00:00
Welcome the Pathfinders podcast series from RBC Capital Markets, where we uncover the key trends and catalysts shaping the fast moving world of biotech and pharma. I'm your host, Joe Coletti. Today, we're continuing our broadcast from our ABCs Global Healthcare Conference here in New York. And we're going to be focusing in particular on the development of therapeutics to treat cancers.
00:27
Speaking with our special guest, Laura Sullivan, Laura is president and CEO of Pyxis Oncology, a clinical stage biotech that aims to develop life changing cancer therapies. As a biotech entrepreneur and advisor, Laura has leveraged her expertise in asset evaluation portfolio management and startup financing to raise nearly $500 million of capital from seed stage through IPO. So I want to start with maybe you giving us a little bit of an overview about Pyxis and what you're trying to do.
01:00
You know, your interventional oncology heritage or IO heritage. Your primary focus on ADCs. And maybe talk a little bit about your your priorities in the next 12 to 18 months. Sure. So Pyxis Oncology, I think, is set apart because we have a passion for trying to tackle difficult to treat cancer types, meaning that we believe it's important to bring forward new science, new biology, addressing new targets.
01:26
We're not about incremental innovation or marginal tweaks, and that's been sort of a consistent theme for us, whether it's been related to our immuno oncology heritage, where the IP originated or the ADC modality that we licensed in from Pfizer a couple of years ago. In both cases, the programs that we were pursuing were first in class and in the case of our lead ADC program, it's a first in concept, meaning it's a new way of using ADCs.
01:53
So so that's been sort of our heritage and our go forward focus for the next 12 to 18 months is delivering the data. So our lead ADC program, we expect the data to come out in the fall of this year that will then guide the next stage of development, which will likely be dose optimization, leading into cohort expansion.
02:15
So we get more specific around the types of cancers that are therapy will address. And then for our second program, our immuno oncology program, that data is expected at the end of this year. That's also a first in class target. So that would also dictate coming out of that data what the next steps are for that program, actually.
02:32
Can you tell us a little bit more about how differentiated your lead program is picks to a1a novel ADC that targets the stroma rather than the cancer cell directly? And just how unique to this compared to the classic approach with other ADC modalities? Yeah, so the ADC modality has gotten extremely hot over the last couple of years, I think, as we're all aware.
02:54
We've seen a lot of dealmaking, we've seen a lot of great clinical data coming from ADCs and all the ADCs that are approved as well as every other ADC in clinical development except for Ares addresses targets that sit on the cell surface. Our target is a splice variant of fiber in actin, which is a structural component of the tumor stroma.
03:16
And the tumor stroma surrounds the tumor cell, and the overall tumor itself, you know, has a boundary that contains the stroma and the tumor cells. So our thesis here is that by altering the nature of the tumor stroma, which provides nutrition, metabolic support for the tumor, you can dismantle the tumor just like, you know, if you were to detonate a building, you know, if you were demoing a building, you to take down the basement.
03:40
Right. And the building would fall. And the same concept here around targeting the stroma. So this concept was pioneered by Pfizer, where we licensed the technology from back in the middle of the 20 tens. They licensed in the target from Dario Neri, who's a researcher in Switzerland, and he's been a scholar of the Stroma for his entire career.
04:04
The Stroman the tumor microenvironment have typically been identified as places for immuno oncology therapies to work, and ADCs have tended to focus on cell surface targets, primarily because there had been a canonical belief, which is actually incorrect, that an ADC needs to address a target on a cell surface and be internalized, meaning engulfed by the tumor cell and then kill it from the inside out.
04:31
And that's why you haven't seen any other stromal targets. But what we've shown through our pre-clinical work, what Pfizer showed showed before us, and we've continued to advance, and which I believe our clinical data will show when we release it, is that that conventional wisdom is just false and you actually can address targets elsewhere in the tumor than the cell surface and be just as effective of a killing machine in taking down the tumor.
