Biotech Course Correction With Treehill Partners' Ali Pashazadeh

At Treehill , allie and his team solve problems , sometimes after the problem like a bad readout , for example , has unexpectedly raised its head , but mostly they solve problems before the symptoms of those problems even appear , when only a sage soothsayer who's seen it coming before is qualified to course correct . I'm Matt Piller .

This is the Business of Biotech , and on today's show we're talking obviation , preventing badness by removing its Source , with Treehill Partners , ali Pashazadeh . Ali , it's great to see you again . Thank you very much for having me . I'm thrilled to have you .

I had the benefit of a conversation with Ali , I don't know a week , 10 days ago , and since then I've been pretty enthusiastic about getting this podcast recording done because he's got a .

I'm not going to set the precedent or set the bar too high here for you , allie , but he's got a pretty no holds barred approach to his take on what's right and what's wrong in biotech right now . But I want to start . I mentioned in my little rambling prologue there that you're a surgeon , so that's where I want to start .

Like these background stories are always so fascinating to me . What does a surgeon , what motivates I should say , a surgeon who's , you know , trained in surgery , to earn the MBA get into investment banking , initially , I think , with Goldman Sachs ? What was the story back then ? What was going on in your head ?

I moved into life sciences in the late 80s , early 90s because one of our family friends died of breast cancer and I had this naive vision of curing breast cancer and going down that route naive vision of curing breast cancer and going down that route . I loved biology .

I loved how the human body thought , how it had multiple systems , redundancies and pathways , which then led me down the route of either going to marine biology or going into human biology . And I was talked out of marine biology into human biology and I loved my medical school years of understanding how the body functioned .

So the first step is understanding normality , uh , how the body functions and and and how the body has multiple systems , and and and and and fail safe loops and and ways of course correcting uh . And then you move on to pathology and then , the minute you start moving into pathology , uh , you end up as essentially adding in two camps . Camp one is um .

As a surgeon , you know , do you like treating chronic conditions or do you like actually um trying to um operate on a patient , for example , or remove a tumor and then within that , you end up in , in , in a pathway where either you create the hole or you essentially fill the hole .

So do you enjoy taking the tumor out or do you actually try to restore normality ? And within that , I spent a lot of time as a plastic and reconstructive surgery , always enjoyed the acute care setting . So , you know , trained as a surgeon . Now , on a personal note , you might say well , how did you get into that in the first place ?

And a lot of it is down to people saying oh , you're not bright enough to get into medicine . Then you get into medicine , they go . Oh , you're bright enough to get into surgery , then they go you're really not really a plastic surgery person , you really shouldn't do it . So when you look at a two-dimensional human being , really shouldn't do it .

So , so on on . When you look at a two-dimensional human being , it looks like someone who is striving to achieve . But a lot of us are driven by usually negative experiences where people say , hmm , you think you could be one of the top x , y and z and you think , you know , I actually can do that .

And then within you know surgery , I , I've never wanted to leave medicine . I was never looking to move out of medicine , but I was always intrigued by how relatively pedestrian the rate of evolution of how we treat patients are .

So , moving into medicine in 1989 and now we're sitting at 2024 , the treatment of appendicitis is exactly the same treatment of appendicitis as it was at the beginning , that the diagnosis of meningitis is exactly the same as it was 30 years ago , for example .

So within that , yes , there's been huge advances in diagnostics , technology et cetera , but there have been significant areas where things haven't improved .

So as I was intrigued by understanding the kind of how drugs were developed , I realized that actually the approach there probably was to marry a medical or scientific background with an investment banking background to understand how companies function , how drugs are developed .

And you know , I was lucky enough to get a place at London Business School that taught me how to learn a new language of business . So you go from seeing patients and pathologies to spreadsheets and PowerPoints .

And the day before I went to London Business School , I remember doing my monthly expenses and I opened up a spreadsheet and I wrote down the numbers into each cell and then , on a calculator , I wrote down the numbers into each cell and then on a calculator . I then added those numbers up .

So the day before I started in medical uh , london business school , I didn't know how to use Excel .

