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]