AI transcript
0:00:03 Hi, and welcome to the A16Z podcast.
0:00:04 I’m Hannah.
0:00:10 This episode is all about the new medical paradigm of CAR T therapy, a new cancer treatment
0:00:15 that uses engineered T cells to attack cancer and has been so effective in treating childhood
0:00:19 leukemias, we believe it may actually be a cure.
0:00:24 In this conversation, Community CEO Oz Azam discusses with General Partner Jorge Conde
0:00:29 and myself all about what CAR T therapy is and how it all works.
0:00:35 Starting with the patient and cell journey to how this medicine is developed, manufactured,
0:00:40 delivered to patients, how different it is to traditional medicines, and then what it
0:00:45 will take to make these new treatments work on more kinds of cancer, scale to more patients,
0:00:47 and be more affordable.
0:00:51 And finally, what company building lessons can be learned from having built the first
0:00:54 CAR T company of this kind from the ground up.
0:00:58 This episode was recorded at the annual A16Z summit.
0:01:03 We’re here to talk about this new kind of therapy, CAR T therapy and what it means to
0:01:10 be building a company that is delivering this brand new medical paradigm for cancer treatment.
0:01:13 So let’s just start by giving a little bit of background.
0:01:16 What is your tagline of here’s what CAR T is?
0:01:21 So CAR T is also known as chimericantidin receptor therapies, nature’s biggest gift
0:01:25 that we were given in terms of protecting us from diseases, something called T cells.
0:01:28 They’re a subset of your blood cells that are called white cells.
0:01:33 White cells typically prevent infection disease, so they are always surveilling and protecting
0:01:34 you.
0:01:42 A B cell produces antibodies, a T cell actually hones in and gobbles up peptides and abnormalities
0:01:45 that are circulating in the system.
0:01:50 And the idea was, could you combine the features of a B cell and a T cell together?
0:01:52 And that’s where the chimera comes in.
0:01:57 So chimera was an ancient Greek mythological figure, right, that was a hybrid I think of
0:02:02 a female lion, a dragon and a serpent or something of that nature.
0:02:07 So the whole idea being, could you combine and create a blend of something with the idea
0:02:11 that you could create therapies around it.
0:02:16 And the number of the therapy really involves taking a patient’s T cells and we re-engineer
0:02:17 those T cells.
0:02:22 Think of it like a GPS system in cells that we’ve been able to engineer.
0:02:26 We take cells from a patient, we re-engineer them, we give them back and those cells detect
0:02:28 cancer and destroy them.
0:02:32 Best analogy is I can give is like a SIM card into the T cells.
0:02:37 That SIM card that gets expressed on the surface of those T cells is very unique, it only dials
0:02:38 one number.
0:02:43 And that number is a specific cancer antigen or a protein that’s an abnormal protein on
0:02:45 the surface of cancer cells.
0:02:50 And we’re able to get these T cells to then actually become killing machines in some ways,
0:02:56 whereby they identify an abnormal protein on the surface of a cell and they go and attack.
0:02:59 So let’s do what I call the patient journey and the cell journey.
0:03:02 So I’m going to take a profile of a child with leukemia.
0:03:08 You have a child of the age of three or four, they start getting bruising, they go to their
0:03:13 family practitioner, they do a CBC, they look at their blood count and they have massive
0:03:17 leukemia in terms of their white cell elevation.
0:03:22 People gets rapidly assessed, they start chemotherapy and great news, they respond.
0:03:26 And most kids with leukemia respond really well to chemotherapy.
0:03:31 Two years later, they’re a routine follow-up and boom, the next thunderbolt comes in.
0:03:34 Unfortunately, they’re starting to now get leukemic breakthrough.
0:03:36 There’s more chemotherapies provided.
0:03:43 But then there comes a point where these patients become what we say in the oncology world,
0:03:44 refractory relapsing.
0:03:49 So they’re refractory to any further chemotherapy occasion being given to them and they’re relapsing
0:03:51 because their disease is worsening.
0:03:57 And so that patient is then brought in to have their blood drawn to see, do they have
0:04:01 that right surface marker that you could create this engineer therapy for?
0:04:06 If they express something called CD19, then we basically harvest out their T cells in
0:04:11 a process called apheresis, whereby patients blood is withdrawn through a machine and it
0:04:14 filters out the white blood cells.
0:04:19 Those cells are then taken and they’re shipped to a central manufacturing facility in the
0:04:25 case of the University of Pennsylvania, they actually have their own manufacturing capability.
0:04:26 So they do it on site.
0:04:27 They do it all on site.
0:04:28 Okay.
0:04:29 And remember, this patient is sick.
0:04:30 Yeah.
0:04:31 So you’ve harvested their cells.
0:04:32 Yeah.
0:04:37 You then go through a process of seven to 10 days where you have to re-engineer those cells.
0:04:42 Those cells go through a process of cell selection, sort of right cells are extracted.
0:04:46 They’re then excited by a certain degree with certain technologies that basically make
0:04:51 the cells in a receptive state that you can then deliver a Trojan horse into it.
0:04:56 The Trojan horse is this payload that we deliver of the genetic code that expresses this new
0:05:00 surface marker called a cart on the surface of the cells.
0:05:04 You then go through a process of three days watching these cells, are they going to grow?
0:05:08 And you cross your fingers and toes because sometimes they don’t grow.
0:05:12 These are cells that become fatigued and they just don’t have that oomph, that energy
0:05:14 that’s needed to grow.
0:05:17 Then you have to harvest out the cells once they’ve grown.
0:05:19 Then you have to freeze them.
0:05:20 Then you have to ship them.
0:05:24 A mild chemotherapeutic regimen is given to the patient.
0:05:25 We kind of call it conditioning.
0:05:30 And conditioning is that you want to get the patients in a certain state that you create
0:05:35 space in their body for them to receive these cells and the cells to expand.
0:05:38 So the cells are given as one infusion.
0:05:42 And what you typically see is a spike in the patient’s fever.
0:05:46 These cells start to multiply very, very rapidly.
0:05:50 And at the same time, they’re pushing out massive amounts of protein and they start
0:05:53 to literally attack the cancer wherever they see it.
0:05:56 Cancer when it’s destroyed releases a lot of toxins.
0:05:59 And that manifests itself in something called cytokine release syndrome.
0:06:00 It’s like a storm.
0:06:01 It’s like a storm.
0:06:03 That’s what they call the cytokine storm.
0:06:07 And so having that patient available to be able to, for example, move to an ICU unit
0:06:12 if needed, it requires a lot of coordination and sophistication, right?
0:06:16 So you then go through that process and hopefully by three, four days you’re seeing that window
0:06:17 of, is this patient really responding?
0:06:21 If you don’t see the cytokine storm, it means the product’s not working.
0:06:25 We actually look forward to an adverse event, which is really weird in medicine.
0:06:28 Because if you don’t see it, you know the product’s not working.
0:06:33 28 days later when the patient is better, the fever’s subsided and you do a bone marrow
0:06:38 biopsy, you do various blood tests and you see over 90% of kids initially in the trials
0:06:41 got complete remission after 28 days.
0:06:46 And there are children out now, out, you know, seven, eight, nine years now.
0:06:47 And that is the cure.
0:06:49 That’s persistent and durable cure.
0:06:53 We hope that they remain in this state where these cells are constantly in surveillance
0:06:54 in the body.
0:07:00 So should a signal arise of an abnormal protein, these cells can then attack it.
0:07:03 So I’ve given you a sense of the cell journey and the patient journey.
0:07:05 Now you think about that, creating a product around that.
0:07:07 It’s a whole new area of medicine, right?
0:07:12 The infrastructure, how do you begin to scale a process like that?
0:07:15 To build the pipes and the infrastructure to scale?
0:07:21 If I go back to 2013, literally, we’d be in the size of a room like this podcast room.
0:07:25 And literally we would have tubes and bags hung on the wall.