So all of a sudden you're now in a in in in a different language , um , and then within that you realize in a Goldman uh , that you know there are multiple incredibly good companies , incredibly good drug developers , that are doing exactly the same as doctors , which is , trying to find new therapies and advancing therapies for patients .

And within that , I was a Goldman lucky enough to get into the Goldman healthcare team and stayed there for a number of years and worked with incredibly good people , learned from them as to how drug development companies function , how they build a pipeline and how those pipelines move initially from smaller companies a lot of times to larger companies and what really

drives the market . And that career then moved on to UBS . And then I was fortunate enough to join Blackstone and start seeing more of the investing side of things .

And in 2014 , one of the team at Blackstone and I formed a trio of partners and tried to take investment banking and advisory a couple of steps forward in terms of what we thought clients needed in order to fuse a medical and scientific lens on corporate transactions .

Um , so you're now living on your wits and your horsepower , but actually you know you've never used excel , you haven't used powerpoint , you don't know what a font is . And then why would you ? Because that's not what we , what we needed to survive in in in medicine .

And then within you know it's 2001 , is is when the milk round along the business school , the bank , started coming around and I realized that I had zero chance of anybody hiring me and there was zero reason why they should hire me .

So what I then then did , at the age of kind of mid to late 20s , was to break down my capabilities into components that were transferable . So a person who can stand in an acute care setting , can make a decision , can work off incomplete information when in banking does that sit ?

You know someone who has integrity and you know , ask an honest question and will give , give you an honest answer where in banking would that fit without fitting with the consulting , without fitting in reverse of banking , and where would the culture be ?

So what I did is I spent probably six months , uh , working with people from goldman , with with beryl lynch , etc . Trying to understand what they could possibly find in me . That was interesting and out of the 700 people that learned the business school , I think I probably was the last person anybody would have expected to get an internship at Goldman .

And then when I got the internship , I know there was a lot of doubters that I could then convert that into a full-time offer . Part of that is a desire and being fortunate so anybody who gets somewhere can't always say that they got their base of merit and part of it was I needed the money to finish my business school degree .

I wasn't earning enough as a doctor to be able to fund all of London Business School , so I needed the internship and I needed the sign-on bonus to be able to do london , all of london business school . So I needed the internship and I needed the sign-on bonus to to be able to do the second year of business school .

So if you look at any story on again on the cv and then you look behind the story . Usually it comes from people who um couldn't afford to to fail and had to succeed . Now were there doubters ? There were absolutely doubters .

And I always think that you take the negativity of any doubters of can a doctor transfer to banking , and you take all that negativity and you kind of put it into a tight ball and you use that as your source of driver to prove people wrong and then hopefully over time you mentor other doctors and other healthcare professionals to get into you know , kind of

learn from the mistakes . But one thing that is absolutely paramount in this you will not succeed on your own .

There is no way in the world Ali could have made that journey without having friends and colleagues and who are now personal friends 20 years later , hold my hand and walk me down those corridors and part of the culture that Goldman had , you know , in my experience , was those people also had their hands held and walked down the corridors and 20 years on I do

that for the next generation . So part of it is one's own drive and one's own ability and horsepower and intelligence and drive etc . But a significant part of it is that people within that organization reaching over the table and saying , look , I'll help you get in .

I think there's a thread of commonality in terms of that sort of inherent , innate like personality that leads them and enables them to get to the business side right , to get to biotech or biopharmaceutical leadership as opposed to scientific , you know , purely scientific leadership . But everyone answers that question a different way .

So , aside from sort of that support structure that you mentioned , you know the people around you to follow the lead , like , what do you think is inherent within Ali Peshazadeh that I guess enables , right enables from within , that transition from I am a surgeon to the business side , which is a completely different language .

So the first one is you need to understand yourself and what drives you .

The second thing is I think that there is a humility that one needs to have as a clinician , which is when a patient comes in , you have a hypothesis of what that patient has and a humility to know that you may be wrong and actually you need to take a step back and learn and understand that the data that you receive from that patient or the x-ray or the

CT or the MRI , you know , may completely change the hypothesis you had . So I think , as you're transitioning from medicine to banking or anything else , it's a humility to know that you may be the best microsurgeon in the country . One minute . The next day you need a calculator to kind of add up Excel , because you didn't know there was an add function .

