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Close to the Edge: What’s in Store for 2024?
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Close to the Edge: What’s in Store for 2024?
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[MUSIC PLAYING]
ALEX PHILIPPIDIS: Howdy, and welcome to Close to the Edge, the show from GEN Edge, where we invite leading executives scientists and innovators from groundbreaking biotech and pharma companies to discuss their science, technology, and their business strategy. I'm Alex Philippidis, senior business editor with Genetic Engineering and Biotechnology News or GEN, the world's first biotech publication, proudly covering the industry for more than 40 years. From the approval of Alzheimer's disease drug Lacombe, to Carl Icahn's battle over Illumina, to the first CRISPR edited therapy being approved, 2023 had more than its share of milestone shaping drug discovery, development, clinical trials, and commercialization.
ALEX PHILIPPIDIS: To look back at the year that is ending and look ahead to 2024, GEN has invited CEOs of three biotech companies to offer some valuable perspective on the industry's strengths and challenges and the strengths and challenges of their own companies. Happy to welcome Neil McFarlane, the CEO of Zevra Therapeutics. Karen Zaderej, CEO of Axogen, and Simon Arkell, CEO of Ryght. Close to the Edge is the flagship video program from GEN Edge, which delivers premium, in-depth biotech business news and strategy reporting plus company profiles, technology innovation, and key opinion leader or KOL interviews.
ALEX PHILIPPIDIS: On our website, you can register for the State of Cell and Gene Therapy 2024, our upcoming virtual summit in which luminaries from industry and academia discuss the latest research developments, innovations, and disruptive technologies in their respective specialties. Don't miss GEN's virtual summit coming up January 24th, the State of Cell and Gene Therapy. Our lineup of top tier speakers includes Peter Marks of the FDA, gene therapy pioneer Jim Wilson, and Victoria Gray, the first patient dosed with exa-cel, the sickle cell disease treatment and first ever approved CRISPR therapy.
ALEX PHILIPPIDIS: Watch for our registration page at our website at genengnews.com. That's g-e-n-e-n-g-n-e-w-s dot com. And hey, it's free. Neil, Karen, Simon, welcome to Close to the Edge.
KAREN ZADEREJ: Thank you.
NEIL MCFARLANE: Thank you.
SIMON ARKELL: Thanks for having me.
ALEX PHILIPPIDIS: First off, can you all three begin by telling me a little bit about your companies and what they do?
NEIL MCFARLANE: Karen, ladies first.
KAREN ZADEREJ: Thank you, Neil. So I am the CEO of a company called Axogen, and we focus in the area of peripheral nerve repair. So nerves are very simply the wires of your body. They carry signals from the central nervous system to allow your muscles to move and to give you feedback from the environment. And we help surgeons with a suite of products that are commercial at this point, that are available to help a surgeon when a nerve is transected.
KAREN ZADEREJ: How can that nerve be put back together in such a way that it regenerates and restores signaling and conduction? We help surgeons when nerves are compressed. Carpal tunnel syndrome is actually an example of that. But that concept is true anywhere in the body. It alters signal conduction. And we help to protect the nerves to prevent that compression from causing muscle weakness, numbness, tingling, and pain.
KAREN ZADEREJ: And finally, we help when surgeons need to end a nerve. Think of it as like leaving a live wire in your body, and that live wire can send aberrant signals back to the brain. That's actually what phantom limb pain is. But that concept is true if you have a surgery, and later you have postoperative pain that seems to not have a clear origin. Well, we're helping surgeons to identify now that that origin may be a nerve, and a way to manage the end of that nerve, so that it doesn't send those aberrant signals.
KAREN ZADEREJ: And so we continue to both develop new technologies and commercialize, all focused in the area of peripheral nerve repair.
ALEX PHILIPPIDIS: Simon or Neil?
SIMON ARKELL: Go ahead, Neil.
NEIL MCFARLANE: So Zevra Therapeutics is a fully integrated rare disease focused organization. Really focused in therapeutics. We have a portfolio of products. One that is commercially available today, Olpruva, for a very rare disorder called urea cyclic disorders. It's an FDA-approved product that we'll be commercializing in the first part of next year. We have another program that is in late stage development and will be refiled with the FDA called arimoclomol.
NEIL MCFARLANE: And that program is being developed for another ultra rare disorder called Neimann-Pick Disease Type C. Then we have a program called KP1077, which is serdexmethylphenidate, which is being developed for a rare sleep disorder called idiopathic hypersomnia. And that is in phase 2, which will read out data in the first half of 2024 to inform our phase 3 development.
NEIL MCFARLANE: And last but not least, we have a phase 3 development program for another rare disease called vascular Ehlers-Danlos syndrome, which is a rare collagen deficiency disorder that we actually are in phase 3 and enrolling in at this point. So all in all, we wrap that up as a public company with a strong balance sheet and a real need to execute for the next number of quarters.
ALEX PHILIPPIDIS: Great.
SIMON ARKELL: Thanks. Yeah. And I'm Simon Arkell. I'm co-founder and CEO of Ryght. And Ryght is not a biotech company. We're a company that is an enterprise software. We focus on artificial intelligence really centered around generative AI, which of course exploded into the consciousness about a year ago with ChatGPT. And one thing we realized as industry veterans who'd been in enterprise software and advanced analytics and artificial intelligence but in this industry of biopharma is that this technology just had huge promise.
SIMON ARKELL: And the issue with ChatGPT, of course, is that it was more of a toy for individuals to play with. You definitely couldn't cut and paste or upload your proprietary secrets if you were a biotech company into ChatGPT due to the security issues. And so we started the company and very quickly, received venture capital funding earlier this year to build an enterprise class, scale out, secure and compliant platform for the biopharma industry that allows biotech pharma companies, CROs, SMOs, software companies, and real world data companies to offer and utilize the benefits of generative AI in their data and their offerings.
SIMON ARKELL: And it's been quite the ride. There are some amazing opportunities. And just this brand new approach to addressing age old problems is pretty exciting for the industry.
ALEX PHILIPPIDIS: Great. So Simon, Neil, Karen, how do you each sum up what 2023 was like for your companies? How much has this been a year to remember, and how much a year to forget maybe?
KAREN ZADEREJ: I think every year had some good highs and some lows in it. We have we have a biologic of our flagship product, advanced nerve graft, that has been actually something that's been a transition from a product that's commercially available today as a tissue, so human tissue for transplantation, to the biologics regulations. And to our knowledge, we're the first transition of a tissue product into biologics.
KAREN ZADEREJ: And so we're really rounding the corner on finishing that. We'll actually have our pre-BLA meeting early next year and then start our rolling submission. So we should have that completed by the second quarter of next year. So we have been doing a tremendous amount of work, including completing our pivotal study and building a new biologics processing center, which we have started into, which is, it sounds funny to say this, but a dream come true for me to see this beautiful clean room system that we have.
KAREN ZADEREJ: So that's been spectacular. As well as from a commercialization standpoint, we continue to discover new areas that nerves are impacting patients and affecting their quality of life. And one of the areas that we've put a significant effort into the last few years and launched into a new segment is in the area of breast reconstruction. And so women historically who had a mastectomy were given then a reconstruction option that made them look normal, but to the woman, they did not feel normal.
KAREN ZADEREJ: And the majority of these procedures are actually implant-based procedures versus a flap or autologous flap reconstruction. We started in the autologous flaps but struggled to really come up with surgical techniques to allow us to do the implant-based procedures as well. Piloted some of that clinical work last year and actually fully launched into it this year.
KAREN ZADEREJ: And are finding tremendous receptivity from women who are saying, this is important to me. I want to hug my children and feel them. That's the most important thing about the outcome here. And so we're seeing significant interest and adoption by surgeons as they think about what's important to their patients. So that's been an important milestone for us as an organization.
NEIL MCFARLANE: At Zevra, we've gone through a transformational phase of the organization. It's pivoted from a pro-drug development technology company a few years ago into a transformational rare disease organization. It's really been focused in a number of areas, including acquisitions that most recently transpired with the acquisition of Acer Therapeutics. With that acquisition, we catapulted ourselves into a commercial stage organization with a commercial product and also a phase 3 development program, which actually accelerated our commercialization strategy from the arimoclomol resubmission of the NDA that we've actually got on track to deliver between now and the end of the year.
NEIL MCFARLANE: So for us, it's been transformational. A lot of these organizations that we've been a part of never get the honor of becoming a commercial stage organization. And for us, we've now been really heads down, part of the transformation, and going from not just a discovery and development organization but also now moving to the commercialization of OLpruva for UCDs, as well as the resubmission for arimoclomol and moving our later stage development programs along that line.
NEIL MCFARLANE: So really a heavy transformational year. Being nimble, making sure that we are focusing on the things that we can do really well without distraction and waste is very important for us. So 2023 has been a fantastic year, transformational, going into a number of catalysts into 2024, that we will have some data readouts that will allow us to inform how we move forward. It's an exciting time for us at Zevra.
SIMON ARKELL: And I'll speak to 2023 for our company, Ryght, but also maybe segue that into just the general industry, both on the tech side but also biotech side, if I could, Alex. And it's interesting. The world kind of woke up to artificial intelligence in a big way this year. That was obviously very helpful for us because we were starting a brand new company that was focused on AI for this industry. And it was a bit of a double edged sword because although I was frothy and very investable, and that helped us raise capital from six VCs as really just an idea earlier this year, we were able to get a company off the ground, which was wonderful for us.
SIMON ARKELL: And it's very exciting when you go from zero to one and building out great tech with a great team. But on the other side of that double edged sword is the fact that the general market, although we were in a very frothy and exciting sub segment of technology, the general malaise in venture capital continued from '22 into '23. And so it's been, I think, very difficult for not only other tech companies to get funding if they have general technology or something that wasn't in one of the really hot areas like generative AI, but also biotechs had a lot of trouble.
SIMON ARKELL: And so we're a software company that's selling to biotechs and many who at early stage are having a lot of trouble raising the capital in order to achieve their goals. And so that's really led to I think a shrinking in the addressable market if you're selling something that you want the biotechs to buy. So it becomes incumbent on those vendors in the industry like ours to really focus on the sweet spot, what's the right size of prospect and customer, et cetera.
SIMON ARKELL: But overall, 2023 I think was fabulous from a strategic and point in time perspective historically. You've seen maybe two tsunamis in the last 25 or so years in my career. One was obviously the dotcom and the internet coming into its own in the late '90s. That was followed up over course with mobile technology, leading to just a massive unlock and a brand new way of doing things for so many industries.
SIMON ARKELL: And then this AI boom. Although AI's been around, this is my third AI company. I started a company called Prediction in 2009, which was a predictive analytics, machine learning software platform company. That was great, and cool, and a new approach. But it wasn't a massive kind of sea change in the way things are done. And the development of large language models, which led to this boom, hitting that inflection point and going live basically a year ago has been, I think, a huge unlock because these problems are age old problems.
SIMON ARKELL: The problems we address in technology and the industry needs to address have not really gone away. They haven't changed that much. But if you can come at them with a brand new approach with new technology that was previously completely impossible, if not just very difficult, it's just led to just all sorts of creativity in the way businesses can be launched, business models can be designed.
SIMON ARKELL: And at the end of the day, helping save patient lives is something that's a really worthwhile ambition for so many in the industry. And I think this is a brand new approach to helping with that.
ALEX PHILIPPIDIS: Great. And just looking, both Simon and Neil, you've both mentioned the real rise of artificial intelligence or AI in terms-- if you too can begin our discussion of the broader biotech industry in 2023 with AI, and what allowed it to take off. Was it simply the rise of ChatGPT? Was it some other trends and things that affect a broader sweep of companies than we've seen in the past?
