Michael Cloonan: CEO of Sionna Therapeutics

Michael Cloonan, CEO of Sionna Therapeutics, shares his insights about leadership in biopharma and how Sionna is working to restore the cystic fibrosis transmembrane conductance regulator for people living with cystic fibrosis.

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John Simboli: 0:00

Mike, what led you to your role as CEO of Siona Therapeutics?

Mike Cloonan: 0:04

My journey into biotech first started when I was at Bain, doing strategy consulting. So I started after business school, went to Bain in Boston, working on strategy consulting. And I was working on a number of different industries at that time, not just healthcare, but I eventually started to specialize in healthcare and pharma and medical devices, and really got me energized about that industry, really because of what you can do from a greater good, from impacting patients and families. I started to feel a strong connection to that industry. And at that time, I felt like this is the industry I want to get into. And I was in Boston and made the jump into biotech at that time, which was back in 2003, and I joined Biogen, one of the bigger biotechs, here in Boston and across the US, and spent 14 years at Biogen. A great run, great opportunity to learn in a bigger biotech company. Did various roles, starting in more finance and business development and strategy, then eventually switched into the commercial organization and running different markets and countries, but really saw, you know, a full scope of responsibilities across my time at Biogen. And I just continued to fall in love with the work that we were doing, launching medicine, seeing the impact that it would have on patients, specifically in areas like MS, hemophilia, spinal muscular atrophy. And then, after 14 years there, had this great experience, I felt like I was ready for the next role for me, which ended up being a Chief Operating Officer, role in a more mid sized company, which was Sage Therapeutics, which was also focused on CNS, but more on depression, postpartum depression, but still sort of a neurology CNS connection. And I felt like it was a great opportunity for me to leverage all of the things I had learned at Biogen over the 14 years, but maybe have a broader impact, you know, a bigger role, broader impact, within a more of a mid sized company. And spent four years at Sage and had another great experience there, experienced some some tremendous highs and some challenges, as every biotech does. And having done that for four years, then you sort of start to feel like you've been the Chief Operating Officer, you've had all this past experience, and do you want to make that jump? So your question was, what made you want to be a CEO? And it's through experiences that you build up over time that sort of puts you in a position to decide is that something you think that would be meaningful? Do you think you could make an impact? I started getting calls from recruiters about various CEO roles, and, you know, really felt like I was ready to take that next step and lead a company in that way. And fell in love with Sionna. That ultimately was the job that I took. I joined the company back in 2021 and at the time, it was a 12 person biotech. Very small, very early stage research-focused company at that time, but I saw tremendous potential of what we could build and do within Sionna. And so that's sort of my career arc, as to how I got to where I got to, and why, and I can get into more why I picked Sionna, but it was a great opportunity, again, to leverage 20-plus years of experience to really help a company achieve its goals, to get patients the medicines that we were working on. And you know, we've seen now, been here four and a half years, and have really progressed the company to a point where the excitement only grows, and what the potential we have. My process in joining Sionna was, the history of Sionna was, our science spun out of Sanofi back in 2019. So these were programs that actually go back to Genzyme. So you know, if the history, Genzyme merged with Sanofi, and then these programs rolled into Sanofi after that point in time. So these, there's a 15-year history to the programs that we have at Sionna. And when we spun out in 2019 we had two co-founders of the organization that came out of Sanofi. They had been working on these programs for a long period of time, and so they were the original founders of the company. They took some of the scientific team with them from Sanofi to start Sionna. And it was at that time that we got the seed capital for the company was put in, and that was from the Cystic Fibrosis Foundation, RA capital and TPG, and that's how Sionna formed. I joined about 18 months after that, so I was not one of the original founders, but came in very early when that, again, the organization was about 12 people, a group of scientists that mainly had come out of Sanofi. And it was at a time when the company felt like they were starting to turn the corner on the science. Really wanted to bring in more of a business leader to run the organization. My background is more on the business side than it is on the scientific side, but we had such a strong scientific foundation within Sionna that bringing in somebody with my skill set as more of a business operator made more sense at that time. So I came in very early, again. As not as the original founder of the company, but have seen sort of the growth and development of the programs and of the company over the four and a half years that I've that I've been here.

