Latest / Making Medicine / Ned Sharpless on Biotech’s Future, HHS Shifts, and Global Competition | Making Medicine Podcast

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Ned Sharpless on Biotech’s Future, HHS Shifts, and Global Competition | Making Medicine Podcast · Making Medicine

0:05
Speaker 1: Hello everyone, and welcome back to the Making Medicine podcast
0:08
Speaker 1: or Science Policy and Innovation Meet. As always, I'm your host,
0:13
Speaker 1: John Stanford. This week we're talking with doctor Ned Sharpless.
0:17
Speaker 1: For the two of you out there who don't know him,
0:19
Speaker 1: Ned is a physician, entrepreneur, venture capitalist, and maybe most notably,
0:23
Speaker 1: a former federal official. He served as director of the
0:26
Speaker 1: National Cancer Institute from twenty seventeen to twenty twenty two
0:30
Speaker 1: and as Acting Commissioner of the US Food and Drug
0:33
Speaker 1: Administration in twenty nineteen. Prior to government, doctor Sharpless was
0:38
Speaker 1: director of the Lineberger Comprehensive Cancer Center at UNC, and
0:42
Speaker 1: today we find him investing in the next breakthroughs as
0:45
Speaker 1: co founder and managing director of Jupiter Bioventures. Today we'll
0:49
Speaker 1: get Ned's perspective on well just about everything, and with
0:53
Speaker 1: that let's get into the episode. Ned, so glad to
0:57
Speaker 1: have you here, Thanks for joining us.
0:59
Speaker 2: Great to be here, Thank you, thank you for the
1:00
Speaker 2: opportunity to speak today.
1:01
Speaker 1: Well, you've got a long list on the resume, a
1:04
Speaker 1: lot of fancy titles, but the current one is with
1:06
Speaker 1: Jupiter Biosciences. I think most folks are familiar with what
1:10
Speaker 1: you're up to, But can you tell us a little
1:12
Speaker 1: bit about Jupiter and what you've been doing since leaving government.
1:15
Speaker 3: Sure, I left government in twenty two, sort of after
1:19
Speaker 3: things settled down a little bit from the pandemic point
1:20
Speaker 3: of view. And about that same time, my colleague Ned
1:25
Speaker 3: David was launching this new MTD called Jupiter Bioventures and
1:30
Speaker 3: with backing from some academic institutions as well as some
1:33
Speaker 3: traditional venture investors and strategic investors. And Ned asked me
1:38
Speaker 3: to incidentally, another guy named Ned. It's very weird, one
1:42
Speaker 3: other person named Ned, and I work with him every day.
1:44
Speaker 2: So But asked me to look at some of the
1:47
Speaker 2: pitch decks he was getting.
1:48
Speaker 3: So word had gotten out that he raised a little
1:50
Speaker 3: bit of money, and you know, as you can imagine,
1:53
Speaker 3: about half of those ideas that he was being shown
1:56
Speaker 3: were in cancer, and so he wanted some mycology. And
2:00
Speaker 3: you know, after having a big administrative job at the
2:03
Speaker 3: FDA and the NCI, it was really nice to be
2:06
Speaker 3: looking at like Western blots again and doing you know,
2:08
Speaker 3: real science and evaluating you know, ideas at the very
2:12
Speaker 3: close to the science. So I really enjoyed it. And
2:14
Speaker 3: so sort of within a week of you know, helping
2:16
Speaker 3: net out with this, I was like, this is all
2:17
Speaker 3: I want to do, and it was like, well, come
2:19
Speaker 3: join me. So we uh, you know, launched Jupiter I Adventures,
2:22
Speaker 3: and at that time we'd sort of started half a company,
2:25
Speaker 3: uh and the idea was to raise money for investors
2:28
Speaker 3: and then then put those moneys into new ventures. And
2:30
Speaker 3: so now we've probably were, you know, closing in on
2:32
Speaker 3: our tenth company.
2:34
Speaker 2: H many of them wind down very quickly.
2:36
Speaker 3: If they don't we have the ideas, you know, they're
2:39
Speaker 3: going to succeed fast or fail fast, and but the
2:42
Speaker 3: ones that uh, you know, progress are still going concerns
2:44
Speaker 3: and so we think it's off to a great start
2:46
Speaker 3: and we're actually starting to discuss raising Jupiter two, you know,
2:49
Speaker 3: the next to the next version of this.
2:51
Speaker 2: And you know, it's a very.
2:53
Speaker 3: Difficult time to be raising money in biotech, but uh, nonetheless,
2:57
Speaker 3: we think you know that you know, good ideas are
3:00
Speaker 3: still able to find capital and resources and so and
3:04
Speaker 3: if you can do that, it's actually a great time
3:06
Speaker 3: to be working in biotech because there are so many
3:08
Speaker 3: phenomenal ideas and so much cutting edge science and so
3:11
Speaker 3: many great people available. So the bad funding environment has
3:15
Speaker 3: this happy side effect if you will, that you know,
3:17
Speaker 3: good ideas and good people are not in short supply
3:19
Speaker 3: right now. So I'm having a lot of fun. I
3:21
Speaker 3: think the work we're doing is very meaningful, and I
3:25
Speaker 3: just wish the biotech investing market would pick up a
3:26
Speaker 3: little bit.
3:27
Speaker 1: Yeah, And so the two nets are out there just
3:30
Speaker 1: down the road in North Carolina as I understand it,
3:33
Speaker 1: Jupiter two.
3:33
Speaker 2: I love that.
3:34
Speaker 1: I feel like the names of your funds are going
3:36
Speaker 1: to be rivals NASA and naming abilities. You talk about
3:41
Speaker 1: that that tough environment, and I love that you see
3:43
Speaker 1: the silver lining of it means that there's great science
3:46
Speaker 1: out there, means there's plenty of scientists and and things too.
3:51
Speaker 1: What do you think the cause of the bad funding
3:55
Speaker 1: environment is and what's it going to take for us
3:58
Speaker 1: to get out of it?
3:59
Speaker 2: In your mind? Yeah, that's it's a complicated question.
4:01
Speaker 3: I mean, I will say the first company I started
4:04
Speaker 3: with g and Therapeutics out of my lab when I
4:06
Speaker 3: was at the University of North Carolina, and we started
4:08
Speaker 3: that really in kind of two thousand and eight, which
4:11
Speaker 3: was possibly a worse biotech funding.
4:15
Speaker 2: It was. It was awful back then.
4:16
Speaker 3: You know, it was a great financial crash, and and
4:20
Speaker 3: I maintained that that was the secret to G One's
4:22
Speaker 3: success because you know, people like Jay Strum are a
4:25
Speaker 3: regional CSO who had twenty five years of industry experience
4:28
Speaker 3: at GSK, he was available. You know, someone like that
4:31
Speaker 3: would have never worked for an early stage biotech if
4:35
Speaker 3: if it hadn't been the kind of the side of
4:37
Speaker 3: the time. So, you know, great people like j and
4:40
Speaker 3: and several other people that we were able to recruit
4:41
Speaker 3: the g ONE in the early days were made available
4:43
Speaker 3: by the bad environment. So you know, bad funding environments
4:46
Speaker 3: have the one happy side effect that you know, good
4:49
Speaker 3: ideas and good people become available and are you know,
4:52
Speaker 3: sort of in surplus. And so I think that the
4:54
Speaker 3: goal is to fined as many of those and started
4:56
Speaker 3: as many good companies as you can during the bad times,
4:59
Speaker 3: and then when things in this cyclic business, you're ready
5:03
Speaker 3: to sell your ideas to acquire.
5:05
Speaker 2: Ors or take the public or whatever's possible.
5:07
Speaker 3: But you know, this this current environment that we're in,
5:10
Speaker 3: this downturn is a bit longer than usual. I mean,
5:12
Speaker 3: it was sort of there was relatively good biotech investing.
5:17
Speaker 3: It's sort of in the pandemic, and then towards the
5:20
Speaker 3: end of the pandemic, things really started to slow down,
5:22
Speaker 3: and you know, we haven't recovered since.
5:24
Speaker 2: And I think it's you know, several things.
5:28
Speaker 3: So one is there's always the other bright shiny object
5:31
Speaker 3: that attracts capital. And clearly AI is having a moment
5:35
Speaker 3: like no other in the history of sort of tech investing.
5:38
Speaker 3: And so I think some of the people that invest
5:40
Speaker 3: in science y stuff, whether it's biotech or tech, you know,
5:43
Speaker 3: have moved to AI. That's that's clearly one thing that
5:47
Speaker 3: we're sort of competing against, if you will. Although AI
5:50
Speaker 3: is having some happy side effects for biotech that are
5:52
Speaker 3: interesting as well. I think additionally, you know, there's biotech
5:57
Speaker 3: is dependent on regulatory certainty, and so when things are
6:01
Speaker 3: unclear about how's the FDA going to work, or how
6:04
Speaker 3: the CMS going to cover my drug, or what's the
6:06
Speaker 3: impact of the IRA going to be. I think those
6:08
Speaker 3: things have been a bit of a body blow, you know.
6:10
Speaker 3: I certainly in twenty two when we were starting this,
6:14
Speaker 3: we would take our ideas to you know, venture capitalists.
6:17
Speaker 2: Part of the Jupiter model is we if we look
6:19
Speaker 2: at something and like it, we go and show.