So the first thing is the humility point . Second thing is I think there needs to be to some extent , a purity in what you're trying to achieve . I don't see myself as a doctor turned investment banker or venture capital executive . I stepped in in 1989 into medical school to learn about human biology and to help patients .

One tool that I used was my medical knowledge and expertise , and I still do that with patients . The other tool is an investment banking tool . My driver is to help companies get products onto the market . Make as few mistakes as they can and the products that should get on the market use our experience to help them get on the market .

The driver isn't fees , titles or any sort of limelight . The objective here needs to be , if you're doing it in my mind , is you genuinely have a desire to help patients , and that desire hasn't gone away . When I step into my medical gown , it's a desire to help patients individually .

When this morning we had a two-hour conversation with a company that is veering off in the wrong direction in a breast cancer treatment , they were saying look , we've worked in breast cancer for 35 years . This is how we think you can get your interesting therapy to patients . This is how you can go from A to Z , and this is how you can navigate it .

You're not helping patient by patient , but you are helping a group of patients . I think that's a commonality between the two worlds .

Because when you're a pilot you have a right , you're in a privileged seat , you have limited standard deviation for errors and your errors have material consequences .

The minute you stop being a pilot and you start becoming a lecturer about how to fly , you have a lifespan of three to five years before the next generation say excuse me , sir , when was the last time you flew ? How do you know what it's like to fly ?

So when I sit talking to people and they're talking to me about breast cancer treatment , I can look back a month and say last fungating breast cancer I saw in an 84-year-old was a month ago . So the same fungating breast cancer that I saw in 1996 , I still see in 2024 .

So we can talk about immunotherapy , we can talk about targeted you know therapies and we can talk about high fluting stuff , but this 84 year old did not present until she had a fungating tumor . So is hormonal breast cancer still relevant to us ? Is early diagnosis and patient access still relevant to us . This is relevant in 2024 , as it was in 1995 and 96 .

So , in that context , I think , unless you remain relevant in 2024 , as it was in 1995 or 96 . So in that context , I think , unless you remain relevant and current as a doctor , you start becoming a banker who puts on a rose-tinted glasses and says , well , and I was real-time , living the hypothesis of what it's like to treat patients .

And I think , being current and relevant and it is difficult because I go through the same revalidation process every year as any other clinician and I'm held to the same standards as any other clinician . I'm held to the same standards as any other clinician .

But what that does do is , again it goes back to the humility , because you step into an emergency room context or a surgical theater and you're surrounded by people who are incredibly intelligent , incredibly bright , incredibly dedicated and any sort of arrogance one might have very quickly boils down to decision by decision making for patients .

So I think keeping yourself current is incredibly relevant to being a good banker or being a good consultant .

So how do they continue being smart and continue to learn and advance themselves ? What have you got which no one else has ? And the answer was okay . I've got a medical background . What have you got which no one else has ? And the answer was okay .

I've got a medical background , a scientific background , and I can talk to healthcare companies and understand what they do from a molecular perspective and mechanistic perspective , and nobody else in the team does so . Then , when I spoke to the head of the healthcare team , he said you don't know how to be a banker , I don't know how to be a doctor .

Why don't you come into my team and I'll teach you what we do and you provide your input and we as a team will be a stronger team at Goldman than compared to Morgan Stanley , ejp , morgan , bank of America and as I gained more and more exposure to high quality companies like AstraZeneca and GSK and the high quality companies , I realized that a significant

proportion of my colleagues were very , very smart , very , very capable far more capable than I was but they didn't understand the subject matter . They didn't know the difference between a you know . They couldn't quantify how relevant a treatment was going to be , they couldn't quantify the materiality of certain decisions being made .

And I thought to myself at that point I can be quite impactful to my team within Goldman by being able to turn around and say look out of the 50 things that we've heard , these are the one or two bullet points that will make this transaction more likely to happen or less likely to happen .

And over time , as the CEOs of those biotechs started becoming friends and colleagues etc . I realized that actually there are a number of universes .

