0:00:10 - David Williams
Cannabis is now largely legal in the US for medical purposes and increasingly for recreational use. The proliferation of edible products like gummies and highly potent synthetics has also boosted emergency room visits for THC intoxication. Currently, there's not all that much that the emergency room can do beyond sedation. My guest today, simon Allen, is CEO of Anebulo, which is developing an antidote for THC intoxication. The company is currently in human testing and has reported encouraging results. Hi everyone, I'm David Williams, president of Strategy Consulting firm Health Business Group and host of the Health Biz podcast, a weekly show where I interview top healthcare leaders about their lives and careers. Please leave a comment, subscribe or leave a rating. Simon, welcome to the Health Biz podcast. 

0:00:57 - Simon Allen
Thank you very much, David. It's a pleasure to be here. 

0:01:00 - David Williams
So it's fascinating what you're working on now and also, looking at your background, look pretty interesting too. I'm wondering if we can start at the beginning and if you could say a little bit about your childhood, any childhood influences that have stuck with you throughout the years. 

0:01:13 - Simon Allen
We will probably gather by my accent, I'm Australian and I did all my education in Australia, but I've lived primarily in the United States, certainly over the last couple of decades, and I would have to say it sounds kind of corny, but my mum has been my greatest influence because she did physiotherapy as her career and I always it was fascinated with the work that she was doing and working with doctors and even started out as a theatre porter like wheeling people into the first portion of an operating theatre based on you know kind of what my mum was doing, working with surgeons. And it was very natural to me before I did my undergraduate in science that I loved biotechnology. I was fascinated with drug development, biotechnology itself, and I really have not done nothing else since. 

0:02:04 - David Williams
That makes sense. You know, a lot of people tell me that their mum or their dad or both were their big influences and they may say it's corny. And then I also think about like let's see, if you grew up with them and they weren't your biggest influences, you know that may say something. Either either they weren't very good parents or you had some and other incredible influence. So I think it's a I'll just say like good answer. You know, I think that makes a lot of sense and it's nice to know that you had an interest in biotech early on. I see, in your early career you had a number of roles, particularly in business development. Can you just talk a little bit about your career progression and sort of how it's gone and whether it looks like it? For some people it like makes more sense in retrospect than it did at the time. But so what was the, what was the feel, what did you do along the way? 

0:02:46 - Simon Allen
Well, I think, as as most early 20 year olds, certainly in this next generation, I really had no idea where I would eventually end up, other than I loved biotechnology. So I did my science degree at the University of Sydney and wanted to get behind the lab desk, basically, and I was very fortunate in the sense that I came over to the United States with a little bit of experience. I worked for an Australian science company for a couple of years, but really there was very little investment in the time I'm talking sort of late 80s, early 90s, where Australia was highly educated in science but didn't really have the infrastructure like they have over in the United States. And so I came over to California and and the East Coast and hooked up with a company called Gilead Sciences, which people do know of today because it's literally a multi-billion dollar farmer company. But when I joined there was less than 50 people there and they had no commercial products and that was my first taste of true drug development. 

I worked as a biologist doing assays, mostly small molecule drug development. We were working on HIV influenza and even went to bio safety level three. If that rings a bell, that's the one where you have to kind of suit up and positive air pressure and laminar flow hoods and everything sterilized on and so forth. So that was amazing to me. I was so fortunate to work for that company because they went on to be very successful and it really taught me how a team, how a company, how a group of highly motivated, highly motivated individuals can do some pretty amazing stuff. 

0:04:25 - David Williams
I would advise anybody coming from all the way around the world, not knowing what they're doing, to find the next Gilead. So that was a we'll rack it up to you. You would do what you were doing and looking at the right spot because they certainly, you know, had interesting origin story and then, really, you know, just gone, just done terrifically since then. 

0:04:43 - Simon Allen
Yeah, I mean it's amazing how life works because I was just talking to somebody that I was able to network with and he goes oh I've got a really interesting company, I'm fascinated by it. And he pulled out our analyst report from his garbage bin I mean he obviously saw a lot of stuff he goes here it is, he's running around in his you know, the wastebasket not true garbage and pulled out this report and said you should look at this company. And I did, went over there and just basically knocked on the door and well, the rest is history. I was really launched, my career. 

0:05:17 - David Williams
That's good, and so you know. After being there, you've been some other places, including as a CEO. You've been involved in doing a crossover round at an IPO. You know what did you. What did you take from those experiences. 

