half of those are science, scientists, clinical development, clinical ops, and the other half are administrative, corporate business folks, intellectual property, all kinds of other functions that support the business. It's been growing really rapidly. Last year we only had 60 people. So we're really growing, mostly on the clinical ops side, now that we've launched a number of clinical studies with our wholly owned pipeline.
KEN DAVIES: Yeah. Alex, over to you.
ALEX PHILIPPIDIS: Sure. Thanks, Kevin. What is it that makes PureTech unique? What makes you different from any of the hundreds of different innovative biotechs in Boston and beyond?
DAPHNE ZOHAR: Well, I think that every biotech will view itself as unique and will have its own unique aspects with regard to its intellectual property or its specific approach that it's taking. We have several factors that I think are unique. One is the way that we've traditionally developed new medicines. We really started with a modality agnostic approach, working with some of the leading experts in the world and really deconstructing the problems, and then identifying new breakthroughs before they're published in major journals.
DAPHNE ZOHAR: There's been, I think, about 25 papers published in Nature, Science, and Cell, after we've secured the key intellectual property. We're going in and we're finding new ideas before the rest of the world knows about them. And then we're doing something that I think a lot of biotech companies, sometimes they hesitate to do, which is the killer experiment. The experiment that has the potential to actually kill the program.
DAPHNE ZOHAR: Whatever it is that we're most skeptical about, we actually try to do that pretty early on. I think that that approach is enabled by the structure that we have, where we have sort of this hub and spoke model, where there's a parent company, and then there's subsidiaries, and we have wholly owned programs that we're developing as well. And the reason that enables us to be more flexible about killing projects early is because our team is motivated to move the resources where the most promising data exists.
DAPHNE ZOHAR: We'd rather shut down a program because then we can work on other programs. But if you only have one platform, technology, or one whatever you want to call it, a pipeline and a product, you're less likely to really want to move resources away from that. I think that's part of what's unique. The hub and spoke model actually has been picking up steam in the industry.
DAPHNE ZOHAR: We were, I think, one of the first ones doing it. But you see companies like Bridgebio, Cinteza, and even Roivant has some element of this. So I think they're a little bit more venture-like than we are.
ALEX PHILIPPIDIS: Why did PureTech embrace a hub and spoke model, and did so fairly early, as you just said?
DAPHNE ZOHAR: It's interesting, because we came to this really from a resource constraint reasoning. Initially we really built PureTech from the ground up. We started with some angel investors that put in very small amounts of seed capital. And I think we're one of the few companies that's really been, in biotech, bootstrapped almost entirely from the start. As a result of that, we found that it made a lot of sense to bring in resources into subsidiaries. So we'd put the intellectual property into a subsidiary company, we'd raise capital, and share the cost of the development with investors.
DAPHNE ZOHAR: One of the things that I think people don't know about us, don't realize, is that we were the initiators and the inventors of all of the programs that are being advanced also in our founded entities. For example, we've now initiated, been a core inventor of 26 new therapeutic candidates, of which 15 are in the clinic and two have gone all the way through from inception at PureTech through FDA regulatory clearances.
DAPHNE ZOHAR: That model has worked really well for us. Now, what we learn from that model was what I just mentioned, I think, the ability to have flexibility in moving resources around. Also have flexibility about how one generates cash. For example, in the last year we generated about $465 million from the sale of equity in one of our founded entities, and that we're using to fund the internal pipeline. And that is something that's very helpful because a lot of biotechs don't have that ability, so they have to go out and tap the capital markets to raise more capital.
DAPHNE ZOHAR: Those are some of the things that I think are unique. We have multiple ways of generating cash. We can create a founded entity. We can partner a program. We have royalties that are due to us as co inventors. That flexibility to generate cash, I think, is important in an industry that's so capital intensive.
ALEX PHILIPPIDIS: Does your activity prioritize the search for unmet medical needs or more new applications for disruptive technologies, or maybe even both?
DAPHNE ZOHAR: Well, we really come at it from the unmet medical needs, so from the disease perspective. And actually that makes a lot of sense. If people think about how the world tackled COVID, for example, you had multidisciplinary scientists, and clinicians, and people getting together. People were sharing data. That's what we've always done and it's always around a specific disease. And what that enables us to do is to bring orthogonal thinking.
DAPHNE ZOHAR: Sometimes people that have never been in the room together will get together and they'll say, "Oh, that was a really promising approach but it was held back by the following issues." And then we can tackle the issues that held it back. And we can identify intellectual property in academia. Sometimes we're the inventor of the solution. And sometimes, for example, we might bring in something that had been developed in pharma but had had some drawbacks that we can address with new technology.
ALEX PHILIPPIDIS: You're in clinic, or close to it, with programs for long COVID, as you mentioned, cancer, neuroscience. I've heard you talk about taking an unbiased approach to ideas. Is there a primary therapeutic focus in your chosen targets? Or you just simply take opportunities as they come?
DAPHNE ZOHAR: In the past, in sort of the founding stages of PureTech we were really looking at big unmet needs, diseases, and we didn't say we were going to focus on one specific area. Over time that led us to this crosstalk between the brain, the immune system, and the gut. We were one of the first groups, for example, tackling the microbiome, really learning about the gut-epithelial barrier. And that led us to the lymphatic system, which is a key component of brain-immune-gut crosstalk.
DAPHNE ZOHAR: And through the lens of this brain-immune-gut crosstalk, I'd say that mostly we're focused on immunology. But the lymphatic system also has led us to diseases, for example, of inflammation, fibrosis, and of course this whole brain crosstalk thing, so CNS disorders as well, and oncology.
ALEX PHILIPPIDIS: You just mentioned brain-immune-gut, or BIG axis, as the company likes to call that. Could you talk about that a little bit and how that applies to treatments?
DAPHNE ZOHAR: I think that what's been really interesting is if you look back in history of the industry, people take sometimes in organ-specific approach. And what's really going on is that these systems are interrelated. It's almost like the brain-immune-gut, almost like a super system. For example, the brain and the immune system are interrelated. You have, for example, 500 million neurons in the gut.
DAPHNE ZOHAR: What we've heard it described as a bag of nerves. And you have the microbiome. You have, really importantly, the mesenteric lymph nodes in the gut, which are an important site for immune cell programming. And the lymphatic system is basically almost like a superhighway for immune cells. The idea is that this crosstalk is happening, and a lot of it's happening, this brain-immune crosstalk is happening actually in the gut, or is mediated by the gut.
DAPHNE ZOHAR: That's sort of what led us to it. And it has implication across a range of diseases. For example, in the case of lymphatic disorders, you have sort of a buildup of fluid in lymphedema, for example. Or in the case, really intriguingly, of neurodegenerative diseases, there's a buildup. And you can almost think of it as the meningeal lymphatics. There's a buildup.
DAPHNE ZOHAR: It's almost like a clogged drain. And when you think about applying anti-amyloid therapies, that's not going to be as helpful if you can't unclog the drain, the meningeal lymphatic vessels. We think it has broad implication across a range of diseases, and whether that be oncology and metastasis.
DAPHNE ZOHAR: And the ability to actually influence the lymphatic system, for example, by administering therapeutics directly into and through the lymphatic system, we think is very powerful. The brain-immune-gut crosstalk, and you've heard of the microbiome, for example, as I think a really key area of that crosstalk, but we think the lymphatic system is the next frontier there.
ALEX PHILIPPIDIS: Evan?
KEN DAVIES: Thanks, Alex. Daphne, does your whole pipeline revolve around the BIG axis, or is that simply the main thrust of your research and development program?
DAPHNE ZOHAR: Yeah. I think that what it does is it gives us some unique insights to what is happening in the biology that then can be applied to practical approaches that one could intervene to develop new therapeutics. That is a lens that we're looking at. The other lens is the disease-specific lens. We use it to generate ideas, and we're learning about these ideas before they're published, and able to do experiments to validate some of them.
