Dr. Carl Firth, Chief Executive Officer, ASLAN Pharmaceuticals Pte Ltd
17 January 2012
By Ai San Yip and Horrace OwinoÂ
Photo creative by Larry Lim, Macro Studios
From Left to Right: Carl Firth, Kiran Asarpota andÂ Angie Lee, Sean Wong, Victoria Lovatt andÂ Kingsley Leung.
ASLAN Pharmaceuticals is an â€œAsia-enabledâ€pharmaceutical company headquartered in Singapore that develops novel medicines for global markets. The company licenses preclinical and early clinical compounds from global pharmaceutical companies, focusing on oncology, respiratory and inflammatory diseases, and uses the high quality and efficient development resources available across Asia to progress the drugs through clinical development.
1. Share with us your story and the motivation behind ASLAN Pharmaceuticals.
I started my career in science and that was my passion. I was educated at University of Cambridge with a PhD in Molecular Biology focusing on modelling and simulation of cell signalling pathways. That was at the time when bioinformatics and human genome sequencing were heralded as the next big breakthrough.
After graduation, I joined AstraZeneca as a lead bio-informatician, worked in that role for a few years then developed an interest to get a broader perspective of the pharmaceutical and healthcare industries. I took on positions in the commercial side of the company including business development, acquisitions, licensing and competitive intelligence in the UK. I then got the opportunity to do an Executive MBA in London Business School, as well as a chance to work for AstraZeneca in China for a few months. After my MBA, I was invited back to China for a placement where I ended up looking after our new product portfolio and worked with R&D teams to figure out the studies that were required to bring our products to the Chinese market.
I did that for two and half years then I moved to Singapore and spent a year with responsibility for business development and strategic planning in Asia Pacific. Shortly afterwards I had the opportunity to move into the finance industry, but still related to healthcare, at Bank of America Merrill Lynch as Head of the Asia Healthcare investment banking team.
I gained a deeper understanding of how the public and private markets approached the various industries by working on compelling stories for investors. I experienced firsthand how companies evolved â€“ from raising capital to seeking exits and trade sales to other industry players. In addition, my background gave me a certain advantage in this new role. In banking you do not necessarily need to be an expert in a particular sector. You need to know how the finance industry works; how investors think and how to raise capital. Since I came from a background where I knew the healthcare industry also, I found that clients respected us because we understood their business. We were able to go in and show our clients that we understood what made strategic sense for them. I was able to put together transactions and negotiate better deals.
My time at Bank of America Merrill Lynch reignited my passion to build something. I was inspired by other people (entrepreneurs / founders) who lived their passion and built a business around it. So, at the beginning of 2010, I stepped down and joined some of my former colleagues from AstraZeneca to devise a plan to see how we could use some of the emerging clinical capabilities in Asia to develop drugs more effectively and more efficiently.Â
Historically, drug development actually has not been very successful due to increasing time to market, tougher regulatory hurdles and the increasing R&D costs of developing a new drug. At the same time, there are a few visible trends occurring in Asia. Pharma companies have been outsourcing manufacturing, drug chemistry and drug toxicity studies to Asia for quite a while to the large number of high-quality and reputable CROs and CMOs based around the Asia region. Pharma companies have also progressively conducted an increasing number of large clinical trials (PhaseÂ III and Phase IV) in Asia. But with the emergence of high quality early phase clinical centres, we asked â€œWhat can we do to leverage on these capabilities in global drug development?â€ With that in mind, we started ASLAN Pharma in late 2010.
Our business model is relatively straightforward. We will license compounds from biotechnology and pharmaceutical companies. Typically, we are mainly interested in compounds that have been chosen for clinical trial PhaseÂ I so they have just finished animal testing, or compounds already in PhaseÂ I. We will then design innovative programs and creative studies to take these compounds through PhaseÂ I and PhaseÂ II and demonstrate these compounds are effective in human subjects. Once we can demonstrate a robust proof-of-concept in these studies, we then look to partner with multinational pharmaceutical companies for global PhaseÂ III developments and commercialisation, while retaining rights to certain Asian markets.
So, what is unique about our model? We will be conducting all of the work in Asia. And the data which we deliver at end of PhaseÂ II should enable a global PhaseÂ III trial that can lead to global registration and launch. We are not just doing it â€œin Asia for Asiaâ€. We are using Asia as a platform to conduct and make more efficient the global drug development process â€“ â€œin Asia for Globalâ€.
