How will the pharma and biotech industry look in say 10 years time? Many of those working in the industry believe it will reform itself dramatically similar to that of the oil and gas industry. One thing is certain and that is it’s time for some real innovation and that needs to start in the boardroom.
In this exclusive interview, Dr Mark McHale, Chief Scientific Officer and Founder of ASLAN Pharmaceuticals, located in Singapore, shares insight into how a small-to-medium pharma company operates and continues to be on the crest of the wave. He also delivers insight into the success behind their current products and how to keep investment alive!
I recently met Dr Mark McHale, Chief Scientific Officer, ASLAN Pharmaceuticals, Singapore, when he was on a business between London and Spain.
I was immediately struck by his passion for the pharma industry, his energy and just complete down-to-earth nature, which has most likely contributed to the success of ASLAN, which was established in 2010.
The pharma & biotech Industry is Mark’s passion, which he shared with me in the following interview.
Pharma IQ: Can you tell us a little about how ASLAN Pharmaceuticals was formed?
Mark McHale: ASLAN was an attempt to change the pharma model. It began with four individuals who came together from big pharma organisations and independently felt that drug development could be done better, faster, and cheaper at a time of massive change in the pharma business.
We all felt very strongly that Asia was the place to be. It’s going to be a growth area in the next 20 years. I think big pharma has realised that now, they’re investing massively in Asia and we wanted to be on the crest of that wave. There are people doing similar models to us in the West, but we felt we would be the first in Asia and have an Asian focus.
At the moment, we talk to all the big pharma and some of them agree or disagree with what we believe. We believe that Asia is maturing rapidly, there are very, very high-quality centres to do clinical research, as good, if not better now, than in the West and you can leverage that, produce quality data such that you could be in Asia and potentially do global launches.
Pharma IQ: Tell us about the particular model that ASLAN has adopted and how is it different to the big pharma models?
Mark McHale: Our model is quite straightforward. We’ve all seen that large biotech and big pharma have overproduced in the last ten years. The discovery organisations got incredibly efficient at producing candidate drugs that could go into development, but for many reasons, because the biotech maybe just haven’t got enough money to move the entire portfolio forward, there are quality compounds that aren’t moving forward.
ASLAN’s policy is not to get compounds that have been moving around for the last several years and may have got tox issues. We’ve seen those before, so we were looking for something different. Being in pharma for a long time, you can sense and feel when there’s a project team that are really passionate about a compound, they love that compound. They view it as a child almost and they want the right foster parent to take it.
So our pitch is to talk to the pharma about their compound. If we see that kind of passion there and we like the compound and it fits with what we want to do strategically - we will propose to take the compound on board and move it to the end of phase two with our own money.
I’m not talking about just moving the compound by doing a clinical study. We also do the CMC package as well as the toxicology package so it is ready for phase three. That’s important because so many times in pharma a compound that you think is ready for phase three has a huge CMC issue that’s going to take two or three years to fix.
At the end, the compound can go back to the original pharma company or it can be sold on to somebody else if everybody was agreed on that. Of course, for example, if you’re doing a deal with a big pharma they’ll probably want their compound back. If it’s a largish biotech or a mid-sized pharma they’re quite happy to sell it on and take a percentage of the profits.
One thing about working out of Asia is it is cheaper to do work, but quality work costs wherever you do it. So there is a discount and there is a way of leveraging cost there but that wasn’t the only driver for us.
Pharma IQ: What are the challenges around this kind of model?
Mark McHale: Let’s take it all the way back. You want a compound so you’ve got to go and talk to all the big pharma and biotech and you’ve got to create the impression of credibility. You do that by speaking the same language, by putting a credible team together to talk to them and by putting a development plan together that’s focused on Asia that is the kind of development plan they would want to do. Perhaps for whatever reason they can’t do that, internally it would take too long to go through committees to do that kind of study or logistically they just haven’t got the resource to do it. But we can say, “We can definitely do that.”
It also helps to know investigators in Asia we can work with in advance, so having those contacts and saying, we know a quality group here in gastric cancer, we can work with them. So in summary, the first challenge is the credibility, then it’s finding the compound and agreeing the development plan. Once you’ve done that, the fun starts because it comes on board so suddenly it’s your compound.
When you work in a large organisation, many people are hired. Naturally you work with people you want to work with. When you’re outside that and you’re looking for consultants to help you in certain areas, you can pick and choose and so I suddenly realised I could put together my A team, if I wanted to, of people I think are fabulous in toxicology or CMC and whatever. I find that quite exciting. Although we’re only 11 people in the company we’ve got a bigger pool of consultants who all have 20-odd years in pharma.
The other thing I didn’t realise at the time was when you’re looking for a certain class of compounds – you can go out there and look at the list of how many companies have those compounds and then talk to them and if they’re amenable to talk to you about you potentially taking it on board, you suddenly have a view of all the compounds hitting that particular drug target and you can pick the one that you think is the best out there and go for that.
Pharma IQ: So you must have to do a lot of networking, can you tell us about the organisations you are working with.
Mark McHale: Yes, we do a lot of networking. When you start it’s hard because nobody knows who you are until you take your first compound on board. Our first partner was Array Biopharma, who has been an absolutely fabulous company to work with, they’re superb scientists. They took the bet on us when we were a fledgling company.