DAPHNE ZOHAR: And many times we'll do those experiments and nobody will ever hear about the program because it won't make it to our pipeline.
KEN DAVIES: You're watching Close to the Edge, the new show from GENEDGE, the premium subscription channel of Genetic Engineering and Biotechnology News. I'm Kevin Davis, joined by Alex Philippidis, the Senior Business Editor of GEN, and we're delighted to be joined by Daphne Zohar. Daphne, PureTech Health, you have assembled an absolutely extraordinary board of advisors and talents. and there are many great advisory boards in the biotech industry, and especially in the Boston area.
KEN DAVIES: But you have, among others, Nobel laureate Bob Horvitz, serial entrepreneur MIT'S Bob Langer, Raju Kucherlapati, the co-founder of Millennium Dennis Ausiello, John LaMattina, the Pfizer veteran, and many other distinguished guests. How do you marshal this talent? I mean, how important is it that you've brought such an A-list together on the team? And how do they contribute beyond just being sort of casual advisors?
KEN DAVIES: How intimate is their role in deciding which projects you pursue?
DAPHNE ZOHAR: It's really involved. And I think that they are passionate about what we're doing. Bob Langer was a co-founder of PureTech, and I was really lucky to meet him early on when I had this idea of founding PureTech. And I didn't really know anybody in the industry. We didn't have any money, and we didn't have any projects assembled. So he, I think to his credit, took a big bet on this idea and helped me to co-found PureTech.
DAPHNE ZOHAR: Along with him was Ben Shapiro, who was Executive Vice President at Merck. When you have people like that, that can open a lot of doors. And we took this approach of bringing together leading experts in a field. Having done that a few times, we have examples, for example, a track record of successfully taking new ideas and bringing them to patients, bringing them all the way through regulatory approvals, and I think also being really fair with people.
DAPHNE ZOHAR: So having them participate in the-- being able to participate with ideas, but also giving them equity and treating them fairly. I think that over time has created a critical mass. And initially it was people wanted to be in the room with Bob and Ben and others. And then you sort of amass this interesting experience. The ability to actually impact patients, I think, is really important.
DAPHNE ZOHAR: A lot of times what we hear from the scientific collaborators who are on the advisory boards of a lot of big pharma companies and biotech companies. They say, "Well, we're on these advisory boards. But people come in and they ask us to look at their pipelines. And then we give them our advice. And then we come back 18 months later, and it's still the same stuff and they didn't really do much with our advice." And in the case of PureTech, what they really feel is that they're able to make an impact.
DAPHNE ZOHAR: They're able to say, "Here's this one idea that I always wish was developed and wasn't, and here's the reason why." And we then go and we actually follow up on it and try to solve that problem. And that's how we came up with the KarXT program was we had a group of experts, schizophrenia experts, and they kept talking about xanomeline, which was developed at Eli Lilly, a muscarinic agonist. And the issue was that there was some tolerability issues around the GI, and it was held back, was not developed.
DAPHNE ZOHAR: And we went and got access to that program and came up with this idea of coupling the muscarinic agonist, xanomeline, with a muscarinic antagonist, trospium chloride. And then we went ahead and did a study that proved that that addressed the tolerability issues, and that became Karuna. And we brought in Steve Paul, who had initially developed xanomeline at Eli Lilly.
DAPHNE ZOHAR: The idea was that, and we've done this across our wholly owned programs as well as the founded entities, is making an impact, I think, is what attracts people to this group and to the model.
KEN DAVIES: So part of your job, it sounds like, is reaching out to investigators who aren't part of the PureTech ecosystem, maybe haven't even heard of the company, but where you and your advisors have perhaps just met and identified a really cool paper or really cool problem. And am I right in thinking that, that sometimes you're reaching out, saying, "We think there's a drug here or maybe even potentially a spin-out company, and would you like to talk to us further?"
DAPHNE ZOHAR: Absolutely. I think sometimes we come with a specific hypothesis and then we're looking at which academics are currently working in that space. Because if they've been working on partially addressing the issue that we want to address, and they've been working on it for 15 years, we're not going to start from scratch. We're going to license in their technology, collaborate with them.
DAPHNE ZOHAR: And oftentimes that idea generation will come from PureTech team members. But other times it will be in this sort of group discussions that we have around solving a specific problem. Or, for example, in the case of our program that we brought in from Teva, which acquired Auspex, one of the companies that one of my C level colleagues, he put together.
DAPHNE ZOHAR: That came from a brainstorm in lymphedema, which is a very big problem. There's a million patients and there's no therapeutics. We started to look at lymphedema and the cycle of inflammation and fibrosis, realized that there had been this program that was developed by Bharatt's former company Auspex, which was acquired by Teva, and Teva wasn't developing it. So we acquired that from Teva.
DAPHNE ZOHAR: And then we were advancing it for lymphedema. But then became aware of what was happening with long COVID from our pulmonologist contacts. So we decided to go ahead and see if we could do something in the area of long COVID. And of course we're advancing it in IPF because of this inflammation fibrosis capability.
KEN DAVIES: You mentioned that you like, your team likes to do the critical experiment, even if it means that that puts an end to the project. Have there been any examples that come to mind over the last year or two where you were really excited about sort of the theoretical promise of a particular new project perhaps that ultimately you decided, I'm sorry, guys, we're going to have to nix this because that experiment just didn't give us the answer we were maybe hoping for?
DAPHNE ZOHAR: Absolutely. Oftentimes that happens before we're committing to the program. But, for example, in the case-- I'll give you a positive one and then I'll give you the negative one. In the case of this program that we're developing, we call it LYT-100, which targets inflammation and fibrosis, the key experiment that we wanted to do was a multiple ascending dose study to see if the tolerability advantages that we believed it had over pirfenidone, which is approved drug in IPF, whether that panned out.
DAPHNE ZOHAR: And we went ahead and did that study. If that hadn't gone well we would have shut down the program. But it went really well, and it made us expand what we were going to do with that program. Another example, depression is in the news today with Sage's data with zearalenone. We had a program that was really interesting that we were advancing for MDD.
DAPHNE ZOHAR: And it was based on an insight that people were noticing that after MRI the individuals that were being imaged felt happier. And then there was a couple of studies in academia. And what was isolated was the slow field magnetic stimulation. And we went ahead and actually did-- So there was a couple of academic studies that were positive in depression, and we went ahead and did four clinical studies.
DAPHNE ZOHAR: And we were doing that with collaborators. And we were able to get data which was not so different from some drug companies that might have advanced it. But we decided that we weren't going to move it forward. So we actually shut that program down. And it was a hard decision but we had set the bar earlier. We said, "If we don't meet this bar, we're going to shut it down." And we were able to move the resources to other programs.
KEN DAVIES: Yeah. Great. Alex, back to you.
ALEX PHILIPPIDIS: Thanks, Kevin. You mentioned in neuroscience, and there are programs and several other indications, is there a balance or preference the company wants. Given BIG axis, for example, do you look for more gastrointestinal, or are you a little more eclectic than that?
DAPHNE ZOHAR: Yes. In our wholly owned pipeline we're really focused on, we could think about the Big axis with a big I, immunology, our chief scientific officer is an immunologist, Joe Bolen. He's been developing mostly oncology drugs his entire career. He was the CSO at Moderna and Millennium. And everything that we're doing is kind of looking through the lens of immunology.
DAPHNE ZOHAR: But I'd say that for our wholly owned pipeline, it's the lymphatic system and related immunology sort of encompasses most of the things that we're doing. That leads us to, for example, lymphedema, inflammation fibrosis, oncology, and other immunology-related disorders, including, for example, IBD, so GI and inflammatory conditions like IBD.
ALEX PHILIPPIDIS: You mentioned long COVID earlier and I was hoping to drill a little bit into that. Obviously it wasn't on your radar a couple of years ago. How did the company come to that potential opportunity and that aspect of COVID?
