[00:00:16] Speaker A: Welcome to the latest episode of the Few and Far between podcast. I'm your host, Chris O'Brien. Many of our podcast guests have spoken about reaching their lifelong goal of bringing their treatment to market. An admirable achievement and not one that everyone reaches. My next guest has transformed his passion for helping others into six drugs that have been approved by the FDA and released to patients who need them. Jonathan Rigby has leveraged his 30 year career journey in pharmaceuticals, biotech and drug delivery into life saving solutions to treat diseases that are personal to him. Currently, Jonathan serves as CEO and Chairman at Cernova, a clinical stage biotechnology company currently focusing on on an implantable biohybrid organ called the Cell Pouch which works to restore normal bodily function for people with type 1 diabetes and other chronic diseases. This is some seriously cool technology. On today's episode, Jonathan and I discuss the details behind the Cell Pouch system, his personal history with type 1 diabetes, and the twisty career path that led him to this important functional cure. We'll also zoom in on the strong attraction of the Bay Area and Boston as biotech hubs and how to visualize a biotech company as a mechanical clock and how this can guide you on the path to success. Okay, let's start the podcast.
[00:01:42] Speaker B: Jonathan Rigby, welcome to Few and Far Between.
[00:01:44] Speaker C: Hello Chris, it's great to be here and thank you for having me.
[00:01:48] Speaker B: Yeah, it's a pleasure to have you on. I'm going to start because of the lengthy and twisty nature of your career, let's give our listeners a little sense of how you got started in pharmaceuticals and you know, we'll go relatively quickly through what is many years of experience. But start us at the beginning. How did you get attracted to the life sciences?
[00:02:05] Speaker C: I'm happy to talk about my Lengthy and twisty as you describe it. Never heard that before, but I guess it is appropriate. So yes, I've been in the world of pharmaceuticals, biotech, medtech for over 30 years. I grew up in the UK. I have a biology degree and an MBA. Lengthy and twisty. I left university on Friday, started work on Monday and I've never stopped since. And as an ambitious 23 year old, I thought I could change the trajectory of the world's largest pharmaceutical company at the time and I failed.
[00:02:36] Speaker B: How did that work out, Jonathan? Complete transformation.
[00:02:39] Speaker C: It didn't work, I admit, because I failed. So on reflection, I thought it might be a good idea to start working for smaller companies where maybe I could have an impact and do something good for humanity. That was my goal. Still My goal. So I worked for a smaller company. I had a niece that died from cystic fibrosis. So I get a kick out of developing drugs for people that are ill and there's a clear need to develop drugs. So we developed an inhaled antibiotic for cystic fibrosis and got that approved. That makes me very excited.
[00:03:16] Speaker B: Lydia, let's not brush over that. First of all, I think many of the people that we interview on this podcast and we work with at our sponsors and inside of Bio Rossi are attracted to life science sciences companies because of the potential to have an impact. But you went directly from the loss of a loved one to working on a drug that treated that condition. That's kind of a crazy progression.
[00:03:35] Speaker C: Yes. As we get through the trail here, Chris, I've done that a number of times.
[00:03:39] Speaker B: But yeah, agree.
[00:03:40] Speaker C: I try to make things personal when they're personal. It stirs a deep seated passion, an overwhelming desire to do good things. And this is sincere, it's not lip service. So yeah, we developed an inhale.
[00:03:54] Speaker B: One of the things we'll talk about. Jonathan, you know, we're going to talk later a little bit about advice for people that are considering what to do in their careers. We can talk about CEO advice as well, but I think you hit on something pretty powerful that you can choose to focus on things that you have a personal connection to.
[00:04:11] Speaker C: You can, you can, Chris. And I've done it several times and it's been deliberate. And also my good wife had a grandmother that was a semi mother to her and she died of pulmonary hypertension. So we developed a drug product for pulmonary hypertension. As we get through here, you know, I'm type 1 diabetes diabetic myself and I've been involved in several ventures in diabetes because of that deep seated desire and passion to fix diabetes. And that's what I'm doing in my current role and I, I know we will come on to that. When I was still in the uk, I developed a drug, as I mentioned, for pulmonary hypertension. That drug is on the market today. But I had a, an eagle eye on what was happening in the San Francisco Bay area, California. And I was enamored by the entrepreneurship, I was enamored by the number of startups and I had my eye on a company called Aradym Corporation that at the time were developing inhaled insulin in collaboration with Novo Nordisk. And as I mentioned, I've been a type 1 diabetic almost all my life. So that resonated with me pretty strongly and I was able to secure a position at Aradigm. And I relocated my family from the UK to the Bay Area where I joined and I was a part of developing that drug product and that gave me a lot of satisfaction on many levels. And working in a startup environment with entrepreneurial people with a great culture really taught me a lot and I think probably solidified the way that I conduct myself thereafter in the workplace. But one day Novo Nordisk actually cancelled that program, which was a bitter blow to the company, a blow to people with type 1 diabetes in uncandom. But I'm of the nature that when things get derailed or there's a problem, there's opportunity that lies therein. And in fact I found an opportunity and I approached a colleague and said, Steve, should we start our own CNS company? And he thought I was crazy. But a few years later he agreed. So we co founded a CNS company called Zogenics and we acquired a technology from Aridigm that at the time was seemingly broken. And we raised a 75 million dollar Series A financing because we had a belief that we could fix the technology. And we did. So we developed the product, made a drug device, combination product for migraine therapy and we launched that product in the United States, we launched it in Europe with a partner and along that pathway we took the company public. And then Zogenics went on to develop a drug for another serious disease called Dravet syndrome, a rare epilepsy that has dire consequences for children suffering from that dise.
[00:06:58] Speaker B: Jonathan, when you had this insight, I'm going to try and spin out a technology from Aerodyne that is at this point a failed entity. Right. It's a canceled project. What stage was that technology at? The broken technology? And what gave you the confidence to say, hey, I'm going to convince my friend over a few beers and we're going to raise a bunch of money and we're going to really go for this. Walk us through how you're thinking then.
