Orphagen CEO Scott Thacher, Ph.D. + Director of Chemistry Ruo Steensma, Ph.D.

“We had Excel sheets all over the place and data from different projects that were just separated in different folders and after a while, it got to the point that it was just hard to manage. We chose CDD, and we’re really happy with the service and the cost and the way the database is evolving.”

— Ruo Steensma, Ph.D., Director of Chemistry, Orphagen Pharmaceuticals


Scott Thacher photoScott Thacher, Ph.D
CEO and Director, Orphagen Pharmaceuticals

Scott Thacher founded Orphagen in 2001. He has 30 years of experience in life sciences research and pharmaceutical R&D and led Orphagen to its first partnership in 2008. Prior to founding Orphagen, Scott directed programs in acne, psoriasis, hyperlipidemia, and diabetes at Allergan and served on management teams for strategic collaborations in dermatology and diabetes. Scott was previously on the biochemistry faculty as the Texas A&M College of Medicine (1986-1993) and holds a Ph.D. in biophysics from Harvard University and a B.S. in physics (Stanford).

Ruo SteensmaRuo Steensma, Ph.D.
Director of Chemistry, Orphagen Pharmaceuticals

Ruo has more than 15 years of experience managing medicinal chemistry programs and progressing compounds through preclinical and clinical development. Ruo worked on two small molecule CCR5 antagonists at Schering-Plough Corporation and subsequently focused on the development of kinase-based oncology therapeutics at the Genomics Institute of Novartis Research Foundation before joining SGX Pharmaceuticals as Director of Medicinal Chemistry. Ruo holds a Ph.D. from The Scripps Research Institute.

Interviewed by Barry Bunin, CEO Collaborative Drug Discovery, Inc.

Listen to the Full Audio

Audio MP3

Edited Interview Transcript

Scott Thacher
Hello. This is Scott.

Barry Bunin
Hi, Scott. This is Barry Bunin calling with the recording for the CDD Spotlight.

Scott Thacher
Hi, Barry. I’m here with Ruo Steensma.

Ruo Steensma
Hi, Barry.

Barry Bunin
Hi, Ruo. I’ve been looking at both your backgrounds on LinkedIn to prepare for this call, so I’m glad to have both of you here. The CDD Spotlight is always an experiment and this time it’s the first time we’re recording two colleagues working together, so it’s sort of a double experiment, if you will. So I thought I would start with a question for both of you: If you could each tell me about your background and how you came to work with each other, and we’ll see how this experiment goes.

Ruo Steensma
Barry, before we start, I guess neither Scott nor I am very clear about what this CDD Spotlight is. Can you explain to us first?

Barry Bunin
Sure. Absolutely. Absolutely. So some context, and this is all on our website. So we tend to like to tell the human side of the science, if you will, and the technology. So we can drill pretty deep on the science and we’ve done these for CDD Spotlight Interviews and posted them online. The most recent ones were Dave Matthews, a kinase research expert at Pathway Therapeutics. Eric Springman, the CSO at Celtaxsys working on innate immunology and then researches also in academia like Joel Freundlich who has a PhD from MIT. He’s at UMDNJ. Mike Pollastri is an ex-Pfizer scientist at Northeastern. Malcolm Kendall is the CEO at Indel Therapeutics. Going back a little bit further, Ellen Berg (CSO of Bioseek, now DiscoveRx) and Jim Wikel; Jim Wikel was the head of computational chemistry at Lilly. He got up there without even having a PhD. And our first one was with Jim McKerrow, MD, PhD at UCSF. So what we tend to do is very spontaneous in that it’s conversational, so we record the discussion and some of it’s about the science, some of it’s about the people, some of it’s about technology, and then it provides some interesting aspects that maybe you and other people find of interest who are also doing drug discovery. So it’s a good way for people to learn from each other. And just as a comfort level, you will get a full copy of the transcript to look at it and we sort of clean it up for going from the verbal to the written medium and add some hyperlinks, that sort of thing. So does that give you a good understanding?