0:07:30 It was literally our sort of brainstorming war room of how do we take this process from
0:07:36 an academic, open process, close the manufacturing, meaning lock it to good manufacturing practice
0:07:42 standards, process development, analytical development, vector scientists, and technical
0:07:44 operations personnel are working around the clock.
0:07:47 So again, very different way of practicing medicine, right?
0:07:52 This was like the Wild West in some ways in the early days, but we did it and we learned
0:07:54 a lot through that process.
0:07:58 We acquired our own manufacturing facility because we’re not in the business of just
0:07:59 creating product for chronic sake.
0:08:01 We want to actually expand it globally.
0:08:06 We need to bring down the cost of goods radically for these therapies because they are really
0:08:07 expensive to make.
0:08:12 So unless you invested upstream in there, then how are you going to be able to scale and
0:08:14 actually make these products affordable?
0:08:17 Isn’t the same time, you know, generate revenue for the company?
0:08:19 The process is so important.
0:08:21 It’s so different to traditional medicine.
0:08:25 So you have to be able to manufacture this therapy.
0:08:30 You’ve got to be able to manage the logistics that go from patient to the provider, from
0:08:34 the provider to the manufacturer, back to the provider, back to the patient, what you
0:08:36 call the vein-to-vein logistics.
0:08:45 So is there really any other way to do this but to be a full stack or fully vertically
0:08:50 integrated company if you’re going to commercialize these types of therapies?
0:08:54 I think the more and more you see where the world is moving to and you look at the personalized
0:08:58 nature of what we’re doing, whether these are current generation products or off the
0:09:04 shelf products in the future, that ecosystem being understood from the patient journey,
0:09:08 the cell journey, cell logistics to your point, adverse event management, and as you think
0:09:13 about the interface of tech for the future, which is going to be required here, whether
0:09:18 that being diagnostics, whether that being management of patient, patient selection,
0:09:24 or whether you’re looking at blockchain, for example, in terms of secure chain of identity.
0:09:28 Because look, if I’m taking your cells, you want to guarantee I’m giving your cells back,
0:09:29 right?
0:09:30 Right.
0:09:33 So there’s a whole security apparatus in this and that people just don’t consider when
0:09:34 they first get into it.
0:09:39 If we didn’t have that pillar of manufacturing, if we didn’t have the research engine, if
0:09:43 we didn’t have the ability to learn from each patient that we manufactured, what’s working
0:09:47 well, do we need to add a bit of this reagent, do we need to stimulate the cells in a certain
0:09:53 way, all of that repeat learning, that can only happen in a full stack company.
0:09:57 In order to be able to really maximize and create great products, we decided to own that
0:09:58 process ourselves.
0:10:03 So can you imagine that if we see success in a clinic and we don’t have the manufacturer
0:10:09 to go in hand, I kind of feel that’s unethical in terms of the breakthrough speed with which
0:10:14 science is evolving, but not being able to manufacture the product would be such a shame.
0:10:19 Building this new kind of technology, this new kind of medicine, the talent, the culture,
0:10:21 and the platform.
0:10:22 Everything new, essentially.
0:10:24 That sounds really painful.
0:10:25 It was not easy.
0:10:30 It was actually developing products in a different way against the paradigm.
0:10:35 So in our world of drug development and product development, there’s a very well-established
0:10:37 cycle of how you do things.
0:10:41 It’s memorialized with the FDA, there’s guidance, etc.
0:10:45 But try developing something that regulators have never done before, or companies have never
0:10:46 done before.
0:10:50 In my career, I never thought I’d work on something that could be curative.
0:10:55 I worked on things that could help people, they could improve their health.
0:10:59 I worked on many things that didn’t do anything for patients, products failed.
0:11:04 But once you’ve touched success in terms of curing a patient, and I use that word very
0:11:09 carefully because as a physician, you always think twice about you’re really curing somebody.
0:11:12 When you’ve done that with a product, it changes your whole perspective about medicine and where
0:11:14 the world could be.
0:11:18 If you have the right team behind you, if you have the right culture behind you, and
0:11:20 if you have the right platforms and technologies.
0:11:23 So you had 400 people within the Cell Engine Therapy Unit in Novartis.
0:11:26 You’re now the CEO of C-Munity, your own startup.
0:11:32 So C-Munity is a T-cell engineering company that’s focused on curing cancer.
0:11:38 We’re doing this by developing therapies in the form of either CARTs or TCRs, T-cell receptor
0:11:43 technologies, and mainly going down the road less trodden when it comes to the tougher
0:11:48 kinds of cancers that are mainly in the solitumous space as opposed to hematological cancers,
0:11:51 which there have been great successes in, still an unmet need.
0:11:56 But there’s an even huge, huge, bigger unmet need with patients with solid cancers, which
0:11:57 is where we really want to focus.
0:12:01 So taking what you did for blood cancers, essentially, and moving that to solitumous.
0:12:05 Correct, and pivoting from that, and the lessons that we’ll learn, and very, very important
0:12:11 lessons, taking that into how do we develop these therapies for patients who have no other
0:12:12 choices left.
0:12:15 Can I ask you a question around the technology and how you’re going to build out your product
0:12:16 pipeline?
0:12:17 Sure.
0:12:23 I’m going to hinge on how you can essentially engineer cells for increased and expanded
0:12:24 functionality.
0:12:25 Sure.
0:12:32 So one simplistic way to think about this is, in CAR-T, it’s an oversimplification to compare
0:12:33 it to software.
0:12:34 But I will.
0:12:39 Every generation of CAR-T is built on the previous generation in some ways, and you
0:12:41 can swap in modular components.
0:12:43 Cassettes, modules, whatever.
0:12:44 Yeah.
0:12:50 It’s the functionality so you can go across different and more complex cancers.
0:12:55 So going from liquid tumors, like the lymphomas, like the leukemias, into solid tumors.
0:13:00 I want to talk a bit about how you think about what needs to happen for you to bring the
0:13:01 cost down.
0:13:03 What has to happen from an engineering standpoint for that to happen?
0:13:04 Yeah.
0:13:06 So let’s break it down.
0:13:11 So how do T cells actually bind or stick to a target?
0:13:13 Think of Velcro, right?
0:13:16 So when Velcro attaches, the idea was that what you actually want is that Velcro never
0:13:17 to come off.
0:13:19 It sticks permanently, really well.
0:13:25 And that was known as high affinity, especially in terms of antibodies.
0:13:29 And people realize, actually, that’s not such a good idea because you actually get off target
0:13:30 effects.
0:13:31 You actually get something sticking where it shouldn’t.
0:13:32 There’s a problem.
0:13:37 So then this maturing of something called affinity tuning happened where it’s the Goldilocks
0:13:38 thing, right?
0:13:43 It’s too hard not to stuff just the right amount where you get a T cell touching and
0:13:47 activating, but not totally binding.
0:13:51 I think that’s been a bit of revolution in terms of T cell engineering thinking.
0:13:53 Then it’s actually developing multiple warheads.
0:14:00 So actually targeting more than one protein, abnormal protein, or antigen, that multivalency
0:14:01 as we call it.
0:14:04 And in certain cancers like glioblastoma, we know we probably have to attack three,
0:14:09 four different kind of surface marker proteins for patients to get a benefit.
0:14:13 Then there is the engineering component of getting these cells to power on.
0:14:17 So if you think of the engine of the cell, how do you really give it more choke so these
0:14:20 cells really power up and co-stimulate?
0:14:25 How do we armor these cells better to help them overcome immunosuppression?
0:14:30 Because Mother Nature’s, one of the things that she’s done an amazing job of is actually
0:14:32 giving cancer privilege, right?
0:14:36 And there are various ways in the system that cancer cells trick the human body.
0:14:38 One of them is immunosuppression.
0:14:42 So we now have the capability through gene editing, for example, to overcome that or
0:14:46 through arm ring of cells, which was not possible before.