John Simboli: 5:09

When you were sifting through the various opportunities that might come your way, as you're talking with with people putting those in front of you, when you were doing your own research. I've spoken with several CEOs who have said there were hundreds of possibilities they've looked at. And then for some, it was a careful winnowing, and then like, okay, that's when I want to put my my bet. For others, it was like falling in love, the way they've described it to me, and some mixture in between. So what was that like for you? Did you know? Could you see it pretty clearly that this was the place?

Mike Cloonan: 5:43

When you start thinking, and I started contemplating being a CEO, one of the things that I thought would be very helpful was to visualize what that company could look like. What is that profile of the company that would be the one that you would jump for? Because I was happy at Sage. I liked the work that we were doing there, and so I wanted to be selective around what that first CEO opportunity would look like. So I had in my mind, sort of a vision of what that could ultimately be, and initially. And so you do get a lot of calls, like you're getting a lot of recruiters reaching out. You're getting different types of CEO opportunities, and you're learning through that process to, sort of, as you said, whittle down what are the ones that seem more or less attractive based on your own interest and where you think you can add value? Because some companies are are just more set up for a specific individual to drive value. But ultimately, with Sionna, it actually surprised me. When I got the call from Sionna, actually the recruiter on the Sionna engagement, I knew the recruiter from a past, from our past life. We had worked together in the past. And she said to me, this is the one. This is the one that you're going to take. And it's, I'm telling you, this is the one. I was very pleased to hear that initially, but also curious as to what it was and when she initially described what the opportunity was, which was, again, this very small, 10 to 12 person research organization, early stage, going after a very challenging target that had not, that had long been considered undruggable, that was sort of the label that had been attached to some of the main programs we were working on. And when I heard that, I was like, Well, are you sure you know me? Because that actually doesn't sound like the exact right fit that I was thinking about. Because as I talked about my career arc, a lot of my background was sort of later stage, biotech, you know, phase two and beyond, commercialization experience, global experience, bigger organizations. And so, at first, it didn't seem to sort of scratch the profile that I was initially thinking. But as I dug in, that's when I fell in love with Sionna. What really stood out for me, for Sionna, was the fact that you had this small organization that you could build, you know, from that stage, and grow it. If you went into a small, a medium sized to bigger company, you already have a lot of things established. And so you're inheriting something as a CEO, rather than building it. And so there was a real appeal to me that I didn't realize at the time, until I really started talking to a company of this size to say, Gosh, I can really build this from almost the beginning. There is this history and legacy of the programs and the team is there, but we can really build this together. Then the science was the other part of this. We have this very unique target that we're going after. And if you know anything about CF, it's a monopoly that exists today. There was a single competitor, and it's an $11 billion market that is dominated by a single player. We had a very unique approach to solving the issue in CF through this mechanism called NBD1. We were the only company working on NBD1, and as I had said, it had the history of being labeled as an undruggable target. And so I liked the challenge that that brought, of we're going after something that no one else has been able to do. We've made progress, and if we do this, we have a potential to positively disrupt a monopoly. And so I like competition. I thrive in that area. And so to me, when I thought about the ability to build a company, to work with a great scientific team, to go after a unique target that, again, could positively disrupt and potentially transform the standard of care. It all really started to come together. Like, she was right. This was the right opportunity for me, and it's that's why I signed up.

John Simboli: 9:16

Your word, visualization, caught my ear just a second ago. I was thinking about, quite likely, I would guess anyway, you visualized what would be like to be a CEO, not having been one before. And I'm guessing that some of the things you visualized turned out the way you anticipated, and some of them didn't. What was that? What was that blend?