Scott Thacher
We’re really honored, Barry, that you are putting the spotlight on us and delighted. So perhaps I should start first in answering the question. Barry, I used to work in drug discovery at Allergan, and I got very interested in the unexplored members of the nuclear receptor family, which really didn’t fit into a more therapeutic area-targeted company like Allergan, so I started Orphagen and started looking for money to go after these unexplored targets.

And so I’ll talk a minute about the business model. We got initial funding through SBIR grants, and then were able to pull enough of those together to create a screening platform for several targets, one of which was in the immune system. And in the midst of our trying to characterize the efficacy of the compounds to a target known as ROR-gamma, we learned that ROR-gamma is involved in regulation of a novel helper T-cell that’s critical to autoimmune disease pathogenesis in many, many forms of the disease. So we were able to go to the next stage of our business model, which was to find a partner and develop revenue through a strategic partnership. We did that with Japan Tobacco in 2008. This turned out to be the first strategic partnership for ROR-gamma, but not the last. Since then, four other pharma companies have developed separate partnerships with other, smaller biotechs.

We’re working on additional unexplored targets and we’re starting to get animal model data for these. We are hopeful that we’ll get additional first-in-class partnerships for that work. The first-in-class approach gives you a leg up with pharma because they’re looking for new technology. We like to say that we’re trying to reinvigorate the pharmaceutical industry one innovative target at a time. What I really mean is that we’re taking advantage of changes in the larger companies where early stage research is funded less and less.

I met Ruo at the time that the ROR-gamma project was beginning to take off. Len Post, a new Board member who had formerly been head of research at Parke-Davis, introduced me to a collague who in turn recommended that I talk to Ruo. She was at SGX at the time and beginning to look around for new options. She’s been working with us since 2008, and one of the first problems she brought was up that we needed a better database. Back then, they were all really expensive or complicated to implement, so we waited. Now CDD Vault has solved a lot of these problems and given us a reliable and very adaptable way of keeping track of our findings. The days of heated database discussions are thankfully over and we have a cost effective solution.

So I’ll stop there and let Ruo break in.

Barry Bunin
Yep, that’s excellent. Yeah, that’s good. That gives Ruo some time to think and I’m familiar with her background at SGX and GNF and Schering as well from just preparing for this call. Thank you, Ruo, for finding us and go ahead and you can give your perspective on how things have evolved.

Ruo Steensma
Okay. I started out, as many other organic medicinal chemists did, at a big pharma and at a time that the chemistry department was really taking off. Every drug discovery company was trying to throw bodies at their programs and I remember we used to have 15 to 20 chemists work on one project and the goal was to knock out a program within two/three years. Prior to that time, it could take eight to ten years for a project to die. At least that’s what I was told. So I started out at Schering-Plough, as you mentioned. While I was there I was very fortunate to work on a CCR5 antagonist program. We had molecules into clinics and I was able to work with a really excellent group of biologists. Chemistry was important, but biology is just as important, maybe even more important in my view. We were able to move the program forward within 18 months and recommend a compound into toxicology studies. That was probably the fastest program we had at the time.

After that, I worked at GNF in San Diego, primarily on kinase programs. Most kinase programs are in the cancer arena. I worked on a number of programs and some of them were in collaboration with other sites of Novartis. Subsequently I was approached by SGX and eventually moved to SGX to manage a group. I continued to work on kinases and started to become more familiar with fragment-based drug discovery and utilizing the structural-based drug discovery tools.

At the time our group was about 15 chemists and we started to outsource some of the work. This is when a lot of chemistry jobs started to move overseas, and I felt that there was an advantage if you manage the outsourced chemistry well. If you find a good CRO, you can really leverage the in-house expertise, as you will, given the lower FTE rate from either China or from India. I thought that was really a good way of doing drug discovery more efficiently. And that’s about the time I met Scott and Scott was basically advancing Orphagen single-handedly. Because of my past experience, I realized a good biologist is so important. I saw the quality of excellence in Scott and other folks I met in Orphagen.So we started working together and first I was a consultant and recently I became an employee. It’s just a small company, and we really move things forward. There’s no red tape. Things just move as fast as you can.