0:14:50 There’s actually ways where you can target the outer casing, if I can call it of cancer,
0:14:54 and kind of make a dent in that armor to allow payloads to go in.
0:14:59 So payload delivery is another key factor, right, that’s changing the way we think about
0:15:01 liquid to solids.
0:15:07 So all these modules now, the lessons learned from hematological emergencies, now pivoting
0:15:11 towards solid tumors, these principles are going to be really important, not just for
0:15:14 companies like us, but for the entire field.
0:15:20 How do we get these therapies into patients earlier in their cancer journey, if and when
0:15:24 it’s appropriate for them to be treated with these kinds of therapies?
0:15:27 And what needs to happen from a product standpoint to enable that?
0:15:31 This whole sort of scale business, that’s really going to come where gene editing comes
0:15:37 into play, in theory, if you have not the patient cells, but cells from multiple sources.
0:15:43 So you’re a donor, I’m a donor, we have great cells, those universal cells be made into sort
0:15:47 of batches from which you can then create an off the shelf product.
0:15:50 That’s going to help reduce the cost of goods, and that’s where the future will move to.
0:15:54 And there are companies that are actually in that space now, we’re in the research stage
0:15:55 of that now.
0:15:59 But again, that’s going to be another flexion point for the field in terms of bringing out
0:16:00 costs.
0:16:07 Novartis, Kim Raya, the first CAR-T product, was going after leukemias, lymphomas, just
0:16:09 about 10% of all cancers.
0:16:13 You’re going after the other 90% plus.
0:16:21 So you’re going after a call at 10 times the market with a 10th of the team today.
0:16:25 Is there something fundamentally different about how you build a startup company from
0:16:32 scratch versus a startup company within a large company that you had at Novartis?
0:16:35 There’s huge differences.
0:16:37 Let’s talk about the talent.
0:16:42 So I quickly bought on board a very good colleague of mine from Novartis, Michael Cresciano,
0:16:47 and he is the resident dealmaker when it comes to everything sound gene therapies.
0:16:51 So between the two of us, we’d actually had a cultural sense of what we had built previously
0:16:55 and the essence of what we needed to keep, but what we needed to pivot to.
0:17:03 And then clearly the speed with which you have to recruit is a very different pace,
0:17:04 right?
0:17:09 I mean, within the Novartis world, it was fast because we went from two people to within
0:17:11 six months having 400 people.
0:17:16 But literally, we lifted and shifted groups out of different functions in.
0:17:18 Sometimes they had a choice, sometimes they didn’t.
0:17:24 But in the startup world, you really are relying on your network very heavily, but also really
0:17:30 digging in quickly about people who fit really well in big pharma may not necessarily work
0:17:34 out in startup situations and small biotech.
0:17:36 So really understanding what is the motive of that individual.
0:17:41 I mean, we get out of bed thinking about T-cells, we go to bed at night thinking about T-cells.
0:17:42 Yeah.
0:17:46 Well, to your point also in the startup, everyone is choosing to be there and they must be making
0:17:48 the choice from a kind of passion.
0:17:53 You know, many colleagues who came on board had experienced malignancy themselves, or
0:17:58 they’d lost a loved one or loved ones in many cases that becomes very, very personal.
0:18:01 In a small company, you have to phase and stage your hiring.
0:18:04 You can’t just do a scattergun approach, right?
0:18:08 Getting a high performing team set up quickly where you buffer each other’s weaknesses
0:18:10 but play to each other’s strengths.
0:18:15 That’s a really, really important trait in startups because there’s no room for insecurity.
0:18:20 You have to have huge self-awareness about what you know and what you don’t know and
0:18:21 times on your side.
0:18:28 It weighed heavily on me the letters and Facebook postings I got from patients and their families
0:18:29 in my former life.
0:18:32 The patients we needed to treat have tried absolutely everything.
0:18:34 The sense of urgency was there as well.
0:18:39 For the first 12 months, it was all we needed at that time to really secure the operations
0:18:40 of the company.
0:18:43 There were many times actually the company should have died.
0:18:48 For example, there was IP that maybe wasn’t what we thought it was before.
0:18:52 There were platforms that maybe the experiments weren’t reading out the way they thought they
0:18:53 would.
0:18:54 It all worked out.
0:18:59 But during that phase, I never knew I could be so tenacious because I tasted such huge
0:19:03 success in my former life to now do this again and think, “Oh my God, could we really
0:19:04 fail?”
0:19:06 And we really could have.
0:19:08 But it’s patients are waiting, right?
0:19:10 There’s nothing like famine to make you hungry.
0:19:11 Oh, absolutely.
0:19:12 Absolutely.
0:19:18 And the next phase of the people side really came in when we had to instill discipline
0:19:23 process, building our quality systems, starting to write protocols, starting to really gear
0:19:27 up for regulatory guidances, submitting INDs.
0:19:29 And sometimes you get people on the bus.
0:19:32 Then you get to figure out, are they on the right seat on the bus?
0:19:34 Because you hire utility players, right?
0:19:37 But you also need specialist players as well.
0:19:39 So how do you move them around the seats on the bus?
0:19:41 Like, should they have got on the bus?
0:19:42 Absolutely yes.
0:19:46 Then sometimes you realize, well, you know, this person may be better in this seat versus
0:19:47 that seat.
0:19:49 So we went through that phase as well.
0:19:52 And did you find that kind of internal cultural building?
0:19:58 I mean, because this is a new kind of bio company, really, where there are kind of internal
0:20:01 cultural issues as well, where you’re getting different types of people with different
0:20:02 approaches to things.
0:20:03 Sure, absolutely.
0:20:06 People bringing in different baggages, right, from a cultural perspective.
0:20:11 The teaming in our world is so different because you have to integrate what is traditionally
0:20:14 clinical thinking with manufacturing science thinking.
0:20:17 In our world, the process is the product, right?
0:20:18 That’s a very different proposition.
0:20:20 So let’s fast forward to the end of the journey then.
0:20:25 So let’s assume that you’re able to demonstrate that these therapies are effective, you’re
0:20:31 able to manufacture them, you’re able to manage the logistical complexities.
0:20:36 If we look at the first generation of CAR T therapies, is it fair to say that commercially
0:20:40 they haven’t lived up to the expectation of what they might look like?
0:20:44 I mean, first of all, introducing a new order in how medicine’s practice is not easy.
0:20:48 I mean, you’ve got to think about how a physician is going to get paid, how does a health care
0:20:53 system make money out of this, what’s the cost of infrastructure build, are they going
0:20:59 to actually invest in a stem cell lab, are they going to invest in the logistical wiring,
0:21:02 and at the same time, do clinical trials and also be a commercial center.
0:21:07 So I think people underestimated the complexity of what it would take.
0:21:13 But at the same time, nobody’s disputing the stellar clinical results that you get.
0:21:15 I think the curves will pick up.
0:21:20 It just took longer for the uptake for a specialty product to be introduced.
0:21:24 And hindsight, maybe there were certain things we could have done a lot earlier.
0:21:28 There’s a finite amount of resource investment you could make at certain pivot points within
0:21:30 the lifecycle of a product.
0:21:34 But I’m pretty optimistic that the players that are going to be in this space are going
0:21:39 to double down and increase the actual spend that’s needed to really make these products
0:21:43 successful because at the end of the day, none of us are in this business to break the
0:21:45 health care budgets of any country.
0:21:49 We also know we have a challenge because the products are expensive to develop.
0:21:53 I think over time, we’ve already seen this, the cost of goods have come down.
0:21:58 We’re one or two engineering steps away from some radical optimization of these products.
0:22:01 We are going to need access to large amounts of data.
0:22:08 We are going to need the AI and adjacent thinking to be blended into the cell journey and the
0:22:10 patient journey and the commercial journey.
0:22:14 The revolution started, it ain’t over yet, and there’s a couple more wins that I think
0:22:17 we’re going to see in the next couple of years in the T-cell engineering space.
