So, I didn't know that. You have to accept that as your baseline. How has your leadership philosophy evolved over the last 30 years?
You know, I wouldn't say that I have a leadership philosophy. In the early days, in the early years...
You have raised over 1.1 billion capital throughout your career. What advice would you give the first time biotech founders preparing to raise funding?
Buy shoes with very thick soles because you are going to be walking to a lot of...
What advice would you give young physicians or scientists who aspire to become biotech entrepreneurs?
The best advice I ever got, I think that influenced my career, was from a most unlikely source.
Welcome to Life Science Insights podcast. I am your host Sundeep Kanumuri. Today, I'm honored to welcome Dr. Ron Cohen, CEO of Orion Cell Therapies, and a distinguished leader in the biotech industry. With the decades of experience building innovative biotech companies and advancing therapies for patients, Dr. Cohen has made a lasting impact on the life sciences community. Orion Cell Therapies is leading the development of next generation cell therapies for neurodegenerative diseases. Dr. Cohen, thank you for joining us. It's a pleasure to have you on the show.
It's my pleasure, thank you. Thank you.
Can you start by telling us a bit about your background?
Well, I've been in the biotech industry for 40 years. I started professionally as a physician, a doctor of internal medicine, and got into the industry really through complete serendipity. I had had another career path that I was experimenting with, and that was theater of all things. So, after my residency and getting my boards in medicine, I came back to my hometown of New York and I was practicing medicine in a way that gave me time to take acting classes and audition. So, I was doing that and having a wonderful dual life and a couple of friends from medical school called me up one day wanting me to be introduced to two of their friends, a couple of scientists, a married couple of scientists who had developed a tissue engineering technology. This is back in 1986. So, at the time it was quite innovative and forward-looking. They were growing human bone marrow, the complete hematopoietic cell lines in a dish three-dimensionally.
And they wanted a doctor who would do clinical things because they had left NYU where they started and they started a little company that eventually became known as Advanced Tissue Sciences. So, I asked my friends why they were calling me because I had no business background. I knew nothing about tissue engineering and it was a mystery to me.
And they said, "Well, their friends had been very specific. They wanted a doctor who had presentational skills." And they said, "Well, look, you've done theater all your life. You have presentational skills."
And I think I said something like, "You understand that that is the lamest job description in history." And they laughed and I laughed and then they insisted. So, as a favor to them, I went and met with these two scientists. I spent half a day with them going through their technology and so on, which was fascinating. And at the end of it, there's a whole story that goes with it that we don't have time for, but it's colorful. But essentially, they asked me to join them on the spot and actually produced an employment agreement with my name on it that they had prepared and they gave it to me and they said, "We'd like you to sign this." And I did.
And why I did, I don't know to this day. It just, you know, in theater in acting you're taught to be in the moment, to respond in the moment to what you're getting. And in the moment it felt like I should sign and so I did. And I've never looked back. So, I spent six, six and a half years with that company helping to grow it. I was one of the three principals. We hired eventually a legitimate CEO. He had been the general manager of Eli Lilly, Canada. And he got interested in what we were doing, so he came in as CEO. He moved us from New York to San Diego, so I spent six years in San Diego. And that was my mentorship. That was my MBA in effect, learning how to grow a company when most of us really didn't know what we were doing. And so we just responded to the challenges as they came along and I hired people who did know what they were doing, so I learned from them.
And ultimately, you know, I was running clinical trials. We graduated from bone marrow to human dermis and we were growing a three-dimensional human skin dermis that I was running clinical trials for burn victims and it didn't work for burn victims, but it did eventually work for deep diabetic skin ulcers and it got approved. It's still out there. It's a product called Dermagraft.
I then reached a point very much like how I had come in where I felt like I had learned so much. I was so excited about drug development and my roots in medicine were really in neurology. I almost did a neurology residency after my medicine residency and the only reason I didn't was I wanted to go back to New York to try this acting thing and I got waylaid by biotech as I told you. So I never did get back to the residency but I had done all of the rotations in medical school and my residency and my father was a neurologist. So I came by it honestly. And I decided that I wanted to start my own... Well, actually my initial thought was I needed to leave because there was something else I needed to do. And so I did leave. Took me 6 months of negotiating with my two partners to leave. But I didn't know what I was leaving for. I just knew I had to go. That's very much like how I signed on to join to begin with. I didn't know I was going to join and then I did. I took a year and then after a year I was studying and looking at all kinds of things and I finally came up and again there were some colorful stories behind it but we don't have time for those. But I finally came up with an idea for a company that was going to focus on restoring neurological function and starting with spinal cord injury. So I picked the easy one. Not really. I picked one of the hardest ones. And I called the company Acorda. A C O R D A. Acorda Therapeutics.
