Synapse sat down with Bernat Olle, co-founder and Chief Executive Officer of Vedanta Biosciences, outside the company’s lab space at LabCentral in Kendall Square. Vedanta recently licensed a live mix of bacteria to modulate the mucosal immune system in the gut of Inflammatory Bowel Disease patients to Johnson & Johnson at the beginning of 2015.
Imagine, instead of taking a pill filled with tiny chemical compounds, that pill was filled with billions of live bacteria. Although that idea might take some getting used to, it just may be the most promising therapeutic strategy for treating many intestinal diseases such as Inflammatory Bowel Disease. Such therapeutics take aim at correcting imbalances in the human microbiome, the trillions of microbes that inhabit our bodies and outnumber human cells by about 10-to-1.
Olle's path to Vedanta
"The most important thing that you can do early on as a scientist in a startup is find a piece of science that you are passionate and excited about."
SYNAPSE: Tell us about how Vedanta was founded and when the idea for the company first emerged.
OLLE: The timeline is complicated because Vedanta was started within the nest of PureTech Health. I and others at PureTech started exploring the microbiome field around 2009, and we spent almost 2 years going to conferences, talking to academics, reading papers in the field, learning about the IP landscape.
At this early stage, we spent some funding filing intellectual property (IP) and getting licenses to technology. We formed a group of scientific co-founders, and conducted some de-risking experiments around selected technologies. When it was finally clear that the project had promise, we incorporated as Vedanta.
SYNAPSE: What are some of the big milestones for Vedanta?
OLLE: Starting with science, in 2011 one of our co-founders, Kenya Honda in Japan, found that there’s a group of microbes in our microbiota that are critical to develop the immunoregulatory branch of the immune system. It was on the cover of Science and got a lot of good press. In 2013 that was followed with a set of Nature papers describing a defined product candidate. In my view, this showed for the first time how to rationally design a product based on defined consortia of organisms from the human microbiome, as opposed to just giving people fecal transplants, which are basically a black box.
From a business perspective, the continued financial support from PureTech - our majority investor - and access to PureTech resources has been essential to the company. The first seed investment from Johnson & Johnson Development Corporation was also a milestone because it was the first external, non-PureTech investment in Vedanta. The first strategic deal, also with Johnson & Johnson, for our leading pharmaceutical candidate VE202 (a live mix of Clostridium strains), was a relevant milestone for the microbiome field at-large. To my knowledge, that was the first time that a pharmaceutical company made a large deal with a microbiome company.
In terms of recruiting, it’s a bit of a cheesy point, but each hire is a milestone because everyone is very important to the company. We have also recently expanded our Board of Directors with the addition of a new chairman of the Board, former CEO of Sanofi Chris Viehbacher.
SYNAPSE: Did you have previous entrepreneurship experience at PureTech before starting Vedanta?
OLLE: Yes, counting Vedanta I had previous experience in founding several companies in the PureTech portfolio.
SYNAPSE: How many full-time employees are currently on your team?
OLLE: That’s changing very fast now! As of January 2015, we only had 1 when we moved into LabCentral, but as of fall 2015 we have 7 people at LabCentral. That’s the scientific team, plus me now full-time at Vedanta. Today we’re hiring a Head of IP and a Head of Preclinical Development (during the course of the interview, Olle took a phone call and officially hired Vedanta’s 8th full-time employee.). We will continue to grow fast over the next 12 months.
SYNAPSE: What is Vedanta's exit strategy?
OLLE: Our exit strategy is world domination! But seriously, ultimately our goal is finding cures for diseases with great unmet needs, where the microbiome plays a role such, as Inflammatory Bowel Disease and others. In PureTech, we have a majority owner that has a much longer-term vision and tolerance for big, bold ideas than most sources of capital, which means more options for liquidity are on our table than if we were owned by VCs itching for an exit tomorrow.
Launching and thriving at a biotech startup
"Early on in my PhD I would have started talking with people in the field and get them to know me so that when positions come up you are on people’s radars. Many times the position never gets posted."
SYNAPSE: What advice do you have for students interested in biotech startups?