0:22:23 Jorge, you also built a company where it required you to kind of like both create a new ecosystem
0:22:25 and enter the existing ecosystem.
0:22:29 What do you think is your primary tool when you were doing that in this particular space?
0:22:30 How did you navigate that?
0:22:35 When you think about new modalities, new therapies, you know, biotech-based products, the big
0:22:37 challenge is exactly as you say.
0:22:41 I mean, it’s just the acceptance of, first of all, clinical acceptance, which should
0:22:48 have a high bar in terms of what people think of as a new modality that’s worth pursuing.
0:22:50 That should be a high bar and it is.
0:22:54 But the reimbursement bar is also incredibly high for any new modality because the costs
0:22:56 are obviously additive at some point.
0:22:59 That tipping point, it does take longer than you think it’s going to take.
0:23:00 For sure.
0:23:05 But when it arrives, then the dominoes do start to fall quickly.
0:23:09 And so the one question to you as it relates to the cell therapies is one of the things
0:23:15 that most new therapies don’t have is the potential to demonstrate something that starts to look
0:23:17 like a cure.
0:23:23 And so because you had sort of these incredibly outsized effects for the first generation
0:23:29 of CAR-T, I would have thought that reimbursement would have followed pretty quickly because
0:23:32 you’re actually seeing children get cured.
0:23:33 It’s a really good point.
0:23:36 So I think for the leukemias for children, it was a no-brainer.
0:23:42 It happened, if you think about it, relatively quickly in the US because it was so compelling.
0:23:44 So what’s your standard of care?
0:23:47 Your standard of care is a stem cell transplant for a kid with leukemia.
0:23:53 So cost of a stem cell transplant, believe it or not, is $750,000 to $1.3 million, depending
0:23:55 on your ZIP code.
0:23:58 When you’ve fully loaded costs, you add it all in, right?
0:24:06 So you are pricing a product at $450,000, $425,000 in case of Kim Ryan, and after rebates
0:24:09 and discounts, whatever that is, right, you can figure out what that number is going to
0:24:10 be roughly.
0:24:14 You’re still getting pretty good value when you think about it.
0:24:20 I think the biggest thing for the payers was, and still remains, for cell therapies or gene
0:24:26 therapies, anything where there’s a price tag that is higher because of the cost of manufacturing,
0:24:33 for example, is that don’t burden us with a one-time upfront cost for your therapy.
0:24:38 We understand that you’ve spent a lot of money in R&D, but this whole notion that we’re
0:24:43 going to be able to discharge our cost up front as a big ticket, I think that’s a thing
0:24:44 of the past.
0:24:45 And there’s precedent now for that.
0:24:50 And you’ve seen presence now with innovation coming through in terms of reimbursement, pay
0:24:54 for performance kind of models, you’re going to see, I think, variations in that and versions
0:24:55 of that.
0:24:59 At the same time, the cost of goods of these products is coming down, be it gene therapy
0:25:00 or cell therapy.
0:25:04 It’s a math problem, right, engineering problem, and in the next five years, that will improve.
0:25:09 But payers, if you look at a medical director in Etna, United, whatever, they have a finite
0:25:10 pop.
0:25:14 They want to know, in four, five years’ time, what am I going to be dealing with, right?
0:25:19 They’re getting so much better now at engaging with companies like us to forecast and think
0:25:23 from an actuarial perspective, right, how am I going to manage a business in this area?
0:25:28 So part of it is, I want some companies like us to be progressive and be creative and have
0:25:32 the engagements earlier, you know, because it is a brave new world.
0:25:34 Nobody has the magic answer here.
0:25:39 So the earlier you get into dialogue with payers and advisors in that setting, the better off
0:25:43 we’re going to be for the sake of patience and for the company as well, long term.
0:25:46 So the first generation of car came out of Novartis.
0:25:54 The second generation of car, T, is coming out of companies like Team Unity.
0:25:58 There was a reason why the second generation didn’t come out of Novartis.
0:26:05 In other words, that you started a new company to go after sort of the next horizon.
0:26:10 How do you make sure that the third generation of car comes out of Team Unity and not out
0:26:13 of a new co that hasn’t been imagined yet?
0:26:14 Curiosity, right?
0:26:15 You have to have that.
0:26:17 Your bedrock is a company.
0:26:18 Where is the world moving to?
0:26:21 Where is the next best idea coming from?
0:26:26 It’s how you think about staying ahead of the curve and building that network and, you
0:26:31 know, opportunities arise in amazing scientific settings where you least expect them.
0:26:34 I think also people in our world, who are known as cell whisperers, who really have
0:26:39 seen there, been there, done it all and have seen what works, what doesn’t, institutional
0:26:41 memories are a really important thing.
0:26:44 I’ve got founders like Jim Riley, Carl June.
0:26:47 You know, they first started off this field in HIV.
0:26:51 They were actually trying to find a cure for HIV with, you know, T cells.
0:26:57 They stumbled upon decoding the HIV virus and realized that this can be a great payload
0:26:58 and look now.
0:27:03 They’re actually curing cancer with a denatured approach to HIV.
0:27:07 So the craziest ideas come from the craziest parts of science in the world, right?
0:27:11 Who would have thought, you know, at the time that that would be a path that 30 years later
0:27:14 would be potentially a cure for cancer?
0:27:17 So last question, takeaway for our other entrepreneurs and founders.
0:27:23 You’ve now twice built a product and a company that’s really pushing all kinds of new limits
0:27:27 and regulatory and policy and manufacturing and delivery and all kinds of things.
0:27:31 What’s something that you would do differently now if you were going back and doing it all
0:27:32 over again?
0:27:35 I think if I had my time again, there are certain things I would have accelerated in
0:27:37 terms of my advisors.
0:27:42 Don’t wait for an issue to arise before you think, hey, you know what, I got this problem.
0:27:45 I should try and find somebody that has an external lens to this.
0:27:48 And it’s where the humility piece has to come in.
0:27:50 You cannot know everything.
0:27:52 Even your team cannot know everything.
0:27:56 So then how do you appoint the right directors to your board who bring different skill sets
0:27:57 and advisors?
0:28:01 I’d accelerate all of that thinking three times faster than I’d done it the first two
0:28:02 times.
0:28:09 So agility, tenacity, again, not giving up, the network that you have to create as an
0:28:14 entrepreneur in this space to really think, good ideas can come from anywhere.
0:28:17 And just staying curious constantly, I mean, the one nice thing about our field is we’re
0:28:22 competitive, but we’re also very, very collaborative as well in this space, more so than you will
0:28:26 see in other biotech spaces, because there’s a humility as well that we just cannot solve
0:28:27 everything ourselves.
0:28:32 We will need to beg, borrow, partner with others if we want to be successful, the sake
0:28:33 of patience.
0:28:34 You can’t do it all yourselves.
0:28:37 So humility, curiosity, and the right team.
0:28:38 That’s good advice.
0:28:39 Absolutely.
0:28:40 Thank you so much for joining us on the A16Z podcast.
0:28:41 Thank you.
0:28:42 [end of transcript]
0:28:43 [end of transcript]
0:28:43 [end of transcript]
0:28:44 [end of transcript]
0:28:44 [end of transcript]
0:28:45 [end of transcript]
0:28:45 [end of transcript]
0:28:46 [end of transcript]
0:28:56 [BLANK_AUDIO]
0:00:04 I’m Hannah.
0:00:10 This episode is all about the new medical paradigm of CAR T therapy, a new cancer treatment
0:00:15 that uses engineered T cells to attack cancer and has been so effective in treating childhood
0:00:19 leukemias, we believe it may actually be a cure.
0:00:24 In this conversation, Community CEO Oz Azam discusses with General Partner Jorge Conde
0:00:29 and myself all about what CAR T therapy is and how it all works.