DAPHNE ZOHAR: We were developing this LYT-100 program, which is targeting inflammation and fibrosis. And it's a deuterated form of pirfenidone, which is an anti-inflammatory, anti fibrotic agent, which is approved for idiopathic pulmonary fibrosis and has had data in other progressive fibrosing interstitial lung diseases. We're working with collaborating with a lot of pulmonologists. And we were hearing early on in the pandemic from pulmonologists that a substantial percentage of people who were recovering from COVID had issues, for example, lung scarring, and also longer-term pulmonary sequelae.
DAPHNE ZOHAR: They were thinking that maybe this could have some application because we know that, for example, in SARS classic and MERS you see this long term inflammation and fibrosis. And there's a belief that IPF may actually be initiated by acute events like viruses. The idea was, could you in this, we know that there's inflammation involved and we know that there's fibrosis, could you administer an oral anti-fibrotic, inflammatory agent, which is known to have efficacy in related pulmonary conditions?
DAPHNE ZOHAR: Could that have an impact? That was how we came to it, very much this disease focus. And we quickly--. And it was actually pretty interesting because the information that we had initially was sort of this vague anecdotal information. But as we were planning the study, more data was coming in, both from patients, self-reported data, but also from studies showing that this indeed was happening.
DAPHNE ZOHAR: And based on that we put together this study, and it's going on right now. And we hope to have data in the second half of this year.
KEN DAVIES: Great.
DAPHNE ZOHAR: Now one thing that was interesting about that though, is even when we were starting this study, everybody was asking, well, there's vaccines and is this even going to be relevant? And at that time I think there was like $5 million patients infected worldwide. And now, I don't know, I think it's probably close to 200 million. And we know that a substantial portion are going to have this issue and we believe that this is going to be endemic.
DAPHNE ZOHAR: So the chronic effects, we were a little bit ahead of the curve, but it seems to be really important and we're glad we can make an impact on it potentially.
ALEX PHILIPPIDIS: Great. And another exciting program actually concerns one of the founding entities of PureTech, tech and that's actually back in May Akili completed a $160 million financing. And the company had said at the time proceeds will accelerate commercialization of EndeavorRx, which is a digital therapeutic for ADHD, first and only FDA-cleared treatment delivered through a video game experience.
ALEX PHILIPPIDIS: Now, how closely did PureTech work with Akili? What does Akili do itself and what does PureTech help with?
DAPHNE ZOHAR: We actually-- that was another program that we started at PureTech, and Eddie Martucci, who is currently the CEO at Akili, was a team member at PureTech. Similar to Karuna, Vedanta, and Gelesis, that the team members at PureTech developed it and then went off into the founded entities. In the case of Akili, it actually came when we were working on that non-invasive neurostimulation project. We were really interested in other ways that one could influence attention and cognition, through, for example, experiences or devices.
DAPHNE ZOHAR: And we had actually an ongoing sourcing effort to see if you could actually influence cognition attention in that way. And we came across the work of Adam Gazzaley at UCSF who was studying attention and basically what's called cognitive interference processing or the way that you deal with distractions and interrupters. And it turns out that you can train this cognitive interference capability.
DAPHNE ZOHAR: And that actually transfers to have benefit it in attention working memory and overall cognition. And there the killer experiment was we're going to run a randomized controlled study using a game, another game that was pretested to have some belief of benefit by parents, right? Another game that was equally engaging that would be the placebo or sham in the study. And we ran that study, and that study was successful at its primary endpoint and then led to the approval of this video game.
DAPHNE ZOHAR: And the video game has these elements that are engineered into the game to train this ability to do two tasks at once. And there's a lot of science that went into it. And it's approved for pediatric ADHD. And for me that was actually very exciting. I have a daughter who has ADHD and she was one of the first people to test the program and was very excited when she learned of the approval.
ALEX PHILIPPIDIS: How broad of an application to video game therapeutics have? And what types of indications can you envision such games being developed for down the road?
DAPHNE ZOHAR: I think that anywhere where you have working memory, attention, and cognition issues, and that relates to a number of cognitive disorders, whether it be-- and this has not been approved for those other indications so I'm just speaking theoretically at this point. They do have some data in some of these indications. For example, some of the early experiments that Adam Gazzaley did were mild cognitive impairment.
DAPHNE ZOHAR: For example, with aging individuals, the ability to train attention, working memory. And then there's a range of other conditions. For example, I think the company is now pursuing long COVID-related brain fog. And there's a range of other indications that they're looking at this point.
ALEX PHILIPPIDIS: We saw a few days back aducanumab winning FDA approval in Alzheimer's. Can EndeavorRx be thought of someday as an Alzheimer's-related or dementia drug?
DAPHNE ZOHAR: Yeah. I think that some of the early work that they did was with healthy adults that had cognitive decline. But that is definitely an interesting area. They also did some really interesting validation work to show that you could identify people with early Alzheimer's, which was later then confirmed by imaging, by their ability to improve on the game. They did a study, which was a really well run study, to show that the Akili interface could be used as almost like a diagnostic for early Alzheimer's, which I think would be very relevant as you think about the rollout of something like aducanumab.
ALEX PHILIPPIDIS: You mentioned cognitive dysfunction following COVID-19 or COVID brain fog to use the scientific term. And I know that EndeavorRx Akili 101 are in development for that as well. How broad or limited a potential does that therapeutic have beyond ADHD?
DAPHNE ZOHAR: Yeah, I mean, I think that there's a sort of the general ability to improve attention, cognition, working memory, which cuts across multiple disorders. It's indicated right now for ADHD. But could there be a broader functionality that cuts across multiple disorders? Absolutely. And I can't speak to what the company's plans are with regard to other indications.
DAPHNE ZOHAR: Because now, at this point, we created Akili, but at this point it's a fully independent company. And that's the case with all of the founded entities. Our internal pipeline is fully managed by us, 100%, and we're going to take those programs forward ourselves. But the founded entities, you can almost think of them as children that we gave birth to, we raised through adolescence, and then somebody else is raising them.
DAPHNE ZOHAR: And that was one of the drivers for us to take these wholly owned programs and raise them ourselves all the way. In the past, the founded entities, we would take them from discovery through human proof of concept often, or generally proof of concept. And then the rest of the work was done by founded entities. And in the case of our wholly owned pipeline, we plan to take them all the way through to commercialization.
ALEX PHILIPPIDIS: When the Akili financing was announced, it was said that PureTech still held a roughly 23% stake in Akili. It's down from about 38% during the series C back in 2018. Why does PureTech keep a stake in entities like Akili, even though it dwindles over time, that adolescent model you just mentioned.
DAPHNE ZOHAR: Yes. I think that for us it's like the kids come and take care of you later. And like I said, we sold equity in one of our founded entities, or about $460 million this year, and that helped to fund all the work that we're doing through the first quarter of 2025 without having to raise capital. That's what's, I think, nice about the model and the history.
DAPHNE ZOHAR: And going forward we're also due royalties in some cases, as co-investors, for example, in Karuna, and Gelesis, which I'd be happy to say a few words about, because I think it's also relevant with the recent approval of Wegovy, Novo's GLP-1.
ALEX PHILIPPIDIS: Go ahead.
DAPHNE ZOHAR: I think that obesity space, in general, has been really-- it's been a really rocky area in biotechs. And the way I look at it is, there's a huge, huge unmet need, with hundreds of millions of people. I think it's over 150 million adults that have overweight or obesity. But the pharma industry made some attempts to developing new drugs, and there was a real issue because those drugs never really had great market uptake.
DAPHNE ZOHAR: And we believe the reason for that is that the drugs were indicated for the obese population. They had some significant adverse events and toxicities. And those really limited their use. They were not really able to be available to the broader population of overweight, so like the 25 to 30 BMI, which is about half of the population and is the biggest, we believe the biggest unmet need in many ways.
DAPHNE ZOHAR: Now what's interesting is the GLP-1s have started to really pick up steam in the obese area. Semaglutide has been, I think it's like $600 million in annual revenues, and that's injected. That was, I think, a daily injection with a lot of potential adverse events. But because they had very good efficacy that's really interesting and it's picking up.