And to fast forward, I started that company in my second bedroom. The only person I got to work with was my girlfriend, now my wife. It took 5 years before I was able to get a $25 million venture round and meanwhile I bootstrapped with angel investors and grants and a corporate partnership. So, I had raised $8 million over 5 years to keep us going. I got 10 of the world's leading scientists in fields related to nerve regeneration, repair, and so on to work with me as a virtual group. And it was one of the first virtual biotech companies. The office was my second bedroom. And then I rented a little studio apartment that would be a real office in New York City because I'd come back to New York. We grew it from there and ultimately we developed and got approved a drug called Ampyra, dalfampridine, which is now standard of care in multiple sclerosis for improving walking in people with multiple sclerosis.
I will say that it improves, I think, a lot of things because it improves conduction in the demyelinated nerves in MS. And then we eventually got another drug approved, which was an inhalable form of levodopa for people with Parkinson's disease. And there are various reasons why that's very valuable to them. That technology came out of Bob Langer's lab at MIT. So, that was a 30-year journey. We eventually grew to be about 650 people. We were a commercial company, so I learned about commercial issues and I used to go out in the sales field with the sales force all the time and meet the doctors and the other health care professionals. I loved all of it and I especially loved meeting the patients who were impacted by our drugs and their family members because that's what made it all sing to me. That's what made it all worthwhile.
And then unfortunately, we ultimately lost a patent battle against the generics and our patents on Ampyra, which at the time was already a $600 million net sales drug in the US alone. It would have been much more than that by now. It had 9 years to go. But the court overturned our patents and that proved to be a challenge that we survived for about 6 years. But we launched our Parkinson's drug into the pandemic. And that hindered us. So, timing, as I say, is everything. And we could no longer stand up against the accumulated challenges. So, we sold our commercial portfolio to another company. And we went away in the middle of 2020. And then that and more recently, I joined a company called Orion Cell Therapies, also currently in the Parkinson's space, where I am the CEO.
It's a great journey, Dr. Ron. You start with the career journey and your leadership. You have spent more than three decades building biotech companies. Looking back, what inspired you to pursue biotech instead of a traditional medical career?
Well, as I said, I was not inspired so much as hit by lightning when I was introduced to those scientists and on the spot, for no obvious reason, I did a 90-degree turn in my entire career path. And I never looked back because once I got into it, the idea that you could take cutting-edge science and develop it into advances in medicine that would help more patients than I could ever help individually in an individual medical career was intoxicating to me. And so, I've never looked back. It became my life's purpose.
Every entrepreneurial journey includes setbacks. Can you share one defining challenge that ultimately made you a better leader?
Well, where do I start? You know, in biotech, there's a defining challenge about every 30 minutes. So, you have to accept that as your baseline.
Um, you know, if I had to pick, certainly one of the greatest was we had done clinical trials in chronic spinal cord injury and multiple sclerosis for this drug, dalfampridine. And in 2004, we were expecting data from two phase three trials in spinal cord injury and one large phase two trial in MS.
And we had a board that was mostly venture capitalists. And if you included the venture capitalists who had board observer rights, at any given time, we could have 11, literally 11, venture capitalists in the room, in the board meeting. So, that in itself was challenging because you had different layers, right? Different preferences among the venture capitalists, and they're all to some extent jockeying for position because their job is to make their position as valuable as possible.
We tried to go public at the end of 2003, knowing that we had these trials that were going to unblind sometime in April.
So, we went out, our management team went out, we did a 2-week road show. We were in the US for 3 weeks. We were in the US, we went to Europe, and we came back, and we had a deal.
But the deal, it was not a good... It was a tough market at the time, and the deal was at a very much lower valuation than the venture capitalists had been hoping for.
And five of them had a preference right. They had a qualifying offering right, where if our valuation was under 200 million, they could deny... They could actually reject the public offering. And it didn't matter if they were a majority of everyone or not, but they had that right. So, we went out, we came back, and they voted against taking the money.
And it was a defining moment for me as a leader, a defining moment for the company. I never imagined that anyone would refuse money in a biotech company. It's just not a biotech company. The rule is, when they pass the cookies, take the cookies. It doesn't matter if the cookies are smaller than you want. Take the cookies, because you never know, right?
So, I spent a day, you know, on the phone arguing, debating, begging, pleading with the VCs, and I couldn't get it through. So, we did not take the money. This would have been in just late December, early January of 2000.
So, then we wait, and they were saying, "Don't worry, the trials are going to be great." And then everything. And I was saying, "Well, I don't..." So, we unblinded those trials. All of them failed. And now we had a crisis, because we were going to run out of money. We had our main trials all failed, and what do we do as a company?
