Last week, BioStock talked to Oncology Venture’s new CEO Steve Carchedi about his vision for the company going forward. Today, we pick up the conversation with the company’s chairman, Duncan Moore. How does he use his past experience from companies like Morgan Stanley when such key recruitments are made? Learn more about his strategies and views in the interview below.
The other day BioStock got the opportunity to chat with Carchedi about his new role at Oncology Venture. Read the interview here. Today, we turn our attention to the company’s chairman, Dr. Duncan Moore, M.Phil. and Ph.D., to find out how the choice of a new CEO was made, and much more. Duncan Moore is on the board of several life science companies. Besides Oncology Venture, he also chairs the Board of Directors at Lamellar Bioscience Ltd and is a board member at Forward Pharma A/S and Cycle Pharma Ltd.
Currently Duncan Moore is a partner at East West Capital Partners. Previously, he was a top ranked pharmaceutical analyst at Morgan Stanley from 1991 to 2008 and was a Managing Director from 1997 to 2008 leading the firm’s global healthcare equity research team. In the 1980’s he was also involved in setting up a specialized biotech investment fund managed by the Danish asset manager BankInvest.
Duncan, what led you to set your eyes on Oncology Venture?
– In very broad terms I can describe what triggered my interest in Oncology Venture in this manner:
– Tumour biology is very complex. It is also heterogenous in at least two ways: The origins of a tumour can vary patient to patient and the path that the tumour develops along to evade the body’s defence mechanisms also varies with time. The idea that a drug can treat all patients with a crudely similar disease is therefore very unlikely to be successful.
– Oncology has moved from generalized cell killing drugs which cause a huge amount of collateral damage as well as running the risk of stimulating the development of resistance mechanisms to much more targeted approaches which have improved the outlook for many cancer sufferers. However, compared to many diseases the treatment success rates are still very low.
– A treatment success of 40-60% is considered acceptable and in some cases good. Therefore, there remains a huge gap between what patients can expect from medicines in other areas of diseases such as infection and metabolism compared to oncology.
»OV is now involved in accelerated drug development through patient screening before clinical trial enrollment so that the drug can be targeted to patients who are likely responders or in some cases likely non responders can be excluded. OV’s technology differs from other companies trying to tackle this problem by virtue of the fact that we embrace total complexity as opposed to trying to reduce extraordinary complexity to a few biomarkers« — Duncan Moore, Chairman of the Board of Oncology Venture
– Oncology Venture started out with a big simple idea which is to accept that tumour biology is enormously complex and is probably different from patient to patient. It is also the case that some patients respond extraordinarily well to some cancer medicines and others do not. Presumably the tumour biology of these patients is susceptible to the chosen medication just as it is not in the majority of other patients. OV set about developing a methodology using big data sets to correlate protein expression patterns with observed drug effects. This has been achieved by digitizing messenger RNA expression patterns and correlating these patterns with resistance or sensitivity to a particular drug. This process has been done for most of the commonly used cancer drugs and back tested against existing clinical trial data sets with an impressive predictive capability.
– Our Drug Response Predictor DRP platform has applications in both drug development and ultimately in enabling clinical oncologists to make more informed drug choices in the practice of clinical oncology. OV is now involved in accelerated drug development through patient screening before clinical trial enrollment so that the drug can be targeted to patients who are likely responders or in some cases likely non responders can be excluded.
– OV’s technology differs from other companies trying to tackle this problem by virtue of the fact that we embrace total complexity as opposed to trying to reduce extraordinary complexity to a few biomarkers.
You have several ongoing assignments in the industry. How do you use your networks and past experiences in your job on the company’s board of directors?
– Being active as a board member across several different companies in the life science space is a great strength. It gives me the opportunity to learn how different management teams cope with the challenges that most companies engaged in drug development or diagnostic technologies face at some point in their development. It also puts me in a position so I can assess the information the management teams provide to me, and it enables me to provide CEOs and fellow board member colleagues with some genuine sparring regarding the tough choices such companies often face with regards to picking what projects to double down on, and what project to put on hold.