Mike Cloonan: 9:34

When you think about what the experiences you've gained before being a CEO. You're going to leverage those experiences, whatever your path that's led you there, If you've come up through the science or the business side, you have experiences that are going to be very tangible and relatable to the CEO role. And so you have a set of skills that can make you successful. And then there's always going to be things that you didn't experience. You can't have done everything prior to being a CEO. And so the things that I found were more of the natural transition that I felt very good about was, you know, the people, the culture, the development of the organization, the hiring and building out the company, and establishing, you know, a strong culture. That was all very tangible and relevant to what I'd done in the past. There was also, you know, developing the strategy and aligning the financial plan with the strategy, all very comfortable, sort of moving from past life into that current CEO role. So again, there's a lot that you have to rely on your instincts and your experience that's going to set you down a path to be successful. The areas that were new for me was the fundraising aspect and as a private company. So I had come from public companies where we had raised capital and raised money, but going to a small private company, VC funded very different capital raising and financing aspect than what I had experienced in the public realm. And so you have to be comfortable being uncomfortable, I think, as a CEO and that you have to know the things that you don't know. And I would say, sort of have confident humility. Because you can't know everything, and you have to be able to rely on your team who might have expertise in a certain area, your board of directors, who are a great resource that we had here at Sionna. And then you know outside experts that you can tap into help you get through it. So you learn as you go through this process, just like anything, you're going to pick up so many skills, and once you do it, you know, once you build up more expertise and more knowledge and more comfort with it. But I think one of the biggest things with the CEO role was, again, really being, understanding yourself, having a self awareness around what you know you di well. What are the things you either haven't had a chance to do yet, or it's not your expertise, and you've got to rely on the team or experts, like I said, and then you acquire them, you build those skill sets, and it becomes a little bit like muscle memory that you build that into your overall, you know, tool kit that you have as a professional. And the second time you go through it, it makes you that much stronger. And every situation is different. That's the other part of biotech. The macro environment could be very different, like the political environment could be very different. And so learning to navigate through that, where situations could be very different than what you might have experienced in the past, and having a flexibility and a nimbleness in terms of how you operate, that's one of the keys in a small biotech.

John Simboli: 12:22

That word nimbleness certainly makes me think of the BioBoss that just published. He was talking about bobbing and weaving, and as far as, navigating, and I had thought at first he meant like, like a boxer, or like closing. And he said, No, it's not so much about avoidance. It's about nimbleness. It's about footwork. I thought that's interesting.

Mike Cloonan: 12:43

Yeah, pivoting. I think pivoting is the word you would hear quite often. Just the ability, the scenario you might have envisioned playing out doesn't play out exactly, and you have to have that ability to pivot to a slightly different, and sometimes even a much different scenario. But you've sort of envisioned what that other scenario is before it happens. You're trying to anticipate. You're trying to see around corners and really think in multiple scenarios. You may have your preferred path or your base plan, but really trying to think through what else could happen and when it does happen, you're already prepared to pivot, because you envisioned it. Because you planned for it, it could have happened that way. I do think sometimes organizations can get caught if you don't envision it. It takes you a second when an outcome happens that maybe you didn't plan for. It can take a little while for you to come to grips with what the scenario is before you can actually act on it. And I think if you can plan ahead and see around corners like that, it just does allow you to pivot that much more quickly.

John Simboli: 13:42

I spoke with a CEO who had been at the company prior to becoming CEO, he'd been on the business development side. He said he'd become very good at trying to develop various scenarios to present to the CEO and the executive team, kind of like what you're talking about. But he said when he got in the role it was a surprise to him, because he hadn't yet made that transition. He said, in one of the very first meetings, he said, you know, guys and ladies, we could do this or this, or this or this. And he said there was a long pause, and someone on the team said, Yeah, but which one are we going to do? So you can't arbitrarily make a decision. You have to involve your team. But that is an aspect of being the CEO that is different from being a member of the executive team in another way, correct?

Mike Cloonan: 14:26

Yeah, absolutely, you are the leader of the team. But the way you know every leader is going to have their own philosophy, their own how they want to be a leader, how they run the team. And to me, it does come down to the team orientation. That is, to me, one of the biggest parts of where a collection of individuals, but we all have a common vision or mission at Sionna. Our goal is to deliver highly impactful medications to people living with CF that could fundamentally change their lives and the lives of their families. That's your North Star. And so as a leader, you have to ground yourself and what your philosophy is on how you're going to lead the team. And a lot of what we talk about as a team, we are a team first. Our individuals and our functions kind of come second. It's the leadership team that we are focused on first, and how we can best help the organization. And so my ask of all of my leadership team members is you, as we come in as a team, you sort of take your functional hat off, like you're not the finance person, you're not the BD person. You are an executive leader, first of the company. And we really want people who can think from an enterprise level. That they can think across the organization, again, not just in their function or their swim lane. And to me, if you have a team that embraces that concept. This is where you can get into the scenario planning that is complex, and you can think, get the context and get the thinking of the entire team that's going to help you build an even better roadmap as to how to be successful. But it does come from this, the spirit of the company, the team is first. The function is second. I'm an enterprise thinker, and I think that really works well. That's been part of my philosophy that I subscribe to, and I think it helps companies be very successful. If you can do it.