One is you're sitting within a large organization like a GST or AstraZeneca , and then you've got a slew of smaller companies running on a shoestring , believing that they have technology or products that can change the market , and those companies are in greater need of support and help and input and guidance than , obviously , the GSK .

So I started gravitating towards how can I work not only with the larger players , but also how could my background possibly be of help to these smaller companies that have great potential ?

You know you had all that exposure and you began to identify probably I'm assuming I'm not going to put words in your mouth , you tell me where I'm wrong but you began to identify probably some common trends around inflection points gone awry or pivot points gone awry , or decisions that perhaps were made or not made that had consequences right .

So fast forward to Blackstone and the launch of Treehill Partners . Coming out of Blackstone , you formed up this mission at Treehill to work in the bi , assuming those white spaces are , uh , those areas where there's criticality of decision making or lack lack of decision making . Uh , that that you recognize . You know what the right decision or solution might be .

Anybody who sits here and says I can see a white space and no one else can I can do things better than you can is someone that shouldn't be on a podcast and shouldn't be talking to too many human beings so you regret my use of the term soothsayer in my rambling so anybody who says so we got to the right point , but we didn't get to the right point

because of the deliberate it wasn't a deliberate conscious , anti-grade pathway to getting to the right point . Because anybody who says that I knew I was going to sit here and I knew I was going to work with companies and prevent them making mistakes and help them get out of difficulty is someone who is drinking their own Kool-Aid .

So I'm hopefully a lot more honest and transparent that at Goldman . If you'd asked me what is the probability of success for a phase three product ? Let's say 50% . What is the probability of success for a phase two ? I'd say 25% . I took that as gospel .

I had always assumed that the 50% that failed failed because the molecule didn't perform and didn't have the results needed to move forward .

As I moved on to Blackstone , for example , I started seeing there is a trend of a lot of companies that are being given advice , including by us , where we're saying to them you want to achieve A or B , so let's use the Olympics as an example . You want to get to the Olympics in four years' time in LA .

Your chances of getting to the Olympics are 2% , 5% , 10% , 20% , 100% , whatever it is , and this is what you need to do to get to that point . What we found is those companies receive that information and go but what do you want me to do with it ? I've never done it before . I don't have the capabilities entirely to do it .

Can you roll up your sleeve and actually work with me to help me get to that point ? So stop being the lecturer , but actually roll up your sleeves and work with us . So when we formed trio partners in 20 uh 2014 , what we did is we took um me with a scientific and medical background . We took max with a , a thoroughbred pedigree , investment banking .

We took the former head of bdl at astrazeneca , former head of m&a at allagan , and put four people into the team where we had a lens . Everyone had a scientific and or medical background . You know , astrazeneca colleague had , you know , 25 , 30 years worth of experience of large cap pharma .

Allegan had , you know , 20 years worth of experience of how specialty pharma does it . And between us , we thought that we could help companies more than a Goldman banker , for example , or different things , because we had operational and scientific and banking backgrounds , in addition to a solid , immersive banking offering .

When we then realized that it's very difficult to get someone to hire Treehill when there is hundreds of other investment banks out there sorry , investment banking boutiques . There are lots of very good investment banks and we had a network and we were able to generate revenue .

But I realized very quickly or we realized as a team we need to have an offering which really can't be replicated . So what we did is same as medicine . If you're trying to build a reputation as a doctor , you find the patient that no one else wants to operate on , nobody else wants to see .

You're in a resuscitation room where you've got the patients who are five minutes away from death . That's how you build your reputation , which is exactly what I did in banking sorry , in medicine . I was the one who was in the resuscitation room .

I was the one difficult operating on the most difficult , sickest patients , because that's how I wanted to build my reputation . So in version one of treehill , we set up a , a boutique , and we said look , this , this would be great . We made some mandates , we made some money and I thought we're not going to grow from this .

This is a highly competitive market with lots of very good competitors . What do people not want to do ? They didn't want to deal with difficult companies and difficult situations where the trial had read out .

So we built a restructuring franchise and over the past decade or so , we've done over 100 corporate turnarounds , companies that have had share price declines of 50 , 60 , 70% .

