In biotech, when "one of these things doesn't look like the other one," it can be a blessing or a curse. On one hand, scientific novelty is praised and rewarded. On the other, unfamiliarity breeds skepticism from the investment community. Brian Finrow, J.D. embraces that reality and the challenges that come with it. Despite an approach to developing antibodies and other biologics that looks decidedly different--they're developed from spirulina cell lines and, in some cases, designed for oral administration (gasp!)--Lumen Biosciences has won hard-fought funding from some nontraditional sources to continue its mission to democratize biologics. Finrow is Co-Founder & CEO at Lumen, and now a two-time guest of the Business of Biotech. He's a Harvard J.D., but don't hold that against him. He's one of the most approachable and transparent founders we've enjoyed the pleasure of hosting, and he didn't disappoint when we sat down for this talk in San Francisco.
You've listened along for years -- now you can watch along, too! Go to bioprocessonline.com/solution/the-business-of-biotech-podcast, where you can put faces to voices as you watch hundreds of interviews with the world's best biotech builders. While you're there, subscribe to the #BusinessofBiotech newsletter at bioprocessonline.com/bob for more real, honest, transparent interactions with the leaders of emerging biotech. It's a once-per-month dose of insight and intel that you'll actually look forward to receiving! Check it out at bioprocessonline.com/bob!
In biotech, when "one of these things doesn't look like the other one," it can be a blessing or a curse. On one hand, scientific novelty is praised and rewarded. On the other, unfamiliarity breeds skepticism from the investment community. Brian Finrow, J.D. embraces that reality and the challenges that come with it. Despite an approach to developing antibodies and other biologics that looks decidedly different--they're developed from spirulina cell lines and, in some cases, designed for oral administration (gasp!)--Lumen Biosciences has won hard-fought funding from some nontraditional sources to continue its mission to democratize biologics. Finrow is Co-Founder & CEO at Lumen, and now a two-time guest of the Business of Biotech. He's a Harvard J.D., but don't hold that against him. He's one of the most approachable and transparent founders we've enjoyed the pleasure of hosting, and he didn't disappoint when we sat down for this talk in San Francisco.
You've listened along for years -- now you can watch along, too! Go to bioprocessonline.com/solution/the-business-of-biotech-podcast, where you can put faces to voices as you watch hundreds of interviews with the world's best biotech builders. While you're there, subscribe to the #BusinessofBiotech newsletter at bioprocessonline.com/bob for more real, honest, transparent interactions with the leaders of emerging biotech. It's a once-per-month dose of insight and intel that you'll actually look forward to receiving! Check it out at bioprocessonline.com/bob!
The business of biotech is produced by LifeScienceConnect and its community of learning, solving and sourcing resources for biopharma decision makers. If you're working on biologics process development and manufacturing challenges, you need to swing by bioprocessonlinecom. If you're trying to stay ahead of the Cell or Gene Therapy curve, visit cellenginecom. When it's time to map out your clinical course, let clinicalleadercom help, and if optimizing outsourcing decisions is what you're after, check out OutsourcePharmacom. We're LifeScienceConnect and we're here to help. I'm Matt Pillar. This is the business of biotech, and my guest today is a repeater. He last joined us in late 2021, way back on episode 73 of the podcast, but he's welcome back anytime because he's among the most thoughtful biotech conversationalists I've had the pleasure of sitting down with.
Matt Pillar:Brian. Finrow is a lawyer by training and if that doesn't make him an outsider by default, the work his company is doing surely does. Finrow is founder of Lumen Biosciences, a company that's working in earnest to democratize or improve the cost and accessibility of biologics by developing therapeutic molecules from spirulina. That's a great start, but even Finrow will admit that the safety, replicability and availability advantages of spirulina address just a fraction of the democratization effort. The bigger challenges the cost of clinical and commercial activities are much harder to solve, but that didn't stop Finrow and I from addressing them when we met in San Francisco to record this episode. Let's give it a listen. Brian Finrow, join me.
Matt Pillar:I believe it was episode 73, which was a long, long time ago. It was like, I think, close to the end of 2021,. It was my first exposure to Lumen Biosciences, the company that you founded and served as CEO. So I don't know. Two plus years have gone by, two and a half years. I thought we'd start maybe just with an update. Long time listeners may remember that episode. It was an interesting conversation, but maybe you could probably go long on this right In that in the ensuing two and a half, close to three years, give us an update on some recent progress in Lumen.
Brian Finrow:Yeah, happy to just broght briefly More of the same. Basically, if anybody happens to remember that prior conversation, Well, it's out there.
Matt Pillar:If you don't go, listen to that one first and then come back. There we go yeah it's a prequel so more of the same from us.
Brian Finrow:We've been in no great surprises. It's all continued to work just like we expected and if anything, I'd say where we've learned is that the breadth of application for the platform is larger, if anything, than what we were really conceptualizing two and a half years ago.
