There are probably few CEOs in the pharma industry who have as much insight into one of their products, as well as its patients, as Seth Lederman, M.D. Lederman is the CEO of Tonix Pharmaceuticals, but did not travel the usual route in getting to that position. He started the company, provided the vision for it, and also supplied the molecule currently in its pipeline; cyclobenzaprine, a drug being developed to address the sleep issue associated with fibromyalgia.
He is also in the unique position of having worked as a scientist in academia (at Columbia University) and as a physician treating patients, prior to starting the company. This experience gives him the perspective of having worked with fibromyalgia patients before setting out to find an effective treatment for them.
“Everybody knew the existence of patients with chronic, widespread pain was a common problem, but for a variety of reasons doctors didn’t want to deal with fibromyalgia,” he says. “In my experience working with these patients, I was reminded of my early days in medicine trying to treat patients who had been infected with HIV.”
Lederman has made quite a transition in this journey of going from physician, to scientist, to CEO. Even when he was working as a bench scientist developing new drugs, he felt the natural place for him was in a large pharmaceutical company. In 1989, he even spent four months performing a short sabbatical with Merck, where he served as part of an industry-leading group developing therapeutic monoclonal antibodies.
“We were trying to engineer a monoclonal antibody as an HIV treatment,” says Lederman. “This was also at a time when monoclonal antibodies were out of favor as therapeutics. Merck had a leading team in that area, but at some point, decided they didn’t want to be in therapeutic antibodies and shut down the group. Ironically, today one of their biggest products is KEYTRUDA, which is a therapeutic antibody. Once they shut down their internal group, they had to purchase Schering-Plough to get an antibody.”
But shortly thereafter, he sensed he had changed — or the industry changed beneath him. He felt many of the large pharmaceutical companies were shifting their focus from research to marketing organizations. Today he believes much of the innovation in the industry is coming from smaller companies. “In that old era, Big Pharma business development groups consisted of a couple of people. Today those departments might have 100 employees. That is a huge change for the industry, and in retrospect, I’m not surprised I ended up working for a smaller company.”
"Once there was an approved drug on the market, naysayers could no longer say the condition didn’t exist, or that the FDA would never approve a drug for it."
Seth Lederman, M.D.
CEO, Tonix Pharmaceuticals
WHEN INVESTORS ARE SKEPTICAL
The first company Lederman formed to work on cyclobenzaprine was called Vela Pharmaceuticals, which received some investor funding and performed a small study. Unfortunately, the company’s investors decided fibromyalgia was too challenging for a VC-backed firm, so they stopped working on the molecule. That changed the entire direction of Vela.
According to Lederman, those VCs called a lot of experts in the field and were told that fibromyalgia didn’t exist or was not a real medical condition. At one point, a senior consultant with a lot of experience in the industry told them the FDA would never approve a product for fibromyalgia. After hearing those types of comments, pursuing low-dose cyclobenzaprine before bedtime for fibromyalgia just seemed like too risky a proposition.
“Ultimately, you do have to go to the FDA for approval, and the FDA listens to those same experts in the field,” says Lederman. “At that time, there were too many experts who didn’t believe fibromyalgia was a real condition. Unfortunately, I never had the opportunity to be on any of those calls and never had the opportunity to debate those opinions. But even during that time, which I call the dark days of fibromyalgia, there were other names that were applied to the condition, such as chronic widespread pain. If you knew any of these patients, you knew the condition was real. It’s almost as if experts simply didn’t like the name. In retrospect, it’s interesting to have lived through the period where the entire mindset on this has changed.”
FRUSTRATION LEADS TO NEW COMPANY, BUT NO VCs
Lederman knows that it is not unusual for VCs to change the focus of a company. Since professional managers are often put in place by the investors, the control and vision of the founder can often be pushed aside. “It was a little frustrating for me, because you feel like your ideas and IP are tied up in the company,” he says. “It did slow me down for a few years, and I was not able to regain control of that IP until 2006, when they finally acknowledged they were no longer pursuing the molecule.”
The beliefs of the consultants and investors did not sway Lederman’s convictions, and he remained committed to finding a new treatment for those patients he spent so much time treating. After he was able to retain the rights for the drug from Vela, he found a partner who was equally passionate about finding a treatment. In 2007, the two of them founded a company called Krele, which later changed its name to Tonix.
Lederman admits that VC investors can bring a lot more than just money to a company. They can help find directors and can locate consultants to use for clinical development. In fact, he says at Vela it benefitted having VC investors on board.