Where you step in as a parachuted and as a team where you say , okay , this is how you deal with your debt holders , this is how you deal with the equity holders , this is the PR you go out with , this is the IR you go out with , this is how you go back to your PI when it comes to the study .

This is the non-deal roadshow you put in place , this is how we change the website . And , because we've done it over 100 times , we get parachuted into very difficult situations and within a week we're part of the fabric of that company , because we've seen it when it goes wrong . We've seen it repeatedly . Did we want to go into that situation ?

Honestly , no , that's not where we started out to , but we realized that no advisory firm was in that position . Then there's a second . So that's version two of Treehill .

Version three was we were seeing 100 companies out of , just say , 1,000 who had been in difficult situations and we thought to ourselves okay , this is the unfortunate 50% of companies that fail in phase three , for example . So going back to Goldman , at Goldman we were saying I'm not talking about Goldman , I'm talking about Ali within Goldman .

At Goldman we'd say 50% of drugs fail because it's the drug's fault . Now roll the clock forward 15 , 20 years . You now start seeing a pattern of companies that have failed and you ask yourself the question maybe it's not the molecule , maybe it's the way we've developed that molecule which has led to the failure .

Maybe it's a clinical trial design that has led to that failure ? And we were fortunate enough to work with a number of the global CROs . So now you're seeing the sausage being made and we realized and this is an aha moment that came in 20 years after kind of going into banking .

Where you go , I can see why you made a decision in your phase 2a which I , as a banker , would have seen five or six years down the road . That would have led you down the wrong pathway . So step one is um , learn to be a banker . Step two is once it's gone wrong , how do you , how do you try and fix it ?

Step three is what decision led to that mistake ? So if you look at treehill today , we can now sit with a company and we can say , okay , it's a healthy company and the company wants you to develop a product in a certain indication . You're now running the binomial tree in an anti-grade manner .

You need to do this , this , this , and you will get the target product profile that you desire .

That target product profile will need to have certain characteristics , which means that by the time of launch which might be five years , six years , eight years the competitive landscape means that target product profile is competitive and companies will say , okay , that's great , so you'll work with me on TPP delineation at the time of launch .

Then they say what is my clinical development pathway , so what is my CDP ? That then leads me to that TPP and we can work with companies in an anti-grade manner and say , okay , you want to go into breast , you want to go into pancreatic , you want to go into whatever the indicators of ophthalmology or other indications .

These are the steps that you need to take between here and time of launch to have a commercially relevant product now . Once you have a commercially relevant product , now you have a fundable , transactable company , which means that you'll be five percent of the companies that succeed .

So the aha moment here is looking at oneself and saying we shouldn't have 50 failure in phase three . We shouldn't blame the molecule . What if phase three , we shouldn't blame the molecule ? What if we stop blaming the molecule for a second and we blamed ourselves ? And , by the way , it's going back to medicine .

In medicine , if you have a mistake or you have a patient or you operate on the patient with a complication , first thing you do is you blame yourself . What did I miss ? What mistakes did I make ? The humility to go back and say , look , maybe I got it wrong before you blame the patient .

In drug development , I think up to this point there has been almost a get out of jail card , which is not 50% fail . And I think what we try to do at Seagull now is work with companies and say how can we help you develop drugs better ?

Now is work with companies and say how can we help you develop drugs better , how can we help you prevent making those mistakes and how does that lead to you raising money ? No-transcript .

Like you're backfilling the analysis .

Companies will do excellent work , consultants will do excellent work , bankers will do excellent work . You can't improve from a node node decision making in the binomial tree . Where the mistakes are made is looking at beyond one or two nodes and if you look at node one , for example , and node 10 .

So when you work with a company , in the first stages they need a good scientific team who understand the science . Then you start moving into a group that needs a medicinal background and drug ability background and a CMC background .

Then you move into a team that actually needs a early drug development background and capabilities and then you move into a team that needs more of a later state drug development capabilities and commercial focused . Those teams are not the same individuals .

So where we see mistakes being made is where people don't realize that their time frame of working on that drug has come to an end and they need to bring other capabilities in on board . So it's . And when decisions are made , decisions are made on incomplete and inaccurate information .