Brian Finrow:The big dramatic thing of course that happened in the interim was the COVID-19 pandemic came and went and that was important for us, particularly because we do a lot of work funded by the US federal government, the NIH, the Department of Defense, barda, and so a lot of that pandemic defense work has been happening at Lumen, as it has with a lot of companies, and so that was really important, building out a lot of our infrastructure. We built a much larger GMP manufacturing facility, completed a couple more clinical trials. We've got a bunch more trials teed up for this year, added a couple of commercial programs and several other clinic bound but not yet in the clinic Charitable I'm calling them charitable programs as well.
Brian Finrow:So just more growth, but more all along the same lines of what we discussed two and a half years ago.
Matt Pillar:Yeah, it's interesting, isn't it, how COVID affected the business climate in a positive way. In some cases. For you it was more federal engagement, probably more resources along those lines, non-traditional support For our business. People weren't traveling, people weren't coming to conferences like this. They just weren't happening. You couldn't. So podcasts and live digital events really boosted our business Now full transparency.
Matt Pillar:We felt that taper off a bit, as we recovered, as the world has gotten back to normal. Are you feeling any of the same? Do you feel like that momentum that, perhaps ironically, covid helped build in biotech not just aluminum, but biotech in general has faded?
Brian Finrow:Some of it has. Yeah, for sure. I mean it can discreet areas, but there's been some real improvements, I think, to the way the world works, something that hasn't stuck around as well. Basically, just to be honest, blunt about it nobody cares about COVID anymore or pandemic defense. It's like all these lessons we thought we were going to learn once and for all.
Brian Finrow:Yeah, we're well within six feet, right now, that's right, but not just on the financial side, of course. If you see, you're very excited about COVID-19 things for about a hot minute, but even we see this with our federal partners there's just a lot more challenging to get that research funded Again. I mean it's still happening. A lot of artists are doing a lot of work. Right now, for example, dod continues to be very interested for their own reasons.
Matt Pillar:So yeah, I mean some of that came and went, but I think there are some completely permanent changes that have happened.
Brian Finrow:I'll just give you two examples that are relevant to my life. Number one very usually people used to go public and the way you would public is you would charter a jet and you'd fly around and do a roadshow. I don't think anybody does that anymore.
Matt Pillar:I'll zoom.
Brian Finrow:Everybody just sit on, zoom in like 48 hours and you're done. It's a much better way to go. They're flying flocks of bankers and accountants from city to city on private jets, so I think that's here to stay. It was forced on the industry and I think it's a better world now without it.
Brian Finrow:The other thing that's even more directly relevant to our work is there was a big cultural bias against distributed clinical trials before COVID, and it was strange because it wasn't like Zoom existed before COVID. I mean, docusign didn't exist before COVID, but it's a cultural bias against it that people would say, well, yes, no, of course you can use DocuSign to buy a house, but for something important like a consent form for a clinical trial, that would be unethical. And then COVID happened and all of a a sudden it became ether. A lot of things that were technically feasible for a long time but culturally impossible became commonplace and I think that there's some real potential for product TV in our industry coming out of things like that. Just one example. I think there's a lot of them like that.
Matt Pillar:Yeah, looking back on the progress that you've made in the past two to three years, I mean, obviously it's been a very challenging time for a lot of biotechs. The capital markets have been down, all the index indices are down. What's your reflection on that? Like I know, that's a big conversation, but can you point to anything post COVID that has maybe been a barrier to the pace of progress at Lumen? Anything in particular? I mean, I know there are a number of things you could probably point to.
Brian Finrow:Well, it's always raining somewhere. During COVID there was plenty of money, but there's no supply. I mean even crazy things like pipette tips. Remember the pipette tips crisis? It just happened us too. Nobody could get pipette tips of all the things in the world, but it was everything Lab space big companies that used CDMOs couldn't find a CDMO space.
Brian Finrow:They're about a year or years out in the future. Cros were overmaxxed because of all the COVID trials and all the disruption and everything. So pretty much every input into the drug development process was hard to get your hands on, except for money. There was plenty of money around. So the economy did its thing right. So prices rise, drawing new supply, and then there was this look, sort of low interest rate phenomenon happened. At the same time. A glut of supply came on the market and then now we have the opposite right there's no money. I mean, the Federal Reserve Bank took away all the money and there's plenty of supply. It's like lab equipment, lab space. Cros are returning phone calls and everything, so everything's easy to hold up. So there's always headwinds, I guess, is the short answer.
Matt Pillar:Yeah, cros and CDMOs. Cmos like that's an interesting, that's gonna be an interesting space to watch. I think I'm interested in your perspective on that. Like during and immediately post COVID, I don't think a day went by where hundreds of thousands, if not millions, of new manufacturing space were being constructed Right like I got probably says every single day, just a giant, giant thing. But in at the same time, the biotechs that I spent time with still complained about the fact that they were backburner and it was hard to get time and space with those outsourcing partners. Is that a bubble? Is that a bubble that's like gonna come back and bite all the outsource manufacturing capacity that was built?
Brian Finrow:I don't know man, Economists are very fond of pointing out that nobody knows how to call bubbles.
Brian Finrow:Every time it seems like there's a bubble, now sometimes there is some dangerous, I don't know. But I would say from our approach, we don't participate in a lot of these, we don't use CDMOs, for example, so it's all kind of indirect. But it does seem like it has a lot of characteristics of real estate, which is famously bubble prone. Because, why? Because why they're very capital intensive projects. Build, at say, a new office building or a new apartment building. It takes years, particularly because of the permitting, and then you end up with this sort of high cost capital asset and it comes online just at the time.