ALEX PHILIPPIDIS: How did AI come to loom so large in the industry?
NEIL MCFARLANE: I may start off just a bit and hand it off to the expert with Simon. But I don't think that, to Simon's point, he's been the founder of a number of AI companies. And I'm not so certain that it is a novel term. In our industry, much from identification of patients in clinical trials, all the way to identifying where to focus your sales forces to be most efficient and can actually add the most value to the prescribers, we've been leveraging technology for many, many years in this regard.
NEIL MCFARLANE: I think the opportunity for us to be able to leverage that and actually take it even further, because we are not AI experts. We're great drug developers. We're great folks who know how to get products to patients where they need it and allow us to make an impact in their lives. But I think working with experts like Simon and others in the area, that this is what they do, the technology that they built for us to be able to then accelerate clinical development, make it cheaper, make it more impactful for patients, and then getting those products to patients, so you can actually do it smarter, faster, and more focused is a welcomed opportunity.
NEIL MCFARLANE: Simon?
SIMON ARKELL: Yeah. Well, thank you. And I just realized that being a natural born salesperson that I have two prospects on the call today. So I'm going to have to call you guys straight after this and see if we can work a deal out. That aside, you're exactly right. This stuff is really, really difficult. And if you're AstraZeneca, you can afford a big team of data scientists and software developers, and you probably get a lot of VIP treatment from AWS, and Microsoft, and OpenAI, et cetera.
SIMON ARKELL: But some of the mid-market biotechs and below, they're never going to have the resources to try and figure this stuff out themselves. And so think of the early days when, I'm old enough now to have been selling websites and e-commerce sites in the mid '90s. And back then, when we sold an e-commerce site, we had to sell some nice Sun Microsystems hardware, which was a Sun UE 450, which cost about $30,000, $40,000.
SIMON ARKELL: You'd have to then find a co-location agreement at a data center and plug the server in. Then you had the middleware software and the e-commerce software, and it was a big project, and every e-commerce site took millions of dollars and a lot of expertise. But everyone knew that they needed websites and e-commerce sites back then. Now you've got, fast forward, you've got Shopify.
SIMON ARKELL: So is there an opportunity for a company that is expert in this stuff, which we are, and we think we are at least and trying to be, and really just hand it over on a silver platter with specific use cases, and co-pilots, and applications that basically allow you to identify that patient for the clinical trial, allow you to identify the probability that a research naive physician could be a successful PI? Allow you to identify the physicians who are treating enough of the patients that become a commercial target for a sales organization that's already through FDA.
SIMON ARKELL: There are just so many of these actual business use cases that drive business very quickly. But I could tell you that if you wanted to set this up, and tune LLMs, and manage vector databases, and build models, et cetera, et cetera, it would cost millions of dollars to set up and then millions of dollars on an ongoing basis to try and maintain that and make sure that you're using the language models that are not obsolete this month because it's happening so quickly.
SIMON ARKELL: And so I think AI has a massive unlocked potential for value, but it's super important to stick to your knitting as the biotech, the CRO, the CMO, whoever happens to be, to use it to solve these problems and not have to worry too much about the technology on the backend. But it is a really exciting time. Just some of the opportunities to move things much more quickly and be more deliberate to get drugs through FDA and then be successful post-FDA is just really exciting.
SIMON ARKELL: Not to mention drug discovery. We have one partner right now that has developed a precision AI model to identify molecules that could be very successful for other indications, which look like offlabel uses. But where do you want to apply these potential drugs, and where should you focus? Well, generative AI will be a great part of that, but it will wrap around the precision machine learning model.
SIMON ARKELL: So ChatGPT, of course, was exciting, and all of this creativity came in the thought process for what's possible. But it's not a be all and end all. It's something that is a supplement to traditional machine learning models that really can help solve the problem.
NEIL MCFARLANE: Yeah. I might add one more thing, Alex, if I could. I think that there's a unique ability for us to leverage large language models and AI when it comes to the rare disease community as well. Specifically when I think about the fact that some of the disease areas in which we're looking at today have less than 1,000 patients that are ever been identified in the United States. And they actually have symptomatology that may mask itself in something else.
NEIL MCFARLANE: And the diagnostic challenge for these patients to be able to actually get a clear diagnosis or progress far enough in their disease that they actually then get genetic testing and allows them to then get properly diagnosed. The opportunity for us to use these large language models and the ability to gather this data to say that maybe you had a seizure disorder, but your seizure disorder was actually being masked by some other underlying rare disease.
NEIL MCFARLANE: That if we could take the epic databases, and take all of the language out there, and then focus that into being able to get earlier genetic testing, and isolating the potential. And as everybody knows, we don't have a lot of therapies for rare diseases, and we're working hard to being able to do that. But that one patient that you can diagnose earlier before they progress is a very meaningful impact.
NEIL MCFARLANE: And I do believe that with AI, and large language models, and the opportunities that are there for us in the rare disease space, it can be really impactful.
KAREN ZADEREJ: So I was going to chime in. Not that, Simon, we're telling you all the places you can style this technology. But an idea that comes to mind--
SIMON ARKELL: No. I'm taking note. I have my notepad here.
KAREN ZADEREJ: So one of the things that we find in the area of nerve repair is nerve injuries are often, very, very often misdiagnosed. And there's not great diagnostics because there's not good imaging of nerves to understand what is something visually that you can see. So they do a clinical exam. And so one of the things that happens when a nerve is not in a good shape is it causes chronic pain.
KAREN ZADEREJ: And many, if not most of those patients get shuttled off into pain management where they go through escalating therapeutics that ultimately end in opioids and a substantial impact into their overall quality of life. Instead, there is a solution to the problem if the cause is actually an anomaly, and these are physical anomalies in the nerve that can be identified.
KAREN ZADEREJ: And there are certain markers in terms of clinical exam that you may be able to see but many physicians may not be familiar with. So I just think this provides a tremendous opportunity to both provide clinical data, so take real world data and convert it into real world evidence, which is a daunting challenge in the biologics world. But I think there's a real opportunity here to do that from a treatment pathway, historical treatment pathway, and opportunities to change that.
KAREN ZADEREJ: But also in patient identification, so that patients could be suggested, this might be an option for you. We find patients who typically come and see a surgeon about their nerve issue, have seen 12 to 20 specialists before they end up with that surgeon who can solve their problem. And so if you can take them off that wheel and get them a solution, both sooner impacting their quality of life, getting a better outcome, but also substantially reducing the overall cost of that episode of pain.
ALEX PHILIPPIDIS: Great. So AI obviously, one factor. But beyond that for your companies, how would you assess 2023 for the broader industry? What were some of the greatest triumphs and accomplishments, and what were some of the greatest challenges that remain into 2024?
SIMON ARKELL: Yeah. I kind of covered a little bit of that in the last one. So over to you guys.
KAREN ZADEREJ: You know, I think innovation continues to be the hallmark of the biotech industry in trying to continue to advance health care with new innovations that provide safe and impactful therapeutics that will save lives and change lives. I think 2023 had a number of those. 2024 will continue, as I see on the horizon, with more things. And as the technologies are continuing to advance that help us to think about discovery and making them faster, I just think that's going to continue to bode well for all of us who might be aging and thinking about these diseases as things that are in our future as well.
KAREN ZADEREJ: Having said that, I think we also have to continue to look at the cost. So many of these biologics that are coming out are astronomically expensive, and we haven't figured out that component of how can we provide these therapeutics and make them affordable and accessible for the populations that need them and get them covered in health care plans. And that's not just a 2024 issue, but it is an ongoing issue for the industry, to think about how do we continue to advance but advance in a way that health care can be provided?
ALEX PHILIPPIDIS: Now. I don't-- Karen, without obviously having an answer at the snap of a finger, but I'm curious if you have any insight on what would be a path toward finding answers on cost and affordability? Who should be at the table, their approaches. Maybe on an experimental basis, you've seen work elsewhere, or--
KAREN ZADEREJ: I wish I was the one that had the answer because I was sort of business [INAUDIBLE] on that.
ALEX PHILIPPIDIS: Right.
KAREN ZADEREJ: Look. I think ultimately, that we have to continue to think about these technologies in a way that we can scale them that make them affordable. Many of the advanced technologies we're talking about are fundamentally very expensive to get to market and expensive to provide. And so continuing to look at both that cost side I think is an important driver, but I don't think it's a simple answer.
KAREN ZADEREJ: So I don't know that there is get a group of people around the table, and poof will come up with an amazing solution. Maybe. Maybe. But I don't see it as quite that simple of a path. But I'll ask Neil, Simon, if you guys have other ideas.
NEIL MCFARLANE: I don't think that I have the answer either, but I hope that the answer continues to allow us to innovate and continues to allow us to bring meaningful therapies to patients. And Alex, I didn't answer your question on the 2023 and 2024 outlook. But I do think that your last question on adding value and building value for patients and delivering on the innovation that has happened. I believe that the last number of years, forget 2023, for 2022, it has been a desert for the biopharma world in terms of funding the innovation necessary to move the business forward.
NEIL MCFARLANE: And this will show up in 10 years from now when we're hoping to be able to bring another therapy that's just not quite ready yet. And we'll get there as we do that. But I think 2023, as I hope, and my crystal ball that is very cloudy hopes that by the end of 2024 we'll start to come out of this, but there are a lot of lessons. Number one, we have to be able to focus. We have to focus our organizations into doing one thing really well versus trying to do everything for everybody.
NEIL MCFARLANE: We in the industry need to earn the right to be able to do the next thing. And sometimes, our zeal to want to get out there and really move our technologies forward gets us distracted. So I think focus is what 2023 has taught us. I think the other perspective is building relationships, also having the ability to find great synergies. Now we have been the benefit of that at Zebra. We were an organization that pivoted from being a pro drug development company a few years ago into a rare disease organization.
NEIL MCFARLANE: We took the opportunity to take a product from a company called Orphazyme that had a complete response letter and then leverage the synergies that we had within our organization to now work on that and refile it to be able to get that product to patients. Likewise, another organization, Acer Therapeutics, another rare disease company that has done great work in building a number of products and taking them to the line, and then funding runs out.
NEIL MCFARLANE: And then we actually were able to come in and acquire that organization, again finding the synergies and focusing on doing one thing well. We're now accelerating our transition to becoming a commercial company, and we'll formally launch our first commercial product in January with then the synergies of potential second launch with arimoclomol, if approved, six months from then.
NEIL MCFARLANE: So I think we're learning that the need to focus, the need to partner, the need to find synergies is really what's going to be able to then give us the opportunity to then continue to build, and innovate, and bring products forward for patients. 2024, I do think we'll see more M&A, especially of smaller companies. I think that there are a lot of data inflection points that people have, again, tightened the purse strings and focused on doing one indication versus a lot.
NEIL MCFARLANE: And that data is starting to come out next year, which I believe will allow us to be able to start the catalyst necessary to move the industry forward. So that's my cloudy crystal ball. Hope it helps.
ALEX PHILIPPIDIS: You mentioned, Neil, the desert of financing in recent years. Any sense that the rain will come, so to speak, in 2024?
NEIL MCFARLANE: Like Simon, I've been in this industry now on the biopharma side for quite a while. Having seen the early 2000s, the mid 2010s, and now again. I don't think it starts raining. I think it's a mist that then allows us to deliver on some of the value drivers and catalysts that will come through in the first half of next year. I read a lot of analyst reports, and there are a lot of really smart folks that have a number of things that can really make an impact in patients' lives.
