December 1, 2021 PAO-11-21-CL-15
Philip Gialenios (PG): Kineticos Life Sciences is a management consulting company helping companies develop and implement growth strategies. We work with biotechs that are trying to bring assets to market, whether that means developing a portfolio strategy that includes asset prioritization planning, finding investors to help them fund clinical trials, identifying potential opportunities for out-licensing and partnerships for co-developing those assets, or eventually helping them with commercialization activities.
We also spend a lot of time supporting service providers to those biotechs, including contract research organizations (CROs), contract development and manufacturing organizations (CDMOs), and the analytical labs that help to bring therapeutic assets through clinical development into commercialization. This part of the business is the legacy of the firm, but it’s also the background of most of our senior executives.
The last group we work with is investors, mostly private equity, who are looking at companies they might purchase or researching market areas they might move into. We help them with market opportunity assessments and diligence work.
Kineticos over the years has also invested in different companies and different technologies. This began when some companies were looking for strategy assistance but couldn’t afford Kineticos’ services. We took payment in the form of equity and helped these companies grow as well. Over the past 2 ½ years, Kineticos has made over 10 investments, and those companies have worked closely with our consulting team, which has helped them develop and get their assets both through the regulatory phase and many through to commercial success. The key to our investments has always been our active involvement in the companies we are supporting as consultants and advisors working with their CEOs, boards, and board members.
PG: Kineticos has not only internal senior leadership with extensive experience in the biopharma industry but also a broad group of operating executives that are independent consultants. We can reach out and leverage their long-term experience for any type of project, whether it is focused on cell and gene therapies for oncology, which are two of our centers of excellence, or projects impacting neurodegenerative or rare diseases. We are able to pull the right team together that brings relevant experience to the table.
With the benefit of our investment activities, we have an ongoing dialogue with companies trying to move forward and take the next step, and we are going on that journey with them. In 2021, we have worked on close to two dozen projects, and 60–65% of those projects were related to the cell and gene therapy field. So we are not only able to access historic industry experience and the expertise of a large array of people, we also have amassed day-to-day experience living in the cell and gene therapy environment.
At Kineticos, we are able to speak to customers about selecting the right indication and understanding the best strategy for getting their asset developed and commercialized. We are familiar with the challenges around manufacturing capacity and how we can help CDMOs looking to explore cell and gene therapy manufacturing, because there is an opportunity to fill a real capacity gap. At Kineticos, we bring the experience of living in that environment, because we are tackling the very same issues on a day-to-day basis within the companies we are involved in. We have some of the greatest people in this area that can provide expert guidance on cell and gene therapy development and help our customers establish effective strategies.
The difference at Kineticos is that we have the opportunity to work with and invest in promising cell and gene therapy companies early on and help build and grow them and assist them in getting their products or services to market. Having both the ability to invest and a consulting firm within the same company means we can really help these companies grow by supporting them across the entire spectrum –– from developing effective regulatory and commercialization strategies to raising money and assisting them in running their companies successfully. We can help make sure that these companies are structured in a way that positions them to create products and services with a high likelihood of approval and thus ultimately to help patients in serious need. That’s what it comes down to: there are so many patients with so many needs. Kineticos can help cell and gene therapy companies progress to a point where their therapies can have real and measurable impacts on those patients’ lives.
PG: Cell and gene therapies have been defined as game-changing and growing technology waves that could define the next hugely successful therapeutic sector within the pharmaceutical industry, if things are managed correctly, or they could come to a crashing halt if they aren’t. As a result, it is an extremely exciting field to be involved in, but also one that is very challenging. Only seven products have been approved in this space to date.
There are, however, more than 1,200 candidates in preclinical and clinical stages of development, and that number is growing every day. The FDA expects that by 2025 –– which is not that far away –– 10 to 20 cell and gene therapies will be approved each year. How does that happen? How do they get manufactured? How do they get staged? What are the logistics? How do we get these therapeutics to the patients?
With cell and gene therapies, these are potential treatments that don’t just manage chronic disease long-term and extend life in the face of debilitating issues, but take patients from being incapacitated to having the ability to lead long, fulfilling lives. It is exciting to be part of the life sciences ecosystem bringing these medicines to the market, but they don’t get there by chance. There has to be strategic planning and clear and well-defined processes to accomplish these goals.
Through both the consulting side of the business and potential investments in companies, we are helping to bring these treatments forward. The ultimate goal of our Founder and Chairman of the Board Shailesh Maingi is to be part of curing some type of cancer. He wants to look back knowing that Kineticos had a footprint in the sand that led to curing cancer.
Shailesh Maingi is also the Founder and CEO of Inceptor Bio, a cell and gene therapy company targeting difficult-to-treat cancers, which has given us a more encompassing awareness of what is going on in this ecosystem and what we can bring to bear for those that we are helping through our investment activities and by having our advisors work directly with companies to establish effective growth strategies. We have created our own ecosystem under Kineticos that allows us to have a broader — but also deeper — understanding of what these companies are doing and how we can help them be successful.
PG: I think that capacity is one thing, but technologies that can accelerate the entire drug development and manufacturing process are just as important. For cell and gene therapies, the current process is manual or semi-automated. The yields are very low –– about 30%, which, for a small molecule drug, would lead to a decision to preclude development completely. There are a lot of manufacturing technologies still to be identified that will increase efficiency and productivity, increase yields and thereby lower capacity demand, and reduce development timelines. Solutions will also be developed to address supply chain issues and the ability to transport products at very low temperatures.