Brian Finrow:All the other ones come online when there's eventually an economic downturn. So CDMO capacity, cro capacity, they seem like kind of lab space capacity. Very, very direct analogy. They seem to kind of have some characteristics of real estate, which is a famously bubble prone business where people are always making and losing fortunes over and over again. So, maybe, so maybe so I think I've heard that.
Matt Pillar:Yeah, you're so. Remind me and our listeners you don't use CDMOs, you're manufacturing clinical supply and in-house.
Brian Finrow:We built our own GMP plan and then we built the big expansion to the GMP plan which we brought online last year. So it's also give me an illustration of that space and what's going on there.
Matt Pillar:It's very different from, I think, from most of your listeners.
Brian Finrow:We use an unique bio manufacturing host. It's a photosynthetic micro. It doesn't require sterility. That's the key to the scalability and safety of it. And with this micro we can express a variety of a very wide range of therapeutic proteins and therapeutic peptides. And the easiest applications are all GI diseases, diseases with some kind of an excess to the GI tract.
Brian Finrow:Now this has some implications for the GMP, the GMP facility. One of them is that well, they are, you know, because the roots of the company are in cell engineering technology and so, just like with Genentech and Amgen, and then in the 80s, they also couldn't go to the CDMO industry. Why is it? Because of the brand new technology in the industry hadn't been created yet. So, like them then we now had really no choice. But the fortunate thing for us is about two-fold. Number one, because it doesn't require sterility for safe GMP manufacturing. It's a way less expensive to build out a facility like this, like literally towards a magnitude cheaper. And the other second advantage we have is because of all of our relationships with grant funders and the US federal government and DOD in particular, we were able to convince them to support the capital investment necessary to build the facility, and so that's how we were able to do this big expansion, and so that's a good thing, because we're maxing out the capacity of that newly expanded facility already for clinical trials this year.
Matt Pillar:Yeah, are there plans to expand or?
Brian Finrow:We have plans to expand. We don't even have the funding for that. So if you know someone in DC, well, that's a good message. Any listeners?
Matt Pillar:Yeah, beautiful segue you mentioned. If you know anyone in DC, I mean that's sort of been the go-to. Tell me a little bit about that. Like, yeah, you and I have chatted about this sort of the I don't know the silo I guess the lumen kind of finds itself into in terms of its funding resources.
Brian Finrow:Like what's what's?
Matt Pillar:described why that is. Why is the traditional biotech VC community maybe isn't such a sweet spot for a lumen? I?
Brian Finrow:try not to take it personally. I put a lot of them around the question.
Brian Finrow:I think you're calling me out on this, just that that selling stock. The institutional investors we have are all Seattle based investors. We're based in Seattle and we have a handful of angel investors as well, some famous guys among the list. What they all have in common is their, their friends of mine and my co-founder from the biotech world or industry generally. So it's a very unusual capital structure. I like to say it has more in common with the way innovation was funded in the Renaissance.
Brian Finrow:You know you go to the Medici family rich families and get that it's your idea funded If you're Leonardo da Vinci. And less in common with the modern, professionalized biotech investor. You know kind of model that's. That's mixed blessings, the you know the the modern biotech model has definitely has a lot more capital, and so you know you can accelerate a lot of things with capital. On the other hand, I've been at companies where they had a lot of capital and one of the things that happens in my experience is that a lot of problems that can't be solved with money people that's their first tool, because it's just lying around including a lot of problems that cannot be solved with money People to first go to.
Brian Finrow:And so I wonder sometimes, you know, if we were, like you know, lavishly funded, it would be fun to have a few hundred million dollars in the bank I'm not going to lie but I wonder if we would have made errors. There's a, you know, a necessity with breeds invention. We've been incredibly inventive.
Matt Pillar:I mean, isn't that scenario a lot of what's led us to this? I mean, let us to the, to the brink of being overpopulated, with biotechs and the ensuing downturn. I mean, doesn't that doesn't that sort of easy access to capital and that sort of bread, the situation that we found ourselves in for the last two and a half years?
Brian Finrow:Yeah, I kind of wonder, right. I mean, drug development is expensive. It's important to do it safely, so it's never going to be cheap, right, like starting starting a website. But you know, does the? You know there's this persistent decline in our deep productivity in our industry. That's been written about extensively for you know, 10 or 15 years now by banks and Scannel and other researchers. And you kind of wonder, I mean it does it sort of tracks the growth in capital abundance for the industry, at least for the last 15 years? And is there a causal relationship between the two? Or is it just you know we need more capital because it really is fundamentally harder? I don't know. I mean it's hard to disentangle cause and effect. My, my scientist colleagues are always telling me so well.
Matt Pillar:I mean it's difficult to add, is difficult to do. Yeah, it is difficult to discern that, like we've seen a lot of great, seemingly great, you know, stated great programs go by the wayside or be backburner to Shell because of resource constraints. You know, I guess the definition of greatness and what gets money when money gets thinner is up to the, up to the investor. I don't know. It sounds to me like your approach is is strategic. It sounds to me maybe this is CEO spin. Be honest with me. It sounds to me like it's more strategic than a matter of that VC community. You know, institutional investors just maybe shine away from a a different way of developing biologics, or is there some of?