But by the time he formed Krele, it was 10 years later, and he had formed his own network of potential board members and investors, which is why he opted to forgo seeking VC investment. “We funded it on our own and then recruited board members who were interested in the fibromyalgia program and were able to invest some of their own money. My time with Vela was a learning experience, and it was a little frustrating, but what I learned from it definitely helped me down the road.”
While Lederman liked the name Krele, he notes Tonix is derived from the word tonic, which in the past was defined as a gentle, soothing medicine. Putting an X at the end simply gave it a more modern look and sound. It also ties in with his goal, which has been to find a fibromyalgia medicine that is well-tolerated by patients.
THE SEARCH FOR A PHARMACEUTICAL PARTNER
As he started to again develop cyclobenzaprine for patients, Lederman felt it would be good to have a pharma company working with him as a partner. “I approached large pharmaceutical companies and proposed that they either partner with us or purchase the technology,” he says. “I also cast a very wide net — going to big, medium, and small companies. I focused my search on those companies that were working on disorders of the central nervous system or had a candidate in their pipeline dealing with sleep disorders or pain.”
There were two principal ways he made contact with potential partners. The first was through the Licensing Executives Society (LES), an association for IP, technology, and business development professionals. The goal of LES is to help facilitate global IP commerce through education, networking, best practices, and mentoring. Although the organization is not 100 percent pharma, Lederman was able to use their directory to reach out to business development professionals in the industry. The other method he used was connections made at pharmaceutical research and investor conferences.
Most of his contacts started with either an email or a phone call. Once a confidential disclosure agreement was signed, information was exchanged, followed by a face-to-face meeting. Lederman feels that if you can get to three meetings, that’s generally a good sign. He believes by the third meeting companies are lining up experts and taking a close look at the molecule. Although he was able to secure a third meeting with a couple of companies, that was as far as he got in the process.
“I think the main problem was the reaction of potential partners that we did not possess enough data, which posed an increased level of risk for them to invest time and money,” notes Lederman. “Today the trend seems to be that companies are willing to pay more for a program that is sufficiently de-risked, as opposed to paying less for a molecule but having to absorb the risk of taking it to the next level. They also may have had some of the same concerns as our VC funders at Vela, but if so, those concerns were not expressed as candidly.”
Although Tonix had already completed one Phase 2 study, several companies told him they might be interested after a second larger and more comprehensive study was performed. But during that time, another critical event occurred: The FDA approved Pfizer’s Lyrica for use in patients with fibromyalgia.
“That was really a watershed moment for the industry,” says Lederman. “Once there was an approved drug on the market, naysayers could no longer say the condition didn’t exist, or that the FDA would never approve a drug for it. All of those concerns just seemed to dissipate.
FIND A CRO AND DO IT YOURSELF
At that point, Lederman decided the best way for the industry to realize the significance of the molecule was to take it through to clinical testing himself. Tonix conducted a second Phase 2b study, which enrolled more than 200 patients and seemed to successfully demonstrate its tolerability and activity. Tonix is currently conducting the first of two Phase 3 trials. Dosing started in May 2015, with results expected to be known by the third quarter of 2016. The current Phase 3 trial has targeted 500 patients in the U.S.
At this time, it appears Lederman’s transition from scientist to CEO is nearly complete. The final step will hopefully involve an approval from the FDA for cyclobenzaprine and speeding the drug to patients in need, something he has looked forward to for more than 10 years. “I think the main reason I became a CEO is that I was more passionate about the project than anyone else,” he adds. “That passion to help patients is what continues to drive my search for new medicines and new relief for patients.”
HOW TONIX RECRUITED FOR ITS PHASE 2B CLINICAL TRIAL
To recruit the 200 patients for Tonix’s Phase 2b study, CEO Seth Lederman, M.D., secured the services of a CRO, which then reached out to sites and investigators. There were also two forms of advertising used to attract patients — a central campaign and a localized campaign that individual sites were able to perform with funds provided to them. The centralized campaign has a website and attempts to reach potential patients via both the internet and social media. Both efforts are overseen by the CRO.
Since the study is attempting to improve the level of pain via better sleep, each night patients will complete a telephone diary consisting of a series of questions answered via keypad. Patients will register a score between 0 and 10, indicating the level of pain experienced in the last 24 hours. Lederman is hopeful for the benefits new technologies may bring and notes future studies may even incorporate validated wearable devices that would track the amount and quality of sleep for patients.