Our second compound was from Bristol Myers Squibb and I could suddenly feel things change because a top five Pharma company has done diligence on us and said yes.
The third compound we took is from Almirall, the biggest Spanish Pharma organisation, but globally I suppose they’re kind of mid-sized. We have strong contacts there that we have worked with before. This is not the only reason you get the compound but it does help because you both know each other’s credibility.
Now, we’re looking at compound 4, 5 and 6 and it’s more about when to bring others on board now, at what point because we want to do a great job on our first three and taking on six straightaway is painful growth. So at the moment we’ll probably go to four. Five and six; we’ll just wait a little longer because delivery is everything.
Pharma IQ: When you talk about delivery, how long do you expect to be working with that compound for?
Mark McHale: That depends on when we and the partner decide to sell it on
or sell it back. So taking the Array compound as an example, when we started the model, three years ago we were somewhat naïve and we thought compounds would come in around the pre-clinical development and there would be this little burn rate. Then we would get some phase one data and some phase two data.
And of course, when we took Array’s compound, ASLAN001 as we call it now, that compound had 200 patients’ worth of phase one data and so we were straight into 2A. So that’s kind of exciting but it’s also a different burn rate but it also means your chances of getting a positive result go up massively as well so it’s been quite exciting.
Then our second compound came in again with some phase one data so we’re finishing phase one and then moving to phase two. And the third compound from Almirall had single ascending dose data so we’re in the middle of a multiple ascending dose study now. So we haven’t quite got to the pre-clinical development yet! Although we’re doing toxicology studies, we’ve not taken things as early as we thought we would.
Pharma IQ: How do you go about getting funding and pushing it through and are your operations more cost effective than big Pharma?
Mark McHale: We started out with seed financing, which was funded by friends, family and the management team so we all put our own money into the business. In pharma – we always used to joke at meetings when compounds were in development, about putting our own money behind a compound, and suddenly we are!
I’m very conscious that the money we’re working with is from a small pool of investors who believe in us so I’m quite passionate that we have to do the right thing with their money. So the second round of money came from Venture Capital investors with support from other stakeholders in Singapore. The management team put more money in as well.
As you get closer to results, venture capital funds want to see your data first. That’s fine because that’s what the business is about and so we’re close to generating quite a lot of data now. I think one challenge I’ve noticed is that the venture capital funds generally like to fund biotech that have principally one compound so it’s like spread-betting, it’s like playing roulette. You invest in 20 companies, each with one compound.
Some win, some lose and then, of course, we’re coming forward saying, no, we’ve got a portfolio. We know that not everything we do will be positive. We’re not massively better than the odds in the pharma business, we’re not that naïve but we do know that we’ve got to produce a certain number of projects to get that positive result and that means that some of the projects will fail. For me, it’s about failing quickly and cheaply if you’re going to fail. That’s where I think big pharma have got it wrong because they’re slow to fail and it costs a lot when they fail.
Moving on to what you asked about how do you do it cheaper? When you move outside pharma one thing you realise is that there’s a price for research and development that pharma pays, there’s a price that biotech pay and a price that the universities pay and they’re all completely different. You’d look at a phase two study and have an intuitive feel for how much that would cost in pharma and you can get that down considerably in a small company, and the CRO is still making a profit. I’m not talking about working with minor CROs. These are all quality CROs.
Pharma IQ: Does the same culture exist when it comes to working with smaller CROs?
Mark McHale: They are very good, particularly in clinical for phase three studies and four studies for pharma and they’re very lucrative so they’ve grown in parallel with pharma.
It’s been quite interesting when you see the different quotes for costs that come back for a piece of work and how they can be very different and somebody who’s very inflated, you can pull them right down and they’ll still make a profit. So that’s one aspect.The other aspect is, I guess, in pharma, if we got a 20% discount I’d be pretty happy, if it went down from a big number to 20% less but sometimes we pull that down considerably, like 80%.
The other thing, I think, is because we’re on the projects every day and we’re very small and we keep a close eye on it, any out-of-scope costs – generally there’ll be 20% inflation on costs at the end because of out-of-scope things. If you stay on top of that, you can remove quite a lot of cost almost all of it. Of course, in pharma you wouldn’t worry about it, it’s a drop in the ocean, whereas we haven’t got an ocean, we’ve got a small pond so every drop is very important!
Pharma IQ: So when does it get to a stage before you start to see a return on investment?
Mark McHale: It’s a tough call. We’ve got phase two data coming out in the first half of this year. We’ve got phase one data coming out all the time on our second study and we’re about to generate more with our Almirall compound.
If you look at the appetite pharma has got for phase three-ready compounds, it’s voracious. So it depends whether somebody comes forward, sees our data and makes us an offer. It’s hard to predict, I guess I’m saying, when somebody would want it.
Pharma IQ: How much you hope to expand but would you consider being acquired?
Mark McHale: We’re quite passionate about keeping it small. At the moment there are 11 of us and when we do the series B we will probably go up to about 18.
We’ll never be more than 18 to 20 people, we’ve all agreed that. We consulted with some people who’d done this kind of model in the States before we set up and interestingly, they said that their company expanded to about 35 to 40 and then what they call a big pharma mentality came on board, where people couldn’t make a decision without going to a committee. That’s not what we want, we’ve got to make a decision very quickly and do it.
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Interview conducted by Niamh Madigan from Pharma IQ.