So people , for example , get a great drug , they get it through tox , they get it through drug ability , they have drug stability . And then you say to them so phase two , a face where we see the most mistakes how did you choose your indication ? Well , I was at a conference and there was a kol or a pi said really interested in pancreatic .

Okay , so so you've done all this work for 10 years . Now got to industry indication selection . Um , did you look at other indications ? Did you look at breast ? Did you look at glioblastoma ? Did you look at pediatric ? You know , did you look at ovarian ? Did you ? What did you look at ? None of this . Pi told me they're really interested .

Now , when that that conversation has been had a couple of times , boards , investors , management then are almost wedded to that decision . So when we come in as treating help , we say , okay , you've chosen indication a or indication b . Have you thought about taking a step back in the note ?

So to go back one step in the note and say what if we chose a different indication ? Because if you look at that in the other indication , your mechanisms of action could also work in endometrial , for example . Your indication could also work in glioblastoma and your drug could be more attractive in that indication . That's an easier pathway to develop .

Companies take a take a step , whether it's sorry , they take a pause where they say I've made this decision , but was this the right decision to make ? Because admitting that that might be a suboptimal decision is not within our dna . So that again goes back to the humility point . So you know , as a scientist , you're always trying to disprove the null hypothesis .

You're always going back and saying was I right ? Was I right ? Was I right ? Was I right ? Was I right ? Do I need to change anything ?

But when you start moving to drug development and this is the aha moment as we're working with the CROs we realized that when companies were approaching us and saying , look , ali and the team , we're thinking of going into indication A or B or C , we could work with them and say , look , why don't we work with you and work through which of those indications make

sense ? Incredible receptivity . So give you some statistics in terms of how widespread we think this is . We looked at over 1,200 studies and that's now increased to 1,400 studies Only 5% of the studies that we looked at were developed with a commercially targeted TPP at the time of launch .

So only 5% of people have put the GPS coordinates into knowing where they were going at the beginning . 85% of studies had one or two material flaws . 60% of studies , it was very difficult to understand what the clinical utility of those studies were . So he's like why are you doing this study ? Oh , the FDA .

I like it , but the FDA or the EMRA isn't going to tell you not to do a study . They're there for patient safety . They're not there for efficacy or commercial relevance . So when you applied an investor's lens to it as an investor , I don't need you to do that study .

You either do a registrational study or you do a de-risking study , but you're doing a study just to generate data . So we found that there is a huge white space and there's receptivity as we work with CROs . There's receptivity as we work with biotechs .

As we work with biotechs because , one , you're preventing people making mistakes , because you're testing the robustness of decisions made . Two , we can reduce the cost of a study by about 30% and we've done it relatively consistently over the past 18 months . We've reduced the timeline of drug development by eight to nine months .

I think we've reduced the error rate but you never know the error rate until errors are made . But we've picked up quite a lot of things that could have been improved . The change order , as in when you start a clinical study , the industry change order is 18% .

So when Ali starts a clinical study and I say it's going to be 100 million , statistically I'm going to be spending 118 million on that study . Our change order at this point is low , single digit . So again , if you go back to why did I at the beginning of this discussion , why did I move into medicine ? Why did I move into into into banking ?

We moved in , or I moved in because I wanted to get better drugs to patients in a more effective , efficient way , and for that reason I think I'm now through some deliberate actions and some aha moments that I hadn't expected .

I think we're now , as Treehill , in a position where we can work with companies and truly advise them how to get their products to patients in the most efficient , cost-efficient and time-efficient manner .

And if you are a a scientist , you're not able to sorry most of the scientists that we know . Um , let me back up for a second and I'll be maybe a little bit more brutal . This you have a chief scientific officer , typically , and typically very capable . They do the scientific work .

Then they bring a chief medical officer on board because they go I need a chief scientific officer . Typically , and typically they're very capable , they do the scientific work . Then they bring a chief medical officer on board because they go , I need a chief medical officer who's going to help me on indication selection .