NEIL MCFARLANE: So I think that's what we need. We need to deliver value by having some positive momentum with delivering of some of the catalysts. We're in that boat too. We have got a number of catalysts into 2024 with our idiopathic hypersomnia program that will be delivering on a phase 2 that will inform our phase 3 program. And then obviously, our arimoclomol that I spoke about before.
NEIL MCFARLANE: That's a game-changer where there are no approved products for Neimann-Pick C in the United States. And there are a lot of patients who are waiting for us to be successful.
ALEX PHILIPPIDIS: So then, Neil, just to focus on you and Zevra for a little bit. Why did the company pivot from being a prodrug company to a rare disease developer?
NEIL MCFARLANE: I think that there are a couple of things that go along with that pivot. The first one is that the company had a very successful history of building, or the Kempharm Company that was the parent company prior to the rebranding had a very successful history of developing prodrugs that had a meaningful impact for patients. Aztarys was one of those that then got outlicensed to Corium, and they have been doing a wonderful job of getting that product to patients in a differentiated component.
NEIL MCFARLANE: And we collect royalties and milestones from them. But I think that there was also a need for the organization to focus on where they could add value and have smaller potential expenses that then would allow them to bring products to patients quicker. They did that and still leveraging the infrastructure that was built and a lot of the solid scientists that were within the organization.
NEIL MCFARLANE: And then that became the Zevra umbrella of being able to really hone and focus an organization that had great scientists, that had products that needed those scientists to be able to then reshape the NDAs or the NDA that could get arimoclomol into the agency by the end of this year. Also continue the development of our KP1077 program, the serdexmethylphenidate program for IH.
NEIL MCFARLANE: So that pivot was about resources, and that pivot was also about how do you bring value faster. And I think that our scientists have been able to do that so far. And 2024 is going to be a big year for us to lean in and execute.
ALEX PHILIPPIDIS: Now on arimoclomol, how is NPC treated now, and how does arimoclomol disrupt that with the new approach?
NEIL MCFARLANE: Yeah. I'll keep it at a very high level. You know, Neimann-Pick C has a multitude of varying symptoms that it comes with. And in the United States, there are no approved products. There are a number of products that are utilized for symptom management, and arimoclomol will be the first approved product in the space to be able to treat those patients. There are, of the offlabel products that are utilized, still an unmet need.
NEIL MCFARLANE: And arimoclomol, we hope, and again, the NDA will be refiled by the end of this year, and we'll have a six-month clock that will allow us to know if we can be successful in moving that along. But I have a high level of confidence that, as I mentioned, the scientists and the team that we had, who had been through a number of CRLs in the past by the way and successfully overcome them, they were the right individuals to be able to really shepherd the resubmission here moving forward for NPC patients.
ALEX PHILIPPIDIS: Great. And also on the purchase of Acer that you mentioned earlier. Was that mainly due to Olpruva, or were there other reasons, and what were some of those?
NEIL MCFARLANE: Yeah. Great synergies is what that is, Alex. I think the opportunity for us to accelerate our commercialization with a commercial-ready product that had been derisked and approved in an area in which we actually call on the centers of excellence within the United States, that have the metabolic geneticists, that have all of the infrastructure to be able to diagnose and treat rare disease patients. For arimoclomol, high level of overlap with the Olpruva patients as well.
NEIL MCFARLANE: So for us to be able to accelerate our commercialization footprint, bring forward our investment in commercializing arimoclomol by having a product that has a high degree of overlap. It gets right back to those synergies and the ability for us to focus. Being good stewards of capital. This is an opportunity for us to leverage an infrastructure that we were going to be building anyway, but we'll do it earlier.
ALEX PHILIPPIDIS: Great. And just on a personal note, two months ago, just two months ago, you assumed your current role as CEO of Zevra. It's the latest chapter for you in a career that stretched more than 25 years in the biopharma and life-sci field. What attracted you to have this company after last serving as CEO a couple of years back when Adamas Pharmaceuticals got acquired by Supernus?
NEIL MCFARLANE: Yes. I love complex businesses, and I love businesses that can make a tremendous impact in the lives of patients. We didn't talked about this earlier, but I started my career off as a nurse practitioner taking care of transplant patients and have always been heavily focused on improving the lives of people that have diseases that we just forget about or at end of life of an organ, that we then have to transplant them.
NEIL MCFARLANE: This organization and Zevra spoke to me in a lot of those ways. It's got a commercial product that in the Acer acquisition, that we can accelerate our commercialization footprint. It's got a late stage development program with arimoclomol that again, unmet need. and these kids and these the people, and their caregivers, and everybody else around the Neimann-Pick C community has been dying to be able to have something that they can leverage.
NEIL MCFARLANE: And through our early access program, we have about 70 patients who have been on therapy that we continue to be able to support. And I'll tell you, I've heard from those patients. We had an employee meeting a few weeks ago, and we had a family that came in and talked to us. We can't work fast enough to be able to impact the lives of those patients. And I actually sleep less and go to bed go to bed later, wake up earlier, and don't sleep because I have that image of that family that truly needs us to continue to work really hard to get there.
NEIL MCFARLANE: And in addition to that, we've got a pipeline. A pipeline that allows us to have a fully integrated organization and a solid balance sheet where we get royalties and milestones from the Azstarys Program. And I think as we get these catalysts across the line and are successful, we have the real opportunity to create a leading rare disease company. I've tried it before. A little too successful, maybe a little too fast.
NEIL MCFARLANE: But there's a real opportunity here with an organization that has a differentiated portfolio of products, a solid balance sheet, great management team, great board, and an opportunity to run, run, run for the rare disease people out there that we can serve.
ALEX PHILIPPIDIS: Does the Acer acquisition augur more growth through M&A for Zevra?
NEIL MCFARLANE: Well, I think we've got to integrate that program right we're talking about less than 2 and 1/2 weeks we closed the deal. So give me a little time before we start thinking about the next one. We've got to integrate that. We've got to focus on executing our NDA and then commercialize and launch that. So at least through the holidays and JP Morgan, we can chat again.
ALEX PHILIPPIDIS: So Karen, we connected a couple of years ago when Axogen was early along in transitioning the anchor market product Avance Nerve Graft into a biologic and over time, expanded its production of biologic products. How far along is that transition?
KAREN ZADEREJ: Now we're in the final stages. We're really into the logistics now of writing lots of documentation and getting ready to do the submission with the FDA. We've completed our pivotal study, met the top line data requirements, which was super exciting. Challenging study to run in traumatic nerve injuries just given the very unscheduled nature of those procedures. But completed a very solid study that is, I think, going to be very impactful for surgeons in their decision making.
KAREN ZADEREJ: We've also, as I said, built a new biologics processing center. So we're in the final stages of completing that. At the same time, we're continuing to look at innovation in other technologies that we're adding into our portfolio. Launching a recent nonbiologic product, a medical device called Axoguard HA Plus for protecting nerves that has been solidly well received by the marketplace.
KAREN ZADEREJ: Helping where those nerves might-- where you have a repair, where there's a compression, and there needs to be a lot of movement of that nerve. This provides an alginate surface that allows the physical gliding as well as the separation of that nerve from the surrounding tissue. So we're quite pleased with the reception of that and surgeon adoption as we continue to expand that as well.
ALEX PHILIPPIDIS: And to what extent does that new product plus the Avance Nerve Graft, how do these form sort of a continuum of products or kind of a broader sweep of offerings?
KAREN ZADEREJ: Yeah. We have actually now five commercially available products. So we have Avance Nerve Graft when a nerve is transected. How does the surgeon put that back together and bridge a gap between the two nerve ends? That's very common in trauma, but it's also common in many oncology procedures. When you remove a tumor, many of the morbidities of surgical oncology are really nerve injuries, where a nerve was adjacent to or entrapped in that tumor.
KAREN ZADEREJ: And of course, a segment is gone, and Avance Nerve Graft can be a way to restore that function for the patient. We have Axoguard Nerve Connector, which is when it's a sharp laceration, so either an iatrogenic injury in a surgical procedure, or you cut yourself with a kitchen knife preparing dinner. Those are all the types of things where there might not be any loss of segment of the nerve, but it's not continuous anymore.
KAREN ZADEREJ: Think of it as sort of duct tape for a nerve in a nonscientific way. That's the way it physically works. And then we have two protection products and a soon to be a third one actually that will launch next year. All looking at different parts of the body and different conditions where you need to protect a nerve, either from a natural constriction from surrounding tissues or in a traumatic procedure in the reconstruction.
KAREN ZADEREJ: They might use a plate on a bone that may now impinge on a nerve. All of those are situations where you may have a compression. So we have our Axoguard Protector Classic, the original, which is a material that remodels into a tunnel or a sleeve around the nerve that allows the nerve to be sort of separated and the surrounding tissue lifted up mechanically off of the nerve.
KAREN ZADEREJ: The HA Plus, as I talked about before. And we will be launching Avive Plus, which will provide a temporary barrier for those time frames where this is a temporary condition, where the surrounding tissue might, for various reasons in a reconstruction, only be impinging for a period of time, and you want that barrier to go away. And so Avive Plus will be launched next year, so that we have then three products in the protection area.
KAREN ZADEREJ: And then our last is Axoguard Nerve Cap. And that's a way to stop or end a painful neuroma from forming. So that's when the nerve is cut. Nerve fibers sprout out. That's where they send those aberrant signals back to the brain, like that live wire in the body. In this case, it's a way to cap it, so that it keeps the nerve fibers both linear, and essentially so that they don't continue to grow and the equivalent of shorting out against each other.
KAREN ZADEREJ: So we're able to provide surgeons this whole suite of tools, depending on the condition that they're in. Whether it's in a traumatic injury or a surgical procedure like a breast reconstruction, or they're trying to diagnose this patient with pain and go in and remove the painful condition around the nerve.
ALEX PHILIPPIDIS: Now earlier, Karen, you mentioned the processing center is close to completion. What sort of time frame do you see for that opening or beginning operation, and tell me a little bit about the center itself and what need it addresses.
KAREN ZADEREJ: Sure. No. We're delighted with it, and it actually is up and running, and we're releasing commercial product from the center, although that's quite new. So we're very excited about that. We've, over the years, leased clean room space. But as we were expanding, we recognized a couple of things. One, you need a lot more elbow room as you continue to grow. And as a biologic, that transition period to more space can get longer and longer.
KAREN ZADEREJ: And so we wanted to actually own our own facility, so we control our own destiny in that space. And so the new facility we have gives us three times the additional processing capacity than what we have today, and it also was built with the design to be able to continue to expand it. So we have additional clean rooms stubbed out that we can continue to expand into. And then we actually designed it so that we could add another 25,000ft and double that quantity yet again.
KAREN ZADEREJ: So we've got a long runway in this facility. It also was really trying to think about from an FDA standpoint, what are all the best practices we can do to create a rule state of the art facility? And so this was a very thoughtful process, in partnership actually with the FDA and thinking about the needs of the particular type of material that we process to make sure that we had an optimum facility.
KAREN ZADEREJ: And so we are up and running and processing today in this brand new space located just outside of Dayton, Ohio.
ALEX PHILIPPIDIS: Great. And Simon, so many companies are coming along, promising to use AI to revolutionize everything, whether it's drug discovery, or clinical trials, or commercialization. You've been in AI for a while, how was Ryght's approach truly groundbreaking when it comes to trials and commercialization?
SIMON ARKELL: I think it's the ability that we have to go very, very deep into this industry. We have a ton of domain experience across our team. Ex-Lumina people who are genetic genomics experts. My CTO and co-founder was the CTO at Sun Microsystems back in the day for their web services business, which used to be called SOA for all the old people out there. And we just seem to have a great team that really understands the depth of the problems that need to be solved in the industry.