At Orphagen, we don’t need to worry about all this bureaucracy and political egos and all that. To me, the most interesting and important thing is how we can move a program forward, how we can solve a problem. So that was very rewarding and we were just leveraging all kinds of things whenever we could to move the project forward. As Scott mentioned, we have made significant progress on a few projects and we’re very happy. One disadvantage for a small company is that we don’t have a lot of funds. We really have to think about how we spend the money. And in some ways, I think it’s actually changed the way I would request studies. –For example we outsource ADME assays. When you’re in a bigger pharma, you kind of say: Okay, I’m going to do metabolism, solubility, and protein binding, the full spectrum of things just automatically. You don’t even think about it, but at the end of the day which data are actually useful? A lot of data you have are not critical. So working at a small company with a constrained budget really makes people think: is this assay really what I need? Is this really going to tell me something important? Is it going to help me to make the decision whether we’re going to move certain things forward or not? It’s changed my way of thinking a lot. I do things much more economically with a goal in mind for how I can solve this problem.

So one of the solutions is the database. As a small company, we had Excel sheets all over the place and data from different projects that were just separated in different folders and after a while, it got to the point that it was just hard to manage. So we started looking for databases and in the end, we chose CDD. We’re really happy with the service and the cost and the way the database is evolving. So hopefully we will continue to make progress and Orphagen will be a growing collaborator that will partner more projects. Right, Scott, that’s our goal?

Scott Thacher
That’s our goal, definitely.

Ruo Steensma
And have money to do additional projects.

Scott Thacher
And, Barry, if you want me to make a comment about budget constraints and what you can do today, I’d be happy to.

Barry Bunin
Yeah, I think I have mostly science questions and technology questions. I think we want to start with the science and then go to the technology and business second. So on the science side, I was just visiting Ron Margolis at the NIH. He’s a senior advisor for molecular endocrinology there.

He’s co-developed this program, NURSA, Nuclear Receptor Signaling Atlas, if you’ve heard about it, which has a lot of information on nuclear receptors… …and NURSA also has some interesting SAR from GlaxoSmithKline from Tim Willson’s group and others. And so I thought maybe just for people who aren’t spending their life like you thinking about nuclear receptors, you could talk a little bit nuclear receptors versus orphan nuclear receptors and sort of what’s interesting or important about the field for someone who’s a smart scientist but maybe not thinking about these targets per se?

Scott Thacher
So the nuclear receptors are a smaller family compared to the GPCRs. There are 48 of them, and I’d say about 20-25 are in drug discovery or are the targets of drugs that are on the market. What’s exciting about them is that they’re just about the only ligand-regulated transcription factors you find in nature. They have a ligand binding pocket “designed in” which allows these DNA binding proteins, because they’re transcription factors, to directly regulate gene expression in response to a small molecule. So the orphan nuclear receptors include a lot of things like PPAR-Gamma, which is a major target for the thiazolidinediones for type 2 diabetes. But in our shop, orphan nuclear receptors really mean receptors where there’s no decent pharmacology, where there are no compounds that you could use for proof of principle or if they’re there, there’s no proof of principle that’s been done because the compounds are not sufficiently potent. So we get new data on those. What’s exciting about the targets is some of them are spread all over the body like PPAR-gamma, but some are in fairly specific locations like ROR-gamma, primarily in T cells or steroidogenic factor-1 (SF-1), two of the targets where we have done drug discovery. SF-1 is primarily in the adrenal gland and gonads and a couple of other tissues and regulates steroid hormone production. So we are starting to get mileage from targets that have restricted tissue expression. One of the knocks on nuclear receptor drug discovery has been targets, like PPAR-gamma, that have had unexpected side effects, perhaps resulting from their breadth of their expression. So, by going after these more focused ones, I think we were grabbing an opportunity where perhaps the safety side of the drug development process won’t be as complicated. And these orphans are in all kinds of interesting places, like the retina. There are a couple that are narrowly expressed there or in the CNS. One controls neural stem cell turnover, for example, and there are really fascinating stories attached to several of these orphans. And here I’ll make my last point, which is that our academic colleagues recognize the interesting targets and have done knockouts and really interesting genomic studies. These findings are enormously valuable in guiding us when we want to pull together a therapeutic story once we’ve identified compounds.

I could tell you more about the specific targets, if you want, the specific targets that we’re working on.