OLLE: To me the most important thing that you can do early on as a scientist in a startup is - it seems very generic, but it’s so true - find a piece of science that you are passionate and excited about. That is so much more important than understanding what a cap table is or what a board member does. All those other things you can learn on the job. If you’ve done your thesis in X and you really understand X, there are very few people in the world that have the types of insights that you have in that area, which basically makes you irreplaceable. And irreplaceable means valuable to a startup. If you are at the forefront of science in an area, that is a very good reason to start a startup. Everything else you can learn in the first couple of years at the company.
I think the biggest mistake you can make is going to the wrong startup. You want to make sure you pick the startup that is going to be the rocket ship and not the startup that has to cross the desert for the next five years, which is 98% of startups. As a scientist you’re in a better position than anyone else to ascertain which are the 2%. You can evaluate the science of the company and decide whether it’s really exciting.
I find often that most people do not do as much homework as they could. In startups, there are a lot of uncertainties. You can’t predict fundraising or the results of a clinical trial, but you can read the papers that the founders wrote, read the patents the company filed, and decide whether you think it’s a piece of crap or whether it’s something real. And that shouldn’t be too difficult for you since that’s essentially what you do all the time as a science student.
This critical evaluation is very important because the difference between picking the rocket ship startup from the other 98% can be dramatic to your career. The difference to your career between going to two big pharmas can be marginal. As long as you have a decent boss, if you do well you’ll have a certain career that goes at a certain speed. The difference between going to Google ten years ago or going to a company that failed is gigantic. It’s the difference between being Sheryl Sandberg or being….who knows. What can you do early on when you don’t know the future? Do the homework and convince yourself that it’s good technology.
SYNAPSE: How did you transition from your PhD and MBA at MIT to where you are now? How did you get your foot in the door?
OLLE: This is not going to be very helpful because it was a very stochastic, unplanned process. I didn’t have a plan. My job search was actually pretty atrocious. I saw a position and just interviewed for it, and luckily got the job. That’s not a great strategy. The reason I got a really nice job has more to do with the fact that the job existed than with what I did in my job search.
Instead, I will tell you what I would do if I were doing my job search today. Early on in my PhD I would have started talking with people in the field and get them to know me so that when positions come up you are on people’s radars. Many times the position never gets posted, which happens often in the venture field.
I did venture creation at PureTech for 9 years and was involved starting companies from scratch, learning every time. At the first company, I learned a lot about IP and project management. At the second company, I learned a bit more about fundraising and managing pharma relationships. I was also involved in several projects that didn’t take off, and these too were good learning experiences. The fourth company, Vedanta, has been the whole shebang - obtaining IP, bringing in co-founders, licensing, dealing with pharmas, fundraising from venture investors, and now growing a team. I guess my time at PureTech has sort of been a PhD in Entrepreneurship.
SYNAPSE: How valuable would you say a postdoc is relative to previous experience in industry?
OLLE: I think the postdoc experience is valuable. When we make offers to PhDs, we account for the years of postdoc and adjust the salary and equity accordingly. Depending on the postdoc they’ve done, it can be just as valuable as an industry job. Industry experience is valuable through, especially if you’re going to be managing people, because from a postdoc there’s no information about how well or how poorly you manage people. In industry, for someone who has been in any management position you can know at least what their management track record is.
SYNAPSE: How can one find work/life balance in the startup world?
OLLE: The quality of life for entrepreneurs is on the harder side. It’s not like working in banking where you just put in tons of hours and generally don’t have a life. You put in a lot of hours, but you are working for yourself in something you are passionate about. It feels very different. But at the same time, a startup is an all-time commitment. It’s not a 9-5 job, punch the card and you’re out. That mentality doesn’t work in startups. Most of the entrepreneurs that I know are pretty obsessed people to different levels of unhealthiness. I spend all of my life on Vedanta. If I go for a run, I think about Vedanta. I go on vacation, it takes me a couple of days to stop thinking about Vedanta. And I think for most entrepreneurs it’s the same. But if you’re doing what you like, it’s bearable.
SYNAPSE: How do you determine who can provide useful advice as part of your Board of Directors?