SIMON ARKELL: And so although you could go off the shelf and find technology to build this yourself, I think having it trained and tuned specifically for the industry is really important. So we built an enterprise scale platform to do just that. And what we've learned by dealing with records representing hundreds of millions of lives in the database longitudinal lab data, other public domain data that's available through PubMed and many other sources, while dealing with this data, we realize that there is an expertise that comes from knowing how to manage the data that the AI is going to train on for this industry.
SIMON ARKELL: And so you could have an expert that is a data expert just generally. They're not going to have a clue how to really optimize the management of this data, structured and unstructured, which of course, is now fair game for this new AI technology. So when you learn how to chunk, and embed , and vectorize all these fantastic new terms that we're learning for the first time ever-- you know, I've been doing this for 30 years and have like 50 new words that I get to talk about on podcasts, which is wonderful.
SIMON ARKELL: But at the end of the day, there are very new approaches that come from this technology, but it's almost exponential in the complexity when you apply it to lab, and medical record, and genomic data for this industry. So it requires a lot of knowledge. I think by unlocking and simplifying that complexity, we're able to solve great problems for our customers. And so that's what we're doing.
ALEX PHILIPPIDIS: Great. Now Ryght uses a secure web-based platform, which as of November, was accepting requests to join a beta program. Where does that now stand, and what sort of timing do you have for fully deploying that?
SIMON ARKELL: Yeah. So we deployed our platform into production for some enterprise clients, and it's just doing extremely well, and it just continues to improve every week. But we decided to go with an approach to try and make this available to anyone in the industry. So if you're an individual working for a large pharma company, a biotech, a CRO, you're on site as an SMO, or just a research coordinator at a clinical trial site, for example, we've created a single user version where you can basically log in, sign up, use it for free, see the benefits of it.
SIMON ARKELL: And then our goal, of course, as a software company is to have as many people play with and have access to this technology as possible but then see these buttons they'd love to click but they can't until they get the enterprise subscription. And so there's an upsell opportunity there. And we're in beta for that single user product right now, but it will be a clickthrough license agreement. After the free trial or the free usage is exceeded, you could put in a credit card for just a few bucks a month to start using it individually, then go to teams and then enterprise.
SIMON ARKELL: But at the end of the day, we're solving problems for the companies, but we do want to have that available to just anyone.
ALEX PHILIPPIDIS: And now going back, I know Neil was talking about capital earlier. When Ryght was Synthetica Bio, the company launched and then secured capital earlier this year. Given that, why did Ryght rebrand itself recently?
SIMON ARKELL: Well, I guess you should probably never have ChatGPT pick your company name for you without thinking about it. So I literally did that. I'm like, what would be a good name for a company that's in AI in the biopharma industry? And really liked one of the options which was Synthetica Bio. And my co-founders thought, yeah, that's pretty cool. Let's go with that.
SIMON ARKELL: So we literally incorporated, because we needed to incorporate. This is the fun of going from something off a napkin to reality. You need to incorporate and register the name. So we did that and got off the ground with that. But we realized that we needed a punchier, shorter name. In fact, Ryght is spelled wrong. And so you'll see there that it's R-y-g-h-t.
SIMON ARKELL: And the y there not only looks oddly shaped, but it stands out because it's a different color, and that is our y as a company. It's a bit of a double entendre as well because generative AI writes content. It writes clinical trial protocols. It writes a lot of different stuff, all the documents that are needed to get through FDA. So it writes.
SIMON ARKELL: But also, I shouldn't admit this publicly, but by having Synthetica Bio, everyone for some strange reason thought we were a synthetic biology company, which of course, we're not. So that was really another reason not to have that name.
ALEX PHILIPPIDIS: Now, Ryght is privately held in a specialty of AI where a lot of the leading companies are publicly traded. What are advantages you see to being private, and what disadvantages, if any, do you see?
SIMON ARKELL: Yeah. Well, this is the seventh company I've started, the fourth venture capital-backed company. So I've never really worked for a very large company, definitely not a big public company. But there are only startups in this industry right now if they started from scratch with this new type of AI. It's so brand new. And so anyone who's got AI and is an established large company is either doing something with internal initiatives or has some sort of technical debt because they've pivoted and turned their machine learning into generative AI.
SIMON ARKELL: So I think there are great, great benefits, of course, in being a startup. You can be nimble. It's always, again, a double edged sword in that I think being an entrepreneur, you want to go after everything. So to Neil's point earlier, having focus right now is really, really important. I've always had this philosophy of figuring out.
SIMON ARKELL: Throw a lot of mud at the walls initially. Find out what's going to stick. You're never going to have enough data to make a decision. You double down, and you get escape velocity with that one idea, that one thing that you think can get traction. And if you're still in the game because you got escape velocity, then you can go out and do the other things over time.
SIMON ARKELL: But focus with anything is really important.
ALEX PHILIPPIDIS: Now Simon, before you co-founded Ryght, you were an Olympic pole vaulter for the Australian national team. You won championship honors in Australia and in the US. How is being CEO like being an athlete, and are there any skills from your days in pole vaulting that have proved most helpful to you?
SIMON ARKELL: I think there's lots of bad jokes possible about clearing the barriers, or clearing the bar, or new frontiers, et cetera. But I came over to the US in the mid '80s on an athletic scholarship. And I was always infatuated with technology. And I was just drawn to the high tech industry, which was Silicon Valley. So I started a couple of companies, just small kind of projects while I was still competing as an athlete.
SIMON ARKELL: And then was on the drug-- I also was never able to get a full time job because I was training for the Olympic games. And so the only way to eat was to start a company or do a project that made a little bit of money, so I could keep training and competing. And so that got into the DNA, and I've only ever started companies since. But I think the focus-- and it's something, again, Neil said earlier on.
SIMON ARKELL: If you are passionate about something, you live and breathe that. You stay up late. You get up early. And that's what you do. And trying to be the very, very best at what you do is something that translates from sports. In fact, I started a group on LinkedIn many years ago called Olympians in Business, and it has thousands of members.
SIMON ARKELL: And these are Olympic athletes who have transitioned into the business world after they retired. And it's been fabulous to actually have some friends who are trying to relaunch that and really turn it into an actual business for them. But you'll find in a lot of people, like hiring Olympic athletes, that they know what success looks like.
SIMON ARKELL: They know how to focus. They know how to execute. They work extremely hard with myopic focus. And that's only good stuff. I actually find it a bit harder in business, and it's taken a long time to get to where I am today because there is not a limited pool of people who just happen to have exceptional athletic talent and focus as there are in sports.
SIMON ARKELL: Basically anyone can compete in business, and they just have to be passionate enough and want to go for it. So it's a good skill set to have, but many people have it too, including the two CEOs who are also on this call.
ALEX PHILIPPIDIS: Great. Well, for them and for you, Simon, for all three of you, what are the sort of planned highlights you're anticipating announcing or accomplishing in 2024 as we start to wind down?
NEIL MCFARLANE: Karen?.
KAREN ZADEREJ: Yeah. Let me go first. Well, we have some big highlights for the coming year. Obviously, we will be completing our submission and the process of the BLA for Avance Nerve Graft. That's been a long process, but we're definitely looking forward to that. We are continuing to expand out and expand some tools in really raising patient awareness, so that they can be good advocates for their own health care decisions in the area where nerves may be affecting them.
KAREN ZADEREJ: So this is really refining our marketing outreach to patients to, again, help find them when they have certain characteristics that may lend them to being a nerve patient. We're launching the Avive Soft Tissue Matrix, which we're looking forward to early next year. So that will be an exciting new product addition. And continuing to expand out in breast neurotization in the surgical oncology for mandible reconstruction due to tumors, the surgical treatment of pain and traumatic injuries.
KAREN ZADEREJ: So all of those are initiatives that we're deep in and continuing to serve those patients with nerve injuries.
NEIL MCFARLANE: Yeah. As we finished 2023 and go into 2024, it is focused in three areas. Number one, it's the successful commercialization of Olpruva for the UCD patients that are out there. Number two, it is making sure that we get the arimoclomol NDA filed and start that preparation to make sure that we could, with success with the FDA, start to get that product to patients. And then lastly, we've got to finish our phase 2 study that we're anticipating data in idiopathic hypersomnia.
NEIL MCFARLANE: That will allow us to be able to inform a phase 3, both in idiopathic hypersomnia and the potential to expand that into narcolepsy. We've got to see the data, but it's about focus on those three areas.
SIMON ARKELL: And for us, as a new company, we're very excited now that we've completed the initial development of our platform, and we're taking customers live. And I'm extremely passionate about helping in the clinical trial process, even drug discovery, and then the other side of that, which is commercialization. But as I was mentioning earlier, to be able to help our biopharma clients and CROs and also the real world data companies and software vendors who are in this space with AI that can really change the game for them.
SIMON ARKELL: As I mentioned earlier, if you can not only identify a site for a clinical trial because they happen to be treating a certain number of patients that could be a good target for your trial, what if you could also have extreme clarity in how successful they're going to be? How about naive sites that are treating patients in, let's say, oncology who are generalist oncologists, but there's something through the data that helps us understand that oncologist could be a very successful PI?
SIMON ARKELL: Then why wouldn't you target them, set up their site, use it as a trial site for the clinical trial? And then most importantly for the patient, you only have a couple of at bats as a patient, especially in oncology. And if you're looking at clinical trials and there are two options for you, right now there are very few options for identifying which clinical trial a patient should be on.
SIMON ARKELL: And it shouldn't be hit or miss. You should know which one not only the patient will be possibly unsuccessful on but might be unsuccessful after initially looking like they're going to be successful. And so if you can inform the oncologist or the PI as to which clinical trial a patient should be on, you could save their lives. And so I think this technology just has this sort of utility and potential across the board, and 2024 is the year of making that happen.
ALEX PHILIPPIDIS: Great. And then taking a big picture view, any hopes in particular for the industry in the coming year that you'd like to see?
NEIL MCFARLANE: Maybe one from my perspective, and it goes back to the earlier comment that I made. I think our ability to continue to innovate and the need for us to have all of the respective players, from the financiers, to the great scientists of the world, to the folks who are commercializing it, the folks who are paying for it, the patient communities who are really striving for success for their loved ones. I hope that we can continue to deliver on that data and that innovation, moving not only into 2024 but many decades into the future.
NEIL MCFARLANE: The opportunity that you see, that I've seen in my two colleagues here on the call today between the device side, the biologics side, and the nerve grafts that Karen is working on, and the AI side that can be helpful to be able to drive patients to getting the right product at the right time and the ability to make an impact in their lives. I hope that we continue to have all of these smart stakeholders coming together that allows us to continue to innovate because with that, we can do good things.
KAREN ZADEREJ: Yeah. I would echo what Neil said and just add that the other piece that we need is the regulatory bodies to continue to come together and integrate the requirements, so that as you're starting to do some of these more complex programs, that you can do a single set of clinical studies that will be able to roll across the world and make it ultimately more affordable for you to be able to get products into many geographies around the world.
ALEX PHILIPPIDIS: Great. Well, sorry to say, our time is drawing to a close. So thank you, Karen. Thanks, Neil. Thanks, Simon for taking the time to be with us today.
NEIL MCFARLANE: Thanks for having us. Really appreciate it.
ALEX PHILIPPIDIS: And thanks to you for joining us on Close to the Edge. We'll have more insightful and interesting interviews in the weeks and months ahead. Today's Close to the Edge was produced by Liana Jabs of GEN's multimedia group. For her and everyone at GEN, I'm Alex Philippidis. Enjoy your day.