Barry Bunin
Sure, if you want. It’s up to you.

Scott Thacher
One of the most exciting right now is a target in the retina, which we’re not naming, for treatment of retinitis pigmentosa. Retinitis pigmentosa (RP) is hereditary blindness and so it’s a genetic disease and it’s probably the most diverse genetic disease that we know of. There are close to a hundred genes that are mutated and they’re not all mutated in the same way. And so once we had the new ligands to the photoreceptor target we started to look at retinal gene expression and we realized that they could block a major renewal process in the rod photoreceptors that requires a very high level of expression of the major rod protein, rhodopsin. Our compounds partially reduce rhodopsin expression and therefore could limit the damage that occurs when the synthesis or targeting of this protein is disrupted in RP. We estimate that such an approach could be effective for 30 to 40 percent of RP patients based on the phenotypes of the mutations that they carry and could significantly slow the rate of photoreceptor degeneration. So it’s an exciting new small molecule approach to a hereditary disease that’s very complex and has no proven therapies on the market. We’re just beginning animal model studies. This work is a great example of the serendipity that we have counted on to make our program successful.

Barry Bunin
Well, I’m actually glad you described the detail. So just earlier today I had some emails with the Foundation for Fighting Blindness, which was founded by the previous owners at the Cleveland Cavaliers Basketball Team and… And so Stephen Rose there used to work at the NIH and The National Eye Institute had some announcements recently about approaches to diseases related to blindness and so we’ve actually done some thinking and some proposals around this specific area that maybe after the Spotlight we can talk about in more details. But it’s always interesting when people go into the details of the sciences to find out what really intrigues someone, what got them interested in the specific problem or specific application. So I’m glad I let you keep talking about the details for sure.

Scott Thacher
Yes, I like the folks at FFB. They are really, really pushing for new therapies.

Barry Bunin
So the next question, and you guys can each answer it from your own perspective, just to tell me a little bit about your successes to date and obviously since we’re at CDD, how has CDD been helpful or helped in terms of the successes that you’ve had and since you are each doing slightly different roles there, I’m curious to hear each of your answers. And Ruo.

Scott Thacher
I guess on my side, it’s improved everybody’s sanity and it really allows us to look at a variety of assays simultaneously. We have a consultant now who can just dial into CDD. No more e-mailing of Excel spreadsheets. It has facilitated additional HTS by creating a system to organize our library more effectively. So I’d emphasize the really significant organizational benefits.

Ruo Steensma
Yeah, I think for day-to-day as we are doing projects, looking at the data, it’s just such a good way to keep us up to date and know where everything is. Basically everything is at our fingertips, so that’s really good. And the other thing is: As a small company using CDD, we do not need to have a separate compound registration system, which I’m very grateful for because I know how costly and how complicated they can be. So I think those are the two things we’re really happy with. We can (securely) share data with each other, save a search so other people can see the important trends, things like that. And just a comment about your supporting staff, like Kellan and Anna, they’re just very helpful. I mean I haven’t had any questions go unanswered for more than 12 hours, so that’s amazing – and their online tips and answers in CDD’s support forum are always very helpful.

Scott Thacher
I guess the other question you were asking, Barry, is: How does it help us make progress? So it really allows us to put two programs side-by-side and decide which one is worth the investment because right at our fingertips, we can tell where the roadblocks have been and where the opportunities are and so we actually switched horses at the beginning of this year in terms of our synthetic chemistry and in part CDD helped us make that a sound decision.

Barry Bunin
Excellent. So I wanted to just ask a little bit about this other company, Io, and Orphagen, in terms of how the two are different, if you are comfortable talking about that, and just thinking about how you’ve been successful structuring things, given the SBIRs, Japan Tobacco, and all these different projects you’ve been doing.