6:21
Speaker 3: It to a larger VC and say, if we got
6:23
Speaker 3: this to a certain stage, would you invest in it?
6:26
Speaker 3: And if they say no, then we scratch our heads
6:28
Speaker 3: and say, maybe this isn't such a good idea.
6:30
Speaker 2: And so many of those conversations went like this.
6:32
Speaker 3: We said, we have this idea of how to cure cancer,
6:35
Speaker 3: and the larger VC would say, well, is it a
6:38
Speaker 3: small molecule or a biologic? You know, a question nobody
6:41
Speaker 3: used to ever ask. And we'd say, well, it's a
6:43
Speaker 3: small molecule, and they'd say, well, could it be a biologic?
6:47
Speaker 2: The reason being that, you know.
6:48
Speaker 3: There's this preference in the law for biologics created by
6:51
Speaker 3: the Inflation Reduction Act the IRA that didn't used to exist,
6:54
Speaker 3: and so it's caused this perverse, weird thing in biotech
6:57
Speaker 3: that's made certain therapeutic classes more valuable than others. And
7:00
Speaker 3: so that kind of regulatory stuff like is CMS going
7:03
Speaker 3: to pay for my drug or is the FDA going
7:05
Speaker 3: to improve this thing in a timely manner?
7:07
Speaker 2: I think it's costed some headwinds as well. And then lastly,
7:10
Speaker 2: no doubt.
7:11
Speaker 3: Biotech is just intrinsically very risky and and and so
7:16
Speaker 3: it needs a stable mark it needs low interest rates
7:18
Speaker 3: to really be appealing. You know, if you can make
7:20
Speaker 3: a good return. You know, with seven percent interest rates available,
7:24
Speaker 3: you would never do biotech because it seems so difficult
7:27
Speaker 3: and hard. So, you know, I think it's the combination
7:29
Speaker 3: of kind of the higher interest rates, the shiny object
7:32
Speaker 3: of AI, and then some regulatory uncertainty. And those three
7:35
Speaker 3: seem to me the major things that make biotech difficult
7:37
Speaker 3: right now. But you know, all of those things have
7:39
Speaker 3: prospects of improving. And you know, I'm an oncologist. You
7:43
Speaker 3: got to be an.
7:44
Speaker 2: Optimist to work in cancer. So I believe things will
7:46
Speaker 2: get a bed better eventually.
7:48
Speaker 3: And the key is to, you know, build those great
7:50
Speaker 3: companies now so that when when the tide turns, you're prepared.
7:55
Speaker 1: You mentioned something I want to stay with, but in
7:57
Speaker 1: a different variant, and that's in these times. You found
8:00
Speaker 1: it was people who made g One such a success
8:05
Speaker 1: in two thousand and eight. Tough times brought those people.
8:08
Speaker 1: People are front and center in the news in our
8:11
Speaker 1: industry on the regulatory side. You can't pick up the
8:14
Speaker 1: Wall Street Journal with something about PRASAD or the FDA
8:17
Speaker 1: or the White House, and this sort of Shakespearean play
8:22
Speaker 1: that's playing out. Not getting into the details necessarily of
8:25
Speaker 1: the individuals, but I'd like to take a look at
8:29
Speaker 1: your thoughts. I mean, you ran the FDA, you ran
8:33
Speaker 1: the NCI, so you actually have this unique perspective of
8:37
Speaker 1: NIH FDA. But let's start at the top. Let's start
8:41
Speaker 1: at HHS. Obviously, the Secretary RFK Junior comes in with
8:47
Speaker 1: a very different viewpoint in so many ways on the
8:51
Speaker 1: life sciences side. Now that he's settled in what consequences
8:59
Speaker 1: are you beginning to see good or bad or neither?
9:03
Speaker 1: How has he changed HHS under his tenure?
9:07
Speaker 3: Maybe the first thing to say about that is the
9:08
Speaker 3: HHS secretary as a general matter is very very important
9:12
Speaker 3: to the NIH, the FDA, the CMSI I don't know
9:14
Speaker 3: that that's necessarily widely appreciated. How the cabinet secretary really,
9:18
Speaker 3: you know, kind of drives the health agenda in HHS
9:22
Speaker 3: and and this administration. I think the secretary secretaries at
9:26
Speaker 3: the cabinet level are particularly powerful. I think, you know,
9:29
Speaker 3: the executive branch is very strong at the moment, and
9:31
Speaker 3: so the you know, the secretaries in general, not just
9:35
Speaker 3: in HHS, but all the large departments are having kind
9:38
Speaker 3: of perhaps you know, an advantage over the battle between
9:42
Speaker 3: the three branches of government. The executive branch is ascendant
9:45
Speaker 3: at the moment. I think it's fair to say for
9:47
Speaker 3: variety of interteing reasons and so and so, I think,
9:50
Speaker 3: you know, this secretary comes in with a very different
9:54
Speaker 3: vision from say, prior holders of that job. He certainly,
9:58
Speaker 3: I worked for Secretary of Besarah when I was in
9:59
Speaker 3: the administration, and I you know, and alex Azar when
10:02
Speaker 3: I was in the Trump administration, and I think it's
10:05
Speaker 3: I think everyone would agree that RFK is a really
10:07
Speaker 3: different guy from those two, who are quite different from
10:09
Speaker 3: each other as well.
10:10
Speaker 2: I mean, there are three very distinct people.
10:12
Speaker 3: But but you know, RFK has uh you know, the
10:18
Speaker 3: thing he's done that has really resonated with the American
10:21
Speaker 3: public is this focus on chronic diseases and things like
10:24
Speaker 3: obesity in childhood. And he's asked a perceptive question, which
10:28
Speaker 3: is why, you know, are so many kids overweight? And
10:30
Speaker 3: is our plan to give them all ozempic And you
10:32
Speaker 3: know the idea answer is no, you know so, but
10:36
Speaker 3: you know, nobody said that that lad, so I think
10:38
Speaker 3: you know, his his leadership, you know, and those sorts
10:41
Speaker 3: of things has really hit a nerve and that's been
10:45
Speaker 3: I think a strong secret of his sort of success
10:49
Speaker 3: in talking about chronic health conditions at the moment. And
10:53
Speaker 3: you know, he's extended that skepticism to vaccines and to
10:58
Speaker 3: you know, the entire pharmaceutical industry and marketed products, and
11:02
Speaker 3: in a way that is I think, you know, uh
11:05
Speaker 3: uh uh resonates with a lot of the American public
11:08
Speaker 3: and and and a lot of that's quite popular and
11:10
Speaker 3: politically solid and and and and that is then having
11:13
Speaker 3: effects on the agencies. So you know, the NIH has
11:16
Speaker 3: been told to focus on sort of screening and prevention
11:19
Speaker 3: and rare in chronic diseases and and not so much
11:23
Speaker 3: you know, developed you know, pills for therapies for you know,
11:25
Speaker 3: things like that, and that's appropriate. I think that you know,
11:29
Speaker 3: those those are research areas that have not been as
11:32
Speaker 3: well supported in the past, and so I think that
11:34
Speaker 3: you know, a change in focus in that regard is
11:37
Speaker 3: not necessarily bad for American science. And in fact, in
11:40
Speaker 3: some ways those are areas of science that where government
11:43
Speaker 3: is well suited to help because industry tends to like
11:46
Speaker 3: be less interested in screening and prevention and stuff like that.
11:49
Speaker 3: So it is an area where government probably could do more. Anyway,
11:52
Speaker 3: I think the you know, some of the personnel actions
11:58
Speaker 3: at the NIH and the FDA have come off pretty
12:02
Speaker 3: chaotic and and that has really caused a problem there
12:07
Speaker 3: that I you know, I was in d C the
12:08
Speaker 3: last couple of days, and it's just when you talk
12:10
Speaker 3: to people who work at these agencies, morals bad. You know,
12:13
Speaker 3: there's a sense that you can get fired for unclear
12:16
Speaker 3: reasons there. They've lost a lot of really good expertise,
12:20
Speaker 3: just people who are a political who just wanted to
12:22
Speaker 3: do their job at these agencies who are no longer there,
12:25
Speaker 3: and uh, and so you know, it's it's clear it's
12:28
Speaker 3: unclear whether you know, you can really address the mission
12:30
Speaker 3: of the agency if you know, some of these very
12:32
Speaker 3: talented individuals are leaving. And something I've I've really always
12:36
Speaker 3: said and been very focused on is in my experience,
12:39
Speaker 3: you know, I spent basically my entire time in government
12:42
Speaker 3: at two agencies trying to recruit people to come.
12:44
Speaker 2: In the government.
12:45
Speaker 3: That's that's a big part of the job if you're
12:47
Speaker 3: NCI director, act AA commissioner, and it's hard you call
12:50
Speaker 3: good people who want and say, you know, I need
12:52
Speaker 3: your expertise.
12:53
Speaker 2: You're the only.
12:54
Speaker 3: Guy in the world who understands AI and you know
12:56
Speaker 3: cancer data and that's really important and the NCI needs that.
12:59
Speaker 2: I need your expertise. You got to come work for me.