Brian Finrow:that too. Well, I mean, I can give you some anti-spin, because I said it the outset. It might just be that I'm a poor salesman of stock. I'm trying to take it personally. I have some theories about it, you know.
Matt Pillar:One is one is very simple.
Brian Finrow:I was talking with the VC, I know, and he's close guy and I'll tell him what we're up to. You know, it's kind of just working and it's all great, just big markets, all this stuff. And he says to me he says, brian, I was like, well, why don't you join us? And he says, well, here's the thing, brian, I like a little bit of doing. It's amazing, it's definitely going to work. Love the sign, it's all the things right.
Brian Finrow:But he says look, I got I got a department of self-therapies over here and I got a. I got a department of oncology. You know, oncology over here. I don't have a department of whatever the hell you are, because there's like literally no one in the firm to do this, and it's, I think of it as being a a kind of a version of the innovator's dilemma. If you're doing something really innovative, then by definition there's not a market for your product, because it's an innovative product that hasn't existed yet, but there might not also be any investors to invest in your thing. Before the Netscape's IPO, nobody ever heard of the internet, for example. Somebody had to be the trailblazer and then all of a sudden, a bunch of internet VCs came into existence. The rest of history.
Brian Finrow:So in my optimistic moments, I like to think, wow, this is what we're doing.
Matt Pillar:We're going to be the Netscape, but in my pessimistic moments, I think but how are you?
Brian Finrow:How would you know any better? We're just some guy.
Matt Pillar:Do you consider Lumen in the I guess, in the camper in the sector of plant-based biologics? No, okay, tell me what discerns that you guys are starting materials? Spirulina you don't equate that to some of these companies that are developing antibodies from some genus of tobacco plant.
Brian Finrow:The reason I'm very specific about my word choice is probably because I went to law school, practice law for 10 years. Lawyers are one of the few groups of people that will never say the phrase. They're semantics, because the semantics are oftentimes very important. In this case, they are very important. Plants are a certain thing and spirulina is a cyanobacterium and cyanobacterium, even though it is photosynthetic like a plant, it's definitely not a plant. Why is this important? It's important for a regulatory reason.
Brian Finrow:If you're going to make a drug in a plant, then the FDA more importantly the USDA and more importantly than the USDA is the farmer's lobby is going to care a lot about what's going to happen with that plant, because plants breed asexually and there's going to be a risk that the gene for your drug is going to go somewhere where maybe it shouldn't. There's a lot of technology out there. You can put protein therapeutics in potatoes or rice or tobacco. They have their pros and cons. The tobacco leaf is usually transient expression. It's almost always, I think, grown in greenhouses. From our perspective, we are very interested in not being hard with the plant brush, simply because we don't want to have a second regulator in the form of the USDA. More importantly, we don't want to pick a fight with the farmer's lobby, which is the most powerful political force in the country.
Matt Pillar:So you don't run that risk.
Brian Finrow:No, where cyanobacterium it is definitely. There's no mechanism for genuscape like sexual recalination or anything like that. It's very important regulatory legal distinction, I would say. The other thing is more conceptual. I say plant-based biotechnology companies. When I come across them periodically, to me it always seems like they're just trying to do the same thing everybody else is doing with E coli or Cho Trying to save a bit of money on the upstream processing side.
Brian Finrow:What we do is very different. It's a completely different therapeutic modality. You can actually make an injectable monoclonal antibody in tobacco leaves. They've done it and you're actually got a GMP process approved a few years back at Oxford. But to me I don't understand the utility of it. There's vast amounts of Cho manufacturing capacity in the world. It's not obvious to me that at scale, particularly with the regulatory headwinds of a plant-based kind of system, that you're going to be able to compete with that enormous amount of sun capital just because it's nothing cheaper than the factory that's already been built and depreciated.
Brian Finrow:What we're doing is wildly different. We're topically delivering cocktails of protein therapeutics, to be coastal, out of topical surfaces of the body like the GI tract, intranasally skin. There are almost all of the distinctions, while they're all unlocked by the unique scalability and cost efficiency of our platform. All that matters is the action of the therapeutic proteins themselves and how we design them. That's actually where almost all of our time gets spent. The fact that it's just grown and something that's photosynthetic is seven-year-old news that is almost irrelevant, aside from the fact that it's fundamental to making it commercializable and scalable.
Matt Pillar:Yeah, okay, very good, I'm glad I cleared that up. What are you doing at an investor conference?
Brian Finrow:Given what you've told us about your strategic approach to investment.
Matt Pillar:What are you looking for here? What's your goal?
Brian Finrow:Two things really. We have some pharma partnerships and there is almost a ritualistic meeting of people. It happens at JPMorgan. We're doing that and it's important to keeping the relationship moving forward. We have meetings here in the city for that. Then there are some of our government partners have teams here as well. It's a good opportunity to touch base with them, much in the same way. Okay, A lot of the rest of it is just going around and seeing old friends and looking for serendipity. I would say Just waiting in the lobby of the St Francis and seeing who wanders by A lot of times.