What ensued was a 9-month odyssey. The first part of which was me sitting in a room and going to our statistician and saying, "I want... The spinal cord trials, I couldn't do anything with, but the MS trial, I looked at it and I could not believe it had failed. It just didn't make sense to me. And so I asked her to give me all 200-plus patients walking outcomes in separate printouts, blinded. And then I took those printouts and based on medical logic, separated them blindly into those that I thought definitely or probably had a drug effect versus those that didn't over a 3-month period. And I gave them back to her. I said, "Go and blind this. Tell me what I did." She came back looking a bit dazed and said, "Well, you picked the people on drug with a nominal p-value of less than 0.001."
And I said, "That sounds like we're onto something." So we spent... My team and I spent 9 months trying to convince the board and the rest of the investors that they should fund a phase 3 trial based on that analysis.
And what we had done was we developed a novel responder analysis, went to the FDA and said, "Will you accept this as a primary outcome measure?" They said, "Yes." And then I gathered our team and we just worked together to figure out how to turn that into a rational clinical trial that we had a lot of confidence in. And then I spent 9 months with my team basically finding our allies on the board and trying to push back on those that were trying to actually dismantle the company at that point, not fund it anymore, and make us go away. So, it was an existential crisis. And what I learned from it, I had many lessons, okay, but first of all, I learned about how the range of thinking among venture capitalists.
From the investors. I learned about how to draw my team together.
And there's nothing like a crisis to help you draw people together, but it was critical not to lose people, right? Because it was a shock to the system, and if I'd lost them, we would have been lost.
And so, I learned ways of motivating them, keeping their eye on the mission, getting them to believe, and then it turned into a cause, where we were just going... we were darned if we were going to let them get the better of us when we knew we had a drug that was going to help a lot of people.
And sure enough, after 9 months, 10 months, I was coming home every night sitting in the garage for maybe an hour plus at a time on my BlackBerry phone talking to one board member or investor after another because I didn't want to bother my family, right? And at the end of 9 months, there was a climactic meeting during JP Morgan in San Francisco in one of the hotels. They had a big boardroom. We had 13 venture capitalists in that room. We came in and made our final pitch. We left the room. They all voted, and as soon as I saw who came out to get us, I knew we had won because it was one of our champions.
Came, and he said, "You won." And we went in, and you know who really won was all of those people with MS and their families and social circles who got this drug because they voted to fund the phase 3 trial and then another phase 3 trial and guess what? The p-values on the primary outcome on those blinded trials, less than 0.001. So, there's another... you know, it was a huge number of lessons in perseverance, in believing in yourself and in what you're doing and in gathering a team that could push through against the obstacles to get to the outcome and to achieve the mission.
Okay. It's a great... It's great to hear all the challenges. Yeah. After such an accomplished career, what motivated you to join Orion Cell Therapies and lead this next chapter?
Well, so I spent about a year and a half after Acorda wrapped up mentoring companies, consulting, I took a board seat. It was all fascinating. I was seeing lots and lots of... I evaluated over 20, I think 24 companies that needed a CEO. And I really wanted a startup. I would have gone for anything interesting even if it wasn't a startup, but I wanted to do it again with everything I've learned. And Orion sang to me because even though it's early stage, they had clinical data. So, they had to my mind a certain amount of proof of concept even though it was not double blind. And this was pluripotent stem cell... induced pluripotent stem cells, iPSCs that they're taken from the patient's own T cells, their own blood cells. We transform them back into pluripotent stem cells and then drive them to become dopaminergic midbrain neurons, the kind that are destroyed in Parkinson's disease in the midbrain. And then they're neurosurgically implanted back into the midbrain into the putamen where they take, they form synapses, and the patient recovers function. And they had already done five, now six people with Parkinson's. They'd already implanted and they had followed a number of them out as long as 12 months. And I was impressed with the improvements I saw. And I thought, number one, it was taking me back in some ways full circle to my biotech roots where I started in 40-year-old tissue engineering, cell engineering therapy. And now with the benefit of all the science and all the progress that had been made in cell therapy, iPSCs in the interim, now was dealing with a much more sophisticated and specific way of restoring function biologically to these people with this horrible disease. So, I was captivated by it and that's why I took the job.
How has your leadership philosophy evolved over the last 30 years?
You know, I wouldn't say that I have a leadership philosophy. In the early days, in the early years, I read leadership books voraciously. I read just any number of leadership books. I got a subscription to a service that actually would condense business books and every month or so you would get another condensed version of... it was like CliffNotes for business.
Business principles, leadership principles, and so on. And what I realized after going through this quite a bit was that I was seeing the same concepts over and over and over. They were just being repackaged with different metaphors, different language, but fundamentally there's a handful of key concepts. And I kept trying to learn, I kept trying to implement them. I would get coaches. I would get advisers to come in as our team grew. And I think the number one thing that I learned was that communication is essential.