DAPHNE ZOHAR: And Wegovy was just approved, with a better dosing schedule, for the obese population. We think that actually what we're going to see over the next few years is the obesity, overweight and obesity, landscape really coming into its own. And it's, as you know, huge unmet needs, comorbidities, even if you look at COVID, for example, but multiple comorbidities from diabetes to oncology related comorbidities.
DAPHNE ZOHAR: And we think what's going to happen is there's going to be these GLP-1s, which are indicated for the obese population. And then what Gelesis has developed, Plenity, is indicated for the entire population between 25 to 40 BMI. But because of its safety profile we think it's uniquely positioned in the 25 to 30 BMI. And they actually launched that that program, that product, Plenity, they did an initial launch, a targeted launch, during COVID via telemedicine in partnership with Ro, and it's the first primary care product to be launched, as far as we know, via telemedicine.
DAPHNE ZOHAR: So you call up a physician that works with Ro, and if you qualify you get it shipped your home within two days. And we think that with obesity, especially with overweight, physicians don't feel comfortable bringing this up with somebody who's just overweight. They're not going to be they're not going to bring it up unless they think there's a significant health issue. And you're not going to go to your primary care physician, often, and ask for a prescription for something.
DAPHNE ZOHAR: So this approach of being able to directly connect with people who are interested in managing their weight we think is going to be really interesting and potentially disruptive. And they're getting ready, both of those, by the way, Wegovy and Plenity are getting ready for a broad launch around the same time. So we can continue to track those.
ALEX PHILIPPIDIS: Daphne, PureTech's stock is close to its all time high. How much does that give the company the latitude to grow more quickly as a result?
DAPHNE ZOHAR: Yeah. If you look at the PureTech--. There's always been a value disconnect in our minds. If you just look at, for example, our public stakes in Karuna, Vor, or cash, you can see that there's still a lot of room to grow in terms of getting full credit for the value that's already there. There's seven other private founded entities. There's our royalty stake in Karuna, Gelesis, and Follica.
DAPHNE ZOHAR: And then we have this really advanced, at this point, wholly owned pipeline. We're getting ready for a phase 3 study in IPF. We have two phase 2s and one phase 1 in oncology. And then we have another program entering the clinic. I think that, on the one hand it's nice to see that we've begun to unlock some of the value. But we believe that there's still value disconnect. And part of that has to do with the fact that we listed in London initially in 2015, because there wasn't really many examples of this hub and spoke model in the US.
DAPHNE ZOHAR: And we've now done a cross listing in the US on NASDAQ. And we think over time that that is going to really help a lot, and it's helped to some extent as well. Especially now that there's other companies like us. Because we were sort of this strange creature that people didn't really have many examples of others like us.
ALEX PHILIPPIDIS: Great. And Ken?
KEN DAVIES: Thanks, Alex. We're almost out of time, Daphne, but thanks again for joining us. You're the first female chief executive we've had on Close to the Edge. So we're delighted you could make time to join us. GEN, as you may know, is a partner with the Rosalind Franklin Society, which is a fierce champion of women in science and the boardroom.
KEN DAVIES: Are you seeing more opportunities for women to join you in the higher reaches of the biotech industry? And what advice are you able to give women who are seeking to move into this sort of area?
DAPHNE ZOHAR: One of the things that I think is really intriguing and promising is that right now everybody wants women on their boards. It's actually hard to find women that you can bring onto your board because they're so sought after, especially women who have, for example, been CEOs or whatever. So I think that that's a very promising development. And I would say the same thing for other diverse populations.
DAPHNE ZOHAR: There is a concerted effort to try to bring diversity into the upper levels of organizations and into the board. And I have to say that in some of our ongoing searches, we're they're taking longer because we're insisting. We're like, we really want to see mostly diverse candidates. I think that's a really positive just a movement in the industry. In terms of advice to women, I think that one of the biggest problems we have is pattern recognition, is that there's just, if you don't have a lot of examples of successful female entrepreneurs, because you didn't have a lot of female entrepreneurs and CEOs to begin with, what ends up happening is people talk about the ones that are a little bit more infamous.
DAPHNE ZOHAR: Like something happens. So you have this kind of negative vicious cycle. And I think that what we have, though, is a lot of very successful women in the industry who have just been doing work, doing great, and I'm really hoping that more of that their work will be highlighted. It might be less interesting than something that's got a scandal going on.
DAPHNE ZOHAR: But it's very successful, very insightful women in the industry. And I think over the next few years we'll see more positive examples that can serve as patterns for the female CEOs of the future. My only advice would be to just continue doing great work and it will eventually be recognized. It might be recognized a little bit later. And it's definitely a challenge from a funding perspective because a very small percentage of women are general partners at venture funds and other investment groups.
DAPHNE ZOHAR: And people tend to invest in the people that look and are like themselves. There's some progress that's been made. But until we see more general partners, managing partner women at investment firms, I think it will still always be a little bit harder for women to raise money early on.
KEN DAVIES: Right. Right. Well, we're so glad to give you this platform to talk about your work and really set such an amazing example and I hope that proves inspirational in some way. That's all the time we have for this particular episode of Close to the Edge. We really want to thank our special guest today, Daphne Zohar, the Chief Executive Officer of PureTech health.
KEN DAVIES: Coming up in this series, more interviews with some outstanding chief executives, including John Evans of Beam Therapeutics, Laurence Reid of Decibel Therapeutics, and Ted Love of Global Blood Therapeutics. So lots to look forward to in the coming weeks, and we hope you'll join us for future episodes of Close to the Edge. GENEDGE is your source for the latest in-depth information on biotech entrepreneurship and technology development from the genetic engineering news team.
KEN DAVIES: We hope you'll take a closer look at GENEDGE and consider a free trial subscription so you can really get a taste of the outstanding reporting and journalism that Alex and his team are putting together.
ALEX PHILIPPIDIS: Close to the Edge is produced by Jamie Cohen and Leona Jabs. For Kevin Davies, I'm Alex Philippidis. Thank you for taking the time and watching, and goodbye for now.
DAPHNE ZOHAR: Thank you. [MUSIC PLAYING]
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KEN DAVIES: Hello, and welcome to Close to the Edge, the new series from GENEDGE where we invite chief executives and thought leaders from groundbreaking biotech and pharma companies to sit down with us to discuss their science, their technology, and their business strategy. I'm Kevin Davies, Editor at Large with GEN and the author of Editing Humanity.
ALEX PHILIPPIDIS: And I'm Alex Philippidis, Senior Business Editor with GEN, Genetic Engineering and Biotechnology News, the publication covering the biotech industry for 40 years. We have a great group of guests lined up for this series, which we'll preview at the end of today's show.
KEN DAVIES: Close to the Edge is an offshoot of GENEDGE, our new premium subscription channel from GEN, providing in-depth exclusive news, interviews, and analysis of key trends in the biotech industry, coupled with a range of multimedia offerings such as this one. More details of our free trial offer at www.genedgenews.com/genedge.
ALEX PHILIPPIDIS: On today's episode we welcome Daphne Zohar, the Founder and CEO of PureTech Health, a very interesting, arguably unique, biotech company headquartered in Boston. Daphne, welcome to Close to the Edge.
DAPHNE ZOHAR: Thank you. It's great to be here.
KEN DAVIES: Daphne, we're so glad you could join us. And before we dive in to really explore what you're doing with PureTech Health, would you mind just telling us first the and briefly just about your scientific and business background and some of the key milestones and experiences that led you to this position.
DAPHNE ZOHAR: Absolutely. I'm an entrepreneur. I've always been an entrepreneur. I started my first company when I was in high school. And I've always been really fascinated by the concept of taking and building something. When you're starting something from nothing, you're really pulling into place different pieces, including, in the case of biotech, technology, people, money. I've always been really fascinated by that, and I became interested in biotech.