[00:07:19] Speaker C: That's a good question, Chris. And actually I had my eye on this technology. It was a company in the United Kingdom called Western Medical. And when I was still in the uk, I knew the people, I listened to them at conferences, presenting and it was the world's first single use pre filled disposable needle free injection technology. That's a mouthful.
[00:07:42] Speaker B: It's a mouthful, but I saw it and I'm like wow.
[00:07:45] Speaker C: I was amazed by it and they had a technical setback. So. But when I was in the United States and I was at Aerodyne Corporation. I went to my boss, the CEO of the company at the time, who I had and still have a great deal of respect for, and said, rick, I think we should acquire this technology. And he said, jonathan, it's broken. They failed. The stock is down 95%. Why would we do that? So, long story short, I convinced him to do that because, speaking to our technology experts, they thought they could fix it. So we acquired that technology for pennies on the dollar and all the intellectual property that came with it, transferred the technology to the Bay Area and went about fixing it.
[00:08:24] Speaker B: Did you bring the team over as.
[00:08:25] Speaker C: Well, or was it the team? Yes, we did.
[00:08:28] Speaker B: Okay, so you looked at it and thought, all right, it's like you said, pennies on the dollar. There's been a ton of effort and smarts put into trying to make this thing work. And your team looks at it and says, or your guys look at it and say, hey, we think we could make something of this thing. So it didn't seem like a crazy risk at the time. Is that right? Or how did it feel?
[00:08:44] Speaker C: It was certainly a risk, but there was a deep seated belief based on diligence, based on scientific analysis, that we could fix it. It was going an investment of money and investment of people's brains. And we did. We fixed it. And, you know, I've done that several times along this long, twisted path that you described.
[00:09:05] Speaker B: Is that a theme? One of the things that strikes me about your career is the number of drugs you've been able to sort of shepherd successfully into use. And, you know, we've had lots of people, including guests on this podcast, who've said, my goal in my career is to get one drug into market. You've had this happen multiple times. Do you think that this ability to spot, you know, frozen or stuck programs, when a bunch of effort and intelligence and money and time have been put into trying to bring them along and then they're stalled for whatever reason. Is the ability to spot and unlock those a key thing in how you. How your career has developed or viewed? Not so much about the stalled program stuff.
[00:09:40] Speaker C: I guess it is, Chris. But I'll make the following point before I tell you the next story.
[00:09:44] Speaker B: Yeah.
[00:09:45] Speaker C: And by no means do I take sole credit for this. You know, I've always been blessed working with very talented people, very committed people that share the same values.
So when I use the word I or me, think broadly about a team that has done this.
[00:10:01] Speaker B: Yeah, okay. Yeah, I don't want absolutely accepted for.
[00:10:04] Speaker C: It, but so when I moved on from Zogenics. I was looking for something new to do and that company was ultimately acquired, by the way, for $2 billion by UCB Pharma. But when I was looking for something new to do, as mentioned, I had passion for to help people with pulmonary arterial hypertension and they were not being treated properly or better. There's lots of things that could be fixed. So I identified an asset in Israel which was a medical device, a single use pre filled infusion technology for parenteral drugs. And I thought, oh, maybe I can use this to develop a drug product for pulmonary hypertension. Okay, so long story short, the board and I connected, the investors and I connected and we agreed that we would alter the trajectory of this medical device to one of a drug device, combination product to treat pulmonary hypertension. And there you go. And the reason I was doing that is because again, I'm type one diabetic. This is not a type one diabetic play. But the company called United Therapeutics that were treating pulmonary hypertension still are. They're a big, strong, wonderful company. They were using an insulin pump to deliver this drug. So it's like, hang on a minute, you can't use something that's designed for type 1 diabetes to treat pulmonary hypertension. There's got to be a better way. So I saw that this product in, in its early stages in Israel could potentially do that. So I convinced the board, they hired me, I set up a company in the Bay Area and hired the team, raised the money, brought in some great investors and went about developing this product to treat this serious disease that kills people, but do it better with a.
[00:11:48] Speaker B: Sort of purpose built solution as opposed to a modified solution.
[00:11:51] Speaker C: Yeah, it was purpose built. Yeah, absolutely. To that company public. And along that road there were some big hurdles that we hit. Technical, financial, competitive.
[00:12:02] Speaker B: All of the hurdles.
[00:12:03] Speaker C: Yes, one of those hurdles. So again, United Therapeutics, who I respect greatly, they had a number of patents issued that on face value stopped us doing business for about 30 years.
[00:12:16] Speaker B: Challenging period of time.
[00:12:18] Speaker C: So that was a bit of a body blow. My board said, jonathan, we, we can't fight this. We don't.
[00:12:25] Speaker B: Yeah, big company, 30 years, you don't.
[00:12:27] Speaker C: Have the time think about closing things down.
[00:12:29] Speaker B: How much had the company invested at that point? How far along ish were you in your journey?
[00:12:33] Speaker C: Probably over $100 million.
[00:12:36] Speaker B: Okay. Yeah, that's a, that's a tough time to find out about a strong patent, I guess.
[00:12:40] Speaker C: Yes. You know, in this industry you, you smack your face in a brick wall reasonably often.
[00:12:45] Speaker B: Yes.
[00:12:46] Speaker C: But I am a believer that when you do that, there's a way over it, a way under it, a way around it, a way through it. Whatever it is, you can get through it. So I started to make calls to patent lawyers one after another. They said, jonathan, close the door and go home.
[00:13:02] Speaker B: Yeah, exactly.
[00:13:03] Speaker C: You're gone. And then lawyer number six said, jonathan, I have an idea. He said, there's a process called an ipr, which stands for Inter Partes Review, where you can challenge patents at the patent office rather than in federal courts.
[00:13:20] Speaker B: Fascinating.