0:00:35 Starting with the patient and cell journey to how this medicine is developed, manufactured,
0:00:40 delivered to patients, how different it is to traditional medicines, and then what it
0:00:45 will take to make these new treatments work on more kinds of cancer, scale to more patients,
0:00:47 and be more affordable.
0:00:51 And finally, what company building lessons can be learned from having built the first
0:00:54 CAR T company of this kind from the ground up.
0:00:58 This episode was recorded at the annual A16Z summit.
0:01:03 We’re here to talk about this new kind of therapy, CAR T therapy and what it means to
0:01:10 be building a company that is delivering this brand new medical paradigm for cancer treatment.
0:01:13 So let’s just start by giving a little bit of background.
0:01:16 What is your tagline of here’s what CAR T is?
0:01:21 So CAR T is also known as chimericantidin receptor therapies, nature’s biggest gift
0:01:25 that we were given in terms of protecting us from diseases, something called T cells.
0:01:28 They’re a subset of your blood cells that are called white cells.
0:01:33 White cells typically prevent infection disease, so they are always surveilling and protecting
0:01:34 you.
0:01:42 A B cell produces antibodies, a T cell actually hones in and gobbles up peptides and abnormalities
0:01:45 that are circulating in the system.
0:01:50 And the idea was, could you combine the features of a B cell and a T cell together?
0:01:52 And that’s where the chimera comes in.
0:01:57 So chimera was an ancient Greek mythological figure, right, that was a hybrid I think of
0:02:02 a female lion, a dragon and a serpent or something of that nature.
0:02:07 So the whole idea being, could you combine and create a blend of something with the idea
0:02:11 that you could create therapies around it.
0:02:16 And the number of the therapy really involves taking a patient’s T cells and we re-engineer
0:02:17 those T cells.
0:02:22 Think of it like a GPS system in cells that we’ve been able to engineer.
0:02:26 We take cells from a patient, we re-engineer them, we give them back and those cells detect
0:02:28 cancer and destroy them.
0:02:32 Best analogy is I can give is like a SIM card into the T cells.
0:02:37 That SIM card that gets expressed on the surface of those T cells is very unique, it only dials
0:02:38 one number.
0:02:43 And that number is a specific cancer antigen or a protein that’s an abnormal protein on
0:02:45 the surface of cancer cells.
0:02:50 And we’re able to get these T cells to then actually become killing machines in some ways,
0:02:56 whereby they identify an abnormal protein on the surface of a cell and they go and attack.
0:02:59 So let’s do what I call the patient journey and the cell journey.
0:03:02 So I’m going to take a profile of a child with leukemia.
0:03:08 You have a child of the age of three or four, they start getting bruising, they go to their
0:03:13 family practitioner, they do a CBC, they look at their blood count and they have massive
0:03:17 leukemia in terms of their white cell elevation.
0:03:22 People gets rapidly assessed, they start chemotherapy and great news, they respond.
0:03:26 And most kids with leukemia respond really well to chemotherapy.
0:03:31 Two years later, they’re a routine follow-up and boom, the next thunderbolt comes in.
0:03:34 Unfortunately, they’re starting to now get leukemic breakthrough.
0:03:36 There’s more chemotherapies provided.
0:03:43 But then there comes a point where these patients become what we say in the oncology world,
0:03:44 refractory relapsing.
0:03:49 So they’re refractory to any further chemotherapy occasion being given to them and they’re relapsing
0:03:51 because their disease is worsening.
0:03:57 And so that patient is then brought in to have their blood drawn to see, do they have
0:04:01 that right surface marker that you could create this engineer therapy for?
0:04:06 If they express something called CD19, then we basically harvest out their T cells in
0:04:11 a process called apheresis, whereby patients blood is withdrawn through a machine and it
0:04:14 filters out the white blood cells.
0:04:19 Those cells are then taken and they’re shipped to a central manufacturing facility in the
0:04:25 case of the University of Pennsylvania, they actually have their own manufacturing capability.
0:04:26 So they do it on site.
0:04:27 They do it all on site.
0:04:28 Okay.
0:04:29 And remember, this patient is sick.
0:04:30 Yeah.
0:04:31 So you’ve harvested their cells.
0:04:32 Yeah.
0:04:37 You then go through a process of seven to 10 days where you have to re-engineer those cells.
0:04:42 Those cells go through a process of cell selection, sort of right cells are extracted.
0:04:46 They’re then excited by a certain degree with certain technologies that basically make
0:04:51 the cells in a receptive state that you can then deliver a Trojan horse into it.
0:04:56 The Trojan horse is this payload that we deliver of the genetic code that expresses this new
0:05:00 surface marker called a cart on the surface of the cells.
0:05:04 You then go through a process of three days watching these cells, are they going to grow?
0:05:08 And you cross your fingers and toes because sometimes they don’t grow.
0:05:12 These are cells that become fatigued and they just don’t have that oomph, that energy
0:05:14 that’s needed to grow.
0:05:17 Then you have to harvest out the cells once they’ve grown.
0:05:19 Then you have to freeze them.
0:05:20 Then you have to ship them.
0:05:24 A mild chemotherapeutic regimen is given to the patient.
0:05:25 We kind of call it conditioning.
0:05:30 And conditioning is that you want to get the patients in a certain state that you create
0:05:35 space in their body for them to receive these cells and the cells to expand.
0:05:38 So the cells are given as one infusion.
0:05:42 And what you typically see is a spike in the patient’s fever.
0:05:46 These cells start to multiply very, very rapidly.
0:05:50 And at the same time, they’re pushing out massive amounts of protein and they start
0:05:53 to literally attack the cancer wherever they see it.
0:05:56 Cancer when it’s destroyed releases a lot of toxins.
0:05:59 And that manifests itself in something called cytokine release syndrome.
0:06:00 It’s like a storm.
0:06:01 It’s like a storm.
0:06:03 That’s what they call the cytokine storm.
0:06:07 And so having that patient available to be able to, for example, move to an ICU unit
0:06:12 if needed, it requires a lot of coordination and sophistication, right?
0:06:16 So you then go through that process and hopefully by three, four days you’re seeing that window
0:06:17 of, is this patient really responding?
0:06:21 If you don’t see the cytokine storm, it means the product’s not working.
0:06:25 We actually look forward to an adverse event, which is really weird in medicine.
0:06:28 Because if you don’t see it, you know the product’s not working.
0:06:33 28 days later when the patient is better, the fever’s subsided and you do a bone marrow
0:06:38 biopsy, you do various blood tests and you see over 90% of kids initially in the trials
0:06:41 got complete remission after 28 days.
0:06:46 And there are children out now, out, you know, seven, eight, nine years now.
0:06:47 And that is the cure.
0:06:49 That’s persistent and durable cure.
0:06:53 We hope that they remain in this state where these cells are constantly in surveillance
0:06:54 in the body.
0:07:00 So should a signal arise of an abnormal protein, these cells can then attack it.
0:07:03 So I’ve given you a sense of the cell journey and the patient journey.
0:07:05 Now you think about that, creating a product around that.
0:07:07 It’s a whole new area of medicine, right?
0:07:12 The infrastructure, how do you begin to scale a process like that?
0:07:15 To build the pipes and the infrastructure to scale?
0:07:21 If I go back to 2013, literally, we’d be in the size of a room like this podcast room.
0:07:25 And literally we would have tubes and bags hung on the wall.
0:07:30 It was literally our sort of brainstorming war room of how do we take this process from
0:07:36 an academic, open process, close the manufacturing, meaning lock it to good manufacturing practice
0:07:42 standards, process development, analytical development, vector scientists, and technical
0:07:44 operations personnel are working around the clock.
0:07:47 So again, very different way of practicing medicine, right?
0:07:52 This was like the Wild West in some ways in the early days, but we did it and we learned
0:07:54 a lot through that process.
0:07:58 We acquired our own manufacturing facility because we’re not in the business of just
0:07:59 creating product for chronic sake.
0:08:01 We want to actually expand it globally.