Brian Finrow:That's the most productive thing for me.
Matt Pillar:Yeah, you made a joke, I think, when we were trying to get this scheduled and there was some jostling that a lot of these meetings don't go anywhere anyway this is going to be more fun.
Brian Finrow:Yeah, I don't know, some people do that. The thing where it's like 30 minute time slots and everybody's sprinting from building to building through the ring. We don't do that. Maybe we should, I don't know. Am I missing out?
Matt Pillar:I don't know. I come here and I pull up in a room like this and do interviews with folks like you. I don't know, until it's reception time and the evening. I really don't know what's going on out there, yeah, Fewer fewer better meetings. I think that's the philosophy I might be wrong about that.
Matt Pillar:Another thing we talked about last time we chatted was sort of the, I guess, big picture biologics development sort of cost paradigm and as a result of that and suing patient pay or costs and just the way that business has always been done. And I know that's a great big, giant question. But you had some opinions, if I recall, on how that changes and perhaps how Lumen is contributing through what the work that you're doing to drive change. Yeah, let's talk about that a little bit Like I guess first give me your perspective on the sort of the status quo and then some thoughts on where you see yourself and Lumen affecting that status quo.
Brian Finrow:Yeah, I think this is a fascinating topic. I mean there's a lot of good data out there, in my opinion, the data from Deloitte Touche. That is a big accounting firm and every year they look at the productivity, the R&D productivity industry, and they add up income. What are the costs of making a new drug across the industry? So it's an average and there's exceptions, both up and down. And then they say, well, now let's do our best to estimate what are the revenues going to be from all the products that, all that R&D is. So you can say calculate or return on investment. So, very simply, if you borrow your money from the US Treasury, it's always, just a couple of years ago, 2% to 1% and then you invest it in bonds at 10% and you don't have any defaults, then that's good because you made a 9% margin, right, Makes sense, profitable. But what our industry does, by Deloitte's math, is they borrow money from shareholders and bondholders at 11% and their return on investment for R&D is 1%. So they're destroying capital, according to Deloitte.
Matt Pillar:To my amazement, this is not a universally held view.
Brian Finrow:I was at a perception last night talking with a senior person, a very, very large CRO, and she insisted that this couldn't possibly be true. So not everybody believes that. I think, though, it's hard to disagree with the math. Deloitte's pretty good at running numbers, and there's some other academics like Jack Scannnell who's written about this extensively too. So if it's true, it kind of puts you in a pickle if you're running a biotech company, because how is that appropriate, taking money from investors and destroying it? So I spent a lot of time thinking about this.
Brian Finrow:For us it goes a little bit back to what we were talking about earlier. We were fortunate. There's an awful lot of serendipity in how lumen came to be and sort of path dependency and random introductions to the Gates Foundation, the DOD with COVID and other things. A little bit of it is that well, okay, it's much easier to make a return on investment if there's a public interest in the thing, and so the federal government helps build it out, a great example being the COVID vaccines that Moderna made. A lot of money went in there Fabulous deal for the American taxpayer, even despite the subsidies.
Brian Finrow:But mostly it's the fact that, of necessity, we've had to be much more efficient, and, by luck, our biology because it doesn't require sterility is just a lot cheaper. So, at the end of the day, ultimately, what it boils down to is everything up to early clinical development is between 10 and 100 fold cheaper on our platform to put a single therapeutic protein into the clinic. Where we hit the wall, though, is in late clinical development, where you're on multi site trials for a lot of diseases and there were thrown into the clutches of the market price, and then standing behind that is commercialization, which I think is another interesting and risky and very expensive area that we haven't yet started to unpick, but I think there's. In my ideal world, we figure out a way to make those two things also 10 or 100 fold cheaper for the types of products we make, and then we really have something on our hands, wouldn't we? But how do you go about doing that in particular? I think it's pretty interesting.
Brian Finrow:There was an article this morning and I think it was in either a stat or end points, and we're talking about Beijing. Something unusual about Beijing is they run all of their own clinical trials and have a huge staff of people. They don't outsource it to contract CROs and the point of the article is their view anyway is that this allows them to run better trials less expensively, basically reversing the outsourcing trend. And I think there's another interesting thing on the commercial side going on right now. Did you see this news about Lilly?
Matt Pillar:It's pretty funny actually they announced they're going to sell Majaro basically direct to consumer.
Brian Finrow:But it was alongside an angry letter saying look, it's scolding people that were getting the GOP one. Analog drugs for cosmetic weight loss and everything.
Matt Pillar:Definitely don't do that. But, by the way, here's our direct to consumer portal.
Brian Finrow:But definitely only use it if it's appropriate, not for cosmetic purposes, which is sort of an interesting example of speaking out of both sides of your mouth. I think it's an interesting experiment and the GOP ones might be the perfect way to do this. If we can figure out a way to disintermediate all of those sort of middlemen in the supply chain for biopharmaceuticals, could that make a big difference in cutting the costs potentially. Maybe that's part of the productivity improvement our industry needs.