[00:13:20] Speaker C: It's a prescribed period of time. It's far less expensive. So we said, okay, let's have a go. So we did it. A wonderful lawyer. And we challenged United Therapeutics patents, and ultimately we overturned all of them. And 100% of the claims were dismissed, which meant we could go on and develop this drug product, combination therapy for pulmonary hypertension. And that ultimately catalyzed an acquisition of SteadyMed by United Therapeutics.
[00:13:51] Speaker B: Fascinating. Okay, so were those patents invalidated or were they narrowed? How did it work? Did it give you.
[00:13:57] Speaker C: They were invalidated.
[00:13:58] Speaker B: They were invalidated. Wow. By the way, I think one chapter in your memoirs at some point should be called Lawyer number Six, because I think most people would give up somewhere around Lawyer number two or three. And when we think about persistence and this kind of theme, Lawyer Number Six feels like a suitable chapter title.
[00:14:15] Speaker C: Yes, that's a good. I concur. I concur. So. So that was a great ending. And I stay with United for about a year. We brought some people over to the United States from Israel from our team that I wanted to make sure everybody was taken care of, the technology was adequately transferred, and a manifestation of that product is also on the market now. So a lot of pleasing things. And then while I was in that transition period, some big investors invested in a company called Zeris Pharmaceuticals, who at the time were developing a liquid stable glucagon to treat severe Hypoglycemia for type 1 diabetes.
[00:14:54] Speaker B: So now we're getting closer and closer to your personal passions here.
[00:14:58] Speaker C: That's correct. So they were also investors in my prior company, and they asked me to represent them on the board Zaris, which I happily did. And I was not long into that role. And the company had a terrible setback. Those registration stability lots failed. Unfortunately, the CEO was let go, and they asked me to jump in temporarily as a CEO again, because type 1 diabetes, having suffered from severe hypoglycemia, almost died a few times. I felt somewhat of an obligation to do makes Sense. Yeah. We brought in some talented people. There are some talented people in the company. We looked at the underlying problem. Long story short, it was fixed. We took that company public.
[00:15:41] Speaker B: Just let's double click for one second there, Jonathan. So that was not a failure with the technology. It was really an operational production issue, a scaling issue, is that right?
[00:15:49] Speaker C: It was a CMC issue.
But you know, that's a big delay. That's a big.
[00:15:54] Speaker B: Right. If you can't produce it, you don't have anything. Right?
[00:15:56] Speaker C: Correct. So, Chris, we again, part of a great team. The problem was fixed, the company went public. We got in a great CEO. That product is approved and it sits on my bedside cabin.
[00:16:08] Speaker B: Wow, that's very, very cool.
[00:16:10] Speaker C: I frequently look at it and think I played a little role in making sure this thing got approved. Yeah, it's saving the lives of people with severe type 1 diabetes.
[00:16:19] Speaker B: That's incredible. That's incredible. So for those who are keeping score, how many approved drugs have you been connected to at this point? Or drugs or drug device combos?
[00:16:27] Speaker C: I have to think about that.
[00:16:28] Speaker B: Most people don't, Jonathan. Most people just say one or zero or something like that.
[00:16:32] Speaker C: Yeah, five or six.
[00:16:34] Speaker B: Yeah, that's really extraordinary. Okay, so great. So let's continuing on. So what happens then? What's the next chapter in the story?
[00:16:40] Speaker C: I was at United for about a year and then I decided to move on peripherally. I was on the board of a company called Thermalin that was trying to develop a thermostable insulin so that you could get insulin to diabetics in countries that don't have cold supply chain.
[00:16:57] Speaker B: Yeah. Where cold chain is not good. Yeah.
[00:16:59] Speaker C: Then I'm on the board of. I'm still on the board of a company called IM Therapeutics that are working on delaying the onset of type 1 diabetes in children and adolescents. Then I was looking around for something else to do and I found a company in the UK that had less than a handful of people and a drug for allergic disease and a drug for autoimmune disease. But it was pre clinical. They had no data, they had no money, they were kind of struggling. And I looked at that and I thought, wow, you know, this is incredible. I don't know how I find myself in these situations, Chris, but I just.
[00:17:35] Speaker B: You seem like the guy to call when things are a little bit dire, Jonathan.
[00:17:39] Speaker C: Yes, exactly. Called Ghostbusters. So I looked at this, I did my diligence, we had lots of discussions. You know, we were thinking of moving back to the UK and my wife liked the idea of living in a little English village with a pub.
[00:17:53] Speaker B: Okay, sure, I could see the appeal.
[00:17:55] Speaker C: You know, and that was kind of nice image as well for me. But, you know, it dawned upon me, if we were going to build this company, I had to be in the United States where you can get talent and you can raise capital. So the board agreed and I remained in the US Started another company in the United States called Revolo Biotherapeutics. So a month in, six weeks in Covid reared its ugly head. And I'm trying to raise money. You know, you think, how the heck can I raise money when can't go.
[00:18:23] Speaker B: And can't meet anyone?
[00:18:24] Speaker C: Yeah, I've never done this before. I've been successful in raising capital, but always met with so. Oh my goodness. And of course, the whole industry hit the same hurdle that I hit and we hit.
So long story short, we were nimble and agile and I relocated to the planet Zoom where I currently live my life.
[00:18:44] Speaker B: Population, some billions of people at this point.
[00:18:47] Speaker C: Exactly. And we raised money. We did a healthy series B financing with a quality investor in the United States and then started to build the company from again, a pre clinical company. And we had people in 14 different states in the US and a great team with a great culture, with passion about what they're doing. And we were developing one of the drugs for a condition called eosinophilic esophagitis, which is another rare disease. It's not very well treated and affects a lot of young people. And, you know, we developed the company, we grew the company, took it from having no clinical data to getting through four clinical trials, including two phase 2a clinical trials in that disease state through hard times for our industry. You know, it's been a few tough years for finance.
[00:19:33] Speaker B: It's been exciting and not in the best of ways. Yeah, yeah.
[00:19:36] Speaker C: But again, back to the brick wall. There's always a way through it, riding it, over it, under it.