Scott Thacher
My former boss at Allergen is probably the preeminent retinoid chemist around today; more patents and one drug in the clinic, which is Tazorac for acne and psoriasis. He had a strategy of identifying subtype and class selective retinoids and so eventually Allegan decided to spin that out since the potential therapeutic areas were outside of their core interests. That technology went through a couple of companies that found themselves unable to make the investment to move those forward and so he found himself unemployed three/four years ago. So I said, “You know, starting a company is not that difficult.” And he said, “You mean, it’s not neurosurgery.” And I said, “Yeah.” Of course I should’ve been more careful because it’s not so easy. We started talking about it. Io is now a separate company from Orphagen. The fact that we were personal friends helped a lot. When I could see that his retinoid technology was on the shelf, I helped find a CEO, Marty Sanders, who’s up in the Bay area who’s now been doing a really good job of moving projects into the clinic. So by the time Io formed, they had clinical data on a couple of compounds. There’s one with significant potential in advanced prostate cancer and Parkinson’s disease. So right now, I’m just a board member and an advisor and we don’t have any mutual projects. But what’s exciting is that IO has realized both the difficulty and the cost of bringing in VC investors, so Marty’s been very creative in finding people to do clinical trials and find small pots of money to move those forward. Io is also looking into the grants approach and I have a feeling they’ll be successful pretty soon.

On our side, I’ve said this many times, we could not have gotten started without SBIR grants. Although with the invention of the microcomputer and database programs like Microsoft Access, the availability of used screening equipment and now cheap chemistry libraries, we found that you don’t need a laboratory with 10 people and high speed robots to do HTS. SBIR provided funding and allowed us to come in with really high risk proposals. In most cases we had no ligands and could only present published data suggesting that the target was exciting. Fortunately, we were able to obtain SBIR funds to screen several targets and we now have very active programs for three of them. In that sense, Io and Orphagen are significantly different business models because Io has got compounds that it can put into the clinic and get clinical trial data. Our primary focus, in contrast, is discovery research.

Barry Bunin
Yeah, go on.

Scott Thacher
Yeah, how many of your clients are VC funded?

Barry Bunin
58.26 percent, just kidding. No, I don’t actually have statistics off the top of my head.

Scott Thacher
You don’t know.

Barry Bunin
Actually I like it when people ask me questions on the Spotlight. So one of the things that CDD is strong for is the phenomenon known as the Long Tail, which is given there’s a few of the biggest companies in the world and lots of small academic groups and smaller companies. But if you look at the area under the curve of all the smaller players, that often is larger than the biggest ones, and so we do have a lot of companies with angel financing or first round VC funding as well as a lot of academic researchers. We also have larger collaborations with the NIH or with The Gates Foundation or big pharmas as well where they are collaborating with others for their external expertise, either complementary biology or chemistry outside of what they do in-house. So I would say that our two biggest fits are when we’re a whole drug discovery informatics solution for an organization like we are with Orphagen for the registration and SAR needs and when an organization is using us for the collaborative capabilities, whether small group working with some consultants and CROs or a big one that is working with smaller groups.

Scott Thacher
Creation of CDD has been a really, really big accomplishment. It reduces the cost of drug discovery and makes it much easier to sort through these orphans. It does not take a one million compound screening facility to find hits. Instead, it takes patience and so any way you can reduce those fixed costs, such as maintaining a decent database, is hugely beneficial. Down here that in the long tail that you’re referring to, there are a lot of non-VC funded companies also doing legitimate drug discovery. It may be at an earlier stage, well before phase II, but it’s an important part of the biotech economy, as far as I can tell.

Barry Bunin
An interesting point – so this Long Tail I’m referring to, it comes from the mathematics and the power laws and it’s true of a lot of things to do with the Internet – like there’ll be a Stephen King best seller, but there’s lots of other books on Amazon that they sell. Or on Wikipedia, if you look, there’ll be a few people who do a lot of the editing and then lots of people who do smaller amounts of the editing. And so in biopharma industry, we’re starting to see a similar thing where more and more of the innovation over time is being done outside of the largest companies and that’s why they’re partnering more and you’re seeing some of the layoffs that happen when big pharmas merge, et cetera. So you do need some fundamental infrastructure to test experiments, to handle your data. And so thinking of where it’s going to be the most economic drug discovery model over time is something that we think about because we’ve had >100,000 logins, so we have sort of a good view of the cross-section of the industry and where it’s going.