13:01
Speaker 3: And they like that, you know, they're like, oh, it'd
13:03
Speaker 3: be fun to work for the government out of this
13:04
Speaker 3: huge budget, and it'll be great. And then as they
13:06
Speaker 3: look into it and get further down the tracks, they
13:08
Speaker 3: realize that they don't want to divest and they don't
13:11
Speaker 3: want to you know, give up consulting and the conflict
13:13
Speaker 3: of inter stuff, and they so so it's very hard
13:16
Speaker 3: to get really talented people to come into government.
13:19
Speaker 2: And when when when.
13:20
Speaker 3: Federal officials are sort of treated in what I would
13:22
Speaker 3: consider a shabby manner, you know, of being offered you know,
13:28
Speaker 3: a senior person at the FDA was offered a you know,
13:30
Speaker 3: a duty posting like a Nebraska or something. It's like,
13:33
Speaker 3: you know, you have twenty four hours to either move
13:35
Speaker 3: to Nebraska or you know, retire.
13:38
Speaker 2: You know, he chose to retire.
13:39
Speaker 3: So so stuff like that is just it's not really
13:42
Speaker 3: good for morale. It doesn't help the agencies attract good
13:45
Speaker 3: people in the future, and that is probably to me
13:48
Speaker 3: one of the most concerning things I see going on now.
13:52
Speaker 3: Why that's happening is you know, it's it's it's not
13:54
Speaker 3: totally clear. I don't I don't think that's necessarily the
13:57
Speaker 3: Secretary's fault. You know, I think the Secretary could be
14:00
Speaker 3: more forcefully speaking out in defense of these agencies. But
14:03
Speaker 3: I don't know that, you know, it's it's his idea
14:06
Speaker 3: that have these AhR actions occur the way they've beenccurring.
14:09
Speaker 3: But I think that you know, while I share some
14:13
Speaker 3: aspects of the Secretary's vision about focus on chronic.
14:15
Speaker 2: Disease and you know, and and you.
14:19
Speaker 3: Know, ask questions about do we need a pharmaceutical solution
14:21
Speaker 3: for everything? I think those are fair questions ask. I
14:24
Speaker 3: do think that the mechanics of these agencies just making
14:27
Speaker 3: sure the right people are showing up, their budgets are adequate,
14:30
Speaker 3: they have the regulatory authorities they need, you know, a
14:33
Speaker 3: really important thing to focus on. And that's where I
14:35
Speaker 3: think things are look troubled to me right now. So
14:38
Speaker 3: you know, I get asked all the time, should I
14:41
Speaker 3: take my product deceiber Is it going to be okay
14:44
Speaker 3: when we have to go to the FDA and try
14:45
Speaker 3: and get our biologic approved. And I can't answer that
14:48
Speaker 3: question now with great confidence. You know, I say, the
14:51
Speaker 3: FDA is a historic agency that has been the benchmark
14:54
Speaker 3: for the world for decades, and.
14:56
Speaker 2: I hope it will continue to be so.
14:57
Speaker 3: And there, you know it's there are a lot of
14:59
Speaker 3: great people there. There a lot of really committed, wonderful
15:01
Speaker 3: people are stuck to the mission, and I hope things
15:03
Speaker 3: will be okay. But when they have it like a
15:05
Speaker 3: new siber director every week, it's confusing.
15:07
Speaker 1: It really is, and confusing at some point either means
15:10
Speaker 1: a project doesn't move forward, or if the project still
15:13
Speaker 1: does move forward, it's more expensive to move forward, neither
15:16
Speaker 1: of which are good outcomes. When I think of HHS
15:19
Speaker 1: and all the I loved your point that the secretary
15:23
Speaker 1: and I don't know that people appreciate it because a
15:25
Speaker 1: lot of people thought, with Rfk's nomination, well, there's only
15:29
Speaker 1: so much he can actually do as secretary versus these
15:33
Speaker 1: other agencies within HHS, and I think we've seen it
15:37
Speaker 1: can have a point. I like to remind people, you know,
15:40
Speaker 1: the NIH is out there doing fundamental research that good
15:44
Speaker 1: ideas flow out of private sector often steps in to commercialize.
15:50
Speaker 1: Then you go down the hall to the FDA, who says, yeah,
15:54
Speaker 1: your thing works and it's safe. And then you go
15:56
Speaker 1: down the hall again to CMS say okay, we're going
15:59
Speaker 1: to reimburse this. And when it flows smoothly, we we
16:03
Speaker 1: are unparalleled in the world and we do bring the
16:08
Speaker 1: best drugs forward and we are the world's medicine cabinet.
16:12
Speaker 1: But I think there's opportunity the more choppiness we put
16:15
Speaker 1: in between each of those agencies. And that's I haven't
16:18
Speaker 1: heard a lot of reporting about that. As someone who
16:20
Speaker 1: has served in multiple administrations both sides the aisle, but
16:25
Speaker 1: also NIH and FDA, do you have any thoughts on
16:28
Speaker 1: the liaising between each of the agencies. Has that changed
16:32
Speaker 1: at all under this administration?
16:34
Speaker 2: You know, that's a really good question.
16:36
Speaker 3: I haven't thought about it in this I mean, I think,
16:38
Speaker 3: you know, when you talk to someone who works at
16:39
Speaker 3: the NCI, for example, right now, they're so focused on
16:41
Speaker 3: like the things that are like happening that they are
16:44
Speaker 3: unworried about there right now that we really I haven't
16:47
Speaker 3: really asked that question of like, is the ability of
16:50
Speaker 3: the you know, the NIH to work with the FDA
16:52
Speaker 3: or FDA to work with CMS changed or different or
16:55
Speaker 3: better or worse. You know, it's a good question to
16:57
Speaker 3: ask that there are as you know, very important interactions
17:02
Speaker 3: among those agencies. So for example, when I was at NCI,
17:06
Speaker 3: there was a very interesting collaboration between the NCI and
17:10
Speaker 3: the FDA related to tobacco.
17:12
Speaker 2: So there was you know, real scientific questions.
17:15
Speaker 3: The FDA needed, the Center for Tobacco Products needed at
17:18
Speaker 3: the FDA that the NCI could fund. You know, if
17:21
Speaker 3: the NCI knew this was a regulatory need, they could
17:23
Speaker 3: go out and you know give grants in certain areas.
17:25
Speaker 3: And so that was a very useful set of interactions
17:28
Speaker 3: that that I think was really important for the public health.
17:31
Speaker 3: And you know, I assume stuff like that is still
17:34
Speaker 3: going on. I hope that those sorts of interagency you know,
17:38
Speaker 3: collaborations are are valued and prioritized.
17:41
Speaker 2: But that really is driven by the secretary.
17:43
Speaker 3: I mean, you know, if the secretary prioritizes those things,
17:46
Speaker 3: then the agencies will work together. And the Secretary says
17:48
Speaker 3: the don't do that, that they won't. So I think
17:50
Speaker 3: that that is a good example of something where you know,
17:54
Speaker 3: we should be paying attention. I think we've been so
17:55
Speaker 3: focused at the NHL like budgets and pay lines that
17:58
Speaker 3: I haven't really asked, you know, like what else is.
18:00
Speaker 2: Working or not working? Uh?
18:01
Speaker 3: You know, the one that is the interaction that has
18:04
Speaker 3: certainly gotten a tremendous focus of the last couple of years,
18:08
Speaker 3: you know, the last you know, decade or so, has
18:09
Speaker 3: really been the FDA CMS interaction. And you know, you know,
18:13
Speaker 3: like should it work the same for a drug versus
18:16
Speaker 3: a device? And uh, you know, and now we've seen
18:19
Speaker 3: plenty of examples of you know, FDA approval and commercial
18:22
Speaker 3: failure because of sort of coverage.
18:25
Speaker 2: And whatnot, and so so I think that there's been.
18:28
Speaker 3: A lot of interest and could that liaison work better
18:31
Speaker 3: or differently?
18:31
Speaker 2: And should it?
18:33
Speaker 3: And you know, my now having been through this with
18:37
Speaker 3: a few different products, my senses, it's not perfect. But
18:41
Speaker 3: I also understand why, you know, why there has to
18:45
Speaker 3: be some sort of barriers between the agencies.
18:48
Speaker 2: Just like there have to be barriers.
18:49
Speaker 3: Between the NIH and the FDA, there there also have
18:51
Speaker 3: to be some barriers between the FDN CMS and they
18:53
Speaker 3: have to say and make some of their decisions, you know, independently.
18:56
Speaker 3: But I think that is a you know that's naturally
19:00
Speaker 3: a perfect example of the kind of thing where the
19:03
Speaker 3: secretary's goals and vision is really really important. And I
19:06
Speaker 3: don't think I can answer yet you know how Secretary
19:09
Speaker 3: Kennedy feels on these matters.
19:11
Speaker 1: I think that's right. Two things we do know that
19:13
Speaker 1: I want your gut check on. First is, like you said,
19:17
Speaker 1: tough to ask those questions when frankly, the house might
19:21
Speaker 1: be on fire. As it relates to NIH grants, freeze unfreeze,
19:26
Speaker 1: take them away from this university. We're not going to
19:28
Speaker 1: work with that region of the country. Here we are.