0:08:06 We need to bring down the cost of goods radically for these therapies because they are really
0:08:07 expensive to make.
0:08:12 So unless you invested upstream in there, then how are you going to be able to scale and
0:08:14 actually make these products affordable?
0:08:17 Isn’t the same time, you know, generate revenue for the company?
0:08:19 The process is so important.
0:08:21 It’s so different to traditional medicine.
0:08:25 So you have to be able to manufacture this therapy.
0:08:30 You’ve got to be able to manage the logistics that go from patient to the provider, from
0:08:34 the provider to the manufacturer, back to the provider, back to the patient, what you
0:08:36 call the vein-to-vein logistics.
0:08:45 So is there really any other way to do this but to be a full stack or fully vertically
0:08:50 integrated company if you’re going to commercialize these types of therapies?
0:08:54 I think the more and more you see where the world is moving to and you look at the personalized
0:08:58 nature of what we’re doing, whether these are current generation products or off the
0:09:04 shelf products in the future, that ecosystem being understood from the patient journey,
0:09:08 the cell journey, cell logistics to your point, adverse event management, and as you think
0:09:13 about the interface of tech for the future, which is going to be required here, whether
0:09:18 that being diagnostics, whether that being management of patient, patient selection,
0:09:24 or whether you’re looking at blockchain, for example, in terms of secure chain of identity.
0:09:28 Because look, if I’m taking your cells, you want to guarantee I’m giving your cells back,
0:09:29 right?
0:09:30 Right.
0:09:33 So there’s a whole security apparatus in this and that people just don’t consider when
0:09:34 they first get into it.
0:09:39 If we didn’t have that pillar of manufacturing, if we didn’t have the research engine, if
0:09:43 we didn’t have the ability to learn from each patient that we manufactured, what’s working
0:09:47 well, do we need to add a bit of this reagent, do we need to stimulate the cells in a certain
0:09:53 way, all of that repeat learning, that can only happen in a full stack company.
0:09:57 In order to be able to really maximize and create great products, we decided to own that
0:09:58 process ourselves.
0:10:03 So can you imagine that if we see success in a clinic and we don’t have the manufacturer
0:10:09 to go in hand, I kind of feel that’s unethical in terms of the breakthrough speed with which
0:10:14 science is evolving, but not being able to manufacture the product would be such a shame.
0:10:19 Building this new kind of technology, this new kind of medicine, the talent, the culture,
0:10:21 and the platform.
0:10:22 Everything new, essentially.
0:10:24 That sounds really painful.
0:10:25 It was not easy.
0:10:30 It was actually developing products in a different way against the paradigm.
0:10:35 So in our world of drug development and product development, there’s a very well-established
0:10:37 cycle of how you do things.
0:10:41 It’s memorialized with the FDA, there’s guidance, etc.
0:10:45 But try developing something that regulators have never done before, or companies have never
0:10:46 done before.
0:10:50 In my career, I never thought I’d work on something that could be curative.
0:10:55 I worked on things that could help people, they could improve their health.
0:10:59 I worked on many things that didn’t do anything for patients, products failed.
0:11:04 But once you’ve touched success in terms of curing a patient, and I use that word very
0:11:09 carefully because as a physician, you always think twice about you’re really curing somebody.
0:11:12 When you’ve done that with a product, it changes your whole perspective about medicine and where
0:11:14 the world could be.
0:11:18 If you have the right team behind you, if you have the right culture behind you, and
0:11:20 if you have the right platforms and technologies.
0:11:23 So you had 400 people within the Cell Engine Therapy Unit in Novartis.
0:11:26 You’re now the CEO of C-Munity, your own startup.
0:11:32 So C-Munity is a T-cell engineering company that’s focused on curing cancer.
0:11:38 We’re doing this by developing therapies in the form of either CARTs or TCRs, T-cell receptor
0:11:43 technologies, and mainly going down the road less trodden when it comes to the tougher
0:11:48 kinds of cancers that are mainly in the solitumous space as opposed to hematological cancers,
0:11:51 which there have been great successes in, still an unmet need.
0:11:56 But there’s an even huge, huge, bigger unmet need with patients with solid cancers, which
0:11:57 is where we really want to focus.
0:12:01 So taking what you did for blood cancers, essentially, and moving that to solitumous.
0:12:05 Correct, and pivoting from that, and the lessons that we’ll learn, and very, very important
0:12:11 lessons, taking that into how do we develop these therapies for patients who have no other
0:12:12 choices left.
0:12:15 Can I ask you a question around the technology and how you’re going to build out your product
0:12:16 pipeline?
0:12:17 Sure.
0:12:23 I’m going to hinge on how you can essentially engineer cells for increased and expanded
0:12:24 functionality.
0:12:25 Sure.
0:12:32 So one simplistic way to think about this is, in CAR-T, it’s an oversimplification to compare
0:12:33 it to software.
0:12:34 But I will.
0:12:39 Every generation of CAR-T is built on the previous generation in some ways, and you
0:12:41 can swap in modular components.
0:12:43 Cassettes, modules, whatever.
0:12:44 Yeah.
0:12:50 It’s the functionality so you can go across different and more complex cancers.
0:12:55 So going from liquid tumors, like the lymphomas, like the leukemias, into solid tumors.
0:13:00 I want to talk a bit about how you think about what needs to happen for you to bring the
0:13:01 cost down.
0:13:03 What has to happen from an engineering standpoint for that to happen?
0:13:04 Yeah.
0:13:06 So let’s break it down.
0:13:11 So how do T cells actually bind or stick to a target?
0:13:13 Think of Velcro, right?
0:13:16 So when Velcro attaches, the idea was that what you actually want is that Velcro never
0:13:17 to come off.
0:13:19 It sticks permanently, really well.
0:13:25 And that was known as high affinity, especially in terms of antibodies.
0:13:29 And people realize, actually, that’s not such a good idea because you actually get off target
0:13:30 effects.
0:13:31 You actually get something sticking where it shouldn’t.
0:13:32 There’s a problem.
0:13:37 So then this maturing of something called affinity tuning happened where it’s the Goldilocks
0:13:38 thing, right?
0:13:43 It’s too hard not to stuff just the right amount where you get a T cell touching and
0:13:47 activating, but not totally binding.
0:13:51 I think that’s been a bit of revolution in terms of T cell engineering thinking.
0:13:53 Then it’s actually developing multiple warheads.
0:14:00 So actually targeting more than one protein, abnormal protein, or antigen, that multivalency
0:14:01 as we call it.
0:14:04 And in certain cancers like glioblastoma, we know we probably have to attack three,
0:14:09 four different kind of surface marker proteins for patients to get a benefit.
0:14:13 Then there is the engineering component of getting these cells to power on.
0:14:17 So if you think of the engine of the cell, how do you really give it more choke so these
0:14:20 cells really power up and co-stimulate?
0:14:25 How do we armor these cells better to help them overcome immunosuppression?
0:14:30 Because Mother Nature’s, one of the things that she’s done an amazing job of is actually
0:14:32 giving cancer privilege, right?
0:14:36 And there are various ways in the system that cancer cells trick the human body.
0:14:38 One of them is immunosuppression.
0:14:42 So we now have the capability through gene editing, for example, to overcome that or
0:14:46 through arm ring of cells, which was not possible before.
0:14:50 There’s actually ways where you can target the outer casing, if I can call it of cancer,
0:14:54 and kind of make a dent in that armor to allow payloads to go in.
0:14:59 So payload delivery is another key factor, right, that’s changing the way we think about
0:15:01 liquid to solids.
0:15:07 So all these modules now, the lessons learned from hematological emergencies, now pivoting
0:15:11 towards solid tumors, these principles are going to be really important, not just for
0:15:14 companies like us, but for the entire field.
0:15:20 How do we get these therapies into patients earlier in their cancer journey, if and when
0:15:24 it’s appropriate for them to be treated with these kinds of therapies?