Matt Pillar:What are I mean? You're in the throes of that CRO. You talked about the cost of clinical development and clinical activity. What are you, I guess, finding or taking away from that experience, where you think you hinted at it? Well, if we could address that, how do we do that? Would you have any?
Brian Finrow:thoughts on how to do that. I don't think we've figured it out yet. I wish we had. For an honest, I'm not a clinician. I trained as a lawyer, so I'm a bit of an outsider to all of this. That's an advantage and disadvantage, because outsiders come into problems with the fresh perspective and you ask dumb questions and it's acceptable. But on the other hand, clinical development is a baffling activity. There's a lot of things that happen and many of these CROs are very, very good at what they do, but there are also a lot of crazy horror stories about budget overruns or performance lapses.
Brian Finrow:I think at the moment, the thing that I'm sort of obsessing about most right now is this fact that legally, as a proud sponsor, the organization, my company is responsible for everything going right that the contractor does. The difficult thing is that it's hard enough to manage employees and have transparency into what people are doing and make sure everybody's got the resources they need and thinking about it in an aligned way and all of the management talent that goes into getting an organization to all row the ship in the right direction. The thing is, when you outsource it, all of those problems become much harder. But your legal responsibility, your ethical obligations to make sure it's all done correctly are no different, but it's just a much more difficult talent management problem. I think I don't know what the answer is. We'll see how this unfolds. Maybe Beijing's right.
Matt Pillar:I was going to ask, not how credible, but how realistic is that for a company that's not Beijing? How realistic is it for a biotech, a clinical stage biotech, that is relying on outside funding to even consider that? I would imagine not.
Brian Finrow:I don't know. Plenty of people told us that it was impossible to build a GMP plan. Then we built not one, but two. I don't know, it's just something fishy about the facts of the world which is the CRO industry. The clinical CRO industry is pretty new, actually. Really in its modern version, the story I've heard is really originated in the late 90s. How were people running all those trials before that existed? It's encouraging because new drug discovery R&D productivity was much higher back then too. It's a fishy coincidence.
Brian Finrow:You might say well, Brian, that's a good news because thank God they brought in the clinical CROs when they did in the 90s, because imagine how much worse it would have been if it weren't for that professionalization and efficiencies of this outside specialist function coming into being. It could have been even worse. Like I say, causation is a difficult thing to nail down. There's something to that, I think. I wonder if Beijing might be in the right path.
Matt Pillar:Another thing that just occurred to me you and I talked about the last time we chatted was and I see it playing out so far here is making us flash is AI. When you and I talked about it, you were, I'd say, decidedly pragmatic about putting AI at its best as a tool. It's just I'm exposed to a lot of companies who are foundationally AI, who are creating a splash right during the pool waving their arms around making waves.
Matt Pillar:What's your perspective on that? Like, maybe even since you've been here, is that a buzz that you're catching?
Brian Finrow:We use an AI ML. I'm not sure exactly where the dividing line is. We use these methods pervasively in our business. We publish some papers, we have a string of collaborations with Google's machine learning AI team, and so we. I don't think we're slouches at AI or like skeptical that it has utility, but I think there's a lot of people interested in how's anybody going to make any money in that world that isn't like Microsoft, like, for example, like you know, chat GBT. It's very obviously Microsoft's going to stick that in every office product, right, and it's going to be amazing.
Brian Finrow:It's going to be great when they get that all done, deployed and the drive to cost of the processing down and everybody can use it. No doubt about it. But it's going to be the channel owners. I think it seems to be the answer. I know there's some questions about like search and maybe AI is going to displace Google. And nobody saw Google coming either, me included. So I don't think I have any great answers.
Brian Finrow:But in our industry I kind of vacillate back and forth. On the one hand I think there's so much utility and so many things that we do, but then I step back from it and I realized but wait a second. The problem isn't like a shortage of new molecules with different attributes. The problem is that trials are too risky and expensive and slow and that's where all the capital gets gobbled up. And while there are people talking about AI is how it's going to help that? There's precious little evidence yet that it's going to happen. But maybe there'll be, like the Google thing, and it'll happen. And I said I think remember very clearly when the law school librarian introduced me to Google. It was a new website. I'm like this is ridiculous. You know who needs a new search engine?
Matt Pillar:I can go to Alta Vista. There's Yalu, you know.
Brian Finrow:If I want to ask my query in the form of a question I can ask.
Matt Pillar:Jeeps Asked why you may need to point some. Put something in the show notes for reference to our younger listeners when you bring up.
Brian Finrow:ask me I remember saying that before there was Google and it just totally changed everything. And maybe someone out there I hope they are there we're going to find a thing that'll just make drugs routine and amazing, like Google made search routine and amazing, and I guess I'm not really betting in that direction. Yeah, yeah, you would know better. You talked to all the guys. Well, I talked to all the guys and typically those conversations revolve around molecular identification and zeroing in on targets.
Matt Pillar:It's not. I'm not in the clinical execution around as much as I am. And biologics, discovery, design and then process development. So I'm just curious about where that's going to take. Conceivably those early efficiencies, like you said at Lumen, your early molecular creation is considerably cheaper. Right, it's when you get into the clinic that expenses mount up like they do for everyone. So I'm as interested I guess what I'm saying is I'm as interested as you are in and how AI might contribute to a change in the cost paradigm across the spectrum, Right?