John Simboli: 16:10

It's in the nature of biotech and biopharma that it's data driven, and the data change. In a world where you're trained to be a decision maker, you're trained to follow the science, follow the data, I remember talking with a CEO who said I had to learn that sometimes I wasn't going to make the right decision, but often I could fix it.

Mike Cloonan: 16:27

Well, when you're asking the question, I started to think about, you're right. I mean, there is it's biotech is hard to predict at time. And we've talked about the scenario planning and trying to think ahead, and you can still get surprised. But one of the things that we, that I do embrace, and the team here does embrace, it's similar to what you're talking about, but I would call it strategic optionality. That's one of the frameworks that we really believe in, which is it's different than scenario planning. It's really trying to best enable multiple ways to win, if you will. And so that could be how you build your portfolio of assets. That could be how you invest your capital and your resources. With biotech, it's always about trying to get to that next stage of development, which will then de-risk the compound that much further, or the program that much further. But until you have that, the more optionality that you have, and you do it in still a what I would call capital efficient way. We only have a finite amount of resources. We can't have infinite strategic optionality. But it's very important, in my mind, when you think about biotech, is that to have multiple options, multiple ways to win, it enables you to pivot more quickly if have different options, different assets. And it's complicated, though. The more strategic optionality you build into the organization, it creates complexity. Because, as you were saying, you're not actually making a decision today. You're keeping options open, but so that's your decision you're making. You're making the decision to keep options open instead of making the decision to go down this specific path. And so it's actually just a different decision making framework of you're still making decisions, but it's, in essence, the decision to keep things open until we have more data. Then we can be data driven and we can narrow the options and start to go down a more defined path. But it's all about leveraging. You know what happens in biotech with data, the de-risking, more certainty comes into play, and it just gives yourself a better chance to make the best decision, as opposed to, too early, maybe narrowing it down, and it might lead you down a different path.

John Simboli: 18:28

You probably smiled when you saw this question about when you were eight or nine years old, did you have any image of what life would be like? It's surprising to me when I've asked that a few times here, when I've had answers like, No, I was trained to be a classical pianist, and then I realized . . . So what was your image, or what you

Mike Cloonan: 18:47

you're thinking, but I definitely was at that What is the unmet need? You began to talk thought? time thinking I wanted to play for the Boston Celtics or the Boston Red Sox. There was no question in my mind I was going to be a professional athlete, and that was a big part of my identity growing up. I love sports. Still do, but you know, as I when I take that now and really think about maybe what you're trying to get at in terms of why I asked that question, you know, what I learned, very early on, having that mindset of an athlete is that, you know, having a common vision of what you want to accomplish, and what does success look like? And the team aspect. The team first, the individual success comes later. And those are parts of my leadership philosophy that I talked about earlier, about things that I still have today. You can trace back to, again, sort of that very early age of what you thought you wanted to be, but was it the actual what you wanted to be or who you wanted to be? And that's what I think about when I reflected on this question. There were things It really comes down to when you think about that, again, I could take from that of who I wanted to be, part of a team, doing something very meaningful, again, the opportunity to be successful and go after a championship, and in biotech that's getting a drug to launch and getting it to patients. So there is a strong connectivity between thinking back now and reflecting of why maybe I landed where I did today. But I did fast forward like, you know, when I did a little bit more okay, beyond that very early stage, when did I start to think about, you know, why I landed in biotech and my early, when I went to undergrad, I started off as a chemistry major. So I always loved science, and thought that where the bar is today. As we said, a third of patients who would be something that I want to do as a career. But then I, you know, as I did more of the science, and I started taking some business classes, I actually pivoted. And I pivoted to business as my major. But what I found out later in life is, having done the science early, pivoting to business and then sort of building your career on the business side, biotech is the intersection of science and business. I mean, that's really what the business model is. And so when I look back now, I'm not surprised that this is where I landed based on what sort of my two academic aspirations or interests were in college, and sort of how I morphed them back together later in life. are on the standard of care have normal CFTR function. So that means two thirds do not have normal CFTR function, and that means that their quality of life is not where it needs to be. Their life expectancy is not where it is, and just their overall how they live, their day to day life, can be improved. And so what we are focused on is driving as many patients with a dual combination to a better threshold or better level of CFTR function, all the way to normal for as many patients as possible. And if we can do that, the downstream implications for patients are significant in terms of their quality of life, potentially life expectancy. All of those things feed into this. And the other part of it is not only trying to raise the efficacy bar and get more patients to normal. The other part of this, we're doing it with two drugs, as compared to the standard of care, which is three drugs. And that standard of care has already an established tolerability profile, but we believe with two compounds, one that's a differentiated one in NBD1, we may have the potential to deliver a differentiated tolerability profile for patients as well. So the first goal is drive the efficacy and improve that CFTR function. But there could also be a corollary CF is a large rare disease. It has about 100,000 patients worldwide that have CF. And so it is one of the largest rare diseases that exist. And also speaks to the market size. As we benefit to this, of having a tolerability improvement, if it said, It's $11 billion market size that is growing to 15 billion in the not too distant future. And so for folks today, we could talk about life expectancy being in that mid 50s, as I said today, that's an important framework to think about. How can we improve the lives of CF patients? There is exacerbations to the disease that could put them into the hospital, where their lungs are not functioning in the way that they want. The mucus is still building up. And so, we've made a lot of progress in the last decade in terms of CF, but those are the things we can take even to a better level, with potentially NBD1 being the backbone of a dual combination that can provide incremental benefits than what they see today. And that's the goal. And just to get having more options does what we think it can do. for patients, as I've talked about, it does create, not every medicine works for every patient, and that's the case in every disease. The more options we have, patients respond differently to options, and so that's our goal. We believe patients deserve more options in CF and that's our goal, is to deliver them new, potentially more efficacious options that could even have a differentiated tolerability profile.