OLLE: It depends on the stage of the company, so it changes over time.
For an early company that’s getting off the ground, any advice is really useful. As you start getting to the point where you want to do business deals with pharmaceutical companies, you want people who have experience in transactions with pharmaceutical companies. In our case Ben Shapiro, John LaMattina, and David Steinberg fill that gap. They have done multiple deals with multiple pharmaceutical companies so they are able to say “This is a bad deal. This is a good deal.” You also want people who have done drug development, and Shapiro and LaMattina fill that need too. They have developed multiple drugs. They know the ways that you can fail because of manufacturing, regulatory, or clinical trial design.
As the company grows as Vedanta is now, you also want people that can be influential in senior hires. For example, we just brought in Chris Viehbacher, the former CEO of Sanofi, as Chairman of the Board of Directors. People at this level can be a sounding board for the key strategic decisions of the company and help connect you with the right people whether you are looking for hires, investors, or potential pharma partners, because they know everybody in the industry and are very connected.
When you talk about really big companies, additional factors may come into the picture. For instance, a pharma company may have the CEO of Coca-Cola on their board (as a hypothetical example). Why do you want somebody who doesn’t know anything about pharma on a board? As an example, the diagnostic company Theranos has Henry Kissinger on their board, who probably doesn’t know anything about medical diagnostics. But these people are highly connected to influential investors, politicians, lawmakers, and lobbyists.
SYNAPSE: At what point is a biotech startup acquirable to a large pharmaceutical company? Say the company has some IP secured and interesting preliminary results - at what point is that something that pharma will want to acquire as opposed to obtain an exclusive license on the IP, for example?
OLLE: Typically pharmas acquire companies for two reasons: one is that you’ve had a track record of developing products in a space, and they want to have that expertise to enter the space. In that case, they don’t just acquire the IP and the products, they really are acquiring the team too. The other reason is that you’ve developed a product that is very valuable, and the value they place on the rest of the company outside of this product is marginal. In this case, they will buy the company to give the investors in the target company liquidity, but all they really want is the product and they won’t keep the team.
The future of microbiome therapeutics
"Our first product is a cocktail that will hopefully be broadly usable."
SYNAPSE: What are some of the unique aspects of the microbiome field compared to other biotech sectors?
OLLE: The characteristics of microbiome therapeutics are very different than what the industry is used to. It’s not just small molecules or proteins, but live organisms too. Pharma doesn’t have the tools to deal with drugs based on commensal bacteria, so they have to be created from scratch. The way these products are manufactured is also different. Running clinical trials also has some unique aspects because you can use microbiome signatures to select and monitor patients, which is not something pharmaceutical companies have done before.
SYNAPSE: Do you envision the future of microbiome therapeutics having a one-cocktail-for-everyone approach or a variety of personalized cocktails?
OLLE: I don’t think there’s enough knowledge in the field today to answer that confidently. We know from fecal transplantation trials that you can take stool from seemingly any healthy person and use it to treat recurrent C. difficile patients who have very different microbiome profiles. That argues against the need for a personalized medicine approach because if everybody needs something different, why do stool transplants work for 95% of people? At the same time, other therapeutic areas may be a different story. I would like to think that there’s going to be a personalization aspect and it makes some sense that there would be, but I don’t have the data to justify that yet. So what we’re doing for our first product is producing a cocktail that will hopefully be broadly usable, but as we learn more, we might discover that there are opportunities to tailor products to certain populations.
SYNAPSE: How do you anticipate the FDA will regulate microbiome therapeutics?
OLLE: The FDA ultimately cares first and foremost about safety. They approve products based on the efficacy-to-safety risk-benefit ratio, so sometimes they approve things that are very unsafe because they are potentially life-saving. But their first concern, and the main killer of drugs, is safety. If you’re doing something like editing the genome, I can image this sounds scary to a regulator. But what we are doing involves benign organisms that have not been recombinantly altered. If you are healthy, you already have trillions of the organisms that we’re putting in our drugs inside of your gut right now. So how bad can that possibly be for your health? What is the chance we will be surprised by an unpredictable safety signal? I think it is very low.