You’re the type of organization that’s very capital efficient doing drug discovery, which is not as uncommon as one might think. The other thing that’s interesting is you guys have been able to keep doing research, doing new targets, new drug discovery, so you’ve actually focused on what you and we all have been trained to do as scientists as opposed to single “Hail Mary-ing’ on one compound in the clinic, there’s actually, like you mentioned with the retina targets, there’s new science and new projects that utilize your skills that you were trained to do, so I kind of admire that. In terms of the sort of reason for existence for us as drug discovery researchers, you’re still doing it.

Scott Thacher
We looked at a VC term sheet, which we had in 2007 with the ROR-gamma technology, and I finally began to understand how things might work economically for the VCs. The VCs we worked with, who I can’t name, were great people, by the way. They gave us lots of advice and ideas but the bottom line was that they were going to bet on one target, period. And one of the partners said: “If you’re successful with that target and you get good clinical data, we’ll let you work on another one.” Well that’s quite a few years down the road and meant that we would be killing other embryonic projects. The partnership model allows for us to reinvest and because we are not owned by VCs, we can do things with more of the long-term in mind. The VCs need a certain quantity of return in a short time period and that can create a conflict.

Barry Bunin
Right.

Scott Thacher
And a VC can really only can get a return in hundreds of millions of dollars pretty far down the pipeline. I mean not exclusively, but primarily that’s true, so that’s what drives later stage projects where VC partners want to make bigger bets. The other challenge is that the VC has multiple funded projects, each one a separate company, so you are now like a division within a larger VC investment consortium rather than acting as kind of an independent company that wants to balance its risk in order to maintain survival. So I think it’s an important shift.

Barry Bunin
And it also dictates the marketplace and what one can do. I know this because I’ve pitched to hundreds of VCs in my life and I kind of know the dynamic. And what’s interesting about it is that there’s a bit of a disconnect in terms of the incentives, so a VC firm is looking for the one in 10 homerun and the two to three doubles or triples and they’re okay if four or six out of the 10 projects just go bankrupt as long as some of the others are successful. That’s the traditional VC model.

And the problem is when you’re developing a company or a life as an entrepreneur, not every drug is going to be a success in the clinic. There’s attrition and so you do want a pipeline of activities so that one can hedge their bets or give yourself the best overall long-term chance of success. Those two are in tension with each other. So if one can get non-dilutive financing from the grants or in partnerships as you’d mentioned…so, for example, we had when I was at Axys Pharmaceuticals (now Celera), we had a collaboration with a great long-term partner that was announced with Daiichi, so I had the pleasure of going there and giving presentations and meeting with them and at Tokyo Institute of Technology at some conferences, so you can get some good long-term partners. Then you actually can, as an entrepreneur, control your own destiny a bit. Whereas the VC model is very good when you are looking at betting deep on one particular project to the exclusion of others and so that’s an interesting tension and I was glad you were able to actually talk about it a little bit openly. That’s kind of unusual.

Scott Thacher
Yeah, I think it’s important.

Ruo Steensma
Do you at CDD have only non-dilutive funding, Barry?

Barry Bunin
We’re also very lucky in some ways or fortunate in how we’ve been able to make this a sustainable company, and we’ve been around about the same time, nine years now. So when I started CDD, it was a spin out of Eli Lilly where I was an entrepreneur in residence and I was able to spinout the company. After demonstrating there were some customers and commercial potential, I was able to get more funding from Eli Lilly if I could get others to partner, to syndicate if you will, and I was able to get very long-term investor-and-entrepreneur sensitive investors with The Founders Fund, who have invested in Facebook and a number of other sort of homerun organizations, and the Omidyar Network, which is the founders of eBay. So we had this combination of people with deep Internet knowledge a well as of course the pharma perspective. We still have Alpheus Bingham from Eli Lilly, retired now from Eli Lilly, on the Board. But we’ve basically been able to be an independent company as long as we keep bringing in revenues. And we’ve won grants; we’ve won seven grants, three from the NIH, three from The Gates Foundation, and one which we’re part of a consortium. So we do a lot of teaming on grants in consortiums like MM4TB with the European Union with Stewart Cole, who actually sequenced TB and is the figure head of the whole entire project. That one involves two big pharmas and 25 different academics and companies and we provide informatics. So we also, like you, we have a number of customers for the software and that’s been growing, doubling with Moore’s Law every 18 months as awareness grows that the CDD Vault provides a cost effective and good solution. So it’s sort of interesting how we’ve been able to sort of balance those and grow the company. The biggest thing is that the logins and the customers keep growing as the platform, as you mentioned, it evolves and gets better and better with feedback from folks like you. So, that’s how we’ve been able to do it and you have to do everything kind of right internally and externally is how I think about it with the team.