19:31
Speaker 1: You know, many months in what do you make of
19:35
Speaker 1: NIH funding? It seems like Congress is going to continue
19:39
Speaker 1: to back the idea that fundamental research is important. But
19:43
Speaker 1: to me, this NIH stuff is unprint precedented. You probably
19:48
Speaker 1: have a better feel with your university relationships just how
19:52
Speaker 1: impactful it is. So what is the impact the last
19:57
Speaker 1: six months of activity at the ni H has on
20:01
Speaker 1: our researchers nationally? And what do we have to do
20:04
Speaker 1: moving forward?
20:06
Speaker 3: Yeah, there's so many things going on and it's it's
20:08
Speaker 3: really a bit chaotic. It'd be hard to you know,
20:13
Speaker 3: we could spend a couple hours on these topic road
20:15
Speaker 3: really justice to it, but you know, maybe a few
20:17
Speaker 3: over arching remarxists. First of all, it is entirely fair
20:21
Speaker 3: to say does the NIH work as well as it should,
20:24
Speaker 3: you know, to question the structure of the NIH. And
20:26
Speaker 3: when I got up there was like, why do we
20:28
Speaker 3: have twenty eight ICs? You know, that's institution centers, that's
20:31
Speaker 3: government twenty eight?
20:33
Speaker 2: Is that the right number? Should it be twenty nine?
20:36
Speaker 2: You know, I mean should it be six?
20:38
Speaker 3: It seemed very administratively complex, and there's a lot of
20:42
Speaker 3: shared functions, you know, every one of those. You know,
20:46
Speaker 3: nih IS has like its own contracting office, you know,
20:49
Speaker 3: do we need that?
20:49
Speaker 2: You know, stuff like that.
20:50
Speaker 3: So the idea, because you could centralize some functions and
20:52
Speaker 3: maybe reduce the number of ICs. And and then another
20:56
Speaker 3: another you know, classic issue is like indirects. You know,
21:00
Speaker 3: this is the money that is paid as support to
21:02
Speaker 3: support a grant. So basically the direct costs you give
21:05
Speaker 3: the an academic institution to do the science, and the indirects,
21:07
Speaker 3: you know, support that. And everybody understands the concept of overhead.
21:10
Speaker 3: You know, if you've had any kind of a budget
21:12
Speaker 3: at all, you're familiar with this, you know, sort of
21:15
Speaker 3: GNA or overhead or whatever you want to call it,
21:17
Speaker 3: and this is the government version of that. But it's
21:19
Speaker 3: they're quite high. I mean, you know, in some grants
21:21
Speaker 3: it maybe seventy percent indirects. The way that that's what
21:25
Speaker 3: the seventy percent means is a little bit esoteric, but
21:27
Speaker 3: it's it's it's a lot of the money, you know,
21:29
Speaker 3: a significant fraction of science funding now goes for you know,
21:33
Speaker 3: sort of non scientific purposes.
21:35
Speaker 2: And and I think at some.
21:36
Speaker 3: Point, you know, it's a fair question to ask, is
21:38
Speaker 3: that the right number? And you know, is this what
21:40
Speaker 3: the American public wants? And those kinds of things. So
21:43
Speaker 3: I think these topics of you know, what the indirect
21:45
Speaker 3: rate ought to be, how many ICs ought to be,
21:48
Speaker 3: you know, what kinds of funt topics the government ought
21:50
Speaker 3: to be funding they're fair.
21:51
Speaker 2: That's all. That's fine. That that's a debate that we
21:54
Speaker 2: should welcome.
21:54
Speaker 3: And and it's also a debate, by the way, we're
21:57
Speaker 3: we should expect Congress to weigh in.
21:58
Speaker 2: You know, Congress, all the nih way indirects are going
22:01
Speaker 2: to be, you know that kind of stuff.
22:02
Speaker 3: So that's so I don't think we should, you know,
22:05
Speaker 3: shriek in horror and say any changes to the NIH
22:08
Speaker 3: you're unacceptable. We won't we won't put up with that,
22:10
Speaker 3: which which has sort of been a little bit of
22:12
Speaker 3: the academic reaction, and I think it's been unfortunate because
22:14
Speaker 3: I think the one thing I learned working in federal
22:16
Speaker 3: number five years is political capital is finite. You only
22:19
Speaker 3: have so much of it. And if you're going to
22:21
Speaker 3: freak out about indirects, then you're you're not going to
22:23
Speaker 3: preserve that one we have or other items where you
22:26
Speaker 3: might want it. And so I've been saying the item
22:28
Speaker 3: we really ought to focus on, you know, those of
22:30
Speaker 3: us in academia who care about the NIH and things
22:32
Speaker 3: like that, is not some of the day to day churn.
22:35
Speaker 3: That's got a lot of excitement, but it's really you know,
22:37
Speaker 3: the top line number that Congress appropriates, and we've just
22:41
Speaker 3: seen the sort of first data point in that, and
22:44
Speaker 3: you know, it was the Senate markup for twenty six
22:47
Speaker 3: you know, has the NIH had a modest increase a
22:49
Speaker 3: four hundred million dollars increase for.
22:50
Speaker 2: The NIH dollar increase to the nci UH.
22:53
Speaker 3: You know, I think everybody who's been saying in the
22:55
Speaker 3: newspaper for a year now that they expect. The thirty
22:57
Speaker 3: eight percent cut to the NIH was shocked, but I think,
23:01
Speaker 3: you know, those of us who worked with the units
23:02
Speaker 3: were not surprised. My first budget when I was in
23:05
Speaker 3: the government was a twenty five percent cut to the
23:07
Speaker 3: unit n CI, and we got we got to raise
23:09
Speaker 3: that year, we got a substantial increase. So you know,
23:11
Speaker 3: Congress doesn't listen to the president when any in any administration,
23:15
Speaker 3: not this president or any president in my life. Though
23:17
Speaker 3: when it comes to the you know, the budget of
23:18
Speaker 3: the UNH. They like the NIH, they like cancer research,
23:21
Speaker 3: and I suspect they're going to want to support that.
23:24
Speaker 3: So you know, that's the thing that I think we
23:26
Speaker 3: should be most politically focused on. And some of the
23:29
Speaker 3: other questions are are are appropriate questions that we can
23:32
Speaker 3: discuss and debate.
23:33
Speaker 1: I want to pivot from NIH. Let's go next door.
23:36
Speaker 1: Quick feedback on the FDA's Priority Review voucher program that
23:42
Speaker 1: has now come out of the Commissioner's Office, not to
23:44
Speaker 1: be confused with the old one out of Congress. What
23:48
Speaker 1: do you make of this? We've had some folks come
23:50
Speaker 1: on the show and sort of say, well, it kind
23:52
Speaker 1: of seems like the FDA commissioner can pick winners and losers.
23:57
Speaker 1: Is that your read and as an FDA commissioner, is
24:00
Speaker 1: that a good or bad thing? If that's the case?
24:02
Speaker 3: Yeah, I mean, I think it's a really interesting topic.
24:06
Speaker 3: My only my only insight here is what I've read
24:09
Speaker 3: in the media. So I have you know, no one
24:11
Speaker 3: is really willing to tell you the details of this
24:14
Speaker 3: program on what you know reporters are hearing anonymously kind
24:17
Speaker 3: of off the record, but I I think that uh, and that's,
24:20
Speaker 3: by the way, in my experience, always a bad sorts
24:23
Speaker 3: of information.
24:23
Speaker 2: I think.
24:23
Speaker 3: So so that caveat applies is that you know, what
24:26
Speaker 3: what you know the Washington Post off the record is
24:29
Speaker 3: often you know, semi true.
24:31
Speaker 2: But but so so I think the.
24:34
Speaker 3: It would be bad in my opinion, if the FDA
24:38
Speaker 3: Commissioner could just sort of say I like this product
24:40
Speaker 3: and not that product moving up in the queue, because
24:43
Speaker 3: that would be really uh, an avenue.
24:47
Speaker 2: From miss use, political interference and all kinds of stuff.
24:51
Speaker 2: You know, it just it would bring it would be
24:55
Speaker 2: it would provide a number.
24:56
Speaker 3: Of problems for the commissioner in terms of the optics
24:59
Speaker 3: of the job. But also you know, real you know,
25:01
Speaker 3: conflict of interest concern and you know, FDA commissioners can
25:05
Speaker 3: definitely get in trouble if they. You know, there's been
25:07
Speaker 3: plenty of past history of you know, commissioners getting associated
25:11
Speaker 3: with specific products and really undermining uh, you know, the
25:15
Speaker 3: agency and their authorities. So I think that I would
25:18
Speaker 3: I would recommend the FDE be very careful about anything
25:21
Speaker 3: that looks like it's kind of the commissioner's priority ree voucher.
25:24
Speaker 3: I think that's a that's that that that sounds kind
25:27
Speaker 3: of appealing that you you know, the executive branch could
25:30
Speaker 3: sort of pick winners and losers, But I think an
25:33
Speaker 3: actuality how that would work would be mechanically troubling. I
25:37
Speaker 3: think it's also important to note that all the other
25:38
Speaker 3: priority you vouchers, you know, for pediatric rare disease and
25:43
Speaker 3: disease and biodefense, all that stuff that that was through statute,
25:45
Speaker 3: you know, all those things where Congress said we're giving
25:48
Speaker 3: you the FDA the ability to do is this would
25:50
Speaker 3: not be statutory. And also the number that was floated
25:53
Speaker 3: would be like one month review, which I think is implausible, right,
25:56
Speaker 3: I Mean, there's you can't do review in one month,
25:58
Speaker 3: So I so I think some of the details you
26:00
Speaker 3: aren't quite fitting together.