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ALEX PHILIPPIDIS: Howdy, and welcome to Close to the Edge, the show from GEN Edge, where we invite leading executives scientists and innovators from groundbreaking biotech and pharma companies to discuss their science, technology, and their business strategy. I'm Alex Philippidis, senior business editor with Genetic Engineering and Biotechnology News or GEN, the world's first biotech publication, proudly covering the industry for more than 40 years. From the approval of Alzheimer's disease drug Lacombe, to Carl Icahn's battle over Illumina, to the first CRISPR edited therapy being approved, 2023 had more than its share of milestone shaping drug discovery, development, clinical trials, and commercialization.
ALEX PHILIPPIDIS: To look back at the year that is ending and look ahead to 2024, GEN has invited CEOs of three biotech companies to offer some valuable perspective on the industry's strengths and challenges and the strengths and challenges of their own companies. Happy to welcome Neil McFarlane, the CEO of Zevra Therapeutics. Karen Zaderej, CEO of Axogen, and Simon Arkell, CEO of Ryght. Close to the Edge is the flagship video program from GEN Edge, which delivers premium, in-depth biotech business news and strategy reporting plus company profiles, technology innovation, and key opinion leader or KOL interviews.
ALEX PHILIPPIDIS: On our website, you can register for the State of Cell and Gene Therapy 2024, our upcoming virtual summit in which luminaries from industry and academia discuss the latest research developments, innovations, and disruptive technologies in their respective specialties. Don't miss GEN's virtual summit coming up January 24th, the State of Cell and Gene Therapy. Our lineup of top tier speakers includes Peter Marks of the FDA, gene therapy pioneer Jim Wilson, and Victoria Gray, the first patient dosed with exa-cel, the sickle cell disease treatment and first ever approved CRISPR therapy.
ALEX PHILIPPIDIS: Watch for our registration page at our website at genengnews.com. That's g-e-n-e-n-g-n-e-w-s dot com. And hey, it's free. Neil, Karen, Simon, welcome to Close to the Edge.
KAREN ZADEREJ: Thank you.
NEIL MCFARLANE: Thank you.
SIMON ARKELL: Thanks for having me.
ALEX PHILIPPIDIS: First off, can you all three begin by telling me a little bit about your companies and what they do?
NEIL MCFARLANE: Karen, ladies first.
KAREN ZADEREJ: Thank you, Neil. So I am the CEO of a company called Axogen, and we focus in the area of peripheral nerve repair. So nerves are very simply the wires of your body. They carry signals from the central nervous system to allow your muscles to move and to give you feedback from the environment. And we help surgeons with a suite of products that are commercial at this point, that are available to help a surgeon when a nerve is transected.
KAREN ZADEREJ: How can that nerve be put back together in such a way that it regenerates and restores signaling and conduction? We help surgeons when nerves are compressed. Carpal tunnel syndrome is actually an example of that. But that concept is true anywhere in the body. It alters signal conduction. And we help to protect the nerves to prevent that compression from causing muscle weakness, numbness, tingling, and pain.
KAREN ZADEREJ: And finally, we help when surgeons need to end a nerve. Think of it as like leaving a live wire in your body, and that live wire can send aberrant signals back to the brain. That's actually what phantom limb pain is. But that concept is true if you have a surgery, and later you have postoperative pain that seems to not have a clear origin. Well, we're helping surgeons to identify now that that origin may be a nerve, and a way to manage the end of that nerve, so that it doesn't send those aberrant signals.
KAREN ZADEREJ: And so we continue to both develop new technologies and commercialize, all focused in the area of peripheral nerve repair.
ALEX PHILIPPIDIS: Simon or Neil?
SIMON ARKELL: Go ahead, Neil.
NEIL MCFARLANE: So Zevra Therapeutics is a fully integrated rare disease focused organization. Really focused in therapeutics. We have a portfolio of products. One that is commercially available today, Olpruva, for a very rare disorder called urea cyclic disorders. It's an FDA-approved product that we'll be commercializing in the first part of next year. We have another program that is in late stage development and will be refiled with the FDA called arimoclomol.
NEIL MCFARLANE: And that program is being developed for another ultra rare disorder called Neimann-Pick Disease Type C. Then we have a program called KP1077, which is serdexmethylphenidate, which is being developed for a rare sleep disorder called idiopathic hypersomnia. And that is in phase 2, which will read out data in the first half of 2024 to inform our phase 3 development.
NEIL MCFARLANE: And last but not least, we have a phase 3 development program for another rare disease called vascular Ehlers-Danlos syndrome, which is a rare collagen deficiency disorder that we actually are in phase 3 and enrolling in at this point. So all in all, we wrap that up as a public company with a strong balance sheet and a real need to execute for the next number of quarters.
ALEX PHILIPPIDIS: Great.
SIMON ARKELL: Thanks. Yeah. And I'm Simon Arkell. I'm co-founder and CEO of Ryght. And Ryght is not a biotech company. We're a company that is an enterprise software. We focus on artificial intelligence really centered around generative AI, which of course exploded into the consciousness about a year ago with ChatGPT. And one thing we realized as industry veterans who'd been in enterprise software and advanced analytics and artificial intelligence but in this industry of biopharma is that this technology just had huge promise.
SIMON ARKELL: And the issue with ChatGPT, of course, is that it was more of a toy for individuals to play with. You definitely couldn't cut and paste or upload your proprietary secrets if you were a biotech company into ChatGPT due to the security issues. And so we started the company and very quickly, received venture capital funding earlier this year to build an enterprise class, scale out, secure and compliant platform for the biopharma industry that allows biotech pharma companies, CROs, SMOs, software companies, and real world data companies to offer and utilize the benefits of generative AI in their data and their offerings.
SIMON ARKELL: And it's been quite the ride. There are some amazing opportunities. And just this brand new approach to addressing age old problems is pretty exciting for the industry.
ALEX PHILIPPIDIS: Great. So Simon, Neil, Karen, how do you each sum up what 2023 was like for your companies? How much has this been a year to remember, and how much a year to forget maybe?
KAREN ZADEREJ: I think every year had some good highs and some lows in it. We have we have a biologic of our flagship product, advanced nerve graft, that has been actually something that's been a transition from a product that's commercially available today as a tissue, so human tissue for transplantation, to the biologics regulations. And to our knowledge, we're the first transition of a tissue product into biologics.
KAREN ZADEREJ: And so we're really rounding the corner on finishing that. We'll actually have our pre-BLA meeting early next year and then start our rolling submission. So we should have that completed by the second quarter of next year. So we have been doing a tremendous amount of work, including completing our pivotal study and building a new biologics processing center, which we have started into, which is, it sounds funny to say this, but a dream come true for me to see this beautiful clean room system that we have.
KAREN ZADEREJ: So that's been spectacular. As well as from a commercialization standpoint, we continue to discover new areas that nerves are impacting patients and affecting their quality of life. And one of the areas that we've put a significant effort into the last few years and launched into a new segment is in the area of breast reconstruction. And so women historically who had a mastectomy were given then a reconstruction option that made them look normal, but to the woman, they did not feel normal.
KAREN ZADEREJ: And the majority of these procedures are actually implant-based procedures versus a flap or autologous flap reconstruction. We started in the autologous flaps but struggled to really come up with surgical techniques to allow us to do the implant-based procedures as well. Piloted some of that clinical work last year and actually fully launched into it this year.
KAREN ZADEREJ: And are finding tremendous receptivity from women who are saying, this is important to me. I want to hug my children and feel them. That's the most important thing about the outcome here. And so we're seeing significant interest and adoption by surgeons as they think about what's important to their patients. So that's been an important milestone for us as an organization.
NEIL MCFARLANE: At Zevra, we've gone through a transformational phase of the organization. It's pivoted from a pro-drug development technology company a few years ago into a transformational rare disease organization. It's really been focused in a number of areas, including acquisitions that most recently transpired with the acquisition of Acer Therapeutics. With that acquisition, we catapulted ourselves into a commercial stage organization with a commercial product and also a phase 3 development program, which actually accelerated our commercialization strategy from the arimoclomol resubmission of the NDA that we've actually got on track to deliver between now and the end of the year.
NEIL MCFARLANE: So for us, it's been transformational. A lot of these organizations that we've been a part of never get the honor of becoming a commercial stage organization. And for us, we've now been really heads down, part of the transformation, and going from not just a discovery and development organization but also now moving to the commercialization of OLpruva for UCDs, as well as the resubmission for arimoclomol and moving our later stage development programs along that line.
NEIL MCFARLANE: So really a heavy transformational year. Being nimble, making sure that we are focusing on the things that we can do really well without distraction and waste is very important for us. So 2023 has been a fantastic year, transformational, going into a number of catalysts into 2024, that we will have some data readouts that will allow us to inform how we move forward. It's an exciting time for us at Zevra.
SIMON ARKELL: And I'll speak to 2023 for our company, Ryght, but also maybe segue that into just the general industry, both on the tech side but also biotech side, if I could, Alex. And it's interesting. The world kind of woke up to artificial intelligence in a big way this year. That was obviously very helpful for us because we were starting a brand new company that was focused on AI for this industry. And it was a bit of a double edged sword because although I was frothy and very investable, and that helped us raise capital from six VCs as really just an idea earlier this year, we were able to get a company off the ground, which was wonderful for us.
SIMON ARKELL: And it's very exciting when you go from zero to one and building out great tech with a great team. But on the other side of that double edged sword is the fact that the general market, although we were in a very frothy and exciting sub segment of technology, the general malaise in venture capital continued from '22 into '23. And so it's been, I think, very difficult for not only other tech companies to get funding if they have general technology or something that wasn't in one of the really hot areas like generative AI, but also biotechs had a lot of trouble.
SIMON ARKELL: And so we're a software company that's selling to biotechs and many who at early stage are having a lot of trouble raising the capital in order to achieve their goals. And so that's really led to I think a shrinking in the addressable market if you're selling something that you want the biotechs to buy. So it becomes incumbent on those vendors in the industry like ours to really focus on the sweet spot, what's the right size of prospect and customer, et cetera.
SIMON ARKELL: But overall, 2023 I think was fabulous from a strategic and point in time perspective historically. You've seen maybe two tsunamis in the last 25 or so years in my career. One was obviously the dotcom and the internet coming into its own in the late '90s. That was followed up over course with mobile technology, leading to just a massive unlock and a brand new way of doing things for so many industries.
SIMON ARKELL: And then this AI boom. Although AI's been around, this is my third AI company. I started a company called Prediction in 2009, which was a predictive analytics, machine learning software platform company. That was great, and cool, and a new approach. But it wasn't a massive kind of sea change in the way things are done. And the development of large language models, which led to this boom, hitting that inflection point and going live basically a year ago has been, I think, a huge unlock because these problems are age old problems.
SIMON ARKELL: The problems we address in technology and the industry needs to address have not really gone away. They haven't changed that much. But if you can come at them with a brand new approach with new technology that was previously completely impossible, if not just very difficult, it's just led to just all sorts of creativity in the way businesses can be launched, business models can be designed.
SIMON ARKELL: And at the end of the day, helping save patient lives is something that's a really worthwhile ambition for so many in the industry. And I think this is a brand new approach to helping with that.
ALEX PHILIPPIDIS: Great. And just looking, both Simon and Neil, you've both mentioned the real rise of artificial intelligence or AI in terms-- if you too can begin our discussion of the broader biotech industry in 2023 with AI, and what allowed it to take off. Was it simply the rise of ChatGPT? Was it some other trends and things that affect a broader sweep of companies than we've seen in the past?