[00:19:40] Speaker B: You said a minute ago that you knew that you couldn't sort of turn this into a successful company in the uk. Maybe I'm overstating it. Was it that you think the odds are better in San Francisco? And will you talk a little bit about the difference? Difference? Is it about the fact that you had built a financial network and other networks in the US or do you think it's just fundamentally harder in the uk?
[00:19:58] Speaker C: With great respect to my patriots, I think it's harder. The industry is much smaller than the U.S. there are not as many big venture funds, maybe per capita There are, but the risk appetite is different.
[00:20:10] Speaker B: I think that's probably a deep point, that there is some. There is capital there, there's certainly talent, there's some extraordinary scientific talent, but maybe the appetite for earlier stage stuff is, Is less. Is that fair?
[00:20:20] Speaker C: Yeah. I mean, a lot of the world's great innovations have spawned from the United Kingdom and still do today. You know, I love the country, I love the people, but there's just something about the, particularly the Bay Area and the United States, Boston and the other biotech hubs were. There's more acceptance of less. Look, nothing works unless there's a big problem. That sounds kind of ironic, but, you know, if you're trying to treat a disease, you try and develop a drug for a disease, there has to be a glaringly obvious problem that you have a scientific, cultural, instinctive desire and understanding that it can be fixed. Is it going to be difficult? Yes. Is it going to cost a lot of money? Yes. But does it need to be done? And if you don't have that need to be done, then it's a waste of time and a waste of money. So, you know, all of the diseases that I've been fortunate and blessed to be involved with really stand out with big needs.
[00:21:20] Speaker B: Hi, this is Chris O'Brien, host of Few and Far between conversations from the.
[00:21:24] Speaker A: Front line of drug Development.
[00:21:25] Speaker B: We'll be right back with this episode in a moment. I personally want to thank you all.
[00:21:28] Speaker A: For listening to our podcast.
[00:21:30] Speaker B: Now in our fifth season. It continues to be an amazing opportunity to speak with some of the top thought leaders in the drug development industry. If you're enjoying this episode, please leave us a review on Apple Podcasts. It really helps people discover the pod. And don't forget to subscribe to Few and Far between so that you never miss an episode. Episode One last request. Know someone with a great story you'd.
[00:21:48] Speaker A: Like to hear me interview.
[00:21:49] Speaker B: Reach out to
[email protected] thank you. And now back to the podcast.
That's a perfect segue, I think, to start Talking about type 1 diabetes and the work you're doing at Cernova. A naive person, me, many, many others might say, is there a huge need in type 1 diabetes because, you know, type 1 diabetics have a solution that sort of works, I guess, maybe how seems to the uninformed viewer listener. So tell us a little bit about the problem.
[00:22:21] Speaker C: Yes. So, Chris, you've just hit the nail on the head. People think, oh, diabetes, you know.
[00:22:27] Speaker B: Yeah, yeah, you linked that a Long time ago.
[00:22:29] Speaker C: Everybody knows someone that has type 1 diabetes or even more type 2, but it's a very different disease. So we'll focus on type 1 diabetes. So what's the problem? You know, And I've been diabetic for, again, most of my life. I have an insulin pump. I have wonderful recombinant insulin. I have a continuous glucose monitor and it speaks to my insulin pump and it tells it what to do. And you know what? It is very complicated. Very complicated. I could show you a trace of my continuous glucose monitor. Now. It looks like the Himalayan.
[00:23:03] Speaker B: Yeah, exactly.
[00:23:04] Speaker C: Really complicated. And I'm a reasonably smart guy and I struggle with. And then you look at the data. So people with type 1 diabetes still have cardiac problems, they still have kidney failure, liver failure, they get neuropathy in their extremities. A lot of people have amputations, people have eye problems. I've had eight eye surgeries myself. Wow. And I look after myself and I exercise a lot. Ironman triathlons and all of the above. But I still struggle every single day. It haunts you. It's like having a nasty gremlin sitting on your shoulder that's constantly chewing on your neck. You cannot get it out of your head. I'm sat here, Chris, at my computer. To my left I have my phone and I can see my blood sugar because I need to see it all the time. On my right, I have glucose tablets in case something goes wrong. So it's a condition that is very, very difficult. And when I was diagnosed with diabetes, I was using a glass syringe with big, rough, nasty needles that I had to clean every day with spirits and reuse it. I was using pork insulin. I had no way of testing my blood sugar. So have we come a long way? Yes, we have. And again, thank the Lord for biotech industry that we have come a long way. But the reality is 1 in 10 people today with type 1 diabetes die of severe hypoglycemia.
[00:24:33] Speaker B: 1 in 10.
[00:24:34] Speaker C: 1 in 10, yeah. That's a big problem. And I've been through that myself. Four times, in fact, recently, just a few months ago, I have a wonderful son. His name is rex. He was 10 at the time and getting fascinated with baseball. And I took him to his first baseball game. We flew to New York to see the Yankees and we had a spectacular, wonderful time. We hung out all day, we stayed overnight. The Sunday morning, 7:00 in the morning, I'm having a diabetic seizure in bed. And my son, who's 10 is pouring coca Cola in my mouth. He's shoving glucose tablets in my mouth.
[00:25:16] Speaker B: Oh my God.
[00:25:17] Speaker C: Had he not been there, I probably wouldn't be talking to you today. So this is the reality of this disease.
[00:25:23] Speaker B: Even a scientist, a highly disciplined person, someone with resources, you nearly died and a 10 year old was what stood between you and death? I guess.
[00:25:33] Speaker C: Yes.
[00:25:33] Speaker B: Yeah. That's extraordinary.
[00:25:35] Speaker C: Our children are trained to understand the disease and understand the symptoms. And in fact, my son, the same guy, he was at school last year and he knew that his French teacher was type 1 diabetic. They'd spoken about it. And in the class, the teacher starts to slur his words, starts to be a little disoriented. So my son recognized that he was going hypoglycemic. The teacher did not.