DAPHNE ZOHAR: And in particular, I was interested in how new medicines get advanced from academia, so you have a breakthrough, and then how does that get advanced to making a difference for patients? And it seemed like there was some room to potentially look at this process and maybe do things a little bit differently. In the case of PureTech, what we really wanted to do was to look at a broad landscape of ideas that could be applied to solving specific disease issues and problems, and we came up with this sort of new model.
DAPHNE ZOHAR: But what really intrigued me was that often in biotech the way that these new innovations get advanced is that one person really drives forward a specific idea or technology and looks at the world through the lens of that specific idea or technology. What we wanted to do was really sort of flip it around and come with an unbiased modality agnostic approach. And that's sort of what led me to form PureTech Yeah, it's been a really interesting journey.
DAPHNE ZOHAR: And there have been a lot of milestones along the way that I'm happy to share.
KEN DAVIES: Yeah. Yeah. Yeah. We look forward to talking about those. Prior to launching PureTech Health, did you have previous chief executive or experience at other biotech companies that has proven fruitful in what you're doing now?
DAPHNE ZOHAR: Yeah, well, I've been doing this for a while. Before PureTech I was involved in starting a couple of companies that were in more of the consumer goods space. And while those were financially lucrative, it really struck me that I wanted to do something where I could make a difference, where I could feel like I was doing something good for the world. And that's sort of what led me to get into biotech. So those other ideas were really, I think, intriguing or interesting, but definitely not as interesting or important as the work that we all do in this industry.
KEN DAVIES: You're located in Boston. Boston, not Cambridge, in the Seaport District. What is the, before we peek under the hood, what is the structure of the company? How big? How many employees? And so on.
DAPHNE ZOHAR: We have about 100 employees. About half of those are science, scientists, clinical development, clinical ops, and the other half are administrative, corporate business folks, intellectual property, all kinds of other functions that support the business. It's been growing really rapidly. Last year we only had 60 people. So we're really growing, mostly on the clinical ops side, now that we've launched a number of clinical studies with our wholly owned pipeline.
KEN DAVIES: Yeah. Alex, over to you.
ALEX PHILIPPIDIS: Sure. Thanks, Kevin. What is it that makes PureTech unique? What makes you different from any of the hundreds of different innovative biotechs in Boston and beyond?
DAPHNE ZOHAR: Well, I think that every biotech will view itself as unique and will have its own unique aspects with regard to its intellectual property or its specific approach that it's taking. We have several factors that I think are unique. One is the way that we've traditionally developed new medicines. We really started with a modality agnostic approach, working with some of the leading experts in the world and really deconstructing the problems, and then identifying new breakthroughs before they're published in major journals.
DAPHNE ZOHAR: There's been, I think, about 25 papers published in Nature, Science, and Cell, after we've secured the key intellectual property. We're going in and we're finding new ideas before the rest of the world knows about them. And then we're doing something that I think a lot of biotech companies, sometimes they hesitate to do, which is the killer experiment. The experiment that has the potential to actually kill the program.
DAPHNE ZOHAR: Whatever it is that we're most skeptical about, we actually try to do that pretty early on. I think that that approach is enabled by the structure that we have, where we have sort of this hub and spoke model, where there's a parent company, and then there's subsidiaries, and we have wholly owned programs that we're developing as well. And the reason that enables us to be more flexible about killing projects early is because our team is motivated to move the resources where the most promising data exists.
DAPHNE ZOHAR: We'd rather shut down a program because then we can work on other programs. But if you only have one platform, technology, or one whatever you want to call it, a pipeline and a product, you're less likely to really want to move resources away from that. I think that's part of what's unique. The hub and spoke model actually has been picking up steam in the industry.
DAPHNE ZOHAR: We were, I think, one of the first ones doing it. But you see companies like Bridgebio, Cinteza, and even Roivant has some element of this. So I think they're a little bit more venture-like than we are.
ALEX PHILIPPIDIS: Why did PureTech embrace a hub and spoke model, and did so fairly early, as you just said?
DAPHNE ZOHAR: It's interesting, because we came to this really from a resource constraint reasoning. Initially we really built PureTech from the ground up. We started with some angel investors that put in very small amounts of seed capital. And I think we're one of the few companies that's really been, in biotech, bootstrapped almost entirely from the start. As a result of that, we found that it made a lot of sense to bring in resources into subsidiaries. So we'd put the intellectual property into a subsidiary company, we'd raise capital, and share the cost of the development with investors.
DAPHNE ZOHAR: One of the things that I think people don't know about us, don't realize, is that we were the initiators and the inventors of all of the programs that are being advanced also in our founded entities. For example, we've now initiated, been a core inventor of 26 new therapeutic candidates, of which 15 are in the clinic and two have gone all the way through from inception at PureTech through FDA regulatory clearances.
DAPHNE ZOHAR: That model has worked really well for us. Now, what we learn from that model was what I just mentioned, I think, the ability to have flexibility in moving resources around. Also have flexibility about how one generates cash. For example, in the last year we generated about $465 million from the sale of equity in one of our founded entities, and that we're using to fund the internal pipeline. And that is something that's very helpful because a lot of biotechs don't have that ability, so they have to go out and tap the capital markets to raise more capital.
DAPHNE ZOHAR: Those are some of the things that I think are unique. We have multiple ways of generating cash. We can create a founded entity. We can partner a program. We have royalties that are due to us as co inventors. That flexibility to generate cash, I think, is important in an industry that's so capital intensive.
ALEX PHILIPPIDIS: Does your activity prioritize the search for unmet medical needs or more new applications for disruptive technologies, or maybe even both?
DAPHNE ZOHAR: Well, we really come at it from the unmet medical needs, so from the disease perspective. And actually that makes a lot of sense. If people think about how the world tackled COVID, for example, you had multidisciplinary scientists, and clinicians, and people getting together. People were sharing data. That's what we've always done and it's always around a specific disease. And what that enables us to do is to bring orthogonal thinking.
DAPHNE ZOHAR: Sometimes people that have never been in the room together will get together and they'll say, "Oh, that was a really promising approach but it was held back by the following issues." And then we can tackle the issues that held it back. And we can identify intellectual property in academia. Sometimes we're the inventor of the solution. And sometimes, for example, we might bring in something that had been developed in pharma but had had some drawbacks that we can address with new technology.
ALEX PHILIPPIDIS: You're in clinic, or close to it, with programs for long COVID, as you mentioned, cancer, neuroscience. I've heard you talk about taking an unbiased approach to ideas. Is there a primary therapeutic focus in your chosen targets? Or you just simply take opportunities as they come?
DAPHNE ZOHAR: In the past, in sort of the founding stages of PureTech we were really looking at big unmet needs, diseases, and we didn't say we were going to focus on one specific area. Over time that led us to this crosstalk between the brain, the immune system, and the gut. We were one of the first groups, for example, tackling the microbiome, really learning about the gut-epithelial barrier. And that led us to the lymphatic system, which is a key component of brain-immune-gut crosstalk.
DAPHNE ZOHAR: And through the lens of this brain-immune-gut crosstalk, I'd say that mostly we're focused on immunology. But the lymphatic system also has led us to diseases, for example, of inflammation, fibrosis, and of course this whole brain crosstalk thing, so CNS disorders as well, and oncology.
ALEX PHILIPPIDIS: You just mentioned brain-immune-gut, or BIG axis, as the company likes to call that. Could you talk about that a little bit and how that applies to treatments?
DAPHNE ZOHAR: I think that what's been really interesting is if you look back in history of the industry, people take sometimes in organ-specific approach. And what's really going on is that these systems are interrelated. It's almost like the brain-immune-gut, almost like a super system. For example, the brain and the immune system are interrelated. You have, for example, 500 million neurons in the gut.