2. Who funds all these business activities, projects and trial expenditures? Are you tapping on any government funding? Technology assistance grant? Venture Capital?
When we started ASLAN, we seeded the company with money primarily from management, friends and family.
During 2011, we conducted our Series A funding, at the end of which we had USD 12 Million, in a round led by Bioveda Capital, a Singapore-based VC fund, and Sagamore Bioventures, a West coast fund, along with a number of private investors who provide us with good connections and support. As we are in our early rounds of financing, it is important that we know our investors well. They would have to be committed to our vision and extend our reach in terms of relationships and on-going access to capital, novel compounds for our pipeline and capabilities.
Generally, there has been a reduction in the availability of funding from VC firms for the drug development industry. This is particularly true in the United States but interestingly, China is able to access â€˜hotâ€™ money which can be a dilemma as there may be too much money chasing after too few good deals. I believe that the rise of Asia is somewhere in-between the U.S. and China systems. And often, we may be able to access newer sources of capital in Asia.
As drug development is a much more specialised industry, you need investors who are knowledgeable in biotech and drug development. Such investors are difficult to come by in Singapore and this is a real challenge. I think there have been great programmes developed by the government to help build up these resources and capabilities in Singapore, but these sources of funding are only good for getting companies started for the first few years. The growth and potential of these companies will be significantly hindered if they are unable to access suitable capital markets.
Fortunately, ASLAN is well-positioned to move past these challenges. We are looking to raise more capital early this year.
Firth says ASLAN Pharma is not the only company (notably, there are some companies in United States that pursue this unique risk-sharing development model as a virtual organisation). ASLAN is one of the first with such a model, working with different CROs and CMOs based in Asia.
Editorâ€™s notes: we were amazed to find out that ASLAN is a virtual company, with a team of just 12, operating from a two-storey shop house at 10A Bukit Pasoh Road, Singapore.
3. How do you secure capital and venture funding?
You need, of course, a great business, a great team and a great portfolio of drugs. Relationships are also important - you will need to build constructive working relationships with the right people, thus, having worked in the finance industry can be very useful! The fact is that having made the right connections with VC firms, private equity groups, you can use these connections and reach out to more people and build good networks of potential investors who will answer your emails and calls because they know you. Clearly, having a great business model is also critical. You will also have to build collaborative teams and have some experienced players on your team - the track records of the team are also going to make the difference.
When you start to talk to investors, you might not have too much to show other than a business plan and team profiles (these people in your team might not have joined you as yet). Thus, at the first round, it helps if the entrepreneurs / founders can bring some money to the table. For instance, you will need to have some capital (either from founders, friends or family) that can support the business and at least about twelve months of financial runway to cover your start-up expenses. This action will also demonstrate to potential investors that you are truly committed â€“ much more so than a small government grant.
In our case, we had not licensed in our first compounds when we were in Series A financing. But we had a good sense of what our portfolio / pipeline would look like. We went to our investors with a good business plan and term sheets, and they invested in the team and in the model.
4. Tell us about your business plan and the processes you went through.
Many big pharma are facing unprecedented patent expiries; there is less money to fund R&D from operations and earnings. Companies are still developing some good compounds (targets and lead candidates) out of the lab. But it has becoming tough to have enough internal capabilities and resources to take all the compounds through PhaseÂ I and Phase II. However, once the compounds have completed Phase IIb (and generated good datasets and clinical outcomes), big pharma will be happy to invest and conduct PhaseÂ III because the drug is now only three or four years away from the market.
In Phase I, when the compound is still seven to eight years away from launch, you are still looking at a lot of risks and uncertainties plus a heavy sum of investment. It is an increasing challenge for big pharma to move all the compounds through this part of the development process. With PhaseÂ I compounds, most of the pharma companies do not want to in-license too early because they face the exact same high risk and capital to move these compounds into the market. Therefore, biotech and pharma companies often want to share risk on early clinical compounds. At ASLAN, we have our own preferred disease areas we want to work on. When we talk to companies which have strong pre-clinical or PhaseÂ I compounds within these disease areas, we like to see evidence that these compounds have the potential to be either â€œbest-in-classâ€ or â€œfirst-in-classâ€. We will then design an innovative clinical strategy to develop these compounds in Asia.