ALEX PHILIPPIDIS: How did AI come to loom so large in the industry?
NEIL MCFARLANE: I may start off just a bit and hand it off to the expert with Simon. But I don't think that, to Simon's point, he's been the founder of a number of AI companies. And I'm not so certain that it is a novel term. In our industry, much from identification of patients in clinical trials, all the way to identifying where to focus your sales forces to be most efficient and can actually add the most value to the prescribers, we've been leveraging technology for many, many years in this regard.
NEIL MCFARLANE: I think the opportunity for us to be able to leverage that and actually take it even further, because we are not AI experts. We're great drug developers. We're great folks who know how to get products to patients where they need it and allow us to make an impact in their lives. But I think working with experts like Simon and others in the area, that this is what they do, the technology that they built for us to be able to then accelerate clinical development, make it cheaper, make it more impactful for patients, and then getting those products to patients, so you can actually do it smarter, faster, and more focused is a welcomed opportunity.
NEIL MCFARLANE: Simon?
SIMON ARKELL: Yeah. Well, thank you. And I just realized that being a natural born salesperson that I have two prospects on the call today. So I'm going to have to call you guys straight after this and see if we can work a deal out. That aside, you're exactly right. This stuff is really, really difficult. And if you're AstraZeneca, you can afford a big team of data scientists and software developers, and you probably get a lot of VIP treatment from AWS, and Microsoft, and OpenAI, et cetera.
SIMON ARKELL: But some of the mid-market biotechs and below, they're never going to have the resources to try and figure this stuff out themselves. And so think of the early days when, I'm old enough now to have been selling websites and e-commerce sites in the mid '90s. And back then, when we sold an e-commerce site, we had to sell some nice Sun Microsystems hardware, which was a Sun UE 450, which cost about $30,000, $40,000.
SIMON ARKELL: You'd have to then find a co-location agreement at a data center and plug the server in. Then you had the middleware software and the e-commerce software, and it was a big project, and every e-commerce site took millions of dollars and a lot of expertise. But everyone knew that they needed websites and e-commerce sites back then. Now you've got, fast forward, you've got Shopify.
SIMON ARKELL: So is there an opportunity for a company that is expert in this stuff, which we are, and we think we are at least and trying to be, and really just hand it over on a silver platter with specific use cases, and co-pilots, and applications that basically allow you to identify that patient for the clinical trial, allow you to identify the probability that a research naive physician could be a successful PI? Allow you to identify the physicians who are treating enough of the patients that become a commercial target for a sales organization that's already through FDA.
SIMON ARKELL: There are just so many of these actual business use cases that drive business very quickly. But I could tell you that if you wanted to set this up, and tune LLMs, and manage vector databases, and build models, et cetera, et cetera, it would cost millions of dollars to set up and then millions of dollars on an ongoing basis to try and maintain that and make sure that you're using the language models that are not obsolete this month because it's happening so quickly.
SIMON ARKELL: And so I think AI has a massive unlocked potential for value, but it's super important to stick to your knitting as the biotech, the CRO, the CMO, whoever happens to be, to use it to solve these problems and not have to worry too much about the technology on the backend. But it is a really exciting time. Just some of the opportunities to move things much more quickly and be more deliberate to get drugs through FDA and then be successful post-FDA is just really exciting.
SIMON ARKELL: Not to mention drug discovery. We have one partner right now that has developed a precision AI model to identify molecules that could be very successful for other indications, which look like offlabel uses. But where do you want to apply these potential drugs, and where should you focus? Well, generative AI will be a great part of that, but it will wrap around the precision machine learning model.
SIMON ARKELL: So ChatGPT, of course, was exciting, and all of this creativity came in the thought process for what's possible. But it's not a be all and end all. It's something that is a supplement to traditional machine learning models that really can help solve the problem.
NEIL MCFARLANE: Yeah. I might add one more thing, Alex, if I could. I think that there's a unique ability for us to leverage large language models and AI when it comes to the rare disease community as well. Specifically when I think about the fact that some of the disease areas in which we're looking at today have less than 1,000 patients that are ever been identified in the United States. And they actually have symptomatology that may mask itself in something else.
NEIL MCFARLANE: And the diagnostic challenge for these patients to be able to actually get a clear diagnosis or progress far enough in their disease that they actually then get genetic testing and allows them to then get properly diagnosed. The opportunity for us to use these large language models and the ability to gather this data to say that maybe you had a seizure disorder, but your seizure disorder was actually being masked by some other underlying rare disease.
NEIL MCFARLANE: That if we could take the epic databases, and take all of the language out there, and then focus that into being able to get earlier genetic testing, and isolating the potential. And as everybody knows, we don't have a lot of therapies for rare diseases, and we're working hard to being able to do that. But that one patient that you can diagnose earlier before they progress is a very meaningful impact.
NEIL MCFARLANE: And I do believe that with AI, and large language models, and the opportunities that are there for us in the rare disease space, it can be really impactful.
KAREN ZADEREJ: So I was going to chime in. Not that, Simon, we're telling you all the places you can style this technology. But an idea that comes to mind--
SIMON ARKELL: No. I'm taking note. I have my notepad here.
KAREN ZADEREJ: So one of the things that we find in the area of nerve repair is nerve injuries are often, very, very often misdiagnosed. And there's not great diagnostics because there's not good imaging of nerves to understand what is something visually that you can see. So they do a clinical exam. And so one of the things that happens when a nerve is not in a good shape is it causes chronic pain.
KAREN ZADEREJ: And many, if not most of those patients get shuttled off into pain management where they go through escalating therapeutics that ultimately end in opioids and a substantial impact into their overall quality of life. Instead, there is a solution to the problem if the cause is actually an anomaly, and these are physical anomalies in the nerve that can be identified.
KAREN ZADEREJ: And there are certain markers in terms of clinical exam that you may be able to see but many physicians may not be familiar with. So I just think this provides a tremendous opportunity to both provide clinical data, so take real world data and convert it into real world evidence, which is a daunting challenge in the biologics world. But I think there's a real opportunity here to do that from a treatment pathway, historical treatment pathway, and opportunities to change that.
KAREN ZADEREJ: But also in patient identification, so that patients could be suggested, this might be an option for you. We find patients who typically come and see a surgeon about their nerve issue, have seen 12 to 20 specialists before they end up with that surgeon who can solve their problem. And so if you can take them off that wheel and get them a solution, both sooner impacting their quality of life, getting a better outcome, but also substantially reducing the overall cost of that episode of pain.
ALEX PHILIPPIDIS: Great. So AI obviously, one factor. But beyond that for your companies, how would you assess 2023 for the broader industry? What were some of the greatest triumphs and accomplishments, and what were some of the greatest challenges that remain into 2024?
SIMON ARKELL: Yeah. I kind of covered a little bit of that in the last one. So over to you guys.
KAREN ZADEREJ: You know, I think innovation continues to be the hallmark of the biotech industry in trying to continue to advance health care with new innovations that provide safe and impactful therapeutics that will save lives and change lives. I think 2023 had a number of those. 2024 will continue, as I see on the horizon, with more things. And as the technologies are continuing to advance that help us to think about discovery and making them faster, I just think that's going to continue to bode well for all of us who might be aging and thinking about these diseases as things that are in our future as well.
KAREN ZADEREJ: Having said that, I think we also have to continue to look at the cost. So many of these biologics that are coming out are astronomically expensive, and we haven't figured out that component of how can we provide these therapeutics and make them affordable and accessible for the populations that need them and get them covered in health care plans. And that's not just a 2024 issue, but it is an ongoing issue for the industry, to think about how do we continue to advance but advance in a way that health care can be provided?
ALEX PHILIPPIDIS: Now. I don't-- Karen, without obviously having an answer at the snap of a finger, but I'm curious if you have any insight on what would be a path toward finding answers on cost and affordability? Who should be at the table, their approaches. Maybe on an experimental basis, you've seen work elsewhere, or--
KAREN ZADEREJ: I wish I was the one that had the answer because I was sort of business [INAUDIBLE] on that.
ALEX PHILIPPIDIS: Right.
KAREN ZADEREJ: Look. I think ultimately, that we have to continue to think about these technologies in a way that we can scale them that make them affordable. Many of the advanced technologies we're talking about are fundamentally very expensive to get to market and expensive to provide. And so continuing to look at both that cost side I think is an important driver, but I don't think it's a simple answer.
KAREN ZADEREJ: So I don't know that there is get a group of people around the table, and poof will come up with an amazing solution. Maybe. Maybe. But I don't see it as quite that simple of a path. But I'll ask Neil, Simon, if you guys have other ideas.
NEIL MCFARLANE: I don't think that I have the answer either, but I hope that the answer continues to allow us to innovate and continues to allow us to bring meaningful therapies to patients. And Alex, I didn't answer your question on the 2023 and 2024 outlook. But I do think that your last question on adding value and building value for patients and delivering on the innovation that has happened. I believe that the last number of years, forget 2023, for 2022, it has been a desert for the biopharma world in terms of funding the innovation necessary to move the business forward.
NEIL MCFARLANE: And this will show up in 10 years from now when we're hoping to be able to bring another therapy that's just not quite ready yet. And we'll get there as we do that. But I think 2023, as I hope, and my crystal ball that is very cloudy hopes that by the end of 2024 we'll start to come out of this, but there are a lot of lessons. Number one, we have to be able to focus. We have to focus our organizations into doing one thing really well versus trying to do everything for everybody.
NEIL MCFARLANE: We in the industry need to earn the right to be able to do the next thing. And sometimes, our zeal to want to get out there and really move our technologies forward gets us distracted. So I think focus is what 2023 has taught us. I think the other perspective is building relationships, also having the ability to find great synergies. Now we have been the benefit of that at Zebra. We were an organization that pivoted from being a pro drug development company a few years ago into a rare disease organization.
NEIL MCFARLANE: We took the opportunity to take a product from a company called Orphazyme that had a complete response letter and then leverage the synergies that we had within our organization to now work on that and refile it to be able to get that product to patients. Likewise, another organization, Acer Therapeutics, another rare disease company that has done great work in building a number of products and taking them to the line, and then funding runs out.
NEIL MCFARLANE: And then we actually were able to come in and acquire that organization, again finding the synergies and focusing on doing one thing well. We're now accelerating our transition to becoming a commercial company, and we'll formally launch our first commercial product in January with then the synergies of potential second launch with arimoclomol, if approved, six months from then.
NEIL MCFARLANE: So I think we're learning that the need to focus, the need to partner, the need to find synergies is really what's going to be able to then give us the opportunity to then continue to build, and innovate, and bring products forward for patients. 2024, I do think we'll see more M&A, especially of smaller companies. I think that there are a lot of data inflection points that people have, again, tightened the purse strings and focused on doing one indication versus a lot.
NEIL MCFARLANE: And that data is starting to come out next year, which I believe will allow us to be able to start the catalyst necessary to move the industry forward. So that's my cloudy crystal ball. Hope it helps.
ALEX PHILIPPIDIS: You mentioned, Neil, the desert of financing in recent years. Any sense that the rain will come, so to speak, in 2024?
NEIL MCFARLANE: Like Simon, I've been in this industry now on the biopharma side for quite a while. Having seen the early 2000s, the mid 2010s, and now again. I don't think it starts raining. I think it's a mist that then allows us to deliver on some of the value drivers and catalysts that will come through in the first half of next year. I read a lot of analyst reports, and there are a lot of really smart folks that have a number of things that can really make an impact in patients' lives.