0:15:27 And what needs to happen from a product standpoint to enable that?
0:15:31 This whole sort of scale business, that’s really going to come where gene editing comes
0:15:37 into play, in theory, if you have not the patient cells, but cells from multiple sources.
0:15:43 So you’re a donor, I’m a donor, we have great cells, those universal cells be made into sort
0:15:47 of batches from which you can then create an off the shelf product.
0:15:50 That’s going to help reduce the cost of goods, and that’s where the future will move to.
0:15:54 And there are companies that are actually in that space now, we’re in the research stage
0:15:55 of that now.
0:15:59 But again, that’s going to be another flexion point for the field in terms of bringing out
0:16:00 costs.
0:16:07 Novartis, Kim Raya, the first CAR-T product, was going after leukemias, lymphomas, just
0:16:09 about 10% of all cancers.
0:16:13 You’re going after the other 90% plus.
0:16:21 So you’re going after a call at 10 times the market with a 10th of the team today.
0:16:25 Is there something fundamentally different about how you build a startup company from
0:16:32 scratch versus a startup company within a large company that you had at Novartis?
0:16:35 There’s huge differences.
0:16:37 Let’s talk about the talent.
0:16:42 So I quickly bought on board a very good colleague of mine from Novartis, Michael Cresciano,
0:16:47 and he is the resident dealmaker when it comes to everything sound gene therapies.
0:16:51 So between the two of us, we’d actually had a cultural sense of what we had built previously
0:16:55 and the essence of what we needed to keep, but what we needed to pivot to.
0:17:03 And then clearly the speed with which you have to recruit is a very different pace,
0:17:04 right?
0:17:09 I mean, within the Novartis world, it was fast because we went from two people to within
0:17:11 six months having 400 people.
0:17:16 But literally, we lifted and shifted groups out of different functions in.
0:17:18 Sometimes they had a choice, sometimes they didn’t.
0:17:24 But in the startup world, you really are relying on your network very heavily, but also really
0:17:30 digging in quickly about people who fit really well in big pharma may not necessarily work
0:17:34 out in startup situations and small biotech.
0:17:36 So really understanding what is the motive of that individual.
0:17:41 I mean, we get out of bed thinking about T-cells, we go to bed at night thinking about T-cells.
0:17:42 Yeah.
0:17:46 Well, to your point also in the startup, everyone is choosing to be there and they must be making
0:17:48 the choice from a kind of passion.
0:17:53 You know, many colleagues who came on board had experienced malignancy themselves, or
0:17:58 they’d lost a loved one or loved ones in many cases that becomes very, very personal.
0:18:01 In a small company, you have to phase and stage your hiring.
0:18:04 You can’t just do a scattergun approach, right?
0:18:08 Getting a high performing team set up quickly where you buffer each other’s weaknesses
0:18:10 but play to each other’s strengths.
0:18:15 That’s a really, really important trait in startups because there’s no room for insecurity.
0:18:20 You have to have huge self-awareness about what you know and what you don’t know and
0:18:21 times on your side.
0:18:28 It weighed heavily on me the letters and Facebook postings I got from patients and their families
0:18:29 in my former life.
0:18:32 The patients we needed to treat have tried absolutely everything.
0:18:34 The sense of urgency was there as well.
0:18:39 For the first 12 months, it was all we needed at that time to really secure the operations
0:18:40 of the company.
0:18:43 There were many times actually the company should have died.
0:18:48 For example, there was IP that maybe wasn’t what we thought it was before.
0:18:52 There were platforms that maybe the experiments weren’t reading out the way they thought they
0:18:53 would.
0:18:54 It all worked out.
0:18:59 But during that phase, I never knew I could be so tenacious because I tasted such huge
0:19:03 success in my former life to now do this again and think, “Oh my God, could we really
0:19:04 fail?”
0:19:06 And we really could have.
0:19:08 But it’s patients are waiting, right?
0:19:10 There’s nothing like famine to make you hungry.
0:19:11 Oh, absolutely.
0:19:12 Absolutely.
0:19:18 And the next phase of the people side really came in when we had to instill discipline
0:19:23 process, building our quality systems, starting to write protocols, starting to really gear
0:19:27 up for regulatory guidances, submitting INDs.
0:19:29 And sometimes you get people on the bus.
0:19:32 Then you get to figure out, are they on the right seat on the bus?
0:19:34 Because you hire utility players, right?
0:19:37 But you also need specialist players as well.
0:19:39 So how do you move them around the seats on the bus?
0:19:41 Like, should they have got on the bus?
0:19:42 Absolutely yes.
0:19:46 Then sometimes you realize, well, you know, this person may be better in this seat versus
0:19:47 that seat.
0:19:49 So we went through that phase as well.
0:19:52 And did you find that kind of internal cultural building?
0:19:58 I mean, because this is a new kind of bio company, really, where there are kind of internal
0:20:01 cultural issues as well, where you’re getting different types of people with different
0:20:02 approaches to things.
0:20:03 Sure, absolutely.
0:20:06 People bringing in different baggages, right, from a cultural perspective.
0:20:11 The teaming in our world is so different because you have to integrate what is traditionally
0:20:14 clinical thinking with manufacturing science thinking.
0:20:17 In our world, the process is the product, right?
0:20:18 That’s a very different proposition.
0:20:20 So let’s fast forward to the end of the journey then.
0:20:25 So let’s assume that you’re able to demonstrate that these therapies are effective, you’re
0:20:31 able to manufacture them, you’re able to manage the logistical complexities.
0:20:36 If we look at the first generation of CAR T therapies, is it fair to say that commercially
0:20:40 they haven’t lived up to the expectation of what they might look like?
0:20:44 I mean, first of all, introducing a new order in how medicine’s practice is not easy.
0:20:48 I mean, you’ve got to think about how a physician is going to get paid, how does a health care
0:20:53 system make money out of this, what’s the cost of infrastructure build, are they going
0:20:59 to actually invest in a stem cell lab, are they going to invest in the logistical wiring,
0:21:02 and at the same time, do clinical trials and also be a commercial center.
0:21:07 So I think people underestimated the complexity of what it would take.
0:21:13 But at the same time, nobody’s disputing the stellar clinical results that you get.
0:21:15 I think the curves will pick up.
0:21:20 It just took longer for the uptake for a specialty product to be introduced.
0:21:24 And hindsight, maybe there were certain things we could have done a lot earlier.
0:21:28 There’s a finite amount of resource investment you could make at certain pivot points within
0:21:30 the lifecycle of a product.
0:21:34 But I’m pretty optimistic that the players that are going to be in this space are going
0:21:39 to double down and increase the actual spend that’s needed to really make these products
0:21:43 successful because at the end of the day, none of us are in this business to break the
0:21:45 health care budgets of any country.
0:21:49 We also know we have a challenge because the products are expensive to develop.
0:21:53 I think over time, we’ve already seen this, the cost of goods have come down.
0:21:58 We’re one or two engineering steps away from some radical optimization of these products.
0:22:01 We are going to need access to large amounts of data.
0:22:08 We are going to need the AI and adjacent thinking to be blended into the cell journey and the
0:22:10 patient journey and the commercial journey.
0:22:14 The revolution started, it ain’t over yet, and there’s a couple more wins that I think
0:22:17 we’re going to see in the next couple of years in the T-cell engineering space.
0:22:23 Jorge, you also built a company where it required you to kind of like both create a new ecosystem
0:22:25 and enter the existing ecosystem.
0:22:29 What do you think is your primary tool when you were doing that in this particular space?
0:22:30 How did you navigate that?
0:22:35 When you think about new modalities, new therapies, you know, biotech-based products, the big
0:22:37 challenge is exactly as you say.
0:22:41 I mean, it’s just the acceptance of, first of all, clinical acceptance, which should
0:22:48 have a high bar in terms of what people think of as a new modality that’s worth pursuing.