0:05:30 - Simon Allen
Yeah, I worked in the lab for about five years and I did an undergraduate and really there's a natural branch, if you will, where you go on and do a PhD and you could be an academic scientist. You could be a scientist working for a corporation like Gilead and it became pretty clear to me that I was really fascinated with biotech. But working in the lab, for me personally was something that I didn't pursue with a PhD and I made the break into business development via doing an MBA back in Australia, worked as an equity analyst covering the Australian healthcare biotech sector and going back to sort of you know, the limited infrastructure there are. I typically say, and I was the fifth highest ranked Australian biotech analyst, and people go oh, that's amazing, and I say I was the fifth when I joined. 

So it was pretty, pretty low bar to get to, but it really taught me the ins and outs of how to value a company, not just its sort of cash flow and cash runway, but also the platform or the drugs that they're developing the team in order to form an opinion, you know, is this a company that's worth investing in or not? And after doing that I got into what I really love and I've been doing this now for a couple of decades which is what I call cell side biotech business development. So I'm not a buyer, I'm typically a seller. I have done some transactions where we bring in certain assets or intellectual property or programs, but typically what I have done is to work for relatively small companies. I'm Gilead when I started with small. It's much larger now. 

But my sweet spot is, you know, companies that might be 50 individuals or less and a Nebulose, a classic example where, frankly, we've got an extremely focused team with a very exciting asset and it's not run with hundreds of people. 

No, no, no, we do this very efficiently. Just to get quickly into the cell side biotech business development not doing a PhD, doing an MBA and really understanding as an associate right, an analyst, working under trained business development professionals. It taught me the art of the deal. It really taught me what it takes to bring assets, companies, individuals together to do licensing. So when I say sell, this isn't selling drugs to doctors, this is selling a drug to another company so that they can continue what is typically the most expensive portion of the development cycle, which is late stage clinical trials and gearing up for commercialization, which is something I leave to other individuals. 

I work very much on the earlier side of things, from an idea to going through to what's called an IND, which is your sort of ticket to enter human clinical trials, and then going through the standard phase one, phase two, three, routine and typically licensing, some point along that line where it makes better sense for more, shall we say, capable company that's able to finance and run complicated sometimes and very large phase three trials, and then gearing up for commercialization, which you know is in the tens of millions of dollars just to get started. 

0:08:42 - David Williams
Sounds good. Well, you sort of anticipated my next question, which is about you know an ebolo, and why is that a fit? Because it sounds like it meets a lot of the characteristics that you, that you describe. Let's talk a little bit about what you're doing there, and you know one. One term that I saw on your site is a THC intoxication, and I'm wondering you know what is that specifically and how big of a problem is it actually? 

0:09:04 - Simon Allen
Yeah, one of the first things I usually ground people on is a statement like whether Narcan for cannabis? Everybody's aware of the opioid crisis, not only in the United States but worldwide, and it really is a crisis, and yet cannabis seems to be under the radar, and it really shouldn't be when it comes to the safety of individuals, and I can walk you through that. But essentially what we do is we've got a small molecule that antagonizes the CB1 receptor, which is a receptor in your brain that's responsible for the psychedelic, psychotropic effects of THC. That's how people get high and unfortunately, what we're seeing today is that there are much more potent forms of cannabis, especially in the edibles, where people inadvertently or advertently overload the system, and that's what's called acute cannabinoid intoxication, or ACI, and people say but I thought cannabis was safe and well compared to fentanyl. I get their point, but it really needs to be looked through a different lens, and that is number one. It's very prevalent. The number of people using fentanyl is extremely small. It's a very small portion of the population, far less than 1%. Some people say around 0.2% of the population would use an opioid and yet right now 25, maybe even as much as 30% of adults in the United States have used or use cannabis regularly, and that's a massive number, and so what really happens here is that individuals might be using it for the first time or haven't used it regularly, and there's these really highly potent edibles as a classic example, where they literally go into intoxication all the way up to being comatose In fact, all the way up in some cases to death, where individuals can die from cannabis. 

That is not a precedent, and so what we do is we have an antidote. We literally are. We hope to be the first FDA approved therapy or antidote to treat acute cannabinoid intoxication Essentially, take it off the table. So one of the things we like to point to is what's called NEDS, and that's a survey taken around the United States in the emergency department, where they are simple questions how many car accidents do you see? How many gunshot wounds do you see? One of the other questions is how many people present with some form of cannabis and intoxication, and the numbers are staggering. It's 5,000 a day according to NEDS. That presented the emergency department on a daily basis with some form of cannabis and intoxication, and there is no therapy or antidote right now, and that's what we hope to do with Aneb 001. 