04:56
But it's so innovative. And just a quick follow up on that. How advanced is the ongoing Phase one clinical trial stage? So right now we have been dosing patients in the phase one dose escalation trial since March of 23. So we're 14 months into the trial. We are at the later stages of dose escalation. We announced in March of this year that we were approaching the eight MCG per kig dosing level for our ADC, which is an unprecedented dose level for this linker payload component of our ADC, meaning other ADCs that are out there with or a Saturn payload, which we have a modified version of it, have tended to cap their dosing levels out
05:38
at, you know, 1 to 3 makes per cag the precedence. Pfizer her two ADC dosed in the 3 to 4 make per kig range in its phase one trial and it it maxed out at 5 minutes per kig it was actually in tolerable at five makes per kid. We had announced in March when we were starting the eight meg per kig dosing that we had cleared 5.4 makes per kig.
06:00
So there's something about this target and this mechanistic approach that may be allowing us to dose patients at higher levels, which could ultimately allow for improved efficacy and potency. Maybe a slightly bigger, bigger picture question around this, as you know, we mentioned Pfizer, and how challenging is it for an early stage biotech firm to conduct complex phase one studies, you know, relative to big pharma?
06:25
Yeah, it's a great question. And actually something I think you know, we talk about a lot because we went public in 2020 with a number of other preclinical companies. And so there's, I don't know, 20 or so of us that are out there with our phase one trials, which I think the market is not used to seeing phase one dose escalation trials.
06:42
It's not as familiar with how to analyze those and read those as it is, you know, phase three trials. So we have a learning curve in the capital markets around what these trials are powered to deliver because it's not powered in phase one to deliver a statistically significant response rate. It's powered to show is there a signal in this tumor and what dose level could you get to?
07:07
So we have a baseline asymmetry, I think with capital markets, nuanced understanding of phase one trials compared to pharmas who live and breathe, phase one trials, who understand what a phase one can and cannot tell you. And then you have little companies like us who are trying to navigate, you know, partnership opportunities with pharmas and then, you know, accurately communicating information with the capital markets in both of these groups seat the same information sometimes very different ways.
07:36
And I do think that makes the communication and the so what's that come out of our trials that much more important for us to clearly communicate? I also think that what's right for the molecule sometimes might be a no brainer in terms of how you might structure that phase one if it existed inside of pharma, because they have the resources to do broad tumor assessment, they have the resources to do, you know, multiple PDX models to inform their clinical development.
08:03
They have the resources to maybe get their arms around more, you know, mechanistic studies that can can predict clinical outcomes. Then we're resourced as a smaller company with the collective. We not just Pyxis. I think in the case of Pyxis, we were very fortunate because we took our asset from Pfizer that they had done a lot of that for us.
08:23
So we actually have a pre-clinical package that I think is, you know, well above the quality of what you would tend to see for our peers who had to originate their own phase ones. So the complexity I think is important for the molecule so that the molecule can tell you what it needs to tell you. But the challenge is boiling that down to clear soundbites, inferences.
08:47
And so what's for the capital markets that are, you know, monitoring on a given day, hundreds and hundreds of clinical trials. And they just want to know quickly, what does this mean? What does this mean? So that's where I think it's hard for us sometimes. Is it really just about continuing to explain this to investors and capital markets, continuing to be present, continue to show up at places like this, at these conferences so that you can articulate and explain this?
09:09
Is there any other sort of secret sauce, if you will, to breaking through? We talk about this a lot, like whether there's other vehicles of communication. I think absolutely the investor conferences are essential and the monthly investor calls earnings even you know, this earnings that we put out today, we put a little more qualitative explanation of our mechanism in the press release than we normally, you know, would do in the past.
09:32
And I think that's because we saw it as another opportunity to communicate. We actually put images of three of our posters from the ACR conference. And again, you wouldn't normally put that in a press release, but it supported some of the narrative and the dialog we've been having around the mechanism. And we felt since we can't talk to everybody 1 to 1 at the same time, using the press release that way would be helpful.