26:02
Speaker 2: I'm not sure Congress are like this.
26:04
Speaker 3: I think some company that maybe got disadvantaged by this,
26:08
Speaker 3: that didn't get this and they therefore their product didn't
26:10
Speaker 3: get it reviewed in a timely manner could sue and
26:13
Speaker 3: argue that, you know, the FDA doesn't have this authority
26:15
Speaker 3: since it wasn't.
26:15
Speaker 2: Provided by statute.
26:16
Speaker 3: So I think it's the if you frame the legal
26:19
Speaker 3: framework to me, strikes me as a little if he
26:21
Speaker 3: But my biggest problem with it is this perception that
26:23
Speaker 3: the uh, the commissioners picking you know, kind of winners
26:26
Speaker 3: or losers for political purposes.
26:28
Speaker 2: Now, having said all that, so that's all the bad
26:30
Speaker 2: stuff that worries me about it. But you know, I
26:33
Speaker 2: think some of the FDA.
26:34
Speaker 3: Have tried to describe it more as, oh, this is
26:36
Speaker 3: just the FDA being able to identify really essential products
26:41
Speaker 3: and sort of prioritizing them. That that's this is just
26:44
Speaker 3: a prioritization thing for things that meet severe on medical needs,
26:48
Speaker 3: and therefore it's laudable. And you know, in fairness, the
26:52
Speaker 3: FDA already does kind of do that. I think the
26:54
Speaker 3: the inside the centers they do have some ability to
26:57
Speaker 3: you know, do this faster than that, and they've all
27:00
Speaker 3: always try to, you know, prioritize the resources in a
27:02
Speaker 3: way that's good for the public health. And so so,
27:05
Speaker 3: you know, some have described this as just making that
27:07
Speaker 3: process a bit more formal. Maybe that would be okay,
27:10
Speaker 3: but I think you know, how you talk about this
27:12
Speaker 3: and how you describe it is really going to matter.
27:14
Speaker 3: And if the optics are the FDA Commissioner has the
27:17
Speaker 3: you know, the ability to you know, just pick a
27:20
Speaker 3: product and and and bump into the head of the queue.
27:23
Speaker 2: I don't think that would be a good look.
27:24
Speaker 1: Yeah, And it's funny you said, I meant to jump
27:27
Speaker 1: in earlier when you talked about RFK Junior and how
27:30
Speaker 1: he kind of resonates with the public. I always, you know,
27:33
Speaker 1: as sort of a creature of Washington. When I'm with people,
27:37
Speaker 1: I remind people that Washington is is just a big
27:39
Speaker 1: mirror of the American public. And you don't have RFK
27:44
Speaker 1: Junior if you don't have a lot of people questioning,
27:49
Speaker 1: like this has been building for some time. Why are
27:52
Speaker 1: rates for chronic disease going up? What's in the water,
27:55
Speaker 1: what's in the food? Why is it different in Europe,
27:58
Speaker 1: Why does that food feel healthier? Like this was bubbling
28:01
Speaker 1: and bubbling and social media added to it. And so
28:03
Speaker 1: I think your point that what's resonating with the people
28:07
Speaker 1: is what we're seeing at the top. And then if
28:09
Speaker 1: you think about what you just said, Hey, a drug
28:12
Speaker 1: we really need or a product we really need should
28:15
Speaker 1: move faster. If I pulled my Thanksgiving table, they'd say absolutely,
28:20
Speaker 1: you know, we would like to see a drug that
28:23
Speaker 1: helps people with cancer that has no other treatment move
28:26
Speaker 1: faster through this bureaucratic process than you know, the sixth
28:31
Speaker 1: in line exema treatment. And so you can also just
28:35
Speaker 1: see something this administration does very well is tap It's
28:38
Speaker 1: very sellable some of these ideas, even and albeit when
28:42
Speaker 1: not all the details are there.
28:45
Speaker 3: Yeah, no, no, I think that's really important to remark
28:48
Speaker 3: is that, you know, some of the things the Secretary
28:52
Speaker 3: of the White House say may not make sense to
28:55
Speaker 3: you know, the facult lead to Harvard Medical School, they
28:58
Speaker 3: make fact that they make sense in the American public offe
29:00
Speaker 3: And that's really the source of the power, right that
29:03
Speaker 3: you know, if if eighty million people are you know,
29:05
Speaker 3: support the administration and believe we're on the right track,
29:08
Speaker 3: and that's that's a data point that we should listen to.
29:11
Speaker 3: And so I think that clearly a large portion of
29:15
Speaker 3: American public has expressed skepticism about vaccines and an interesting
29:20
Speaker 3: chronic diseases and getting the food dies out of the food.
29:23
Speaker 3: And you know, this stuff is manifested, as you said,
29:25
Speaker 3: is built for many years. It's not a new phenomena,
29:27
Speaker 3: and it's manifested through you know, Secretary of Kennedy and
29:30
Speaker 3: and and so that's something we should listen to.
29:33
Speaker 2: I think the the's some way the academic.
29:35
Speaker 3: Response that that guy is, you know, completely out there
29:39
Speaker 3: and he's not he's not not serious and we have
29:41
Speaker 3: to listen to him is the wrong response. I mean,
29:42
Speaker 3: I think that this is in some ways an indication
29:46
Speaker 3: of what the American public wants, and it's important.
29:49
Speaker 1: So that was tremendously helpful, by the way of I
29:52
Speaker 1: think so many good takeaways on the administration, things that
29:56
Speaker 1: are coming up down Pennsylvania Avenue on Capitol Hill. Would
30:00
Speaker 1: love your your quick feedback. You mentioned already the pill penalty,
30:05
Speaker 1: and hey, that's a great drug you've got there any
30:08
Speaker 1: chance it comes as a biologic, because then I'd be interested.
30:11
Speaker 1: So obviously the epic act not included in reconciliation Orphin
30:16
Speaker 1: cures was which fixes one of the key flaws in
30:19
Speaker 1: the i RA. The concern about small molecule versus biologic
30:25
Speaker 1: still real, still something you think about.
30:27
Speaker 3: Oh yeah, no, it's it's definitely something I think about,
30:29
Speaker 3: and I think it really is while it's around, it's
30:34
Speaker 3: going to be driving this preference for one therapy of
30:37
Speaker 3: class versus the other.
30:38
Speaker 2: And I like to point out that like small molecules
30:41
Speaker 2: really useful.
30:42
Speaker 3: That's like penicillin, right, I mean, there's some really good
30:45
Speaker 3: drugs and and and they have a lot of advantages.
30:47
Speaker 3: They you know, you can take them at home. They
30:49
Speaker 3: don't need in fusion centers. Biologics are great too, but
30:53
Speaker 3: they have some complexity that small molecules don't. So it's
30:56
Speaker 3: it's really in our interest to have its not really
31:00
Speaker 3: a preference in the law one way or the other,
31:01
Speaker 3: because I think we need both, you know, good research
31:03
Speaker 3: in both classes of medicine.
31:04
Speaker 2: So I worry about this a lot. You know. In fact,
31:07
Speaker 2: when the IRA came out, I.
31:09
Speaker 3: I I think there were there were some who hoped
31:12
Speaker 3: to repeal it entirely, and I thought that was probably unwise.
31:16
Speaker 2: I thought there were aspects of the IRA that are
31:18
Speaker 2: very popular, that do.
31:20
Speaker 3: Things that you know, it solves, however, inelegantly, the problem
31:24
Speaker 3: that some drugs seemingly never went off patent, that they
31:27
Speaker 3: you know, had these very extended branded lives that were
31:30
Speaker 3: hard to defend, and it drove everybody crazy, you know,
31:33
Speaker 3: Republicans and Democrats both, and so the IRA was a
31:35
Speaker 3: solution to that problem. And capping some of the out
31:38
Speaker 3: of pocket costs very popular.
31:39
Speaker 2: Some of the other popular.
31:40
Speaker 3: So my main I always we should try and fix it,
31:43
Speaker 3: you know, we should try and try and address those things.
31:46
Speaker 2: That uh are are are are the.
31:48
Speaker 3: Most detrimental industry and into drug discovery, into helping the
31:51
Speaker 3: American patient. And you know, one of those things was
31:54
Speaker 3: the orphan problem where you know, if you if you
31:56
Speaker 3: got your drug approved for an orphan designation, the IRA
31:59
Speaker 3: then created this massive disincentive to not ever see organ
32:02
Speaker 3: distingish for anything else.
32:03
Speaker 2: And that you'll know the details better than I, but
32:06
Speaker 2: you know that that.
32:07
Speaker 3: Was in part fixed, if you will, in the reconcil
32:10
Speaker 3: in the one big beautiful bill in the reconciliation process.
32:13
Speaker 2: So what's left to me?
32:14
Speaker 3: The other problem that you know, it seems to make
32:18
Speaker 3: not great sense from my point of view, is the
32:20
Speaker 3: pill penalty, and I do hope that will get fixed.