Brian Finrow:Maybe. So I think the shortage in early stage discoveries and molecules. It's targets, good targets, and you know this is true because anytime there's a good target emerges, like PD1, then there's just flood of great molecules and GLP1 right now. Right, how many GLP1 analogs are there out there? Every different flavor of ice cream is being rapidly pushed through the clinic. So there doesn't seem to be a shortage of ways to go after a target Like if only we had a way to make a molecule like it go after the GLP1 receptor. It's not really the issue. It's just that all of these companies have to spend, depending on whose numbers you believe $2 billion risk and probability and time adjusted, or $7 billion probability and time adjusted capital to get one product through the clinic. That's where all the money goes. Getting a molecule to load into that process is easy.
Matt Pillar:So, given the breadth and depth of molecules and targets, that perhaps targets? You tell me that Lumen has. In the years since you founded the company, you mentioned that you've got a sort of choose your own adventure path. How do you like you've got a lot of opportunity there. How does that play into your calculus around target identification and the indications that Lumen will pursue, is pursuing and will down the road?
Brian Finrow:Yeah, I'm a little talking about it. How do you kind of call me out on this here? Because we don't do any of that In our business. We have the luck of being the first to the field, so it feels a little bit like being I don't know genetic in the early 80s, where they finally figured out how to make molecule antibody and there was a list as long as you're on, a great idea to go after, and I didn't mean all of them worked, but many of them were amazing products and they prop up the stock prices of some of these companies, and Amgen, for example, to this day.
Brian Finrow:Right Enbril I think the first patent on Enbril was founded in 1989. So the persistence of being a first mover in a new field where you can do anything that everybody knew would be a good idea for a long time, but now you can actually scaleably execute on it is huge. For us, that means we really only go after targets that have a lot of not just animal data but human clinical data, validating the target, biology and also in all the cases, also the therapeutic modality, the mucosal topical delivery, and so for us, what keeps?
Brian Finrow:others at bay at least at the moment we've kind of got this base to ourself is the scalability and cost efficiency of our platform for this particular application. If we could find a way, if the AI guys, as we're calling them, could find a way to get the same confidence in the target biology that we're using these techniques, that we get out of double-fashioned reading papers from some 80s and 90s and then they really have something. I mean, that would be a real gift to humanity and I think they've cracked that yet, but maybe there's something there.
Matt Pillar:Yeah, so give us an update on the clinical activity element.
Brian Finrow:Right. So a bunch of activity. We just wrapped up a trial a few weeks ago in December. There's a new area for assistance.
Brian Finrow:Instead of delivering our protein therapeutic cocktail or antibody cocktails to GI mucosal services, this case we were delivering into intranasal passage and what we're interested in that trial was well, tolerability and safety.
Brian Finrow:Obviously we always look at that, but there's decades of clinical trials on that therapeutic modality so we weren't so worried about that, but still happy to see that it's very well tolerated.
Brian Finrow:The thing we're more interested in we don't have the data on this yet, but we did a staggered dosing. We dosed some of these individuals who are dosing them daily, some of them every other day and some of them every third day. What we're really interested in is taking the mucosal samples from the nasal passages so we can build out a rough measure of how long the antibody cocktail persists in those tissues. This is under the COVID-19 program, the DOD funded clinical trial, but very obvious applications for not only for COVID-19, which, as I mentioned earlier, nobody cares about anymore, but there's a lot of other viral infections influenza, rsv. This could have great utility, for the use case is really obvious. I think a lot of people would be interested before they go on an airplane, taking some kind of antibody cocktail and just sort of coding the mucosal membranes of your nasal passages that were respiratory tract, to at least reduce the odds of getting an infection during that window of exposure.
Matt Pillar:And so that's very exciting.
Brian Finrow:We'll have the PK data from that, I think, in a couple of months. This year we have a lot on deck. We're running five trials We've got funded, we've got three more in various stages of getting funding committed for. So we can pull that off. That's eight clinical trials to initiate this year and some of them will kind of extend out their different lengths. So that's where the huge growth is for us and it's why we're hiring and thinking so aggressively about clinical development costs very salient and also the manufacturing facility, because that's a lot of clinical trial material to manufacture in our GMP plan. So we're hiring very aggressively. If you're interested in a job, look out our website. What sort of jobs are you hiring for? Clinical manufacturing, r&d.
Matt Pillar:Yeah, those three areas. Lumen, biosciencesorg, Lumenbio All right, Lumenbio, Go there and check out the job offers. Speaking of jobs, so what you found? You found the company when 2017. 2017. Looking back on the years that have passed since then, what offers some pointed advice for companies? I'm sorry for folks who are in your shoes back then for stipping a toe and founding a biotech company.
Brian Finrow:Okay, okay, if you could walk on this, I'm sure. No, no, I've tried the other side, I was gonna say. When I was selling overpriced legal services as a lawyer at Cooley, I used to tell people that advice is worth roughly what you pay for it.
Matt Pillar:Okay so.
Brian Finrow:Free advice you gotta take with extra grains of salt, sure.