Scott Thacher
One aspect is that, I don’t want to say we don’t have a lot of competition, but it’s hard for an academic lab to screen one target and develop the expertise to do it right, assuming they work on a target. And of course it’s hard for industry to do this because it’s so early. So we have a niche which means if we have to slow down a little bit because of funding, we don’t have somebody necessarily breathing down our neck. If we do, then the asset is valuable enough that we can go out and partner.

So a lot of the standard metrics that you apply in big pharma, as Ruo was saying early, don’t work as well in this environment.

Barry Bunin
Right. Exactly. So in that sense, we’re parallel. If we can control our cash flow, we can think about things for the long-term. We don’t have to be short-sided because we can plan for the long-term – and you’re in a similar boat, so, you can make rational decisions… In the long run, the sort of fads and what comes and goes, goes away and the substance is what matters. So I think as long as you can control your own destiny as an entrepreneur, as long as you can keep having the cash come in, then you can set up for long-term success because your decisions are always based on what’s most strategic as opposed to the flavor of the month or the quarter or the year. So in that sense, as I like to say, we have a little island of innovation where we can develop new technologies, informatics technologies. As long as we keep having the growth, we can keep doing the fundamental things right, and it sounds like that’s true for you as well. It means you have to keep doing things right, of course, that is the caveat.

Going back to the formative experiences for you, so I asked a lot about Ruo’s background and you had mentioned some of the work at Allergen. I noticed you had Harvard on your resume and background and so I was just curious how your formative experiences affected you and your subsequent career as well.

Scott Thacher
I got a BS in physics and I actually worked for an oil company for two years and then I remembered being told about biophysics and I thought the research there would be more exciting. At the time Harvard would take unreconstructed physicists and retrain them, which is what happened to me, and I was lucky to work with a very smart guy who let us do what we wanted to do, Guido Guidotti, a biochemist. The environment was just freewheeling. Intellectually it was great. And then after that, I worked in cell biology and got some exposure to retinoids and then got into academic life for a few years. One of my favorite projects early on was partial purification of an enzyme from epidermal cells in culture. I couldn’t characterize it any other way, so I made monoclonals that could pull down the enzymatic activity and that finally led me to the protein. It was a thrill and it’s kind of like high throughput screening. That practical side of discovery has always intrigued me. The idea that you can make something that’s so good that other people want to use it is very satisfying – especially when it then empowers research in someone else’s lab. The same approach applies to partnering—you need to get something that really works in the partner’s hands or you’re in serious trouble.

Later, I went to Allegan. I got exposed to the nuclear receptors and gradually realized how exciting that new field was. I had also started a couple of nonprofit organizations along with my academic career and figured if I could talk people into doing stuff for nothing, that skill might be helpful in starting a company where all you can give people early on is a piece of paper linked to ownership of stock. And I wanted to do something where the science was exciting, so I’ve been very lucky that Orphagen has worked so far. One thing that I really liked about my boss at Allergan, Rosh Chandraratna, was that he had to do figure out where new classes of retinoids could be effective. He found compounds specific for RAR-alpha and also for the RXR class. So he was constantly looking at the literature and trying to set up collaborations with academic people all over the world. That was good exposure for me in trying to figure out how to make Orphagen work.

Barry Bunin
Well that’s a nice introduction. I know we’re running out of time here. I’ll give folks a chance for any last things to say whether about CDD or the collaborations or around entrepreneurship or otherwise, it’s a good note for us to wrap up the CDD Spotlight interview.

Ruo Steensma
Like I mentioned before, I think we’re very happy with the CDD service and also the continued developments, basically improving the current capabilities from the database, so that’s really helped us a lot in getting organized and being well informed.

Scott Thacher
Barry, thanks a lot.

Barry Bunin
Thanks for your time.