[00:26:00] Speaker B: Wow.
[00:26:01] Speaker C: So he immediately stood up, asked the class to be quiet. Personally, when I go hypoglycemic, noise is magnified and it sounds like someone's hitting you on the head bed with, with a frying pan. So he asked the class to be quiet. He immediately went to the teacher's drawer and he knew he had some glucose, so he got the teacher, gave him some glucose and then he ran off to the office to get the nurse.
[00:26:22] Speaker B: Oh my God.
[00:26:23] Speaker C: These are realities of type 1 diabetes. I speak to many parents, I raise money for children with type 1 diabetes that can't afford insulin pumps. And you speak to their parents. And the parents are terrified, absolutely terrified. The children, a little nonchalant, they don't really understand it, but the parents are terrified. And the long term consequences of this disease. Your body is slowly rotting. You know, you get high blood sugar, results in glycosylated haemoglobin in the periphery of your, of your blood vessels. So blood can't get to your eyes, it can't get to your kidneys, it can't get to your liver, it can't get to your toes. And that's what causes the problems. So we have to do something to fix this rotten, rotting disease. That's why I'm doing what I'm what I'm doing.
[00:27:08] Speaker B: Okay, well, that's a perfect segue. So let's talk about Cernova. How did you get started there? And just tell us a little bit of the story and then we'll get to the technology in a minute. But how did you get involved?
[00:27:17] Speaker C: Yeah. So again, Chris, another thing I keep seemingly happen is early last year I was looking for something new to do as you do. I know some people. It used to be called the JDRF Fund. Now it's called T1D Breakthrough Type 1 Diabetes. It's a philanthropic venture fund that invests exclusively in companies developing solutions for type 1 diabetes. I know them. And so I was in their office in Boston having a nice chat and they said, jonathan, have you heard about a company called Cernova? And I hadn't. They talked to me about it and they said, oh, you should take a look, as it would happen. One of the directors of Cernova, he and I sit on a NASDAQ listed oncology company board together, just by coincidence. So we got connected, we started talking and he said, jonathan, you know, we're looking for someone to join the board. It'll be great to have you on the board. So I looked closely at the company. The first thing again I look at is, is there a problem? Yes, there's a problem. I get it. I see it every day. So they were developing the main product for type 1 diabetes. So yes, there's a need. Million percent.
[00:28:23] Speaker B: Sure, yeah, no question.
[00:28:24] Speaker C: But at the time, the company had some challenges. Disgruntled shareholders, management issues, a lack of money and all of the above things that I seem to find myself facing.
[00:28:35] Speaker B: A perfect opportunity for you. Lots of problems and a really interesting technology.
[00:28:39] Speaker C: So I joined the board. This was around the time of June of last year. The company was out raising money and it failed to raise the money. And so I was asked to be executive chairman and help. Of course, I said yes. And then a month or so later I was asked to be the CEO and I said yes. It was the most promotions I've had in two months.
[00:29:01] Speaker B: What's your secret? It turns out to be 30 years of work ahead of time.
[00:29:05] Speaker C: Building, you know, it was again, it was the brick wall. So I joined and then within a short period of time, we managed to raise a small round to keep the company liquid and moving forward. And you know, with all respect to everybody in the rear view mirror, we had to change management. So we made a lot of changes to management. We made a lot of changes to the board. We brought in industry veterans that really, really understand how to develop drug products and have complementary skill sets. And we did that and then so, you know, changed the culture of the company, frankly. And then luck would have it, as fate would have it, I don't know. I was contacted by a representative in the Kingdom of Saudi Arabia several months ago. And in the Gulf countries in Saudi Arabia, they have a terrible problem with type 1 diabetes.
[00:29:56] Speaker B: Disproportionate.
[00:29:57] Speaker C: It's disproportionately high. They actually say it's an epidemic and it's growing rapidly every year. So congratulations to them. They wanted to fix this, and they were scanning the universe for companies for technologies that can help. Long story short, we have many talks. They agreed that we have something that could potentially act as a functional cure for type 1 diabetes. So I was asked to fly to Riyadh to the biotech Summit last November. And of course, I did. Met lots of investors, met lots of representatives from the royal family. Lots of investors. We entered into a letter of intent with the Kingdom of Saudi Arabia and a life sciences venture fund in Germany. We're working together here to raise money to continue development of our product to treat people with type 1 diabetes world over. So that's a big, audacious goal, but that's what we're doing. And we're doing that because there's a problem.
[00:30:54] Speaker B: The goal is a functional cure.
[00:30:55] Speaker C: Yes.
[00:30:56] Speaker B: That's the language you're using. Yeah. So that's extraordinary. And I don't think I knew that part about the potential partnership with Saudi and with the Gulf. Makes a ton of sense in terms of fit and need. Did they find you or did you go looking for them?
[00:31:08] Speaker C: They found us. They found us. So actually, what happened was they were speaking to one of our investors in Europe, in US. He made that introduction. Credit to those guys for connecting us.
[00:31:18] Speaker B: Well, and I guess some of this is have the right thing. Right? If you've got something that is exciting, sometimes people will find their way to you, one way or another, or people will help them do so.
[00:31:26] Speaker C: Yeah, absolutely. 100%.
[00:31:28] Speaker B: Amazing. Okay, so now let's talk about the technology. So what is the cell pouch system? And what the heck is a biohybrid organ? Let's talk about that.
[00:31:37] Speaker C: The biohybrid organ. We'll get onto that in a couple of seconds. That's a phrase that we coined.
[00:31:43] Speaker B: Yeah, I like it.
[00:31:43] Speaker C: Sonova was founded on a wonderful scientific mission to develop a product where you could put cells inside. It's called a cell pouch to treat cell diseases where people have dysfunctional cells that cause disease. And in fact, today we put out a press release. We filed an IND Investigational new product.
[00:32:06] Speaker B: New drug. Yeah.