NEIL MCFARLANE: So I think that's what we need. We need to deliver value by having some positive momentum with delivering of some of the catalysts. We're in that boat too. We have got a number of catalysts into 2024 with our idiopathic hypersomnia program that will be delivering on a phase 2 that will inform our phase 3 program. And then obviously, our arimoclomol that I spoke about before.
NEIL MCFARLANE: That's a game-changer where there are no approved products for Neimann-Pick C in the United States. And there are a lot of patients who are waiting for us to be successful.
ALEX PHILIPPIDIS: So then, Neil, just to focus on you and Zevra for a little bit. Why did the company pivot from being a prodrug company to a rare disease developer?
NEIL MCFARLANE: I think that there are a couple of things that go along with that pivot. The first one is that the company had a very successful history of building, or the Kempharm Company that was the parent company prior to the rebranding had a very successful history of developing prodrugs that had a meaningful impact for patients. Aztarys was one of those that then got outlicensed to Corium, and they have been doing a wonderful job of getting that product to patients in a differentiated component.
NEIL MCFARLANE: And we collect royalties and milestones from them. But I think that there was also a need for the organization to focus on where they could add value and have smaller potential expenses that then would allow them to bring products to patients quicker. They did that and still leveraging the infrastructure that was built and a lot of the solid scientists that were within the organization.
NEIL MCFARLANE: And then that became the Zevra umbrella of being able to really hone and focus an organization that had great scientists, that had products that needed those scientists to be able to then reshape the NDAs or the NDA that could get arimoclomol into the agency by the end of this year. Also continue the development of our KP1077 program, the serdexmethylphenidate program for IH.
NEIL MCFARLANE: So that pivot was about resources, and that pivot was also about how do you bring value faster. And I think that our scientists have been able to do that so far. And 2024 is going to be a big year for us to lean in and execute.
ALEX PHILIPPIDIS: Now on arimoclomol, how is NPC treated now, and how does arimoclomol disrupt that with the new approach?
NEIL MCFARLANE: Yeah. I'll keep it at a very high level. You know, Neimann-Pick C has a multitude of varying symptoms that it comes with. And in the United States, there are no approved products. There are a number of products that are utilized for symptom management, and arimoclomol will be the first approved product in the space to be able to treat those patients. There are, of the offlabel products that are utilized, still an unmet need.
NEIL MCFARLANE: And arimoclomol, we hope, and again, the NDA will be refiled by the end of this year, and we'll have a six-month clock that will allow us to know if we can be successful in moving that along. But I have a high level of confidence that, as I mentioned, the scientists and the team that we had, who had been through a number of CRLs in the past by the way and successfully overcome them, they were the right individuals to be able to really shepherd the resubmission here moving forward for NPC patients.
ALEX PHILIPPIDIS: Great. And also on the purchase of Acer that you mentioned earlier. Was that mainly due to Olpruva, or were there other reasons, and what were some of those?
NEIL MCFARLANE: Yeah. Great synergies is what that is, Alex. I think the opportunity for us to accelerate our commercialization with a commercial-ready product that had been derisked and approved in an area in which we actually call on the centers of excellence within the United States, that have the metabolic geneticists, that have all of the infrastructure to be able to diagnose and treat rare disease patients. For arimoclomol, high level of overlap with the Olpruva patients as well.
NEIL MCFARLANE: So for us to be able to accelerate our commercialization footprint, bring forward our investment in commercializing arimoclomol by having a product that has a high degree of overlap. It gets right back to those synergies and the ability for us to focus. Being good stewards of capital. This is an opportunity for us to leverage an infrastructure that we were going to be building anyway, but we'll do it earlier.
ALEX PHILIPPIDIS: Great. And just on a personal note, two months ago, just two months ago, you assumed your current role as CEO of Zevra. It's the latest chapter for you in a career that stretched more than 25 years in the biopharma and life-sci field. What attracted you to have this company after last serving as CEO a couple of years back when Adamas Pharmaceuticals got acquired by Supernus?
NEIL MCFARLANE: Yes. I love complex businesses, and I love businesses that can make a tremendous impact in the lives of patients. We didn't talked about this earlier, but I started my career off as a nurse practitioner taking care of transplant patients and have always been heavily focused on improving the lives of people that have diseases that we just forget about or at end of life of an organ, that we then have to transplant them.
NEIL MCFARLANE: This organization and Zevra spoke to me in a lot of those ways. It's got a commercial product that in the Acer acquisition, that we can accelerate our commercialization footprint. It's got a late stage development program with arimoclomol that again, unmet need. and these kids and these the people, and their caregivers, and everybody else around the Neimann-Pick C community has been dying to be able to have something that they can leverage.
NEIL MCFARLANE: And through our early access program, we have about 70 patients who have been on therapy that we continue to be able to support. And I'll tell you, I've heard from those patients. We had an employee meeting a few weeks ago, and we had a family that came in and talked to us. We can't work fast enough to be able to impact the lives of those patients. And I actually sleep less and go to bed go to bed later, wake up earlier, and don't sleep because I have that image of that family that truly needs us to continue to work really hard to get there.
NEIL MCFARLANE: And in addition to that, we've got a pipeline. A pipeline that allows us to have a fully integrated organization and a solid balance sheet where we get royalties and milestones from the Azstarys Program. And I think as we get these catalysts across the line and are successful, we have the real opportunity to create a leading rare disease company. I've tried it before. A little too successful, maybe a little too fast.
NEIL MCFARLANE: But there's a real opportunity here with an organization that has a differentiated portfolio of products, a solid balance sheet, great management team, great board, and an opportunity to run, run, run for the rare disease people out there that we can serve.
ALEX PHILIPPIDIS: Does the Acer acquisition augur more growth through M&A for Zevra?
NEIL MCFARLANE: Well, I think we've got to integrate that program right we're talking about less than 2 and 1/2 weeks we closed the deal. So give me a little time before we start thinking about the next one. We've got to integrate that. We've got to focus on executing our NDA and then commercialize and launch that. So at least through the holidays and JP Morgan, we can chat again.
ALEX PHILIPPIDIS: So Karen, we connected a couple of years ago when Axogen was early along in transitioning the anchor market product Avance Nerve Graft into a biologic and over time, expanded its production of biologic products. How far along is that transition?
KAREN ZADEREJ: Now we're in the final stages. We're really into the logistics now of writing lots of documentation and getting ready to do the submission with the FDA. We've completed our pivotal study, met the top line data requirements, which was super exciting. Challenging study to run in traumatic nerve injuries just given the very unscheduled nature of those procedures. But completed a very solid study that is, I think, going to be very impactful for surgeons in their decision making.
KAREN ZADEREJ: We've also, as I said, built a new biologics processing center. So we're in the final stages of completing that. At the same time, we're continuing to look at innovation in other technologies that we're adding into our portfolio. Launching a recent nonbiologic product, a medical device called Axoguard HA Plus for protecting nerves that has been solidly well received by the marketplace.
KAREN ZADEREJ: Helping where those nerves might-- where you have a repair, where there's a compression, and there needs to be a lot of movement of that nerve. This provides an alginate surface that allows the physical gliding as well as the separation of that nerve from the surrounding tissue. So we're quite pleased with the reception of that and surgeon adoption as we continue to expand that as well.
ALEX PHILIPPIDIS: And to what extent does that new product plus the Avance Nerve Graft, how do these form sort of a continuum of products or kind of a broader sweep of offerings?
KAREN ZADEREJ: Yeah. We have actually now five commercially available products. So we have Avance Nerve Graft when a nerve is transected. How does the surgeon put that back together and bridge a gap between the two nerve ends? That's very common in trauma, but it's also common in many oncology procedures. When you remove a tumor, many of the morbidities of surgical oncology are really nerve injuries, where a nerve was adjacent to or entrapped in that tumor.
KAREN ZADEREJ: And of course, a segment is gone, and Avance Nerve Graft can be a way to restore that function for the patient. We have Axoguard Nerve Connector, which is when it's a sharp laceration, so either an iatrogenic injury in a surgical procedure, or you cut yourself with a kitchen knife preparing dinner. Those are all the types of things where there might not be any loss of segment of the nerve, but it's not continuous anymore.
KAREN ZADEREJ: Think of it as sort of duct tape for a nerve in a nonscientific way. That's the way it physically works. And then we have two protection products and a soon to be a third one actually that will launch next year. All looking at different parts of the body and different conditions where you need to protect a nerve, either from a natural constriction from surrounding tissues or in a traumatic procedure in the reconstruction.
KAREN ZADEREJ: They might use a plate on a bone that may now impinge on a nerve. All of those are situations where you may have a compression. So we have our Axoguard Protector Classic, the original, which is a material that remodels into a tunnel or a sleeve around the nerve that allows the nerve to be sort of separated and the surrounding tissue lifted up mechanically off of the nerve.
KAREN ZADEREJ: The HA Plus, as I talked about before. And we will be launching Avive Plus, which will provide a temporary barrier for those time frames where this is a temporary condition, where the surrounding tissue might, for various reasons in a reconstruction, only be impinging for a period of time, and you want that barrier to go away. And so Avive Plus will be launched next year, so that we have then three products in the protection area.
KAREN ZADEREJ: And then our last is Axoguard Nerve Cap. And that's a way to stop or end a painful neuroma from forming. So that's when the nerve is cut. Nerve fibers sprout out. That's where they send those aberrant signals back to the brain, like that live wire in the body. In this case, it's a way to cap it, so that it keeps the nerve fibers both linear, and essentially so that they don't continue to grow and the equivalent of shorting out against each other.
KAREN ZADEREJ: So we're able to provide surgeons this whole suite of tools, depending on the condition that they're in. Whether it's in a traumatic injury or a surgical procedure like a breast reconstruction, or they're trying to diagnose this patient with pain and go in and remove the painful condition around the nerve.
ALEX PHILIPPIDIS: Now earlier, Karen, you mentioned the processing center is close to completion. What sort of time frame do you see for that opening or beginning operation, and tell me a little bit about the center itself and what need it addresses.
KAREN ZADEREJ: Sure. No. We're delighted with it, and it actually is up and running, and we're releasing commercial product from the center, although that's quite new. So we're very excited about that. We've, over the years, leased clean room space. But as we were expanding, we recognized a couple of things. One, you need a lot more elbow room as you continue to grow. And as a biologic, that transition period to more space can get longer and longer.
KAREN ZADEREJ: And so we wanted to actually own our own facility, so we control our own destiny in that space. And so the new facility we have gives us three times the additional processing capacity than what we have today, and it also was built with the design to be able to continue to expand it. So we have additional clean rooms stubbed out that we can continue to expand into. And then we actually designed it so that we could add another 25,000ft and double that quantity yet again.
KAREN ZADEREJ: So we've got a long runway in this facility. It also was really trying to think about from an FDA standpoint, what are all the best practices we can do to create a rule state of the art facility? And so this was a very thoughtful process, in partnership actually with the FDA and thinking about the needs of the particular type of material that we process to make sure that we had an optimum facility.
KAREN ZADEREJ: And so we are up and running and processing today in this brand new space located just outside of Dayton, Ohio.
ALEX PHILIPPIDIS: Great. And Simon, so many companies are coming along, promising to use AI to revolutionize everything, whether it's drug discovery, or clinical trials, or commercialization. You've been in AI for a while, how was Ryght's approach truly groundbreaking when it comes to trials and commercialization?
SIMON ARKELL: I think it's the ability that we have to go very, very deep into this industry. We have a ton of domain experience across our team. Ex-Lumina people who are genetic genomics experts. My CTO and co-founder was the CTO at Sun Microsystems back in the day for their web services business, which used to be called SOA for all the old people out there. And we just seem to have a great team that really understands the depth of the problems that need to be solved in the industry.
