The Biotech CEO — It's Not For Everyone
By Kenneth Moch, president and CEO, Cognition Therapeutics
I’ve often described the challenge of developing new medicines as analogous to the difficulty of climbing the highest mountains on Earth. If one follows that analogy, then seeking to develop a new treatment for Alzheimer’s disease is like climbing K2, the second highest peak — in winter. That feat has not yet been accomplished, and those who aspire to do so describe it as their last frontier. Similarly, the brain is one of the last frontiers in medicine and drug development.
As has been demonstrated by the plethora of failed drug development efforts in Alzheimer’s disease, Parkinson’s disease, schizophrenia, depression, and other neurological disorders, our understanding of how the brain works is in its infancy. Conducting research and clinical development on an indication as rife with failure as is Alzheimer’s disease is certainly one of our greatest challenges. Everyone involved — from scientists to patients to regulators to investors — needs to be exceptionally risk tolerant. The few medications that have been approved can slow the progression of the symptoms of Alzheimer’s, but none are truly disease modifying. To add to the skepticism in the field, recent well-publicized failures — solanezumab, bapineuzumab, verubecestat — draw into question the underlying theories of the cause or causes of Alzheimer’s disease.
It’s not surprising that so many of us have been personally affected by Alzheimer’s disease. It is this personal connection that has motivated and continues to inspire interest from investors, scientists, regulators, and patients to strive for a solution.
WHY I ACCEPTED THIS NEW CHALLENGE
There were three factors that drove my decision to take on this new position.
First, I have been fortunate to have been involved in founding and leading a number of pioneering companies, including the first liposomal drug delivery company and the first cord blood stem cell company. For this reason, I have become accustomed to being told that “No one has done that before.” I have learned to live with the ambiguity and uncertainty that is drug development within a small company, and I find the challenges and potential of building a new company to be invigorating.
Second, I wanted to be involved in another company that had the potential to change medical practice and truly improve lives. While the industry has demonstrated an increasing focus on rare diseases and orphan drugs, I felt that this was the right time in my career to take on a major disease that directly impacts a large population.
The third reason is the scientific founder of Cognition, Dr. Susan Catalano. I was immediately enthralled by her passion for her mission and the intensity with which she was working to accomplish her goals. In the face of all of the odds against her, she drove Cognition from an idea to a clinical stage company. That’s the type of innovative, committed person we all should support
THE CEO’S TOP PRIORITIES
As a CEO, I consider my prime responsibilities to be four-fold: 1) to paint a vision of the future of the company 2) to ensure that the company has the human and financial resources to accomplish that vision 3) to set standards of performance and 4) to audit performance against those standards.
It was clear early on that we needed to focus on a key set of tasks in order to differentiate ourselves and “paint a clear vision.”
Our top priorities, therefore, were to further elucidate and differentiate our mechanism of action and to craft a financial and business plan for the company, both of which will support future fund-raising efforts. Further, we are deepening our relationships with our scientific advisors, thereby expanding the core team who can talk openly about our scientific strategy. These relationships will not only validate our scientific premise but also will be crucial as we make progress in our goal of advancing our small molecule therapeutic through clinical development.
Drug development is a team sport, and one needs the correct players to succeed. In a small company such as ours, we needed to find contractors, consultants, and advisors who could provide the experience and intellectual content to make sure we are appropriately progressing our lead molecule. Happily, many were already working with us.
EARLY LESSONS LEARNED
I think the superordinate learning experience relates to communication — within the team, with the board, and with current or future investors and partners.
This is the first time I have managed a predominantly virtual company with key executives and consultants living in different cities and states. Going back to my belief that drug development is a team sport, it was critical that everyone have a profound familiarity with the skills, experiences, perspectives, and personalities of their key colleagues. For me personally, that meant immersion not only in our science but also in the personalities of the team members. I have focused on making sure we communicate with one another frequently and that we meet face-to-face as often as possible in order to reinforce our relationships, work through challenges, and make plans for the next stages of our evolution.
With the board, it is important early on to begin to paint that “future vision.” How do you convert a belief in the potential of the company into an increasing possibility of success? This involves introducing the company to your existing network, pressure testing the positioning with as many independent thinkers — scientists, investors, bankers, etc. — as possible, to see what needs to be done to build a company that will hopefully provide an extraordinary return.
While not a new lesson, it was also clear that a lot of legwork would be required to increase the awareness of and interest in Cognition with the universe of potential investors and partners. Luckily, there are many more venues in which to interact with investors and partners than there were in the early days of this industry. The key lesson, not new to my current position, is that one needs to be focused from day one on building and expanding these relationships.
A VOLATILE AND RISKY ENVIRONMENT
I often describe a biotech company as a research and development pipeline unencumbered by revenue. Biotech companies sustain themselves via the sale of equity or through milestone payments achieved in partnerships but not through ongoing revenue. Couple this with an understanding that the complexities that inevitability occur along the drug development path are magnified — the highs may be higher, but the lows are also lower. These factors make this industry unique and can be uniquely stressful. Every executive of an early-stage biotech, and every employee for that matter, has to understand their own level of risk tolerance. If you are not prepared for this type of volatile and risky environment, then being at a biotech may not be the right fit for you.
This is an industry of extraordinary potential to make meaningful changes in the quality and quantity of life, but this fact is counterbalanced by the complexities of bringing these new medicines to market. That being said, the psychological reward of shepherding a new drug from development to approval after years of hard work, and of seeing people live who otherwise might have died, is extraordinary. So perhaps the most crucial consideration for an executive is: What motivates you to go to work each day?