[00:32:06] Speaker C: To treat thyroid disease. So we did that today. So we're not just diabetes with treating other things as well. Well, the cell pouch itself is about the size of a credit card, and it's made of a surgically implantable porous mesh. And if you imagine this in your. In your mind, you can't see it. There are 10 chambers. They are horizontal chambers, probably about an inch and a half in length, probably about a quarter of an inch in diameter. They're like little tubes. And in these tubes we put a little plastic rod that blocks the chambers. So then the surgeon comes along and he makes a small incision in your abdomen, and these pouches, or several of them, they go under your skin and above the muscles of your abdomen. So then he leaves the pouches there for about six weeks.
And in that six week period, blood vessels grow all over the pouch.
[00:33:08] Speaker B: It's crazy.
[00:33:09] Speaker C: And they grow into it, but they can't grow into the chambers because you have these little rods.
[00:33:14] Speaker B: Plastic rods. Yeah.
[00:33:15] Speaker C: So then when it's become vascularized, and this is where the term biohybrid organ comes from, it looks like and is behaving like a vascularized organ that's supplying nutrients and oxygen.
[00:33:27] Speaker B: Incredible.
[00:33:27] Speaker C: So then the surgeon will then remove these rods that I described. And at the moment, it's putting donor islet cells. Islet cells are the cells in your pancreas that do three things. They secrete insulin, they secrete another hormone called glucagon and a hormone called somatostatin. So getting back to the problem, I give myself insulin, so when my blood sugar is coming down, my pump will stop producing insulin. That's when you go hypoglycemia.
[00:33:56] Speaker B: Yeah.
[00:33:56] Speaker C: And if you're not diabetic like yourself, your pancreas will secrete glucagon. That will counteract the effect of the insulin. And then there's a hormone called somatostatin that controls both of those hormones. So you keep it regulated. That's why you're not diabetic. With me, I'm diabetic and I only have one. I have insulin, which is only one of the three things that I need.
[00:34:19] Speaker B: Tough to regulate a system with one out of three.
[00:34:21] Speaker C: So what we've found out in our clinical studies, so we're in a phase 12 clinical study, and in the first cohort we had six patients, and all six of them reached insulin independence, which means that they. It takes some time, but over a period of time, they no longer need to rely on external insulin injections or otherwise. And you might think, ah, okay, whatever. But that's a big deal. The data says that a person with type 1 diabetes makes over 200 decisions.
[00:34:55] Speaker B: A day related to.
[00:34:56] Speaker C: Yeah, I don't believe that data. I actually think it's a lot more because again, I described earlier, it never leaves you.
[00:35:03] Speaker B: Yeah, you're constantly kind of recalibrating your day based on this.
[00:35:08] Speaker C: You wake up thinking about it. My insulin pump, Lord, it beeps all night because my sugar's going up, my sugar's going down, my battery's low, whatever, it beeps all night. Thank God it does because it keeps me alive. And my poor wife, she's constantly poking me in the ribs telling me something's wrong and I have to get up and take care of things. And it really is an overwhelmingly controlling condition.
I'm used to it, I kind of take it for granted, but in one way it really ticks me off. I was going to use another word, we're being recorded here, but it really gets me down, but it makes me fight.
[00:35:49] Speaker B: That must be a hell of a motivator.
[00:35:51] Speaker C: Yeah, I've done some. I don't know if you want to talk about it or not, Chris, but when I was not long after I'd been diagnosed, I was fighting this condition and I was very, very uncontrolled for years. Went to university and did all the things that a strapping young 18, 19 year old man does.
[00:36:09] Speaker B: Live forever.
[00:36:10] Speaker C: Yeah, I largely ignored my diabetes is the truth. And then later in my 20s, I realized I was wildly out of control, had several eye surgeries and I had to fix it and I did. So I finally faced the reality and grappled the bull by its horns. And a couple years in, I went to my doctor and said, doctor, I want to do a triathlon. And she said, jonathan, don't do it.
[00:36:35] Speaker B: Terrible idea.
[00:36:35] Speaker C: You're crazy, you're going to kill yourself. So, all right, I'm going to do it was the instinct. And this is a little triathlon, small distances. I did it and I almost died of exhaustion and made me realize how unfit I was.
And so, so then I said, okay, I'll do another one. So I did another one, another one, another one. And this is called sprint distance. And then Olympic distance. I thought, ooh, maybe I'll have a go at that. But the, the thought was overwhelming that this physical achievement I could not. I worked hard, trained hard, and did an Olympic distance. Nearly died. And did another one, another one, another one.
[00:37:18] Speaker B: When you say nearly died, people will say that about any hard thing. Ugh, it nearly killed me. And they, but they're exaggerating. Are you talking about you really almost died in this process?
[00:37:27] Speaker C: Yeah, I passed out a few times.
[00:37:28] Speaker B: And it's problematic, I guess, when part of the thing is in the water.
[00:37:31] Speaker C: Had to be picked up off the floor. Yeah. Then I thought, oh, I'll do a half ironman. And again in my brain, that was an unattainable feat. But then I did one. It was interesting. And then I did another and another and another. And then I thought, well, maybe I can shoot for the heights here and do a full ironman, which is a 2.4 mile swim, 112 mile bike, followed by a little marathon at the end.
[00:37:54] Speaker B: A little marathon.
[00:37:54] Speaker C: I did one and then I did another one and I did 11 of those. I don't know how many marathons I've done. I can't count. But along that process, I decided I would make use of it and thought, I will raise money for children with type 1 diabetes that cannot, cannot afford other health insurance companies refuse to pay for insulin pumps. That's what I did. And I've done it many times. My ankles now rebel. My ironman career is over.
[00:38:23] Speaker B: You've decided just to shift to a functional cure for diabetes. You throw up your hands. I give up on raising money.
[00:38:28] Speaker C: Yeah. No, I still raise money in November of last year. November is Type 1 Diabetes Awareness Month. November of last year was 101 years since Bunting and Best, two Canadian scientists who actually worked in Toronto were sent over his base and they've discovered insulin. 101 years. Yeah.