0:12:01 - David Williams
Yeah, in a sense, a great explanation. I can see why you're on the cell side, so to speak, if I compare it with the fentanyl. So on the one hand it sounds very analogous, which is you've got something that's more potent than people can handle and you need to bail them out. When it happens and I know you mentioned that the cannabis intoxication can cause death I would imagine fentanyl is more likely to for any given person that has it, and if I have Narcan like I have Narcan in my house, just in case somebody has it then somebody may be an inadvertent user as well, because something may be laced with fentanyl. 

On the THC side, it sounds like one of the things I understand that happens with edibles is that your peak effect doesn't hit for an hour and a half or so, so you might continue snacking until that happens, and then you're very overwhelmed. And then I wonder whether the synthetic THC that we hear about is maybe that's analogous to fentanyl, in other words, something you don't expect, or something that's more potent and you couldn't handle. Is that, am I thinking about it, the right way? 

0:13:02 - Simon Allen
Yeah, so THC as we all know, delta 9 is the most typical form of cannabis that you find in a dispensary is something that can be lethal, but not nearly as lethal as what we call the synthetic cannabinoids, and those are designed to bind to the CB1 receptor, as I mentioned. That's where THC applies its effect far stronger, like hundreds, if not a thousand times stronger. And so, yes, synthetic cannabinoids such as K2 and spice those are two fairly common names, and unfortunately, they tend to be used in the lower socioeconomic portion of the population at which is really unfortunate because those are the individuals that probably need the greatest care and yet can't access it. And so we do see, when you talk to the emergency department doctors which we've surveyed a couple of hundred since I've been on board here, they know when it happens, because it happens as a wave. It's not like they see it regularly, but it'll happen, because a synthetic cannabinoid will literally hit the street. It's very potent and very easy to overdose on and can last far longer than any type of intoxication with Delta 9, thc and, yes, aneb 001 is very effective. It's unethical to run a clinical trial with synthetic cannabinoids, as you might imagine. Yes, you don't sign people up to take such a nasty drug, but what we call nonclinical work outside of humans and certainly all the way up through to animal studies, you're able to test how synthetic cannabinoids bind to CB1 and also test in that nonclinical setting how Aneb 001 can essentially displace it. That's the way it works. It finds the CB1 receptor, it binds to the CB1 receptor and it's kind of a strong binder, like synthetic cannabinoids are. But it does the opposite. So THC and cannabinoids are a partial agonist. That means it kind of turns the receptor on or activates the receptor, and what we do is we bind to the receptor and essentially switch the receptor off or an antagonist, we do the opposite. And so THC or synthetic cannabinoids can be flowing around your system in high concentrations, but Aneb 001, being on board, effectively blocks that CB1 receptor. And so it's fascinating. We do clinical trials where we literally get people high, right, so we give them an edible. We've gone up to fairly high doses. And we do placebo Like most clinical trials, double blind, placebo, controlled and individuals that are on placebo go through the normal thing. 

You know they feel high, their heart rate goes up, anxieties, they're the sway swagger that you know. They can't stand still, if you will. They tend to fall over. Some of them can't even get off the sofa in our clinical trials. And yet when they hit Aneb 001, as in on the active side, I hear comments from patients like how are you feeling? I'm like, oh, this is not that good. And we're like, oh, what's the matter? Someone stole my high. I kid you not, that was a quote from a patient. So we literally that effective and you're right about the edibles. 

It does take a while to kick in, and that's what happens. Typically, people don't know the dosage that they're taking. Maybe take one or two, and it's extremely high dose. And other individuals think they know what the dose is and that's good for them. I think it doesn't work, because they expected the effects to be far sooner and might take two, three, four or five, which is unfortunate. And so those are the individuals that present, as I said, on a daily basis to the emergency departments. And this is the big difference where fentanyl, yeah, it's a killer and it's causing massive damage to the population, there's no doubt. 

Well, cannabis, unfortunately, is a cut a thousand times, but not that deep, and the reason for that is the patient outcomes, believe it or not, are very poor Individuals. 