Now , what we've seen over the past 20 years consistently is if you hire yourself a glioblastoma chief medical officer and you look at the past three studies , they ran and those studies , the glioblastoma studies , for example , surprise , surprise , which study do you think they're going to run for your drug ?

Yeah , and a oncology cmo is a very different beast to a , um , an ophthalmology cmo . So , as you're going through things , your and we said , we said you know when we work with companies and we're telling them look , your CMO selection is the most crucial recruitment event in your company's history because that CMO will decide which pathway you go down .

That CMO will work with the organization and external advisors and CROs to set up a clinical study That'll take them a year or two . That study will run for a year or two . So four or five years down the road you'll realize whether you made the right decision , right clinical study design and the right outcome .

If you get it wrong , you've just made a five-year mistake and then you've got to go back to the beginning of it . So I think what happens is people look at it in two dimensions . They say I've got a drug that can go for such and such an indication . What have people done before ? Oh , people have this mechanism of action . They've got into AMD .

They go to a couple of conferences , they hire some good consultants . Everyone goes . Yeah , amd makes perfect sense . Conferences they hire some good consultants and everyone goes . Yeah , amd makes perfect sense . I don't think there is as much robustness in the decision making process as there could be .

So if we look at a couple of products in um in ticada , they went down the breast cancer route . They they get picked up by the roy vance of the world and go into a completely separate indication . We looked at those products and we said how did you , as a large , incredibly respectable organization , go down that route ?

Well , that team thought it was the right thing to do . When they generated the data , they now handed it to a new team . The two teams hadn't talked to each other . Yeah , so we see that quite often . So I think it's again .

If you're looking at a drug development , you need a team that is able to have a conversation about a molecule at the same time that that , in the same room , someone who's actually launched a product . And yes , they're 10 to 15 years away from each other .

But what you do today and tomorrow , the next day , needs to be vetted by the commercial person or be relevant to the commercial person . Otherwise you're developing a drug like a baton . You know . You need to know where you're going .

I guess the the chronology and cadence of hiring decisions in specific leadership disciplines on the continuum right Like when do we hire a CSO , when do we hire a chief medical officer , when do we hire a chief regulatory officer , when do we hire a chief commercialization officer and it doesn't sound formulaic , it doesn't sound like there's a you know , a formulaic

approach to doing that um , but it sounds like those decisions are crucial to the , the strategy that you're discussing , right like does treehill um advise on on that sort of that hr element ?

So it's not just a three-year effort and the objective there is optimizing your drug development , as the CEDO kind of says , the label says , and the objective there is exactly as I said before 30% reduction in cost of development . 9 to 12 months reduction in timeline . Reduction in cost of development nine to 12 months reduction in timeline .

Taking your change order from your industry 18% down to low single digits and in each of those situations , being far more robust in the way that TPP is developed and commercially relevant and putting a robust team in place that not only puts the CDP in place but oversees the CDP throughout the development of the cycle .

And we've been working with Fosun Pharma USA , the large Chinese company . It was one of the first companies to adopt this and that has been instrumental in identifying interesting molecules that can be developed for the US market using the CDO model . So on that one .

If we need to bring a CMO for a specific indication , we will help identify that person , help bring that person to work with that person to put the CTP in place .

You know , acme Biotech is my biotech company and we're developing around molecule and I've got a team of people who are , you know , qualified to help me move from node to node to node in the traditional node to node to node sense , right , and maybe I've got , you know , the benefit of some foresight . You know , maybe I can look six nodes down . That's good .

I can look six nodes down the line I might be able to implement that internally , building into my culture , say , hey , this is how you know the , the roadmaps here .

But there are outside , you know , maybe traditional uh institutions in in the biotech landscape , around the biotech landscape , that have influence , uh , that , that , um , that exert some pressure right on on my company and hundreds and hundreds of others .

They're investors perhaps , right , like I need to show some stuff , I need to show some movement on these , you know , on the trajectory from node to node to node , to continue to attract investment dollars . Maybe they're the regulatory agencies FDA and EMA who are like , in order for me to move down the regulatory continuum .

I've got to show in the traditional paradigm some progress . How do I deal with those ? Maybe it's my board ? I got a board that comes from the traditional biotech space or biopharmaceutical space , and their expectations are based on just the way we've always done it .