[00:38:48] Speaker B: Incredible.
[00:38:49] Speaker C: Which again, is saved millions of lives and still does today. So I decided to raise some money. So I decided to roll 101 miles to raise some money for children. So I did that. So I keep doing these crazy things, but. But back to Samova. We had six patients in the first cohort achieved insulin independence, which is fantastic.
[00:39:10] Speaker B: Is there any existing technology that achieves functional insulin independence?
[00:39:15] Speaker C: Nothing on the market. There are other people in the space, for example. They're a very large biotech company and they're in the clinic trying to fix the same problem. We wish them all the best. I want everybody to succeed. They succeed, we succeed. Either way, they succeed and people with diabetes succeed. So we could be viewed as being competitors. Well, we are, but I want them to succeed. And so right now we are using these donor islets from deceased patients. The company, several years ago, before I came along, formed a collaboration with a large drug manufacturing company in Europe called Evotech. So, you know, science being as miraculous as it is, Evotech are making islet cells from stem cells. These stem cells, they use a protocol to make them differentiate into islet cells.
[00:40:06] Speaker B: Extraordinary. Yeah.
[00:40:07] Speaker C: Which are in abundant supply.
[00:40:09] Speaker B: Massively increases your supply.
[00:40:11] Speaker C: It increases the quality, it increases the supply. And we have pre Clinical data with animal models that are. They have induced diabetes. And then they have the cell poach with the evotech cells and I see.
Apologies for that noise. That's my insulin pump.
[00:40:31] Speaker B: No, no, I think that one we want to leave in. Yeah, that's proof positive that this is what your evenings look like.
[00:40:35] Speaker C: That was not staged. It's saying, Jonathan, your blood sugar is high. So. Yeah. So we implant little cell pouches into these animals with these cells and I'm jealous of the glycemic control curve that these animals have.
Goal is probably next year we get into the clinic with the stem cell derived islets, which also make insulin, glucagon and somatostatin.
[00:41:01] Speaker B: Amazing.
[00:41:01] Speaker C: And we put them into our cell pouch and we get on with the business of providing a functional cure for diabetes.
[00:41:08] Speaker B: That's really, really exciting. Okay, I'm going to close out, I think for you. I'd particularly like to think about advice you have for new CEOs, because one of the things that we've seen you have a track record of doing is coming into an organization with an exciting technology, but a whole bunch of hurdles and challenges. You referenced changing culture in Cernova as well as of course, bringing in a whole bunch of industry veterans. What does your first 30 days look like when you come into a new job like this? And what are the things that are, you think, really important? If there are things you could sort of say that translate broadly into sort.
[00:41:41] Speaker C: Of advice, it starts before the 30 days. Days where you get to know the technology, the product, the drug, the device, whatever it is, and you really need to focus on the need. Is there a problem that you're fixing here based on your discussions with experts? So I. Due diligence. I don't rely just on my gut instinct. I speak to people who are more familiar with the diseases, that are more familiar with the science. They say, yep, you know, Jonathan, it's a real thing.
[00:42:09] Speaker B: Yeah, mental here.
[00:42:10] Speaker C: But you got to be realistic. It's. It's got a long way to go. And then, Chris, I love mechanical watches and mechanical clocks. That's a bizarre passion of mine. And I think of companies like a mechanical clock. Okay, so on one side you have two or three big cogs. They're your mission, your vision and the goals that you set to realize the mission and the vision. And on the other side you have all these little cogs, your regulatory firs, your R and D, your operations, your finance, your business development, your investor relations, all the day to day things that operate the company. Then there are three little cogs in the middle. Join these two clusters, and without them, the whole thing doesn't work. And those three little things are leadership, passion, and culture.
[00:42:55] Speaker B: I love it. I love it. That's great.
[00:42:57] Speaker C: Yeah. If you don't have leadership, the clock won't work. If you don't have passion, go home and I'll go and do something else. It won't work. If you don't have a culture where people enjoy doing what they're doing, they love going to work, the whole thing will either stall or won't work. So I see a company like a mechanical clock. So advice is don't do something that you're not passionate about. You're wasting your time, you're wasting everybody's time. So think about that. It's tangible. You create a culture where people love going to work. They're respected, they want to do what they're doing. They're driven to do what they're doing. They're prepared to roll up their sleeves, get stuck in and really work hard, and then, you know, treat people well. But the main thing is understand the patients. When I started the company for pulmonary hypertension, SteadyMed, we made a deliberate effort to really know the patients. My wife and I. My wife worked with me, Mary Lynn. We went out and we met dozens and dozens and dozens of patients to understand this disease, understand the problems, understand the life. And we. We provided a resource to these patients that they didn't have. We launched a campaign called Be Phenomenal with Phenomenal. And we provided them with recipes now, food that doesn't negatively affect their condition, exercise routines specific to this terrible disease. We formed a relationship with the community. And if you look at our website today, Sonova, you'll see there's a tab on the top right called Patients, and you click on it and there's a resource there that educates and helps children with type 1 diabetes. You'll see this little cartoon, and we have a little puppy dog with a continuous glucose meter. It helps parents understand the disease. So we're giving them something they wouldn't otherwise have. So get close to the patients. Understand the problems. The more you understand the problem, the greater your passion is, the better your leadership is. Your culture is stoked, and it drives you along this pathway to doing something good.
[00:45:01] Speaker B: Jonathan, I love that, and I love that you describe those as the three little cogs that connect those big ones, because people can both under and overestimate, right? They can not pay attention to things like culture, or they can think that culture is the only thing that matters, and that's not true either. You need this ability to deliver. You need this fundamental science, and then you need a leadership team that can knit all of that together. That's really terrific. And finally, I'll just say I love that point about connecting with patients. We know that some companies do this, form really deep relationships with patient advocacy groups and get to know the patients. Maybe more competition in rare disease than in some other spaces. I think it's so important both to improve your insights about what patients need and to build those connections and that trust with that community. Jonathan Rigby, what a pleasure having you today on Few and Far Between. We look forward with great eagerness to see what you and the Cernova team are going to do in the coming years.