Matt Pillar:So I don't know that I have any. It's like the gift horse analogy, right.
Brian Finrow:The gift horse. The saying is you don't look at it.
Matt Pillar:What you do like, if you're gonna take on that or the horse that's given to you is the one you really wanna assess. Right, you wanna take that apart.
Brian Finrow:I think advice comes in matched proverbs, and I think proverbs are always matched right.
Brian Finrow:There's always like look before your leap. But it's also true that who has the tastes is lost. So a lot of advice comes in these sort of mix and match things and I think of them as being more like cones. There's just sort of the things you wanna meditate and think about and then you still gotta make your own decision about what's the right thing. So two cones that I recommend is thinking about that were important to me. First of all, I can endorse the lifestyle.
Matt Pillar:It's not for everybody.
Brian Finrow:So you gotta know yourself and make the right choice. But it's great fun starting a company. I mean it's especially fun when it's winning. It's especially agonizing when you're struggling and you get plenty of doses of boats. It's a very high emotional balance activity running an early stage company, but it's great fun. I recommend it to anybody that has the slightest inclination.
Brian Finrow:And then the second thing is maybe related. Part of what makes it fun is the unpredictability of it. And boy our experience is there's just been so much serendipity driving, so many critical events in the company's development. There's just no way you could have planned. I mean, just almost from the minute we stepped out of the gates things started happening Good and sometimes challenging, but mostly for the good. There's this feeling that as you start a new thing like this and it's not just starting companies, it's starting new art programs or writing a book or something there's a tendency of the world to just sort of it looks like it's all closed up and impenetrable. And then you, just you take the first step and everything just starts opening up in front of you. That's the kind of lived experience of it. So I guess it translated into advice form, it would be to keep an eye out for the opportunities and don't get too attached to the path you think you're gonna take.
Matt Pillar:How do you enable that? Like you know, serendipity doesn't happen in a vacuum. Like you can't have a great idea, pull up in a space like this, Take meanings.
Brian Finrow:You do just have an open mind and a naive attitude and kind of a learning mindset and you take me. So very short anecdote. We have time for a short anecdote. Yeah, this is for sure. I like this one. My co-founder, Jim. He's a scientist and we started the company and he, with Gates Foundation, found us. We're based in Seattle, they're based in Seattle. I found us through a friend of friend and they had this problem that they were interested in. So they invited themselves to come over and they said well, I said, Jim, this is great, the Gates Foundation is gonna come over.
Matt Pillar:I don't know if you know this.
Brian Finrow:But they got all this money. It's great. So he says, well, what do they want to do? He says well. I said, well, they want us to make antibodies in spirulina. He said, well, that's a ridiculous idea. He says spirulina is a prokaryote. You know the male in the antibodies require a glycosylation, all of this sort of complicated stuff.
Matt Pillar:So that's a really dumb idea. You take the meeting. I've got real work to do. That's a little word. I've got real work to do.
Brian Finrow:And so I took the meeting, because that's kind of my attitude, who knows. And it was sat down and I said so what's going on?
Brian Finrow:So we want you to help us. We got this problem we need all these kids are dying in the developing world. We want to make an antibody cocktail so cheap that we can just feed it to these kids, stop them from getting these enteric diarrheal diseases and save their lives, and it's going to be great. And I said, oh well, I do what I usually do in this case, which is I kind of roll back in my head Robotically.
Brian Finrow:I try to remember exactly the words Jim said there. You know the science, not the words. He said where? I explained well it's like a prokaryote. I don't know this, but you can't. Glycosylation and all these things. And I stopped and he says no, no, no, no, no, no, no no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no no no no, no, no, no, no, no, no no no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no.
Brian Finrow:And so I was like, oh hey, I'm going to have to shift my mind. So I do know that somebody's saying, hey, you got a million antibodies why don't you make a camel antibody fragment and?
Brian Finrow:he expressed a brain in prokaryotes, and I had dragged one of my science colleagues with me who was less rude than mechalophantic flowed from that meeting and I tell you there's been 10 or 15 other things like this, where just random circumstances generate the most spontaneously a path forward, where, like I say, it just seems impenetrable, an impenetrable triple ticket, and it happens so often To answer your question, I don't know how to create it While we're talking earlier, when I come down here, I try to have fewer meetings and more serendipity, and my way of doing that is lurking in the St Francis lobby or different places and waiting for things to happen and, god damn, it always does yeah.
Matt Pillar:Well, it's always a pleasure to have you. I'm gonna let you go make some of that serendipity happen. I really enjoy talking with you. Very thoughtful, excellent conversation. I appreciate having you on and we'll do it again. I hope so. Yes, man, we'll keep it up. Okay, thanks, brian. I'm Matt Pillar and you just listened to the business of biotech, the weekly podcast dedicated to the builders of biotech. We drop a new episode with a new exec every Monday morning and I'd like you to join our community of subscribers at bioprocessonlinecom, apple podcast, spotify, google Play or anywhere you get your podcasts. You can also subscribe to our Never Spammy, always insightful monthly newsletter at bioprocessonlinecom backslashbob. If you have feedback or topic and guest suggestions, hit me up on LinkedIn and let's chat and, as always, thanks for listening.