DAPHNE ZOHAR: What we've heard it described as a bag of nerves. And you have the microbiome. You have, really importantly, the mesenteric lymph nodes in the gut, which are an important site for immune cell programming. And the lymphatic system is basically almost like a superhighway for immune cells. The idea is that this crosstalk is happening, and a lot of it's happening, this brain-immune crosstalk is happening actually in the gut, or is mediated by the gut.
DAPHNE ZOHAR: That's sort of what led us to it. And it has implication across a range of diseases. For example, in the case of lymphatic disorders, you have sort of a buildup of fluid in lymphedema, for example. Or in the case, really intriguingly, of neurodegenerative diseases, there's a buildup. And you can almost think of it as the meningeal lymphatics. There's a buildup.
DAPHNE ZOHAR: It's almost like a clogged drain. And when you think about applying anti-amyloid therapies, that's not going to be as helpful if you can't unclog the drain, the meningeal lymphatic vessels. We think it has broad implication across a range of diseases, and whether that be oncology and metastasis.
DAPHNE ZOHAR: And the ability to actually influence the lymphatic system, for example, by administering therapeutics directly into and through the lymphatic system, we think is very powerful. The brain-immune-gut crosstalk, and you've heard of the microbiome, for example, as I think a really key area of that crosstalk, but we think the lymphatic system is the next frontier there.
ALEX PHILIPPIDIS: Evan?
KEN DAVIES: Thanks, Alex. Daphne, does your whole pipeline revolve around the BIG axis, or is that simply the main thrust of your research and development program?
DAPHNE ZOHAR: Yeah. I think that what it does is it gives us some unique insights to what is happening in the biology that then can be applied to practical approaches that one could intervene to develop new therapeutics. That is a lens that we're looking at. The other lens is the disease-specific lens. We use it to generate ideas, and we're learning about these ideas before they're published, and able to do experiments to validate some of them.
DAPHNE ZOHAR: And many times we'll do those experiments and nobody will ever hear about the program because it won't make it to our pipeline.
KEN DAVIES: You're watching Close to the Edge, the new show from GENEDGE, the premium subscription channel of Genetic Engineering and Biotechnology News. I'm Kevin Davis, joined by Alex Philippidis, the Senior Business Editor of GEN, and we're delighted to be joined by Daphne Zohar. Daphne, PureTech Health, you have assembled an absolutely extraordinary board of advisors and talents. and there are many great advisory boards in the biotech industry, and especially in the Boston area.
KEN DAVIES: But you have, among others, Nobel laureate Bob Horvitz, serial entrepreneur MIT'S Bob Langer, Raju Kucherlapati, the co-founder of Millennium Dennis Ausiello, John LaMattina, the Pfizer veteran, and many other distinguished guests. How do you marshal this talent? I mean, how important is it that you've brought such an A-list together on the team? And how do they contribute beyond just being sort of casual advisors?
KEN DAVIES: How intimate is their role in deciding which projects you pursue?
DAPHNE ZOHAR: It's really involved. And I think that they are passionate about what we're doing. Bob Langer was a co-founder of PureTech, and I was really lucky to meet him early on when I had this idea of founding PureTech. And I didn't really know anybody in the industry. We didn't have any money, and we didn't have any projects assembled. So he, I think to his credit, took a big bet on this idea and helped me to co-found PureTech.
DAPHNE ZOHAR: Along with him was Ben Shapiro, who was Executive Vice President at Merck. When you have people like that, that can open a lot of doors. And we took this approach of bringing together leading experts in a field. Having done that a few times, we have examples, for example, a track record of successfully taking new ideas and bringing them to patients, bringing them all the way through regulatory approvals, and I think also being really fair with people.
DAPHNE ZOHAR: So having them participate in the-- being able to participate with ideas, but also giving them equity and treating them fairly. I think that over time has created a critical mass. And initially it was people wanted to be in the room with Bob and Ben and others. And then you sort of amass this interesting experience. The ability to actually impact patients, I think, is really important.
DAPHNE ZOHAR: A lot of times what we hear from the scientific collaborators who are on the advisory boards of a lot of big pharma companies and biotech companies. They say, "Well, we're on these advisory boards. But people come in and they ask us to look at their pipelines. And then we give them our advice. And then we come back 18 months later, and it's still the same stuff and they didn't really do much with our advice." And in the case of PureTech, what they really feel is that they're able to make an impact.
DAPHNE ZOHAR: They're able to say, "Here's this one idea that I always wish was developed and wasn't, and here's the reason why." And we then go and we actually follow up on it and try to solve that problem. And that's how we came up with the KarXT program was we had a group of experts, schizophrenia experts, and they kept talking about xanomeline, which was developed at Eli Lilly, a muscarinic agonist. And the issue was that there was some tolerability issues around the GI, and it was held back, was not developed.
DAPHNE ZOHAR: And we went and got access to that program and came up with this idea of coupling the muscarinic agonist, xanomeline, with a muscarinic antagonist, trospium chloride. And then we went ahead and did a study that proved that that addressed the tolerability issues, and that became Karuna. And we brought in Steve Paul, who had initially developed xanomeline at Eli Lilly.
DAPHNE ZOHAR: The idea was that, and we've done this across our wholly owned programs as well as the founded entities, is making an impact, I think, is what attracts people to this group and to the model.
KEN DAVIES: So part of your job, it sounds like, is reaching out to investigators who aren't part of the PureTech ecosystem, maybe haven't even heard of the company, but where you and your advisors have perhaps just met and identified a really cool paper or really cool problem. And am I right in thinking that, that sometimes you're reaching out, saying, "We think there's a drug here or maybe even potentially a spin-out company, and would you like to talk to us further?"
DAPHNE ZOHAR: Absolutely. I think sometimes we come with a specific hypothesis and then we're looking at which academics are currently working in that space. Because if they've been working on partially addressing the issue that we want to address, and they've been working on it for 15 years, we're not going to start from scratch. We're going to license in their technology, collaborate with them.
DAPHNE ZOHAR: And oftentimes that idea generation will come from PureTech team members. But other times it will be in this sort of group discussions that we have around solving a specific problem. Or, for example, in the case of our program that we brought in from Teva, which acquired Auspex, one of the companies that one of my C level colleagues, he put together.
DAPHNE ZOHAR: That came from a brainstorm in lymphedema, which is a very big problem. There's a million patients and there's no therapeutics. We started to look at lymphedema and the cycle of inflammation and fibrosis, realized that there had been this program that was developed by Bharatt's former company Auspex, which was acquired by Teva, and Teva wasn't developing it. So we acquired that from Teva.
DAPHNE ZOHAR: And then we were advancing it for lymphedema. But then became aware of what was happening with long COVID from our pulmonologist contacts. So we decided to go ahead and see if we could do something in the area of long COVID. And of course we're advancing it in IPF because of this inflammation fibrosis capability.
KEN DAVIES: You mentioned that you like, your team likes to do the critical experiment, even if it means that that puts an end to the project. Have there been any examples that come to mind over the last year or two where you were really excited about sort of the theoretical promise of a particular new project perhaps that ultimately you decided, I'm sorry, guys, we're going to have to nix this because that experiment just didn't give us the answer we were maybe hoping for?
DAPHNE ZOHAR: Absolutely. Oftentimes that happens before we're committing to the program. But, for example, in the case-- I'll give you a positive one and then I'll give you the negative one. In the case of this program that we're developing, we call it LYT-100, which targets inflammation and fibrosis, the key experiment that we wanted to do was a multiple ascending dose study to see if the tolerability advantages that we believed it had over pirfenidone, which is approved drug in IPF, whether that panned out.
DAPHNE ZOHAR: And we went ahead and did that study. If that hadn't gone well we would have shut down the program. But it went really well, and it made us expand what we were going to do with that program. Another example, depression is in the news today with Sage's data with zearalenone. We had a program that was really interesting that we were advancing for MDD.
DAPHNE ZOHAR: And it was based on an insight that people were noticing that after MRI the individuals that were being imaged felt happier. And then there was a couple of studies in academia. And what was isolated was the slow field magnetic stimulation. And we went ahead and actually did-- So there was a couple of academic studies that were positive in depression, and we went ahead and did four clinical studies.