32:23
Speaker 3: I think that that, you know, would provide an incentive
32:30
Speaker 3: to you know, for venture and people like me to
32:33
Speaker 3: work on small molecules. Again, it doesn't sound if you
32:37
Speaker 3: don't kind of understand what's really nine to thirteen is
32:38
Speaker 3: that big a difference, But if you really think about
32:41
Speaker 3: you know, pills, drugs in general make most of their
32:43
Speaker 3: money the longer they're on the market is doctors feel
32:47
Speaker 3: comfortable using them and they get embraced. So the last
32:50
Speaker 3: year or two or by far the most valuable. So
32:52
Speaker 3: you know, cutting the period from thirteen to nine years,
32:56
Speaker 3: you know, is sort of like a fifty percent cut
32:59
Speaker 3: in the net present value of the asset. So you know,
33:02
Speaker 3: those kinds of huge, you know, effects are going to
33:05
Speaker 3: disincentivize people, and we're all, we're only going to have biologics,
33:08
Speaker 3: and you know, biologics have their advantages, but you know,
33:11
Speaker 3: we need small molecules as well. So so I think,
33:14
Speaker 3: you know, fixing that seems like an obvious thing that's
33:17
Speaker 3: still ought to happen. I believe there's bipartisan support withs
33:20
Speaker 3: in Congress. I do think that this has got a
33:22
Speaker 3: decent chance. Uh if you know, Congress is able to
33:25
Speaker 3: pass laws and you know, you know, if things are
33:31
Speaker 3: going to happen, then this I think has decent prospects.
33:33
Speaker 1: That's a that's a big if. Ned I wouldn't normally
33:37
Speaker 1: put a guest through scientific rigor, but you are a
33:41
Speaker 1: world class expert in oncology.
33:44
Speaker 2: I did a.
33:44
Speaker 1: Piece with jf Over at Atlas about small molecule and
33:49
Speaker 1: the next sort of revolution in oncology, and one of
33:53
Speaker 1: his key points was that specific to cancer, there is
33:58
Speaker 1: so much that biologics just may not be able to
34:01
Speaker 1: do down the line in terms of reaching certain parts
34:03
Speaker 1: of the body. Things like that. You're world class oncology
34:06
Speaker 1: expert agree with that statement that for the cancer community,
34:11
Speaker 1: we were actually kind of beginning to look back at
34:14
Speaker 1: small molecule and see what's there.
34:17
Speaker 2: Yeah, no, no, no doubt. I mean, you know, like,
34:19
Speaker 2: like one really obvious, easy to.
34:21
Speaker 3: Understand advantage of small molecules is it's like a pill
34:24
Speaker 3: you can take every day, and so you know, antibodies
34:28
Speaker 3: like biologic you often infect infuse even to do that
34:31
Speaker 3: weekly as a hassle often it's kind of every couple
34:33
Speaker 3: of weeks. So if you need a drug to be
34:36
Speaker 3: present at a decent pharmacological concentration to you know, provide
34:40
Speaker 3: some effect for a long period of time, like you know,
34:42
Speaker 3: leukemia is sometimes to do this for years. We treat
34:45
Speaker 3: our kids for AML for ALLL for like two years. Right,
34:48
Speaker 3: you just need a small molecule to do that. There's
34:50
Speaker 3: really no way to do that with a biologic so,
34:52
Speaker 3: you know, so sustained pharmacologic effect is an obvious example
34:57
Speaker 3: where small molecules kind of win. The other thing we're
35:00
Speaker 3: small molecules kind of win is you can kind of
35:01
Speaker 3: do them anywhere, so you can pack up a box
35:05
Speaker 3: of pills and send it to Malawi to fight malaria.
35:08
Speaker 3: You know, Carte cells require a complex GMP manufacturer and
35:12
Speaker 3: stuff like that. So so small molecules have this and
35:15
Speaker 3: they go generic. You know that there's very appealing feature
35:18
Speaker 3: that there's a very straightforward path to then become low
35:21
Speaker 3: cost medicines that can be used for worldwide impact.
35:23
Speaker 2: So we we we should, you know, love small molecules.
35:26
Speaker 3: Some of our best friends, you know, I mean, these
35:28
Speaker 3: are these are medicines that we've all taken and used
35:30
Speaker 3: throughout our lives and and uh and and and it's
35:33
Speaker 3: not like we found them all. You know, there are
35:35
Speaker 3: great ideas still left to be tapped. So I think
35:37
Speaker 3: that is a therapeutic class that really is important.
35:42
Speaker 1: But big picture, how critical does IP protection, strong, consistent,
35:48
Speaker 1: transparent IP protection? How important is that to you as
35:51
Speaker 1: an investor?
35:52
Speaker 2: Yeah, I know, that's that's really important.
35:55
Speaker 3: I mean that's kind of the you know, the checklist
35:58
Speaker 3: of things that you go through when you want to
36:00
Speaker 3: look at a new idea a company to invest in.
36:02
Speaker 2: The i P is you know, front end center.
36:05
Speaker 3: It's always like the first or second thing we consider,
36:08
Speaker 3: and you know, can you get more i P?
36:10
Speaker 2: Can you get different i P?
36:11
Speaker 3: You know that that's without strong i P, these these
36:14
Speaker 3: ideas can't be made valuable. And you you certainly see, uh,
36:18
Speaker 3: this is a consistent problem where they're they're problems medicine
36:22
Speaker 3: that we like to solve. But it's hard to get
36:24
Speaker 3: good i P for a variety of reasons, and so
36:27
Speaker 3: you don't see as much work in areas. So so
36:29
Speaker 3: you know you have clear proof of the importance and
36:31
Speaker 3: i P in early stage drug discovery and and and
36:34
Speaker 3: and develop medical products in general. So and you know,
36:38
Speaker 3: I think that the US has had a good intellectal
36:41
Speaker 3: property framework. I mean, I think the IP law and
36:44
Speaker 3: Hatch wax Men in particular is you know, good in
36:46
Speaker 3: the United States, and it's created a framework that I
36:49
Speaker 3: basically believe in and I think works.
36:51
Speaker 2: And I and in.
36:52
Speaker 3: The Ney the bidol angle that allows you to take
36:54
Speaker 3: IP from a university and commercialize that you know, yeah
36:57
Speaker 3: or is really important doesn't exist in all of the
36:59
Speaker 3: kind trees, and it really hurts academic commercialization. So I think,
37:02
Speaker 3: I think you and the United States has has hit
37:04
Speaker 3: upon a good framework that in many ways is great.
37:06
Speaker 3: And to me that the biggest threat that I worry
37:09
Speaker 3: about in this space, and it's back in the news
37:11
Speaker 3: today is the most favorite nation status. So so the
37:14
Speaker 3: law allows the US government to sort of march I mean,
37:17
Speaker 3: I'm not most take it back marching rights.
37:19
Speaker 2: So MFN is a different problem like that.
37:24
Speaker 3: But Margin riises his idea and hatch Waxman that you
37:26
Speaker 3: can that the US government can take a piece of
37:29
Speaker 3: electrial property if the product isn't being developed in a
37:32
Speaker 3: timely and fair way, and you know, it had been
37:35
Speaker 3: used a lot.
37:36
Speaker 2: By the drug pricing people to try.
37:39
Speaker 3: So the NIH would get a petition about every other
37:41
Speaker 3: year saying the US government should take the i P
37:44
Speaker 3: for some medicine insolutam.
37:45
Speaker 1: Always extending always, Yeah.
37:49
Speaker 2: It was. It goes back.
37:50
Speaker 3: I think it was even like HIV drugs back in
37:51
Speaker 3: the year, right, Yeah, long and distinguished history of this
37:54
Speaker 3: and and it Uh, you know, it would be really
37:57
Speaker 3: bad to do this because that one, if it were
38:00
Speaker 3: happened one time, then it would sort of undermine all
38:02
Speaker 3: IP collectively.
38:03
Speaker 2: Anytime a.
38:06
Speaker 3: Manufacturer we're making, you're charging too much for their drug
38:09
Speaker 3: in somebody's eyes, you know, some some in some politicians'
38:12
Speaker 3: opinion the drug is too expensive, then there would be
38:15
Speaker 3: the prospect of you know, losing the IP and and
38:17
Speaker 3: and devaluing the assets.
38:18
Speaker 2: So it would be really scary.
38:21
Speaker 3: It would be bad for academic collaborations because you know,
38:24
Speaker 3: they would it would provide the strong dist incentives to
38:26
Speaker 3: not work with government because it's based on the pretext
38:28
Speaker 3: of the government supplied some funding for the idea earlier on.
38:32
Speaker 2: So so marchin rights are really bad.
38:34
Speaker 3: And you know, and now I see this as uh,
38:36
Speaker 3: the administration is threatening Harvard University with you know, seizing
38:40
Speaker 3: some of their IP through march in if they don't
38:44
Speaker 3: start to agree with.
38:45
Speaker 2: The administration on certain issues.
38:46
Speaker 3: So I don't like marchin being used for any purpose
38:49
Speaker 3: because I think once you once the government asserts it
38:52
Speaker 3: can do that for this reason, it's easy to do
38:55
Speaker 3: it for that reason in a future administration.
38:57
Speaker 2: So I and I think that would really undermine.
38:59
Speaker 3: The these strong and stable and muti property framework that
39:02
Speaker 3: we have in this country.
39:03
Speaker 1: All policymakers listening to this episode, that is what's clear.