09:57
But I do think, especially when you have new target, new tumor biology and a new mechanism and you're a phase one program, there's a lot of areas of uncertainty and and scholarship that you have to quickly explain. So repetition helps. I think, you know, earlier this year, as we were going up the escalation steps, we got a lot of questions around, you know, some of the safety insights we shared in March, basically that the headline was the March press release said, you know, well-tolerated to date.
10:32
Good message, right? But then everyone wants the detail underlying it and they assume if you're not giving it that that's potentially a negative. And so you have to do a lot of communicating to say, no, that's not a negative, this is a positive and here's why. And so this earnings release today, we haven't gotten any questions really about safety.
10:51
So I feel like the repetition of those messages is now set in and now we can move on to other things about like the mechanism or what we think the next steps of development could be coming out of the data. So it's, it's essential. Yeah. So I think there's a lot of lessons built in there. So other companies, when dealing with capital markets, particularly on an areas as complex and innovative as this, I want to turn to you personally, but also talk a little bit about leadership and how your leadership has evolved.
11:20
You have a very impressive personal background. We know you worked at Pfizer for a number of years as well. I'd love for you to just share a little bit of how you came to be where you are right now, but also want to talk about just how you've seen your own leadership evolve over time throughout your career and how you're sort of applying and putting into practice now at Pyxis.
11:40
Yeah. So I was never the person that had like a a specific aspiration of what the next career step would be. I was always motivated by the business problem at hand. And frankly, two things was, was the business problem at hand challenging and was I having fun? And if those two conditions held, then I was happy. And if either one of those wasn't holding, it was time to figure out, okay, what's the next thing?
12:06
And so that led me to sort of different roles when I was inside Pfizer. And then that led me to biotech because my transition to biotech came from stepping out of my day job at Pfizer, where I led the strategy and portfolio group for Michael Boylston at the time, too, spending two years figuring out how to pull assets off the shelf from Pfizer and put them in a new business model which became Springworks Therapeutics.
12:30
So my transition to biotech came by founding Springworks and leaving with the assets. And then with Pyxis, I had the chance to do it again in a more traditional venture backed setting. And so, you know, each of those experiences had sort of meaty business problems to solve and were fun because I was learning new things. I was meeting new people, I was getting a chance to apply sort of, you know, my critical thinking skills in different ways.
12:56
So I never sat out and said, I want to be a CEO. But the CEO role ended up being the role that satisfied those conditions. And I think one of the things I've learned, having been in the seat now for almost five years, is especially as a biotech CEO, you have to be completely adaptable. Some some days my job is more of a spokesperson communicating like today, like today and other days.
13:20
It's actually like almost like a project manager going in deep with the scientists or the clinical team and making sure the right hand in the left hand are connecting and getting in the weeds that way. So some days it's to be more hands on and more concrete and tactical, and other days it's to be more high level. And so I think that in this job, even more so than, you know, maybe any analogous role I had in a corporate setting, you have to be agile because every day it asks something different of you.
13:51
And so that's exciting and fun. And sometimes it's super, super challenging because, you know, you might feel like being a spokesperson one day, but you're really needed in the weeds that day. And if you have to do it because you know, you can help the team come together and they need that of you and that's the best way you can kind of work with the whole team.
14:10
And I think the way, you know, our leadership team has evolved, you know, I, I sort of joke sometimes that, you know, biotech is one of the few professions that rewards you for getting older because you get pattern recognition, you know, years of experience, you learn things and then you know how to apply them to the next experience.
14:30
And, you know, at the same time, you want always young, innovative, fresh thinking. So you want a mixture of the both in your organizations. But in ours, we have very seasoned executives in our leadership team who've pretty much all cut their teeth in Big Pharma as well, where you can learn from the best of the best on the principles of drug development.