DAPHNE ZOHAR: And we were doing that with collaborators. And we were able to get data which was not so different from some drug companies that might have advanced it. But we decided that we weren't going to move it forward. So we actually shut that program down. And it was a hard decision but we had set the bar earlier. We said, "If we don't meet this bar, we're going to shut it down." And we were able to move the resources to other programs.
KEN DAVIES: Yeah. Great. Alex, back to you.
ALEX PHILIPPIDIS: Thanks, Kevin. You mentioned in neuroscience, and there are programs and several other indications, is there a balance or preference the company wants. Given BIG axis, for example, do you look for more gastrointestinal, or are you a little more eclectic than that?
DAPHNE ZOHAR: Yes. In our wholly owned pipeline we're really focused on, we could think about the Big axis with a big I, immunology, our chief scientific officer is an immunologist, Joe Bolen. He's been developing mostly oncology drugs his entire career. He was the CSO at Moderna and Millennium. And everything that we're doing is kind of looking through the lens of immunology.
DAPHNE ZOHAR: But I'd say that for our wholly owned pipeline, it's the lymphatic system and related immunology sort of encompasses most of the things that we're doing. That leads us to, for example, lymphedema, inflammation fibrosis, oncology, and other immunology-related disorders, including, for example, IBD, so GI and inflammatory conditions like IBD.
ALEX PHILIPPIDIS: You mentioned long COVID earlier and I was hoping to drill a little bit into that. Obviously it wasn't on your radar a couple of years ago. How did the company come to that potential opportunity and that aspect of COVID?
DAPHNE ZOHAR: We were developing this LYT-100 program, which is targeting inflammation and fibrosis. And it's a deuterated form of pirfenidone, which is an anti-inflammatory, anti fibrotic agent, which is approved for idiopathic pulmonary fibrosis and has had data in other progressive fibrosing interstitial lung diseases. We're working with collaborating with a lot of pulmonologists. And we were hearing early on in the pandemic from pulmonologists that a substantial percentage of people who were recovering from COVID had issues, for example, lung scarring, and also longer-term pulmonary sequelae.
DAPHNE ZOHAR: They were thinking that maybe this could have some application because we know that, for example, in SARS classic and MERS you see this long term inflammation and fibrosis. And there's a belief that IPF may actually be initiated by acute events like viruses. The idea was, could you in this, we know that there's inflammation involved and we know that there's fibrosis, could you administer an oral anti-fibrotic, inflammatory agent, which is known to have efficacy in related pulmonary conditions?
DAPHNE ZOHAR: Could that have an impact? That was how we came to it, very much this disease focus. And we quickly--. And it was actually pretty interesting because the information that we had initially was sort of this vague anecdotal information. But as we were planning the study, more data was coming in, both from patients, self-reported data, but also from studies showing that this indeed was happening.
DAPHNE ZOHAR: And based on that we put together this study, and it's going on right now. And we hope to have data in the second half of this year.
KEN DAVIES: Great.
DAPHNE ZOHAR: Now one thing that was interesting about that though, is even when we were starting this study, everybody was asking, well, there's vaccines and is this even going to be relevant? And at that time I think there was like $5 million patients infected worldwide. And now, I don't know, I think it's probably close to 200 million. And we know that a substantial portion are going to have this issue and we believe that this is going to be endemic.
DAPHNE ZOHAR: So the chronic effects, we were a little bit ahead of the curve, but it seems to be really important and we're glad we can make an impact on it potentially.
ALEX PHILIPPIDIS: Great. And another exciting program actually concerns one of the founding entities of PureTech, tech and that's actually back in May Akili completed a $160 million financing. And the company had said at the time proceeds will accelerate commercialization of EndeavorRx, which is a digital therapeutic for ADHD, first and only FDA-cleared treatment delivered through a video game experience.
ALEX PHILIPPIDIS: Now, how closely did PureTech work with Akili? What does Akili do itself and what does PureTech help with?
DAPHNE ZOHAR: We actually-- that was another program that we started at PureTech, and Eddie Martucci, who is currently the CEO at Akili, was a team member at PureTech. Similar to Karuna, Vedanta, and Gelesis, that the team members at PureTech developed it and then went off into the founded entities. In the case of Akili, it actually came when we were working on that non-invasive neurostimulation project. We were really interested in other ways that one could influence attention and cognition, through, for example, experiences or devices.
DAPHNE ZOHAR: And we had actually an ongoing sourcing effort to see if you could actually influence cognition attention in that way. And we came across the work of Adam Gazzaley at UCSF who was studying attention and basically what's called cognitive interference processing or the way that you deal with distractions and interrupters. And it turns out that you can train this cognitive interference capability.
DAPHNE ZOHAR: And that actually transfers to have benefit it in attention working memory and overall cognition. And there the killer experiment was we're going to run a randomized controlled study using a game, another game that was pretested to have some belief of benefit by parents, right? Another game that was equally engaging that would be the placebo or sham in the study. And we ran that study, and that study was successful at its primary endpoint and then led to the approval of this video game.
DAPHNE ZOHAR: And the video game has these elements that are engineered into the game to train this ability to do two tasks at once. And there's a lot of science that went into it. And it's approved for pediatric ADHD. And for me that was actually very exciting. I have a daughter who has ADHD and she was one of the first people to test the program and was very excited when she learned of the approval.
ALEX PHILIPPIDIS: How broad of an application to video game therapeutics have? And what types of indications can you envision such games being developed for down the road?
DAPHNE ZOHAR: I think that anywhere where you have working memory, attention, and cognition issues, and that relates to a number of cognitive disorders, whether it be-- and this has not been approved for those other indications so I'm just speaking theoretically at this point. They do have some data in some of these indications. For example, some of the early experiments that Adam Gazzaley did were mild cognitive impairment.
DAPHNE ZOHAR: For example, with aging individuals, the ability to train attention, working memory. And then there's a range of other conditions. For example, I think the company is now pursuing long COVID-related brain fog. And there's a range of other indications that they're looking at this point.
ALEX PHILIPPIDIS: We saw a few days back aducanumab winning FDA approval in Alzheimer's. Can EndeavorRx be thought of someday as an Alzheimer's-related or dementia drug?
DAPHNE ZOHAR: Yeah. I think that some of the early work that they did was with healthy adults that had cognitive decline. But that is definitely an interesting area. They also did some really interesting validation work to show that you could identify people with early Alzheimer's, which was later then confirmed by imaging, by their ability to improve on the game. They did a study, which was a really well run study, to show that the Akili interface could be used as almost like a diagnostic for early Alzheimer's, which I think would be very relevant as you think about the rollout of something like aducanumab.
ALEX PHILIPPIDIS: You mentioned cognitive dysfunction following COVID-19 or COVID brain fog to use the scientific term. And I know that EndeavorRx Akili 101 are in development for that as well. How broad or limited a potential does that therapeutic have beyond ADHD?
DAPHNE ZOHAR: Yeah, I mean, I think that there's a sort of the general ability to improve attention, cognition, working memory, which cuts across multiple disorders. It's indicated right now for ADHD. But could there be a broader functionality that cuts across multiple disorders? Absolutely. And I can't speak to what the company's plans are with regard to other indications.
DAPHNE ZOHAR: Because now, at this point, we created Akili, but at this point it's a fully independent company. And that's the case with all of the founded entities. Our internal pipeline is fully managed by us, 100%, and we're going to take those programs forward ourselves. But the founded entities, you can almost think of them as children that we gave birth to, we raised through adolescence, and then somebody else is raising them.
DAPHNE ZOHAR: And that was one of the drivers for us to take these wholly owned programs and raise them ourselves all the way. In the past, the founded entities, we would take them from discovery through human proof of concept often, or generally proof of concept. And then the rest of the work was done by founded entities. And in the case of our wholly owned pipeline, we plan to take them all the way through to commercialization.