[00:45:53] Speaker C: I do, too.
[00:45:56] Speaker B: Terrific.
[00:45:57] Speaker C: Well, thank you, Chris. Appreciate you having me on. And anybody wants to chat, you can find me on the good old LinkedIn network. I'm happy to help.
[00:46:04] Speaker B: Fantastic. Okay, thanks again, Jonathan.
[00:46:07] Speaker C: Thank you, Chris.
[00:46:11] Speaker A: Welcome, Producer Adam.
[00:46:12] Speaker D: Hey, Chris, it's great to be here. I had some questions after listening to the current episode. You know, you and I have been working on podcasts in all sorts of different areas. And have you noticed that the passion for doing good and helping others, this is a key driver for a lot of our podcast guests?
[00:46:29] Speaker B: I really have.
[00:46:30] Speaker A: I think this is a life sciences thing. Not to say that entrepreneurs in other places don't also care about such stuff, but the life sciences biotech companies, they attract people who are mission driven. And so I think we have a disproportionate number of founders who have some kind of personal connection to the thing that they're working on or who were brought into medicine or into biotech development for personal reasons. And that's one of the things that makes this a really exciting industry to work in.
[00:46:57] Speaker D: I agree. Regarding Jonathan's focus on his type 1 diabetes, what are your thoughts on the need for an individual who personally understands the disease in order to guide the next evolution in treatment?
[00:47:08] Speaker A: I guess I would say I think it's a nice to have, not a need to have. There are certainly plenty of entrepreneurs who don't have a direct experience with the disease that they're working on. But I think empathy with patience is really, really important. And being able to communicate to your team that's working long hours in a risky venture that we're doing something that's important and it's going to have a positive impact on a whole bunch of people is really powerful. And of course, you know, who better to do that than someone who suffers from this condition himself. I thought he was really compelling when he was talking about how dangerous type 1 diabetes is, even for a person like Jonathan, who is. Is very, very smart, extremely disciplined, affluent, he has a bunch of things in the plus column, and he still described near death experiences. So very, very powerful.
[00:47:53] Speaker D: Agreed. In your experience in the clinical trials industry, how often do you smack into a brick wall and how do you restart? How do you recover?
[00:48:02] Speaker A: Well, look, we're lucky enough to be in the supporting role for these biotech companies. At Biorasi, we're a CRO, so we are supporting folks who, who are doing this breakthrough work. I think it's pretty common. And sometimes people are running into a brick wall because the science does not prove out. But there are other times where. And more heartbreaking examples where you run into a brick wall because you're not able to raise funding or you have not executed effectively. And there are plenty of drugs that don't make it out of the clinic and into approval and broader use for reasons that are disappointing. A common trait we see in all of these founders is a willingness to push through walls. The many walls that stand between a concept and an original idea and a drug that actually is used to treat people. And how cool that Jonathan has so many under his belt at this point.
[00:48:46] Speaker D: Very much. I was just amazed by the amount of work that he had done there. So, bit of a personal question for you. You and Jonathan discussed the importance of the first 30 days in a new job. What are your recommendations on the best way to invest that time?
[00:48:59] Speaker A: Yeah, it's an interesting question because. Because some folks will say you need to come in and be incredibly decisive immediately. And other people will say you need to take time to listen and understand what's going on, understand your people, all that kind of stuff. I think the reality is you need to have a blend. If the perception of the team is that you are sitting there doing a lot of listening, but you're not communicating anything about where the company is going, that's a problem. On the other hand, if you come in day one with a really strong point of view that's not informed by the experiences of the leadership team, that's also a problem. So I think you have to feel like the clock is ticking for you as the CEO, to communicate a vision for where the company is going and what changes need to be made. I think you should feel a lot of urgency around that. But I also think it's very important to listen carefully to your senior team to understand what the main hurdles or obstacles are so that when you do declare, you're declaring things that are more likely to be shot on goal rather than just kind of random shots into the darkness. You want a lot more targeted messaging and less spaghetti against the wall.
[00:49:59] Speaker D: Yeah, I agree. You don't want to just see what sticks and just.
[00:50:02] Speaker B: Yeah, exactly.
[00:50:03] Speaker A: Unfortunately, a lot of stuff doesn't stick and it's very confusing to the team if you say a lot of things. So it's somewhere between measure twice and cut once and which, you know, sort of be patient. But I think you need to feel a lot of urgency to do that. Listening very actively and very quickly so that people feel like this new leader who's come on board, whom we're expecting to tell us where we're going, everybody wants to hear from that person and you want to do that as quickly as possible.
[00:50:25] Speaker D: Last question. I really liked Jonathan Rigby's metaphor of the mechanical clock as a basis for today's biotech leaders. It sounded really applicable. Do you agree?
[00:50:37] Speaker A: I absolutely agree. I have never heard that one before. I think Jonathan could turn that into an article or a book if he. He wasn't too busy trying to cure diseases. But the idea to me of thinking about, on the one hand, all of the critical operational components that you need, on the other hand, your mission, vision and values for the company, and that leadership is this linkage between those two sets of gears. I thought that was fantastic. Probably a helpful frame. Definitely one that I'm going to continue to think about as we move forward.
[00:51:05] Speaker D: Again, a great episode and a great conversation.
[00:51:07] Speaker A: Yeah, he was terrific. Really fun. All right, thanks, Alex. Adam, thank you for listening to the.
[00:51:16] Speaker B: Latest episode of Few and Far Between Conversations from the Front Lines of Drug Development. Our podcast is now available on Apple Podcasts and other streaming services. Please take a moment and leave us a user review and rating today. It really helps people discover the podcast and we read all the comments. Those comments help us make Few and.
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[00:51:35] Speaker B: And Far between between so you don't miss a single episode. Got an idea for a future episode? Email us at fewandfarbetweenairossi.com or contact us on our
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