If we move on to the question of overseeing the management of a company like Oncology Venture. The board recently appointed Steve Carchedi as the new CEO. What did you look for in the search for this position, and what led you to choosing Mr. Carchedi?
– The world’s largest market for cancer treatments is in the US, and the Food and Drug Administration (FDA) in the US is also the single most important stakeholder for any biotech company with a global outlook.
»When we found Steve and he was ready to make a transition in his career, it was obvious that we should try to get him on board, and I am very pleased that he agreed to join the company and the board of directors«
– So, as Oncology Venture has now reached a stage where it should focus on becoming a commercial enterprise it was important to find someone who could bring the right level of experience to the company in commercializing clinical oncology assets in the world’s largest market for our products. This meant that we needed to find someone with the ability to understand and have experience in dealing with the complexities of clinical development, regulatory challenges and with an understanding of how to engage with the marketplace.
– In my view it was not necessary to find someone from the USA but clearly there are many more companies in the USA with a successful track record in achieving what we now need to achieve at OV so it probably was not a surprise that our search resulted in finding someone with Steve’s profile in the USA. In addition we needed to find someone who was up for the challenge of repositioning the company after the previous team had been unable to advance the company from its research origins in the direction that investors and the Board had wanted.
– The list of such people is not very long, so when we found Steve and he was ready to make a transition in his career, it was obvious that we should try to get him on board, and I am very pleased that he agreed to join the company and the board of directors.
»Over the years it has become clear to me that the main risk in a biotechnology company is not the clinical or science risk as is often perceived, it is in my view the management risk. With the limited amount of resources available at most biotechnology companies the consequences of mistakes or errors in strategy and execution are magnified greatly«
You are on the board of many Life science companies. Are you always looking for the same type as Steve? If not, how do you match a prospective CEO with a specific company?
– Biotech companies are always interesting and challenging, because, if successful, they have to go through a number of very different phases. Initially it is often just a handful of people, then the organization typically grows and often someone with a science background is needed as CEO to make qualified decisions regarding what options the company should actively pursue. Then later when there is some level of clinical Proof-of-Concept it becomes ideal to find a CEO with a combination of entrepreneurial and commercial background. If the company grows to a large organization, it becomes important to ensure that the management has the right team regarding building an efficient and focused organization. This may be by changing the CEO or simply by adding to the executive management team.
– Over the years it has become clear to me that the main risk in a biotechnology company is not the clinical or science risk as is often perceived, it is in my view the management risk. With the limited amount of resources available at most biotechnology companies the consequences of mistakes or errors in strategy and execution are magnified greatly.
To what extent does investor politics play a role in these kinds of decisions, and how do you navigate this landscape?
– The role of the Chairman is to oversee the governance of the company and not get involved in operational activities. However, if the company’s development is clearly deviating from what investors expect then the Chairman and his board need to step in and make changes. As a public company it was clear that we were faltering on a number of fronts therefore we decided we needed to make some changes.
You have made some major changes in management of Oncology Venture during this year. What was the purpose of this transformation and how will we see the effect of these organizational changes going forward?
– Oncology Venture has truly extraordinary promise in my view. With a bit of luck and the right management team as well as the required capital we have the potential to make a big difference to the way clinical oncology is practiced. It was increasingly clear that the company needed to transition from a science and research enterprise to a commercial enterprise so that we could gain the necessary traction with the marketplace.
– The overall purpose was to put the company in the best possible position in terms of making decisions driven by a commercial mindset, I think we managed that transition quite well. I say quite well because with the benefit of hindsight I think we should have started the process earlier as corporate change is never easy and it is time consuming
– Steve has a very extensive experience in all areas related to sales and deal-making in oncology from both the perspective of a biotech company as well as a multinational pharmaceutical company. He therefore understands what we are trying to sell as well as the mindset of the potential buyers. Henrik Moltke our new CFO has extensive experience in managing the finances of life science companies, as well as informing investors, both retail investors and institutional investors. We therefore believe that we will be able to access new sources of capital which we will need to advance our company projects.