All the way up to death, which I'm not saying happens regularly, but all the way up to that point they can actually get admitted to the psychiatric ward because they are literally out of their mind, causing trouble, they're essentially intoxicated, and that can cost the healthcare system, I kid you, not as much as $50,000. Because in the US, as you know, we tend to have to treat people, it doesn't matter if they have insurance or not. At the emergency department they get treated and the healthcare system of those 5,000 a day. Obviously they don't all go to the psychiatric ward, but even just getting admitted to the emergency department can cost three, four, $5,000 to the system and overnight stays. As you might imagine, that number increases and so what we focused on is the average cost of an ACI patient presenting at the emergency department and getting treated. Not only is the patient extremely uncomfortable high heart rate, anxiety is off the charts but that's about an $8,000 hit to the healthcare system. 

0:18:05 - David Williams
So I'm hearing a couple of things within what you're describing. First of all, that it's a you mentioned the company being focused, and I see that you've got one product that's not presented as a sort of a broad platform necessarily, although we can talk about that, and that in the emergency department that the value proposition is not just hey, this is gonna be well reimbursed from insurance, but rather the health systems themselves that are trying to manage the flow of patients in the emergency room might have a return on investment from this product, even if it's not reimbursed. And I think that ties in what we were saying about this may affect some of the lower socioeconomic categories of people that don't have insurance or have insurance that doesn't pay as well. 

Is that right? Is that sort of how you're wrapping the value proposition? 

0:18:47 - Simon Allen
Yeah, this would be an FDA approved therapeutic which we would expect to be reimbursed for people that have healthcare coverage. But, to your point, obviously not everybody has healthcare coverage. And talking about those synthetic cannabinoids with the homeless and disadvantaged individuals, they're most likely not to have healthcare insurance and so, yeah, the system has to take that on the chin. With regards to the pharmacoeconomic impact, and you're right, these emergency departments can be overwhelmed and it's not unusual for an individual with ACI to be in the ED for six hours, eight hours, because it takes that long to metabolize high levels of THC in the system. And all doctors can do today, because there's no FDA approved therapy is typically give a benzodiazepine to essentially make them less anxious, to sedate them, and a beta blocker to stop their heart from beating too fast. Now, that's really treating the symptoms of ACI, not the root cause. Those drugs do nothing to overcome the intoxication, or, shall we say, the high impact of the CB1 receptor, where this is really happening. And so we strongly believe that our focused, small molecule drug, which does one thing in one thing only, it, literally, once it's side gets into your blood, it finds the CB1 receptor and latches onto it really hard and blocks it so that THC or synthetic cannabinoids, literally can't bind to the receptor. And that's a wonderful thing. 

That's really why I got involved with this company, because I saw the shifting geopolitical it's geo, because it's just North America and the United States, but the US certainly over the last five years. To me it's been fascinating. I call it one of the fastest moving social issues that nobody talks about and the impact is swept under the carpet because the cannabis industry doesn't want to talk about ACI. That's like Budweiser or some beer company, like Courser, whatever, talking about DUI and alcohol poisoning. I mean, they don't talk about it, they don't want to. 

And the dispensaries and the cannabis industry they're happy selling their product and the government is just as happy to collect the tax. And so you've got this weird perverse incentive for these highly potent products where there is literally no QA, qc. So when we develop Aneb 001 and it gets to market, you'd imagine the FDA is all over us, like they are over all companies that develop drugs for the purity and the synthetic route. And how do you make it and how do you qualify and what concentration it is? That does not happen at the dispensaries. No, no, no. So it's really the Wild West. 

0:21:29 - David Williams
Now the company's very focused. I saw on your site one particular product, the pipeline. Would you envision this being as you described? Before you get it through phase two, look for someone with different set of capabilities for phase three and commercialization, and would you expect that that's kind of the path where the company would go, or do you have thoughts on, you know, the pipeline of products that come behind this? 

0:21:51 - Simon Allen
Well, right now we are squarely focused on Anebs 001 and we've got a highly laser like team that's tasked with that mission and whether or not we in license because we don't have a platform. So some companies I work for have a platform. It's like the goose that lays the egg and you have the goose and you see how. 

Golden or otherwise Right, gold, that's the dirty secret, right? Most biotechs fail and I certainly hope Nebula is not in that category. Yeah, there are a lot of eggs that aren't golden, but I digress we. The reason why I think I've got a golden egg here is the mechanism of action. How a drug works can typically be its greatest strength or its greatest weakness, and I have definitely worked for companies where the mechanism of action of these molecules and development is unclear. Right, literally, we put it into an essay and it lights up something and we say, oh, that's really good. You don't even know how it works. That's not the case with our pain. It's a very well characterized mechanism of action, very simple, in fact. 