At Kineticos, we are constantly talking to people with really good ideas. The challenge is to support their development and then help them to commercialize in a way that will lead to regulatory approval. It isn’t just capacity and throughput; you have to start with the drug development phase and consider the regulatory approval process. All of these aspects need to be considered and addressed when building technologies that will reduce time to market.
Underlying all of these challenges and questions is the need for enough experts that can identify and address these challenges and ultimately deliver sustainable answers. There is a real scarcity of expertise in cell and gene therapy development and manufacturing. A company may decide to fund and build an internal manufacturing facility to ensure capacity and process control, but they need to find people with the right expertise. Smaller companies are challenged to find CDMOs they can trust and that have the right expertise and capabilities.
Scalability is going to be the biggest challenge. It’s great that we’re figuring out how to deliver personalized medicine for individual patients supported by companion diagnostics, but these subsets of patients are small groups. How do you come up with cost-efficient, high-yield processes in manufacturing so you can get more from each run and get the treatments back into more of the right patients? How do we move away from autologous to allogeneic therapies that don’t require HLA matching? How do we move from delivering only blood-based cancer treatments to cell therapies that can effectively tackle the multitude of solid tumor cancers?
The cost of existing cell and gene therapies continues to rise, which is a real concern that will need to be addressed. Everybody wants patients to benefit from these novel treatments, but how should they be paid for, especially if there is no absolute guarantee they are curative? CAR-T cell therapies can cost $370,000 per injection, and the gene therapy Zolgensma, which is curative for spinal muscular atrophy, comes in at more than $2 million. This is a rare disease with a small patient population, and the cost may be justified and balanced against the annual costs for long-term care with untreated patients, but the insurers don’t really know how to manage this yet.
If these treatments are ultimately curative, elimination of long-term management costs will be very beneficial to the overall healthcare cost structure. But it is still the early days for cell and gene therapeutics, and, in the meantime, we need to be creative in how we cover the costs of these products. We work with companies on a regular basis regarding their pricing strategies, thinking ahead about reimbursement and the potential level of physician adoption of their therapies. The last piece is critical, because, without physician acceptance, these therapies do not end up treating patients, and the whole point of this exercise is lost and voided.
PG: The drug development process for a cell therapy or a gene therapy is totally different than a small molecule or even a monoclonal antibody. For many of the targeted indications, no treatment yet exists. There is a lot of pressure on regulatory agencies from patient advocacy groups to accelerate the development and approval processes, because patients will die without these therapies. Clinical studies often start off with phase I/II trials that look at both safety and efficacy and, if the results are positive, the phase III (or pivotal) studies and BLA filings and launch can be accelerated. Rather than seven plus years, it can take just three or four to get a product approved. That acceleration helps with risk management, because companies learn pretty quickly whether their products work.
It is also worth mentioning that a study by McKinsey in 2018 found that the success rate for cell and gene therapies is 11%, compared with about 8% for small molecules and monoclonal antibodies. Of course, there are much larger data sets for small molecules and mAbs than for cell and gene products, but, if that trend continues, that should translate into many more product approvals.
PG: One of the downsides of that high success rate is that the cell and gene therapy field has become very crowded. The biggest issue many small biotechs face is getting attention from investors and getting the right investors to fund their projects all the way from IND to commercial launch. There is a lot of money moving into the market, but there are also a lot of biotechs with promising candidates vying for that money.
The question for those biotechs becomes how to differentiate themselves. How do they demonstrate that they have the right platform and the right asset to move forward and actually be successful? We know this because companies are asking Kineticos these questions and looking for us to help them stand out and be recognized in a crowded space.
In 2020, venture capital funds alone — excluding private equity — invested $24 billion in biotechs. In 2021, just within the first six months, VCs invested $21 billion — almost double what was invested the entire previous year. Not all of that money went into cell and gene therapies, of course. There are so many biotechs developing many types of therapeutics, as well as diagnostics. And then there are service companies: manufacturers, laboratories, clinical research companies, logistics firms. There are countless companies across the development cycle looking for funding. Kineticos helps many of these companies build and promote strategies that ultimately attract critical investment dollars.
Focusing on some of the most dynamic areas of life sciences, specifically oncology and cell & gene therapy, Kineticos Life Sciences has built an incredible team of consultants, industry leaders and operating experts who bring tremendous experience to the close collaborations they build with their clients. Companies they work with benefit from having these people as a seamless extension of their organization. Kineticos arguably has the strongest network of SMEs and KOLs in both oncology and the relatively small universe of cell & gene therapy pioneers.
Philip Gialenios brings over 30 years of life science, biotech, and pharmaceutical experience to Kineticos, having held numerous R&D and commercial roles throughout his career. As Kinetico’s Chief Operating Officer, he is responsible for the strategic leadership of all business development, marketing, and sales efforts and ensuring the organization’s commercial success. Prior to Kineticos, Philip worked for three years as an independent consultant, taking on interim commercial leadership roles at mid-size biopharma and healthcare companies addressing commercial strategy, operational alignment and optimization, and sales and marketing execution. His prior experience includes 27 years across executive commercial, sales and marketing leadership, and scientific roles at Novo Nordisk Pharmaceuticals, Sigma-Aldrich Corp, Charles Rivers Labs, and the United States EPA. Philip earned his BS degree in Zoology with a concentration in Medical Sciences from North Carolina State University.