14:49
And I say that because there's no substitute for experience and knowledge. You could be a brilliant researcher with a great idea in an academic setting, but that doesn't mean you know how to put together an FDA briefing document. You just have to learn. And it's not a knock on your intelligence or anything. It's just an experience base. And so in a small biotech where you don't have the ability to get that wrong, you don't get a second chance.
15:15
Right. If you if you do the briefing book wrong, you've lost time, you've lost momentum. You need people who know how to do the briefing book right the first time. So our team brings years of experience and pattern recognition and also that shared passion to novel science. You know, none of us in Pyxis want to be figuring out, you know, how do we tweak this amino acid to make a linker on an ADC better?
15:39
Like that's important if it helps translate to patient outcomes, but we'd rather say, what's the new target or the new biology that, you know, we could apply our pattern recognition to to solve these hard problems. And then I'd say we have the we have a number of values that picks us. But the one that I'm the proudest of is it's called patients over ego.
16:01
And so if you keep in mind always that you're doing this for the patient, it will often cut through some of the organizational things that, you know, any of us face in our day to day jobs. Like if somebody is in a meeting and and somebody else, you know, commented on their area and they start to feel like, God, that was my area.
16:19
Okay, patients over ego, that's your ego talking. The other person said it because it's for the benefit of the patient and it can help just bring you back to, you know, what's right and what's important. So team is that mixture of credentialed, knowledgeable folks. And then I think with sort of a shared vision around what they want to achieve and kind of a cultural common, a common cultural desire of how to work together.
16:41
You know, you talked a lot about experience being one of the greatest teachers. So I wouldn't be working in capital markets if I didn't ask you a little bit about M&A, one of our favorite topics, But I'm kind of curious what your philosophy is around how you think about it and what your approach is. So we we were very fortunate that we raised a lot of money in 21 right before the downturn.
17:06
So we had 320 million in our war chest, which was great because we needed it to get through, you know, the pre-clinical work to launch the clinical trials. And we have runway now through the end of 26. What we also saw during the downturn, while we were well-funded and a lot of our peers were not, was that there was great science that was available on sale and it felt to me like Black Friday after Thanksgiving, right where everything's super, super bargain priced.
17:34
And so we said, you know, if there's an opportunity to bring in technology that fits these criteria, I mentioned earlier that, you know, could be transformative for patients that we had the expertise to address and potentially could get us into the clinic faster than where we were because the capital markets looks for that. And that would be a win win for us and for investors.
17:54
So we actually spent a good portion of the downturn screening and evaluating opportunities as buy side M&A that we were the buyer. What we found and what we learned through all that was that even when the deal thesis is there for pipeline mergers, you still have the challenge of the human elements of merging, you know, cultures and you need to boards to vote on things.
18:16
And so there were a number of things we saw that were attractive that could have complemented our pipeline quite well. But the counterparty wasn't ready to do a deal. And then the tragedy of it was, you know, 6 to 9 months later, many of them would call us back because they thought they could raise money and they couldn't.
18:32
And and several of them ended up going belly up. And, you know, it was just a real lesson for how M&A, as much as it's deal thesis analytics, I think rises and falls on the people and right their ability to participate in a deal. So I think the for players like us probably those bargain days are gone because you know everyone's stocks risen a bit and maybe not as much as we all want them to have risen to, but they're not the dark days of 22.
19:01
But I think for pharmas, it's still it's still bargain hunting. Yeah. And so, you know, and I think having been on the inside of pharma and when my last role I worked a lot with the business development groups, biotech quote, de-risking for pharma is an absolute, you know, viable channel of great science to go into pharmas. So I think with still depressed stock prices historically, you know, there's still a supply of potentially great science for farmers to acquire at a discount in their language or their their measure.
19:35
Maybe not, not mine. You know, they might see a 2 billion acquisition as a bargain, and I'd be like, that's amazing. So I think that there's still the appetite there. But I also think for pharmas, some of them, you know, really need to identify that strategic fit the gap fill, and then others will sort of follow the breadcrumbs of exciting science.