39:08
Speaker 1: You are opening Pandora's box, and from the investment community,
39:11
Speaker 1: we will always assume there will be some risk that
39:14
Speaker 1: IP will be taken and cost goes up or people
39:17
Speaker 1: walk away. You mentioned most favored nation this idea we
39:21
Speaker 1: would pay European prices for drugs. We have had a
39:24
Speaker 1: whole episode devoted to it. I mean, could you even
39:28
Speaker 1: operate if we paid what we pay in Europe? Or
39:32
Speaker 1: does the whole NPV go out the window if the
39:35
Speaker 1: US market is France.
39:37
Speaker 3: Yeah, this is a complicated topic, and I think and
39:41
Speaker 3: one in which I am not an expert, don't I
39:43
Speaker 3: don't you know, I generally have this calculation when we
39:47
Speaker 3: when we look at a medical product and the incidence
39:49
Speaker 3: of the disease is the same in the United States
39:51
Speaker 3: and the rest of the world, So it's not like
39:53
Speaker 3: you know, something that specifically happens in Southeast Asia or something. Yeah,
39:56
Speaker 3: calculation is the US is half of the total market
39:59
Speaker 3: and the the world is the other half. Most varidation
40:02
Speaker 3: sets would would distort that calculus in a serious way.
40:05
Speaker 3: I think, you know, the US would become less valuable
40:08
Speaker 3: and you'd start to care a lot more about what
40:10
Speaker 3: the rest of the world would pay. And in general,
40:12
Speaker 3: prices are much lower, even in affluent countries in Europe,
40:15
Speaker 3: for example, So it may be that, you know, certain
40:20
Speaker 3: kinds of products couldn't be profitable under that framework, although
40:24
Speaker 3: it also may be that.
40:27
Speaker 2: You know, certain countries that are not the US could
40:29
Speaker 2: pay more for their drugs and.
40:31
Speaker 3: And you know, so it's you know, where it fits
40:33
Speaker 3: on the scale of bad things that can happen to
40:34
Speaker 3: the pharmaceutical industry. Mfn IS is probably not the worst
40:38
Speaker 3: thing that could happen, but it is a serious worry
40:40
Speaker 3: and the details.
40:41
Speaker 2: Of how it'd be implemented and how it'd be work.
40:43
Speaker 3: You know, is it is it a basket or has
40:45
Speaker 3: it truly got to be the lowest price, you know,
40:47
Speaker 3: lower than France or whatever. You know, those details are
40:49
Speaker 3: really matter and of course be important. But but I
40:51
Speaker 3: do think, you know, the one thing I do understand
40:54
Speaker 3: about this is it's a political issue.
40:56
Speaker 2: The politics of this were bad.
40:58
Speaker 3: You know, the idea you know this is this is
41:00
Speaker 3: the one thing that like drives Bernie Sanders and Ted
41:04
Speaker 3: Cruz equally crazy. Is that a medicine in the United
41:07
Speaker 3: States is you know, ten times is expensive here than
41:10
Speaker 3: it may be in a very wealthy European country. And
41:13
Speaker 3: so that that perception, that belief that that occurs is
41:17
Speaker 3: bad politics. And so if we believe that this framework
41:22
Speaker 3: needs to continue to exist in this way, then then
41:24
Speaker 3: I think the farms of industry has to have a
41:26
Speaker 3: better explanation.
41:27
Speaker 2: For why that is.
41:29
Speaker 3: And it reminds me the response, the political response, not
41:33
Speaker 3: the policy response, but the political response reminds me a
41:37
Speaker 3: little bit of what industry did with drug pricing for many,
41:41
Speaker 3: many years. The industry line was, if the FDA approves it,
41:44
Speaker 3: we got to pay It. Doesn't matter what the price is,
41:46
Speaker 3: doesn't matter if the drug's valuable or not. Any approved
41:49
Speaker 3: medicine we got to pay for.
41:50
Speaker 2: That's what insurance should don't think about it.
41:51
Speaker 3: YEA, yeah, And that was nice because that meant that
41:54
Speaker 3: if your drug got approved, you could predict the market whatnot.
41:56
Speaker 3: But it politically was awful because it meant that, you know,
41:59
Speaker 3: that we were committing to paying for medicines that often
42:02
Speaker 3: didn't work as well as we thought, or there was
42:03
Speaker 3: no sort of priorization for value based therapies or whatever
42:07
Speaker 3: and so. And because industry took this hard line and
42:11
Speaker 3: refused to consider, you know, the value of the medicines
42:13
Speaker 3: in any any reasonable.
42:14
Speaker 2: Way, we got the IRA. And so I think that's
42:17
Speaker 2: what's going to happen here.
42:18
Speaker 3: If if if the if the posture continues to be
42:21
Speaker 3: drugs just got to be much much more expensive in
42:24
Speaker 3: in you know, the US than in Switzerland or or whatever,
42:28
Speaker 3: then that's that's a that's a tough posture to defend.
42:31
Speaker 3: And I think the solution there has to be some
42:32
Speaker 3: solution to this that allows medicines still be profitable, that
42:37
Speaker 3: allows to reward in a nation, but doesn't ask the
42:39
Speaker 3: American consumer to pay an undiburden.
42:41
Speaker 1: And I wonder if this direct to patient is somewhat
42:48
Speaker 1: of an off ramp one of the g LP ones.
42:50
Speaker 1: I forget which one I thought Lily's you know, thousand
42:54
Speaker 1: buck lits list price four hundred dollars Lily Direct get
43:00
Speaker 1: just get it straight from Lily. That's a sixty percent reduction.
43:04
Speaker 1: It's not quite what the UK pays. But so I
43:07
Speaker 1: wonder if that's a pressure valve that relieves some of
43:10
Speaker 1: this and is an off ramp.
43:12
Speaker 3: I think we should be discussing these solutions, you know,
43:15
Speaker 3: is there some way too? And I don't I don't
43:18
Speaker 3: think you know, there are reasons why medicines should be
43:22
Speaker 3: more expensive the United States in other countries that are good,
43:24
Speaker 3: like like we have a much stronger regulatory environment. We
43:28
Speaker 3: for you know, prioritize patient safety. You know, getting something
43:31
Speaker 3: through the US FDA is much harder than most other
43:33
Speaker 3: regulatory agencies. And the American public will wants a high
43:37
Speaker 3: bar for safety, right, so we should be willing to
43:39
Speaker 3: pay for that. So it makes sense to me that
43:41
Speaker 3: the medicines don't have to be the same, you know,
43:44
Speaker 3: the prices don't have to be exactly the same, but
43:47
Speaker 3: you know that we should pay some modest premium for
43:50
Speaker 3: the American and perimeter of the drug working. But so
43:54
Speaker 3: so I think things like what you suggested, you know,
43:56
Speaker 3: could direct a consumer sort of bring costs down to
44:00
Speaker 3: a more reasonable strike zone. Are really the right questions
44:03
Speaker 3: that industry should be asking is you know, I think
44:05
Speaker 3: these you acknowledge they have a really bad political problem here.
44:08
Speaker 3: You know, when you start getting bipartisan you know, criticism,
44:12
Speaker 3: you should listen to that.
44:14
Speaker 1: That's that's the blinking yellow light for you on.
44:16
Speaker 2: Side is mad.
44:18
Speaker 3: You can get away with it because you know, that's
44:19
Speaker 3: the Congress can't do anything thing. But when when both
44:22
Speaker 3: sides start to say, you know, we don't like this,
44:25
Speaker 3: you start to pay attention. And so so I think
44:26
Speaker 3: that you know, creative solutions like you know, more robust
44:30
Speaker 3: use of direct to consumer.
44:31
Speaker 2: We should definitely discussing.
44:32
Speaker 1: We've got a couple of minutes for two big topics,
44:35
Speaker 1: so quick rereaction. The first one is AI in drug development.
44:42
Speaker 1: Are we there yet? Are you thinking about it? There's
44:46
Speaker 1: a lot of hype, but not not so much yet.
44:50
Speaker 3: No, it's it's it's it's extremely useful tool, you know,
44:53
Speaker 3: like the alpha fold. The ability to of AI to
44:56
Speaker 3: predict protein structures is a Nobel Prize winning discus.
45:00
Speaker 2: It's a big deal. It really helps drug discovery.
45:03
Speaker 3: But it's also you know, it's not like you can
45:06
Speaker 3: just spit your idea into you know, chatty BT and
45:09
Speaker 3: it gives you a drug ten minutes later.
45:10
Speaker 2: I mean, you know, it's drugs.
45:12
Speaker 1: Let me, let me just come up with something right now.
45:15
Speaker 3: So you know, I've tried even asking you know, some
45:17
Speaker 3: of the more sophisticated ones like you know it, you know,
45:21
Speaker 3: Terance how the famous mathematician said, AI kind of works
45:24
Speaker 3: like a dumb.
45:25
Speaker 2: Grad student, and that's about where it is.
45:27
Speaker 3: You know, you know, if you need it to mine
45:28
Speaker 3: ideas and help you figure out you know, expression profile,
45:32
Speaker 3: you know it really analyzed data, it's you know, it's
45:36
Speaker 3: a helpful tool, but it's not you know, human level,
45:39
Speaker 3: uh you know, intelligence at the moment, or at least
45:42
Speaker 3: the creativity, I should say.