SIMON ARKELL: And so although you could go off the shelf and find technology to build this yourself, I think having it trained and tuned specifically for the industry is really important. So we built an enterprise scale platform to do just that. And what we've learned by dealing with records representing hundreds of millions of lives in the database longitudinal lab data, other public domain data that's available through PubMed and many other sources, while dealing with this data, we realize that there is an expertise that comes from knowing how to manage the data that the AI is going to train on for this industry.
SIMON ARKELL: And so you could have an expert that is a data expert just generally. They're not going to have a clue how to really optimize the management of this data, structured and unstructured, which of course, is now fair game for this new AI technology. So when you learn how to chunk, and embed , and vectorize all these fantastic new terms that we're learning for the first time ever-- you know, I've been doing this for 30 years and have like 50 new words that I get to talk about on podcasts, which is wonderful.
SIMON ARKELL: But at the end of the day, there are very new approaches that come from this technology, but it's almost exponential in the complexity when you apply it to lab, and medical record, and genomic data for this industry. So it requires a lot of knowledge. I think by unlocking and simplifying that complexity, we're able to solve great problems for our customers. And so that's what we're doing.
ALEX PHILIPPIDIS: Great. Now Ryght uses a secure web-based platform, which as of November, was accepting requests to join a beta program. Where does that now stand, and what sort of timing do you have for fully deploying that?
SIMON ARKELL: Yeah. So we deployed our platform into production for some enterprise clients, and it's just doing extremely well, and it just continues to improve every week. But we decided to go with an approach to try and make this available to anyone in the industry. So if you're an individual working for a large pharma company, a biotech, a CRO, you're on site as an SMO, or just a research coordinator at a clinical trial site, for example, we've created a single user version where you can basically log in, sign up, use it for free, see the benefits of it.
SIMON ARKELL: And then our goal, of course, as a software company is to have as many people play with and have access to this technology as possible but then see these buttons they'd love to click but they can't until they get the enterprise subscription. And so there's an upsell opportunity there. And we're in beta for that single user product right now, but it will be a clickthrough license agreement. After the free trial or the free usage is exceeded, you could put in a credit card for just a few bucks a month to start using it individually, then go to teams and then enterprise.
SIMON ARKELL: But at the end of the day, we're solving problems for the companies, but we do want to have that available to just anyone.
ALEX PHILIPPIDIS: And now going back, I know Neil was talking about capital earlier. When Ryght was Synthetica Bio, the company launched and then secured capital earlier this year. Given that, why did Ryght rebrand itself recently?
SIMON ARKELL: Well, I guess you should probably never have ChatGPT pick your company name for you without thinking about it. So I literally did that. I'm like, what would be a good name for a company that's in AI in the biopharma industry? And really liked one of the options which was Synthetica Bio. And my co-founders thought, yeah, that's pretty cool. Let's go with that.
SIMON ARKELL: So we literally incorporated, because we needed to incorporate. This is the fun of going from something off a napkin to reality. You need to incorporate and register the name. So we did that and got off the ground with that. But we realized that we needed a punchier, shorter name. In fact, Ryght is spelled wrong. And so you'll see there that it's R-y-g-h-t.
SIMON ARKELL: And the y there not only looks oddly shaped, but it stands out because it's a different color, and that is our y as a company. It's a bit of a double entendre as well because generative AI writes content. It writes clinical trial protocols. It writes a lot of different stuff, all the documents that are needed to get through FDA. So it writes.
SIMON ARKELL: But also, I shouldn't admit this publicly, but by having Synthetica Bio, everyone for some strange reason thought we were a synthetic biology company, which of course, we're not. So that was really another reason not to have that name.
ALEX PHILIPPIDIS: Now, Ryght is privately held in a specialty of AI where a lot of the leading companies are publicly traded. What are advantages you see to being private, and what disadvantages, if any, do you see?
SIMON ARKELL: Yeah. Well, this is the seventh company I've started, the fourth venture capital-backed company. So I've never really worked for a very large company, definitely not a big public company. But there are only startups in this industry right now if they started from scratch with this new type of AI. It's so brand new. And so anyone who's got AI and is an established large company is either doing something with internal initiatives or has some sort of technical debt because they've pivoted and turned their machine learning into generative AI.
SIMON ARKELL: So I think there are great, great benefits, of course, in being a startup. You can be nimble. It's always, again, a double edged sword in that I think being an entrepreneur, you want to go after everything. So to Neil's point earlier, having focus right now is really, really important. I've always had this philosophy of figuring out.
SIMON ARKELL: Throw a lot of mud at the walls initially. Find out what's going to stick. You're never going to have enough data to make a decision. You double down, and you get escape velocity with that one idea, that one thing that you think can get traction. And if you're still in the game because you got escape velocity, then you can go out and do the other things over time.
SIMON ARKELL: But focus with anything is really important.
ALEX PHILIPPIDIS: Now Simon, before you co-founded Ryght, you were an Olympic pole vaulter for the Australian national team. You won championship honors in Australia and in the US. How is being CEO like being an athlete, and are there any skills from your days in pole vaulting that have proved most helpful to you?
SIMON ARKELL: I think there's lots of bad jokes possible about clearing the barriers, or clearing the bar, or new frontiers, et cetera. But I came over to the US in the mid '80s on an athletic scholarship. And I was always infatuated with technology. And I was just drawn to the high tech industry, which was Silicon Valley. So I started a couple of companies, just small kind of projects while I was still competing as an athlete.
SIMON ARKELL: And then was on the drug-- I also was never able to get a full time job because I was training for the Olympic games. And so the only way to eat was to start a company or do a project that made a little bit of money, so I could keep training and competing. And so that got into the DNA, and I've only ever started companies since. But I think the focus-- and it's something, again, Neil said earlier on.
SIMON ARKELL: If you are passionate about something, you live and breathe that. You stay up late. You get up early. And that's what you do. And trying to be the very, very best at what you do is something that translates from sports. In fact, I started a group on LinkedIn many years ago called Olympians in Business, and it has thousands of members.
SIMON ARKELL: And these are Olympic athletes who have transitioned into the business world after they retired. And it's been fabulous to actually have some friends who are trying to relaunch that and really turn it into an actual business for them. But you'll find in a lot of people, like hiring Olympic athletes, that they know what success looks like.
SIMON ARKELL: They know how to focus. They know how to execute. They work extremely hard with myopic focus. And that's only good stuff. I actually find it a bit harder in business, and it's taken a long time to get to where I am today because there is not a limited pool of people who just happen to have exceptional athletic talent and focus as there are in sports.
SIMON ARKELL: Basically anyone can compete in business, and they just have to be passionate enough and want to go for it. So it's a good skill set to have, but many people have it too, including the two CEOs who are also on this call.
ALEX PHILIPPIDIS: Great. Well, for them and for you, Simon, for all three of you, what are the sort of planned highlights you're anticipating announcing or accomplishing in 2024 as we start to wind down?
NEIL MCFARLANE: Karen?.
KAREN ZADEREJ: Yeah. Let me go first. Well, we have some big highlights for the coming year. Obviously, we will be completing our submission and the process of the BLA for Avance Nerve Graft. That's been a long process, but we're definitely looking forward to that. We are continuing to expand out and expand some tools in really raising patient awareness, so that they can be good advocates for their own health care decisions in the area where nerves may be affecting them.
KAREN ZADEREJ: So this is really refining our marketing outreach to patients to, again, help find them when they have certain characteristics that may lend them to being a nerve patient. We're launching the Avive Soft Tissue Matrix, which we're looking forward to early next year. So that will be an exciting new product addition. And continuing to expand out in breast neurotization in the surgical oncology for mandible reconstruction due to tumors, the surgical treatment of pain and traumatic injuries.
KAREN ZADEREJ: So all of those are initiatives that we're deep in and continuing to serve those patients with nerve injuries.
NEIL MCFARLANE: Yeah. As we finished 2023 and go into 2024, it is focused in three areas. Number one, it's the successful commercialization of Olpruva for the UCD patients that are out there. Number two, it is making sure that we get the arimoclomol NDA filed and start that preparation to make sure that we could, with success with the FDA, start to get that product to patients. And then lastly, we've got to finish our phase 2 study that we're anticipating data in idiopathic hypersomnia.
NEIL MCFARLANE: That will allow us to be able to inform a phase 3, both in idiopathic hypersomnia and the potential to expand that into narcolepsy. We've got to see the data, but it's about focus on those three areas.
SIMON ARKELL: And for us, as a new company, we're very excited now that we've completed the initial development of our platform, and we're taking customers live. And I'm extremely passionate about helping in the clinical trial process, even drug discovery, and then the other side of that, which is commercialization. But as I was mentioning earlier, to be able to help our biopharma clients and CROs and also the real world data companies and software vendors who are in this space with AI that can really change the game for them.
SIMON ARKELL: As I mentioned earlier, if you can not only identify a site for a clinical trial because they happen to be treating a certain number of patients that could be a good target for your trial, what if you could also have extreme clarity in how successful they're going to be? How about naive sites that are treating patients in, let's say, oncology who are generalist oncologists, but there's something through the data that helps us understand that oncologist could be a very successful PI?
SIMON ARKELL: Then why wouldn't you target them, set up their site, use it as a trial site for the clinical trial? And then most importantly for the patient, you only have a couple of at bats as a patient, especially in oncology. And if you're looking at clinical trials and there are two options for you, right now there are very few options for identifying which clinical trial a patient should be on.
SIMON ARKELL: And it shouldn't be hit or miss. You should know which one not only the patient will be possibly unsuccessful on but might be unsuccessful after initially looking like they're going to be successful. And so if you can inform the oncologist or the PI as to which clinical trial a patient should be on, you could save their lives. And so I think this technology just has this sort of utility and potential across the board, and 2024 is the year of making that happen.
ALEX PHILIPPIDIS: Great. And then taking a big picture view, any hopes in particular for the industry in the coming year that you'd like to see?
NEIL MCFARLANE: Maybe one from my perspective, and it goes back to the earlier comment that I made. I think our ability to continue to innovate and the need for us to have all of the respective players, from the financiers, to the great scientists of the world, to the folks who are commercializing it, the folks who are paying for it, the patient communities who are really striving for success for their loved ones. I hope that we can continue to deliver on that data and that innovation, moving not only into 2024 but many decades into the future.
NEIL MCFARLANE: The opportunity that you see, that I've seen in my two colleagues here on the call today between the device side, the biologics side, and the nerve grafts that Karen is working on, and the AI side that can be helpful to be able to drive patients to getting the right product at the right time and the ability to make an impact in their lives. I hope that we continue to have all of these smart stakeholders coming together that allows us to continue to innovate because with that, we can do good things.
KAREN ZADEREJ: Yeah. I would echo what Neil said and just add that the other piece that we need is the regulatory bodies to continue to come together and integrate the requirements, so that as you're starting to do some of these more complex programs, that you can do a single set of clinical studies that will be able to roll across the world and make it ultimately more affordable for you to be able to get products into many geographies around the world.
ALEX PHILIPPIDIS: Great. Well, sorry to say, our time is drawing to a close. So thank you, Karen. Thanks, Neil. Thanks, Simon for taking the time to be with us today.
NEIL MCFARLANE: Thanks for having us. Really appreciate it.
ALEX PHILIPPIDIS: And thanks to you for joining us on Close to the Edge. We'll have more insightful and interesting interviews in the weeks and months ahead. Today's Close to the Edge was produced by Liana Jabs of GEN's multimedia group. For her and everyone at GEN, I'm Alex Philippidis. Enjoy your day.
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