19:55
And I say that because at the Asia conference this year, they did the this was the first time there was an inaugural strategic meeting two days before the science started. And they invited, you know, a dozen of the top pharma. So all the big names were there with their lead clinical people and business development people. And they walked through each one of them, walked through their pipelines and talked about their BD strategies.
20:17
It was the best meeting I'd been to in years because it was chock full of insights. You know, Merck said, Here's what we look for. And Pfizer said, Here's what we look for. And Genentech says, Here's what we look for. And many of them look for specific, you know, gap fills. But others are just, hey, if you've got a great mechanism or great biology, come talk to us, because that's what we focus on.
20:40
So I think that appetite is still very much there based on even what I heard at the ACR conference. It's really interesting. We have time for one more question. When you think about investors, I mean, you talked you talked a little bit earlier about what's difficult to translate. Maybe you have to do some extra work to translate some things to the capital markets, whether it's about you, whether it's sort of bigger picture, other things that you'd like to convey to capital markets that you think they should be paying more attention to can be about you can be broader.
21:07
I think I know what part of your answer might be, but I kind of want to I want to get your perspective on that. So I think one of the things that I had been surprised to learn or observe over the last year and maybe it for capital markets experts like you, it's not a surprise, but the nuanced risk tolerance differences amongst different investor groups, meaning, you know, as we raised our pipe in the spring, we found some investors could get really comfortable at the new target, but not so much the new mechanism, meaning the stroma.
21:38
They still and then others who are like, Wow, the stroma is cool, but I wish you had a de-risk target. And then we found the sweet spot of investors who are okay with both. And I hadn't fully appreciated those nuances of risk assessment and tolerance in the investor community until we really got deep into the pipe. Because when you're preclinical raising money, you think, being in the clinic will cure everything.
22:03
But it does it it's just it's just a more it cures some of it because you, you know, gotten into patients, but you're still in a risk assessment mode by the capital markets community. So I think that what I would love to see is if and it's probably two parts in the investment community and in the biotech community, more of a meeting of the minds of getting comfortable around investing in areas of new biology and new targets, and what some of the clues are that can give people comfort about that risk.
22:36
So, for example, we're often asked like mid-March when we put out, you know, a positive or a tolerable safety profile and we got a lot of questions, Well, how do we know that it works? And you're not your safety is not tolerable because it's not working. And, you know, we'd say, well, we have waiting lists at every site.
22:59
There's 1500 phase one trials going on in oncology in the U.S. and Europe. We have waiting lists at every site. I don't know. I mean, investigators probably aren't going to put their patients on a waiting list if they think nothing is happening. So it's a clue. It's not the hard fact that the investor wants, which is tell me that this works and which we can't do until we get data.
23:22
But it's a clue that's actually pretty powerful. So what I would love is, as you know, we have more of these early stage trials in the capital markets that the reading of the clues, people get more comfortable, the reading of those clues. And maybe we as biotechs get more comfortable giving some of those clues because we just can't give data that's intermediate or in the middle of a trial.
23:47
It's not responsible because you're still gathering information. So you don't want people to take insights away, positive or negative, for something that you're waiting on 50% of your data. But I can tell you in our case, we've had investigators with waiting lists, nearly the entirety of the trial. So the fact that we're now a year in at higher dose levels and they're they still have patients on waiting lists, maybe in the early days, they were doing it out of, okay, this is cool.
24:11
This is novel. Let's let me get my patient out. Well, now we have 14 months of data that they've seen and they still are waiting lists. So investment community, figure out what that means because I can't tell you. And I think that's a great message to end on. Lara, it's been a real pleasure having you on. I hope you'll come back and we wish you best of luck.
24:30
We would love to. Thank you so much. This was great. That's all for this episode. Thanks again for listening to Pathfinders and BioPharma brought to you by RBC Capital Markets. Please remember to subscribe to get more great content and be alerted about future episodes. This episode was recorded on May 14th, 2024.
25:03
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