I learned about receptor blockades and receptors when I was doing my undergrad biochemistry back in sort of the early eighties, so this concept has been around for a very long time and it's really just this fast moving social issue in the United States, with cannabis basically becoming freely available and highly potent forms where the the need became paramount. And so when I heard about this, joe Lawler, my chairman he was the one that had the penny drop moment filed the intellectual property, secured the molecule, and I'd been talking to him over the years about certain ideas and bouncing stuff off him, and this was one where, as soon as I heard it, I'm like Joe, this is. This is awesome, because very rarely have I represented a drug where I don't have to talk about efficacy. It's fascinating. People just say, oh, I know what it does. Yeah, talk to me about other stuff and other drugs that obviously sell side biotech business development. You have to have your pitch and people say, well, how does it work? Imagine saying well, we don't really know, that's under investigation. 

0:23:51 - David Williams
Next, question yeah. 

0:23:53 - Simon Allen
Next question. You typically lose them right there, unless it's a blockbuster and it's got really solid evidence then, because plenty of drugs have been approved without clear mechanism or the drug might have multiple mechanisms and you don't know which is the most important one, because it does more than one thing, like bind or receptor. So this one was clearly attractive to me because I saw the development path as being straightforward, and that's where we're at right now. We've completed our phase two and we're talking to FDA about what it takes to get the drug to market, as in the phase three registrational path, something that we hope to inform the market in the coming period of time. 

0:24:36 - David Williams
What has? This has been characterized as a difficult time for fundraising for, especially in biotech, and I'm wondering what your approach has been toward funding the development of this product and whether it's been a challenge and to what extent you fall within this category that has been challenged to raise money. 

0:24:56 - Simon Allen
Yeah, being in this business now for a couple of decades it goes through cycles and sort of the 2000, early 2000s was a clack, you know. Remember the dot com boom and everything. Biotech was taken up by that, where you could literally have a PowerPoint deck and head down Sandhill Road, which is sort of a Bay Area street where all of the venture capital have their offices, and just have a PowerPoint deck and say, look, I'm Simon Allen, I've got a team here and here's an idea, and they're like well, thank goodness, because we've got a lot of money to invest in. I'm glad you came around. And other times you can have something as strong as a neb zero, zero one and in the down times and it's just near impossible to get funded. So we're in a period right now after COVID. 

As you might imagine, biotech took a huge rise with COVID. 

Everybody wanted to invest in it, so it's no surprise that now that COVID is over that there's sector rotation, so people don't really think biotech is as hot as it used to be. And you're right, david, that does create limitations and the ability to company is to fund themselves, and so the typical ways are dilutive, where you go out and sell shares and essentially bring money in. And the other way is non dilutive, which is something that I'm very focused on in my career with the sell side, where you don't sell shares, you sell access to the product. You license the product. You can do it for Europe, you can do it for Australia, you can do it worldwide. You could even have royalty sharing. There's a whole bunch of stuff you can do to raise capital in order to fund the future development. So we focus on both of those, the dilutive and non dilutive, and there's no good time to do a bad deal, but at some point you have to fund the company. So you look at both of those avenues. 

0:26:40 - David Williams
Great, well, well put. Simon, I have a last question for you, which is with all that you're working on, do you have time to read any books, and have you read anything good recently, anything that you might recommend? 

0:26:50 - Simon Allen
Yeah, I anticipated that question in the sense that I know that that's something that you ask about and I don't want to sound sort of like I don't read books anymore, but I must admit I've really turned to the electronic media far more. It's something that's much more accessible, and so all of my information that I get is really not from books anymore. I do read books for pleasure and on my time to you know, on an airplane and stuff like that. They're usually novels and science fiction, that type of stuff, but I must admit my time of going to libraries and researching something that's all over now. I'm a big fan of the internet and so I would say the biggest book I read that gives me the most inspiration is basically, you know, quote unquote Google. 

0:27:33 - David Williams
Yeah, well, that's a big one, all right, well, Simon Allen, CEO of Anebuki, thank you for joining me today on the Health Biz podcast. 

0:27:41 - Simon Allen
Fantastic David Real pleasure. 

0:27:43 - David Williams
You've been listening to the Health Biz podcast with me, David Williams, president of Health Business Group. I conduct in-depth interviews with leaders in healthcare, business and policy. If you like what you hear, go ahead and subscribe on your favorite service. While you're at it, go ahead and subscribe on your second and third favorite services as well. There's more good stuff to come and you won't want to miss an episode. If your organization is seeking strategy consulting services in healthcare, check out our website, healthbusinessgroupcom.