You are also chairman of the board of several private companies. However, in the case of Oncology Venture the company is public and mainly has retail investors in the shareholders group. How does it impact how you act as a chairman of the company?
– Oncology Venture is a bit unusual in that it has been a public company for some time and has been entirely supported by retail or high net worth investors. This is in marked contrast to many companies in the US that are backed by venture capital or private equity before becoming a public listed company. Oncology venture has had to make progress with much smaller amounts of capital but there has always been a recognition that we would need the sort of capital that can be provided by institutional investors if we were to achieve the full potential of the company’s technology platform.
– In essence this is one of the main reasons we needed to transition from the existing management to the new team. Over the last 18 months it became clear that we were not going to get this institutional support unless we became a much more focused commercial entity. As a shareholder in OV (have invested in multiple rounds) it was important that the Board managed a transition from one level of support to another whilst retaining the support of our founding shareholder group so that they could realise the investment potential which undoubtedly lies within the group.
Finally, you have been involved as a professional investor in biotech since the early years of the industry here in Northern Europe. Over the years the number biotech companies listed on stock exchanges has grown dramatically. What do you look for, when you assess investment opportunities in a space where the number of investment candidates is numerous, and the competitive landscape is vastly different that in the early days of biotech?
– I was trained as a scientist, and to this day I still rely on my insight into biochemistry and biology and either I look for something which I think I understand in-depth and where I see some degree of convincing data that a particular project could work out. I also look for projects that can make a big impact within the area where the company is active. But as I have indicated earlier in this interview no amount of quality science can overcome the need for a strong management team with the skillsets to deal with the challenges that a company is facing at any one particular moment in time.
– Overall, biotech has been through a remarkable and very positive development and the growing number of biotech companies is extremely positive for the outlook for the sector. Since the mid 1970s when every company was set up as a rival to GSK or Pfizer we now have a much broader diversity of business models so that investors can construct portfolios of investments covering a huge range of opportunities.
– It is my firm belief that biotechnology will continue to be the engine of discovery in the life sciences markets. Whilst it is true that the multinationals generate the bulk of the revenues in the pharmaceutical sector it is undoubtedly the case that the origins of most of the break through medicines are from research institutes and biotechnology companies where the life blood is investigating the possible as opposed to backing the probable.
»The era of personalized medicine is increasingly with us but it cannot just be for the privileged few. Technology must also be applied to making breakthrough medicines available to a much broader segment of the world’s population. Just waiting for patent expirations is not an acceptable solution«
– Human healthcare will remain a rewarding activity in every sense of the word. No matter if you are a patient today, a relative of a patient or just a healthy person who has an average risk of developing an unwanted condition later in life, then the flourishing biotech environment, especially in places like Scandinavia where there is a well developed biotechnology ecosystem, is something to encourage and support.
– Despite all of the undoubted positive aspects to the biotechnology sector it is clear that the hurdle for success is getting higher. Data needs to be both compelling and support cost effective treatments. The era of personalized medicine is increasingly with us but it cannot just be for the privileged few. Technology must also be applied to making breakthrough medicines available to a much broader segment of the world’s population. Just waiting for patent expirations is not an acceptable solution.
– I think Oncology Venture is a relevant in this regard: Can the company, backed by real data, make a convincing case that the company will be able to develop treatments and screening systems that are significantly better than what’s available to patients today? That’s the challenge for Oncology Venture.
– One thing that hasn’t changed much is that as an early-stage biotech investor, it is beneficial to be equipped with an above-average level of patience as these companies almost always take longer to mature than you initially hoped. But when it happens, it can be rewarding in many ways. Of course financially, but it is also nice to know that you supported the development of treatments or technologies that ultimately contributed to human healthcare.
The content of BioStock’s news and analyses is independent but the work of BioStock is to a certain degree financed by life science companies. The above article concerns a company from which BioStock has received financing.