Executive Insights From A Successful Entrepreneur: Creating Companies And Looking At Problems In A Different Way

By Rob Wright, Chief Editor, Life Science Leader
Follow Me On Twitter @RfwrightLSL

Daphne Zohar is the founder and managing partner of PureTech Ventures, a Boston-based venture creation firm specializing in translating breakthrough research from top tier academic institutions into therapies that will impact human health and well-being. A successful entrepreneur, starting her first company at the age of 16, Zohar has been recognized as an influential and innovative force in biotech. She recently sat down with me to share some of her life science industry insights, and PureTech’s approach to creating companies and looking at problems in a different way.

Life Science Leader (LSL): What have you been witnessing taking place in the industry?

Zohar: Well, I think that there was this feeling that the industry was in decline, and the venture industry has been contracting, a lot of venture funds are not actively investing in life sciences anymore and at the same time, pharma companies have been cutting internal research and looking to externalize. What I think is happening now is almost like a rebirth. There was this contraction and then now new innovations are coming out of that. I think one area that's really interesting is this whole area of digital health. A lot of the pharma companies are realizing that new technologies are actually an important factor in delivering health care to patients. They don't have to be stuck in a mindset of, “We, as a drug company, only deliver capsules to patients.”

LSL: How should pharma adjust to this new mindset?

Zohar: I think it's a matter of embracing new technologies that help to connect pharma with patients and thinking of patients as consumers and the whole change in the general health care industry is something that pharma can actually lead, as opposed to following or being left behind. Some of the more progressive companies, I think, are really realizing that and trying to embrace new technologies and find ways that these new technologies can support and expand their current business, as opposed to cannibalizing them.

LSL: Explain the process by which you form a company?

Zohar: When we form a company, we start with looking at the problem and working with leading scientists in this specific therapeutic area, or technology area, and that leads us to where the innovation is. We start with either a therapeutic area, or an area of technology which we think is really exploding, emerging, where there's a lot of academic papers, there's a lot of interest in academia, but at the same time, there haven't been a lot of companies started. In one of those two areas, we'll say, “Okay, either this therapeutic area is important or this technology area is important,” and then we'll start by saying, “Okay, what's our wish list of the top people in the world that are working on this problem?” Usually it's a cross this disciplinary group that we try to bring together. We actually form a company with them. We get to know them and ask them if they'll join us and form a company without knowing what we're going to develop in that company.”

Once we've gotten together with them multiple times, we build a really close relationship with them and then with each other, a whole bunch of different ideas get shared, the ideas that came out of the labs of each of those scientists, former post-docs that are working on interesting things, papers that they've reviewed, grants that they've reviewed, ideas that they've had that they've never told anyone, and ideas that we as a group have, in a brainstorming session. There might be a hundred ideas that come up. We'll sort through all of them, we'll look at intellectual property or we'll look at viability, things like that. We'll look at what are the key value inflection experiments that we need to do, and then we actually will do them. We'll bring in the technology that we think is the best. What's interesting is the group will often converge on one or two of the ideas, which is surprising, since everybody's coming up with their own ideas, but we've found that people are actually very open and collaborative, as opposed to trying to push their own.

We in-license the most interesting technology, do experiments, file IP, and then we'll bring it to a stage where we can directly partner with large pharmaceutical companies and other strategic partners. In the past, what we would do was bring in venture money. We've actually found that model to be less interesting for us today.

LSL: Where do you get your start?

Zohar: Well, with these experts, when we're talking and looking at the ideas that are coming out of their own work or work that they've reviewed or ideas that they've had, the concept is really to think about new ways of tackling existing problems. For example, we have a company, Tal Medical, developing a noninvasive neuromodulation device for treating depression. Steve Paul, former president of Eli Lilly Research Labs, is the acting CEO. What makes this really interesting is taking a device-based approach to treating depression, as opposed to a drug. The idea is that the brain is basically an electrophysiological organ with a number of circuits, which can become dysfunctional. Imagine if you could “reboot the system”, similar to what is done with a defibrillator for the heart. We actually have human data showing that this has an immediate effect in treating depression. The pharma industry's been very sophisticated in thinking about what are the specific chemicals it could modulate in treating various ailments. But this is a different way of looking at the problem. We are looking at other new ways of tackling problems that can be then proven out in the clinic.

LSL: What was the driving inspiration behind the PureTech approach?

Zohar: I think that part of it had to do with efficiency, and if you think about how our companies started, typically a company started when somebody hears about a technology, they get excited, and if they have an entrepreneurial personality, they drive it forward. The first time that a skeptical or broader viewpoint perspective is taken is when the venture industry comes and looks at a whole bunch of companies that were started by these entrepreneurs. Our idea was why not start the company in a more methodical way? Look at all of the ideas/technologies that you could potentially start a company around and pick the best one. A lot of times a venture industry will say, “Okay, we bet on a jockey and not the horse,” but if you're betting on the jockey and you're not really spending as much time thinking about the horse, the horse is also pretty important. They’re betting on the jockey and assuming the jockey can pick the horse, but what we're saying is we're the jockey. We're going to find the best horses and we're going to do that in a systematic way. When you're looking at one technology or one idea that it's hard to assess how good it is without seeing all the other ideas out there. Our approach is really just trying to be efficient and looking at everything that's out there, and then not coming with a bias, not starting with, “This is my idea and that's why I'm going to push it forward,” but rather saying, “We have a clean slate. We can do anything we want to, and this is obesity or baldness or Alzheimer's. We can do anything we want to. What's the best way of tackling this?” You'd be surprised, but those conversations don't happen often. A lot of times, we get these leading scientists and they say, “You know what? I've never had this type of conversation.” They're always asked to comment on somebody else's program. Even when they are advisor to pharma, they're asked to come in and say, “How would I improve on this, incrementally improve, as opposed to how would I do this if I could do anything?”