John Simboli: 38:17

A lot of my work, just by chance, has been with people who companies are working in the rare disease side and having a normal life, then suddenly having your world upside down, and then having this incredible opportunity to have your life back again. It's almost beyond words.

Mike Cloonan: 38:31

That's why we work in biotech, right? To see the impact that you can potentially make on people living with that disease. It's impacts the families, because everyone is sort of involved with that. And so it really is unique, not only to biotech, but again, to certain disease areas, where you could see fundamentally game changing improvement in the lives of people living with the disease, and their families, for sure. Just to summarize so it's very clear, Sionna is going after a new approach for CF. And CF is a monopoly, as we've talked about, where there's a single player that has dominated the space for a long time. And as we know, the vast majority of patients are not getting to normal CFTR function. So our mission is to drive as many patients as possible to normal CFTR function. We're going after that to solve the unmet need that exists, and we're going to leverage this very new, first in class target called NBD1, which is not, it's not a new target, per se, in terms of being studied. It's a new target in that, for the first time, somebody is in the clinic with NBD1. And it really is the key to unlocking more CFTR function. It helps fully correct the protein. And if you can fully correct the protein, you can fully normalize its function. And one of the ways we are going to get there and to drive that incremental benefit for patients in a clinically meaningful way, is to combine NBD1 with one other complementary mechanism that we have in our portfolio. And when we do that as part of a dual combination, we have the potential to raise the efficacy bar and deliver meaningful clinical improvement for patients living with CF. We talked a lot about the strategic optionality. That's a big part of what we're building. Our portfolio has strength and depth, both across many dimensions. We're entering a key point in our life cycle at Sionna, where we're entering phase two with this add-on to the standard of care, proof of concept, while at the same time running this dual combination healthy volunteer study with SION 451. And one thing we didn't talk about is we will have data from both of those studies in the middle of 202o. So a very impactful less than 12 months now for Sionna, and we're in a very fortunate financial position because we recently completed our IPO, as you may have seen back in February of this year, where we raised over$200 million. It has provided a lot of financial flexibility to execute that strategy that we've talked about. And so very important year, a transformational year for Sionna. But we've put ourselves in the position, through very strong execution, to be here and to turn those cards over in the middle of 2026

John Simboli: 41:01

Mike, thanks for speaking with me today.

Mike Cloonan: 41:04

Thank you, John. It's been a real pleasure. I really appreciate the time and being able to talk about Sionna.