45:44
Speaker 2: So.
45:44
Speaker 3: So I think I think I think it's very useful
45:46
Speaker 3: set of tools. I compare it to like Excel. Like
45:49
Speaker 3: you know, Excel is a very useful program that we
45:52
Speaker 3: you know, makes a lot of things in our life
45:55
Speaker 3: much easier, but it doesn't really fundamentally change the universe yet.
45:58
Speaker 3: And I think that's where AI is is that while
46:00
Speaker 3: there's you know, tremendous hype and a lot of promise
46:03
Speaker 3: right now. It helps with some very specific tasks like
46:07
Speaker 3: what is the protein going to structure going to look like,
46:09
Speaker 3: what's the target going to bind?
46:11
Speaker 2: How's that interaction going to do? And you know, so it.
46:13
Speaker 3: Does help you skip steps and speed drug discovery, and
46:15
Speaker 3: and and and I think it also, by the way,
46:18
Speaker 3: has a very useful set of functions on you know,
46:21
Speaker 3: analyzing clinical data on the back end. So you know,
46:23
Speaker 3: companies like Tempests are now trying to aggregate clinical data
46:27
Speaker 3: so they can use AI to you know, find trends
46:29
Speaker 3: in the clinical data that are hidden, and that's a
46:31
Speaker 3: really good use of AI, I think as well. So
46:34
Speaker 3: there are there are some real areas where it's helping tremendously,
46:37
Speaker 3: but it's it's not it's not quite up to the
46:40
Speaker 3: level of hype yet.
46:42
Speaker 1: If AI is option one A, Option one B is
46:47
Speaker 1: Chinau some divide, I would even say in the early
46:51
Speaker 1: stage community, certainly, lots of thoughts on Capitol Hill, how
46:55
Speaker 1: do you think about China's surging in biotech space and
47:02
Speaker 1: what what in your view is the right attitude of
47:05
Speaker 1: how to handle that.
47:06
Speaker 3: I mean, I think it's it's I can just make
47:10
Speaker 3: a few observations that are I think undisputed facts, which is,
47:14
Speaker 3: you know, when I sort of started out as a scientist,
47:16
Speaker 3: there were lots of Chinese grad students and post docs
47:18
Speaker 3: coming to the US and getting training, and they were
47:20
Speaker 3: very good.
47:21
Speaker 2: They were very good scientists.
47:23
Speaker 3: They worked very hard, and many of them could not
47:25
Speaker 3: get jobs in the United States. Many of them wanted
47:27
Speaker 3: to stay, but they couldn't get jobs here, and they
47:28
Speaker 3: went back to China where they now continue to be
47:31
Speaker 3: very good scientists. And so whether we you know, it
47:34
Speaker 3: was a good idea or not, we've trained a generation
47:36
Speaker 3: of really fantastic Chinese scientists and so now the level
47:40
Speaker 3: of you know, science over there is really high, and
47:43
Speaker 3: you know, the best scientists in China are working at
47:45
Speaker 3: the level of you know, Harvard and Stanford and whatever.
47:48
Speaker 2: Your favorite institution is the United States.
47:50
Speaker 3: So so that that means that where China a couple
47:53
Speaker 3: of years ago, it looked like most of the products
47:55
Speaker 3: were kind of me too.
47:56
Speaker 2: You know.
47:56
Speaker 3: It was like you have apartment hibbit in the US
47:59
Speaker 3: and then we'd have seven Chinese department members. You know,
48:01
Speaker 3: we still have a lot of that. There's still a
48:03
Speaker 3: lot of meth tooism in China. But there's also original
48:05
Speaker 3: discovery now, you know, investigator initiated stuff that's leading to you.
48:09
Speaker 2: Know, first in class medicines.
48:10
Speaker 3: And you're starting to see American companies realize there's this
48:14
Speaker 3: creativity and ingenuity and the Chinese scientists and buying those assets.
48:18
Speaker 3: So we're now starting to see a lot of you know,
48:20
Speaker 3: kind of first in class assets being created in China
48:24
Speaker 3: and being brought, you know, into the US market, often
48:27
Speaker 3: through some kind of joint venture with an American pharmacuo company.
48:30
Speaker 3: And I think from my point of view, that's fine.
48:33
Speaker 3: You know, if China's up its game, then we have
48:35
Speaker 3: to do the same, and we should. At the end
48:38
Speaker 3: of the day, we're all trying to cure cancer or
48:40
Speaker 3: chronic disease for our patients, and so you know, the
48:43
Speaker 3: fact that Chinese scientists have gotten good at this is
48:45
Speaker 3: something we should celebrate, not complain about. I do think
48:50
Speaker 3: there's been some bad stuff about the relationship that we
48:54
Speaker 3: shouldn't gloss over. You know, there's clearly been theft of
48:57
Speaker 3: intellectual property in the past, and that's still probably go
49:00
Speaker 3: on to some extent. There's certainly things about the Chinese
49:03
Speaker 3: market that are in penetral these regulatory tariffs and barriers
49:06
Speaker 3: to entry and things like that. So it's not completely fair,
49:10
Speaker 3: you know about you know, you can develop your idea
49:14
Speaker 3: here in the US, but then when you're going to
49:15
Speaker 3: try and sell them to the Chinese.
49:16
Speaker 2: Market, you're forcing this collaboration that isn't quite right.
49:19
Speaker 3: So I think there's some trade things that you know,
49:22
Speaker 3: really drive the White House and Congress crazy that we
49:25
Speaker 3: should even out. And it's fair to point out that
49:27
Speaker 3: those things need to get normalized. But basically the relationship
49:31
Speaker 3: from my point of view, is fundamentally changed from twenty
49:33
Speaker 3: years ago.
49:34
Speaker 2: That now there's very high quality science there.
49:37
Speaker 3: There are assets being developed there that we should really
49:39
Speaker 3: take a look at, and you know, the ability to
49:42
Speaker 3: collaborate with Chinese partners scientifically is really important American companies.
49:46
Speaker 3: So I you know, have a lot of work we
49:48
Speaker 3: use with Chinese CROs and we you know, consider clinical
49:51
Speaker 3: trials in China.
49:52
Speaker 2: You know, there are a bunch of things about the
49:53
Speaker 2: Chinese market. They're attractive.
49:54
Speaker 3: So it's a mix of some good stuff and some
49:57
Speaker 3: bad stuff, but it is you know, the ascendancy of
50:01
Speaker 3: China scientifically is an undisputed fact and one that we're
50:03
Speaker 3: gonna have to live with in the future world.
50:06
Speaker 1: Well said, Ned, we have covered a lot of ground.
50:11
Speaker 1: I'm so grateful that you took time out of your day.
50:14
Speaker 1: Congratulations on Jupiter's initial success. I'm excited for Jupiter two
50:18
Speaker 1: and then Jupiter three and then Jupiter eight. Any closing thoughts,
50:22
Speaker 1: and thank you again for being just stellar guests. We'll
50:25
Speaker 1: have to have you back very soon.
50:26
Speaker 3: No, thank you for the moment to come, I mean
50:29
Speaker 3: for the for the opportunity to speak. I mean, I
50:30
Speaker 3: think maybe my closing thought is something I feel like
50:33
Speaker 3: I've been saying to everybody lately, is that, you know,
50:37
Speaker 3: while it seems like a kind of crazy, chaotic environment,
50:40
Speaker 3: at the end of the day, what we're doing, you know,
50:43
Speaker 3: trying to discover new medicines for patients and cure disease
50:47
Speaker 3: and improve the quality of life for everybody is still
50:50
Speaker 3: something that everybody in America wants. You know, there's a
50:52
Speaker 3: uniform agreement this is a good thing to be doing.
50:55
Speaker 3: There's broad bipartisan support for this, and so I think
50:58
Speaker 3: things like the NIH and the FDA going to be
51:00
Speaker 3: fine because they have to be fine, because the American
51:02
Speaker 3: public wants them to be fined, as does the Congress
51:05
Speaker 3: in the.
51:05
Speaker 2: In the White House.
51:06
Speaker 3: So I think that while you know, it seems a
51:09
Speaker 3: little chaotic at the moment, my advice is to you know,
51:12
Speaker 3: as a scientist or a doctor or someone involved in
51:16
Speaker 3: drug discoveries, kind of keep your head down, uh, and
51:19
Speaker 3: and do you stay stay stay focused on the important mission,
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Speaker 3: and all this other stuff will work out.
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Speaker 1: Thank you, Ned, great to spend some time together.
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Speaker 2: It's good to see you guys again. Thank you very
51:28
Speaker 2: much for having me.
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Speaker 1: That's all for this episode of the Making Medicine podcast.
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Speaker 1: A special thank you to Ned for joining us. Hopefully
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Speaker 1: he'll be back soon. And a special thank you to
51:38
Speaker 1: the many of you who have shared positive feedback on
51:40
Speaker 1: the re launched Making Medicine. A reminder to subscribe to
51:43
Speaker 1: our YouTube channel so you can stay up to date
51:46
Speaker 1: on the world of policy and innovation. Follow us on LinkedIn,
51:49
Speaker 1: x and Instagram using the links in the description of
51:52
Speaker 1: this video, and as always, keep innovating.
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Speaker 2: Two