So why Asia? Increasingly, Asia has some of the highest quality clinical centres in the world, particularly in centres like Singapore, Korea, Australia and Taiwan, with experienced clinical investigators. Many regulators in the Asia region are relatively open to innovative approaches and have a balanced view of risk / benefit in clinical programs, particularly in diseases where there are high levels of unmet need. Compare this to the increasingly conservative regulatory environment in the West. This allows us to have a more open dialogue with the regulators, and often work with shorter regulatory timelines.Â In terms of recruitment rates, you typically see rates between two and five times faster in Asia due to the structure of the healthcare system â€“ large medical centres serving large populations. Costs can also be lower, though this is notÂ really out primary driver. Indeed, the costs of smaller clinical studies may not be much lower, but certainly for much larger studies, and importantly for manufacturing and preclinical animal studies, the costs can be a lot less than the same study in US or EU.
We really like to sit down with our potential partners, with our proposed development strategy and say: â€œThis is how we can develop your compounds in Asiaâ€. Then, we will discuss a fair split of the value based on what each party brings to the table, and put together a transaction to license the compound so itâ€™s fair and equitable to both parties. Typically, we in-license global rights across all indications and geographies, and - in some scenarios - the pharma partners might have a right to buy the compound back at the end of the PhaseÂ II.
Currently, there are an increasing number of quality early-stage compounds available for partnering in the pharma industry. I think there will be more and more companies like ASLAN that bridge this gap in drug development. So far, we are excited to be the worldâ€™s first pan-Asian company. I believe our vision is to build a robust portfolio of innovative compounds in our clinical pipeline. So far we have licensed two compounds and will be looking to announce our third deal (licensed compound) in the next 3 months. Towards the end of this year, we hope to have the strongest portfolio of innovative compounds in Asia (ex-Japan).
We want to stay lean â€“ we are a team of 12 people at the moment - and efficient so we can make quick decisions, move quickly in delivering studies and have minimal overhead. Our team provides the ability and expertise to screen and identify the right compounds, evaluate these compounds, structure deals, and design innovative development strategies, but we then outsource the operations to experienced clinical / preclinical CROs and CMOs. We are responsible forÂ designing the studies, reaching out to experienced principal investigators, and forging partnerships with CROs and CMOs, who will execute these plans.
5. What are the licensing deals with Bristol-Myers Squibb and Array BioPharma?
During July 2011, we licensed ARRY-543 from Array BioPharma of Boulder, Colorado. ASLAN001, as weÂ named this compound, is a pan-HER inhibitor that has completed a number of PhaseÂ I studies already (studied in over 200 patients) for solid tumours in United States. We are putting together the development plan of ASLAN001 to focus on gastric cancer,Â hepatobiliary cancer and other cancer diseases in which there have been few changes in therapies over the last 20 years and where the prognosis is often poor. Gastric cancer is one of the biggest killers in oncology in Asia, so a significant unmet need exists. Our first PhaseÂ II gastric cancer study has started now in Korea, but we will expand to other countries, including Singapore, after this first study completes.
Our second in-licensing deal was with Bristol-Myers Squibb on BMS-777607 (ASLAN002) is a cMET inhibitor, a receptor tyrosine inhibitor for gastric cancer. We also plan to run studies in other tumour types in the future. We licensed this in November 2011 and plan to start a PhaseÂ I study shortly.
When we evaluate theseÂ pre-clinical compounds, we want to be â€œfirst-in-classâ€ or have the potential to be â€œbest-in-classâ€. We are continuing our licensing efforts over the course of 2012 and hope to make another announcement very soon.
6. If there is one word of advice you can give to aspiring technopreneurs who are looking to start their business in the biomedical industry, what would that be?
There is no easy way to set up a company in this space. The challenge is that one individual (scientist) who comes up with an idea will not likely have a full set of skills to execute and build the company. I do not have this. That is why you start building a team of people who complement one another to bring the requisite skills to the table, for example, through your team, partners, investors and advisors.
One of the critical success factors is bringing together that right group of people. And you can easily pull people in, as long as you have a compelling idea and are prepared to recognize the value that these individuals can bring to the business and not get too concerned with what you have to give away at an early stage. I would rather own a little bit of an incredibly success company than a big piece of an unsuccessful one. It is all about the people that surround you and what you may do to bring them onboard.