ALEX PHILIPPIDIS: When the Akili financing was announced, it was said that PureTech still held a roughly 23% stake in Akili. It's down from about 38% during the series C back in 2018. Why does PureTech keep a stake in entities like Akili, even though it dwindles over time, that adolescent model you just mentioned.
DAPHNE ZOHAR: Yes. I think that for us it's like the kids come and take care of you later. And like I said, we sold equity in one of our founded entities, or about $460 million this year, and that helped to fund all the work that we're doing through the first quarter of 2025 without having to raise capital. That's what's, I think, nice about the model and the history.
DAPHNE ZOHAR: And going forward we're also due royalties in some cases, as co-investors, for example, in Karuna, and Gelesis, which I'd be happy to say a few words about, because I think it's also relevant with the recent approval of Wegovy, Novo's GLP-1.
ALEX PHILIPPIDIS: Go ahead.
DAPHNE ZOHAR: I think that obesity space, in general, has been really-- it's been a really rocky area in biotechs. And the way I look at it is, there's a huge, huge unmet need, with hundreds of millions of people. I think it's over 150 million adults that have overweight or obesity. But the pharma industry made some attempts to developing new drugs, and there was a real issue because those drugs never really had great market uptake.
DAPHNE ZOHAR: And we believe the reason for that is that the drugs were indicated for the obese population. They had some significant adverse events and toxicities. And those really limited their use. They were not really able to be available to the broader population of overweight, so like the 25 to 30 BMI, which is about half of the population and is the biggest, we believe the biggest unmet need in many ways.
DAPHNE ZOHAR: Now what's interesting is the GLP-1s have started to really pick up steam in the obese area. Semaglutide has been, I think it's like $600 million in annual revenues, and that's injected. That was, I think, a daily injection with a lot of potential adverse events. But because they had very good efficacy that's really interesting and it's picking up.
DAPHNE ZOHAR: And Wegovy was just approved, with a better dosing schedule, for the obese population. We think that actually what we're going to see over the next few years is the obesity, overweight and obesity, landscape really coming into its own. And it's, as you know, huge unmet needs, comorbidities, even if you look at COVID, for example, but multiple comorbidities from diabetes to oncology related comorbidities.
DAPHNE ZOHAR: And we think what's going to happen is there's going to be these GLP-1s, which are indicated for the obese population. And then what Gelesis has developed, Plenity, is indicated for the entire population between 25 to 40 BMI. But because of its safety profile we think it's uniquely positioned in the 25 to 30 BMI. And they actually launched that that program, that product, Plenity, they did an initial launch, a targeted launch, during COVID via telemedicine in partnership with Ro, and it's the first primary care product to be launched, as far as we know, via telemedicine.
DAPHNE ZOHAR: So you call up a physician that works with Ro, and if you qualify you get it shipped your home within two days. And we think that with obesity, especially with overweight, physicians don't feel comfortable bringing this up with somebody who's just overweight. They're not going to be they're not going to bring it up unless they think there's a significant health issue. And you're not going to go to your primary care physician, often, and ask for a prescription for something.
DAPHNE ZOHAR: So this approach of being able to directly connect with people who are interested in managing their weight we think is going to be really interesting and potentially disruptive. And they're getting ready, both of those, by the way, Wegovy and Plenity are getting ready for a broad launch around the same time. So we can continue to track those.
ALEX PHILIPPIDIS: Daphne, PureTech's stock is close to its all time high. How much does that give the company the latitude to grow more quickly as a result?
DAPHNE ZOHAR: Yeah. If you look at the PureTech--. There's always been a value disconnect in our minds. If you just look at, for example, our public stakes in Karuna, Vor, or cash, you can see that there's still a lot of room to grow in terms of getting full credit for the value that's already there. There's seven other private founded entities. There's our royalty stake in Karuna, Gelesis, and Follica.
DAPHNE ZOHAR: And then we have this really advanced, at this point, wholly owned pipeline. We're getting ready for a phase 3 study in IPF. We have two phase 2s and one phase 1 in oncology. And then we have another program entering the clinic. I think that, on the one hand it's nice to see that we've begun to unlock some of the value. But we believe that there's still value disconnect. And part of that has to do with the fact that we listed in London initially in 2015, because there wasn't really many examples of this hub and spoke model in the US.
DAPHNE ZOHAR: And we've now done a cross listing in the US on NASDAQ. And we think over time that that is going to really help a lot, and it's helped to some extent as well. Especially now that there's other companies like us. Because we were sort of this strange creature that people didn't really have many examples of others like us.
ALEX PHILIPPIDIS: Great. And Ken?
KEN DAVIES: Thanks, Alex. We're almost out of time, Daphne, but thanks again for joining us. You're the first female chief executive we've had on Close to the Edge. So we're delighted you could make time to join us. GEN, as you may know, is a partner with the Rosalind Franklin Society, which is a fierce champion of women in science and the boardroom.
KEN DAVIES: Are you seeing more opportunities for women to join you in the higher reaches of the biotech industry? And what advice are you able to give women who are seeking to move into this sort of area?
DAPHNE ZOHAR: One of the things that I think is really intriguing and promising is that right now everybody wants women on their boards. It's actually hard to find women that you can bring onto your board because they're so sought after, especially women who have, for example, been CEOs or whatever. So I think that that's a very promising development. And I would say the same thing for other diverse populations.
DAPHNE ZOHAR: There is a concerted effort to try to bring diversity into the upper levels of organizations and into the board. And I have to say that in some of our ongoing searches, we're they're taking longer because we're insisting. We're like, we really want to see mostly diverse candidates. I think that's a really positive just a movement in the industry. In terms of advice to women, I think that one of the biggest problems we have is pattern recognition, is that there's just, if you don't have a lot of examples of successful female entrepreneurs, because you didn't have a lot of female entrepreneurs and CEOs to begin with, what ends up happening is people talk about the ones that are a little bit more infamous.
DAPHNE ZOHAR: Like something happens. So you have this kind of negative vicious cycle. And I think that what we have, though, is a lot of very successful women in the industry who have just been doing work, doing great, and I'm really hoping that more of that their work will be highlighted. It might be less interesting than something that's got a scandal going on.
DAPHNE ZOHAR: But it's very successful, very insightful women in the industry. And I think over the next few years we'll see more positive examples that can serve as patterns for the female CEOs of the future. My only advice would be to just continue doing great work and it will eventually be recognized. It might be recognized a little bit later. And it's definitely a challenge from a funding perspective because a very small percentage of women are general partners at venture funds and other investment groups.
DAPHNE ZOHAR: And people tend to invest in the people that look and are like themselves. There's some progress that's been made. But until we see more general partners, managing partner women at investment firms, I think it will still always be a little bit harder for women to raise money early on.
KEN DAVIES: Right. Right. Well, we're so glad to give you this platform to talk about your work and really set such an amazing example and I hope that proves inspirational in some way. That's all the time we have for this particular episode of Close to the Edge. We really want to thank our special guest today, Daphne Zohar, the Chief Executive Officer of PureTech health.
KEN DAVIES: Coming up in this series, more interviews with some outstanding chief executives, including John Evans of Beam Therapeutics, Laurence Reid of Decibel Therapeutics, and Ted Love of Global Blood Therapeutics. So lots to look forward to in the coming weeks, and we hope you'll join us for future episodes of Close to the Edge. GENEDGE is your source for the latest in-depth information on biotech entrepreneurship and technology development from the genetic engineering news team.
KEN DAVIES: We hope you'll take a closer look at GENEDGE and consider a free trial subscription so you can really get a taste of the outstanding reporting and journalism that Alex and his team are putting together.
ALEX PHILIPPIDIS: Close to the Edge is produced by Jamie Cohen and Leona Jabs. For Kevin Davies, I'm Alex Philippidis. Thank you for taking the time and watching, and goodbye for now.
DAPHNE ZOHAR: Thank you. [MUSIC PLAYING]
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