0:22:50 That should be a high bar and it is.
0:22:54 But the reimbursement bar is also incredibly high for any new modality because the costs
0:22:56 are obviously additive at some point.
0:22:59 That tipping point, it does take longer than you think it’s going to take.
0:23:00 For sure.
0:23:05 But when it arrives, then the dominoes do start to fall quickly.
0:23:09 And so the one question to you as it relates to the cell therapies is one of the things
0:23:15 that most new therapies don’t have is the potential to demonstrate something that starts to look
0:23:17 like a cure.
0:23:23 And so because you had sort of these incredibly outsized effects for the first generation
0:23:29 of CAR-T, I would have thought that reimbursement would have followed pretty quickly because
0:23:32 you’re actually seeing children get cured.
0:23:33 It’s a really good point.
0:23:36 So I think for the leukemias for children, it was a no-brainer.
0:23:42 It happened, if you think about it, relatively quickly in the US because it was so compelling.
0:23:44 So what’s your standard of care?
0:23:47 Your standard of care is a stem cell transplant for a kid with leukemia.
0:23:53 So cost of a stem cell transplant, believe it or not, is $750,000 to $1.3 million, depending
0:23:55 on your ZIP code.
0:23:58 When you’ve fully loaded costs, you add it all in, right?
0:24:06 So you are pricing a product at $450,000, $425,000 in case of Kim Ryan, and after rebates
0:24:09 and discounts, whatever that is, right, you can figure out what that number is going to
0:24:10 be roughly.
0:24:14 You’re still getting pretty good value when you think about it.
0:24:20 I think the biggest thing for the payers was, and still remains, for cell therapies or gene
0:24:26 therapies, anything where there’s a price tag that is higher because of the cost of manufacturing,
0:24:33 for example, is that don’t burden us with a one-time upfront cost for your therapy.
0:24:38 We understand that you’ve spent a lot of money in R&D, but this whole notion that we’re
0:24:43 going to be able to discharge our cost up front as a big ticket, I think that’s a thing
0:24:44 of the past.
0:24:45 And there’s precedent now for that.
0:24:50 And you’ve seen presence now with innovation coming through in terms of reimbursement, pay
0:24:54 for performance kind of models, you’re going to see, I think, variations in that and versions
0:24:55 of that.
0:24:59 At the same time, the cost of goods of these products is coming down, be it gene therapy
0:25:00 or cell therapy.
0:25:04 It’s a math problem, right, engineering problem, and in the next five years, that will improve.
0:25:09 But payers, if you look at a medical director in Etna, United, whatever, they have a finite
0:25:10 pop.
0:25:14 They want to know, in four, five years’ time, what am I going to be dealing with, right?
0:25:19 They’re getting so much better now at engaging with companies like us to forecast and think
0:25:23 from an actuarial perspective, right, how am I going to manage a business in this area?
0:25:28 So part of it is, I want some companies like us to be progressive and be creative and have
0:25:32 the engagements earlier, you know, because it is a brave new world.
0:25:34 Nobody has the magic answer here.
0:25:39 So the earlier you get into dialogue with payers and advisors in that setting, the better off
0:25:43 we’re going to be for the sake of patience and for the company as well, long term.
0:25:46 So the first generation of car came out of Novartis.
0:25:54 The second generation of car, T, is coming out of companies like Team Unity.
0:25:58 There was a reason why the second generation didn’t come out of Novartis.
0:26:05 In other words, that you started a new company to go after sort of the next horizon.
0:26:10 How do you make sure that the third generation of car comes out of Team Unity and not out
0:26:13 of a new co that hasn’t been imagined yet?
0:26:14 Curiosity, right?
0:26:15 You have to have that.
0:26:17 Your bedrock is a company.
0:26:18 Where is the world moving to?
0:26:21 Where is the next best idea coming from?
0:26:26 It’s how you think about staying ahead of the curve and building that network and, you
0:26:31 know, opportunities arise in amazing scientific settings where you least expect them.
0:26:34 I think also people in our world, who are known as cell whisperers, who really have
0:26:39 seen there, been there, done it all and have seen what works, what doesn’t, institutional
0:26:41 memories are a really important thing.
0:26:44 I’ve got founders like Jim Riley, Carl June.
0:26:47 You know, they first started off this field in HIV.
0:26:51 They were actually trying to find a cure for HIV with, you know, T cells.
0:26:57 They stumbled upon decoding the HIV virus and realized that this can be a great payload
0:26:58 and look now.
0:27:03 They’re actually curing cancer with a denatured approach to HIV.
0:27:07 So the craziest ideas come from the craziest parts of science in the world, right?
0:27:11 Who would have thought, you know, at the time that that would be a path that 30 years later
0:27:14 would be potentially a cure for cancer?
0:27:17 So last question, takeaway for our other entrepreneurs and founders.
0:27:23 You’ve now twice built a product and a company that’s really pushing all kinds of new limits
0:27:27 and regulatory and policy and manufacturing and delivery and all kinds of things.
0:27:31 What’s something that you would do differently now if you were going back and doing it all
0:27:32 over again?
0:27:35 I think if I had my time again, there are certain things I would have accelerated in
0:27:37 terms of my advisors.
0:27:42 Don’t wait for an issue to arise before you think, hey, you know what, I got this problem.
0:27:45 I should try and find somebody that has an external lens to this.
0:27:48 And it’s where the humility piece has to come in.
0:27:50 You cannot know everything.
0:27:52 Even your team cannot know everything.
0:27:56 So then how do you appoint the right directors to your board who bring different skill sets
0:27:57 and advisors?
0:28:01 I’d accelerate all of that thinking three times faster than I’d done it the first two
0:28:02 times.
0:28:09 So agility, tenacity, again, not giving up, the network that you have to create as an
0:28:14 entrepreneur in this space to really think, good ideas can come from anywhere.
0:28:17 And just staying curious constantly, I mean, the one nice thing about our field is we’re
0:28:22 competitive, but we’re also very, very collaborative as well in this space, more so than you will
0:28:26 see in other biotech spaces, because there’s a humility as well that we just cannot solve
0:28:27 everything ourselves.
0:28:32 We will need to beg, borrow, partner with others if we want to be successful, the sake
0:28:33 of patience.
0:28:34 You can’t do it all yourselves.
0:28:37 So humility, curiosity, and the right team.
0:28:38 That’s good advice.
0:28:39 Absolutely.
0:28:40 Thank you so much for joining us on the A16Z podcast.
0:28:41 Thank you.
0:28:42 [end of transcript]
0:28:43 [end of transcript]
0:28:43 [end of transcript]
0:28:44 [end of transcript]
0:28:44 [end of transcript]
0:28:45 [end of transcript]
0:28:45 [end of transcript]
0:28:46 [end of transcript]
0:28:56 [BLANK_AUDIO]
with @OzAzamTmunity1, @JorgeCondeBio, and @omnivorousread
CAR T therapy, the groundbreaking new medicines that uses engineered T-cells to attack cancer, has been so effective in childhood leukemias that we believe it may actually be a potential cure. But this isn’t just one new medicine, it’s an entirely new therapeutic tool—and a total paradigm shift from most traditional medicines we’ve seen before.
Tmunity CEO Usman “Oz” Azam was previously the head of Cell and Gene Therapies at Novartis, in many ways the first CAR T company and the team brought us blood cancer CAR T-cell therapy Kymriah—the first cell-based gene therapy to be approved in the US. In this conversation, Azam discusses with a16z’s general partner Jorge Conde and Hanne Tidnam what CAR T therapy really is and how it all works. The conversation begins with the “patient and cell journey” of this treatment and how this medicine is developed, manufactured, delivered to patients; why exactly it’s so different traditional medicines; what it will take to make these new medicines work on more kinds of cancer, scale to more patients, and cost less; and finally, what company building lessons can be learned from building the first CAR T company of its kind from the ground up.
This episode was recorded at the annual a16z Summit.