So I guess the question if I'm trying to be concise about it is how do I deal with the external influences that may kind of stand in the way of the efficiency that you're describing right , just based on history and tradition , you're completely correct .

If you ask us an honest question , we'll give you an honest answer that is independent of politics , independent of P&L , you know for us , and independent of benefit something that would benefit Treehill , for example . So we will tell you exactly what we think in an unfiltered way .

We don't get involved in company politics and we step in and say , look , this is what , this is what we've seen , this is what we think you should do . What we find is , um , certain companies are so embroiled in the I always call it molecule in a context , that program or that molecule is in the context .

I'd say , 50 of the time we can help that program if we can solve the context , but in 50 of the times we can't solve the context .

So you've got an angry board , you've got an angry shareholder , you've got legal constraints , you've got all sorts of factors where you know if you have an honest , you know , sit down session where you roll your sleeves up and say , look , guys , I know this is what you're trying to achieve . That's not how the world is played out . This is what we have .

This is how we can all win . As long as we're going for a win-win , which we think we can guide you through , everybody needs to come to the table with a compromise of some sort . What we find is , when people are reasonable , you can almost always find that compromise . So I'll give you an example of this US company .

Phase 3 Asset has spent $110 million to recruit 12 patients over a three-year period . This trial was not recruiting and we had a conversation with the management and said to them you need to kill your phase three . This just isn't recruiting . The way it was set up , this trial just won't .

You will do better by terminating that study , taking your follow-on compound , designing a phase three , and you will get a readout quicker than this study will continue recruiting . Now , the 30 to 40 million spent on that product over the next , on that study over the course of the next 12 months , new management came in .

New management came back and said why didn't we listen to your advice 12 months ago , 30 million ago ? How would you kill the phase three without killing our share price ? And we said look , you need to be honest with you . This is a US listed company . You need to be honest with your investors . You need a non-deal roadshow .

You need to go around to all your research analysts . You need to go around to each of your investors and you need to explain to them . You know , to the extent you can , based on the confidentiality and disclosure and et cetera . You need to work with your IR companies . You need to go around and you need to educate the market .

The share prices move because people are surprised . You need to go around and you need to do one the right thing for shareholders . Two right thing for patients .

And you need to go around and have an honest conversation where you take the bull by the horn and you let people know obviously with lawyers involved and everything else , that you're about to kill a phase three , that you spent $150 million on the board and Denard , for six months , spent another $15 million , came back and said we think we're going to do that .

Now he said okay , what do you think the share price reaction will be ? We're like it won't move . They're like but 80 . You think the share price reaction will be like it won't move . So like , the 80 of our share price is linked to the phase three , so it isn't . We've spoken to your top shareholders .

We've spoken to your research analysts and it isn't yeah , their price moved 1.2 percent . Yeah , on the day the market moved two percent . We've done that repeatedly . So when you say to people look , if you want a solution , there is a solution there , but we need to remove the context of the program .

So everyone put emotions aside , let's move into the surgical theater component , if there is something that we need to cut out , we need to cut it out . If you don't want to cut out , then you know this is going to fail . Then you can all blame each other , and and and and . Sometimes they blame us .

You know we step in and say , look , this is what we think you need to fix it . Then they turn around and go well , you should have advised us five years before you knew us . And you go well , look , I'm not part of the . You know I'm not the patient , I'm the one you came to see in the er department . I didn't make you sick .

So on this one , when people it's a human capital . Again , going back to um , the , the 50 of phase threes failed because of a molecule of humans , I'd say most of the time when you say to someone I think we need to course correct , it's not new information to them they go . We've been saying the same .

We just can't get it past the board , we can't get the shareholders . And then we work with people either front line or behind the scenes and saying , look , this is how we've convinced other people to make that decision .

Uh , we have this whole metric by by which , you know , we do this analysis where we ask the company 900 questions and we went through ceo , cmo , cso , etc .

Ask them about their role , their function , then ask them about each other's role or function , and then we went to the board members and we did this in over 100 companies and went and then we came up with the conclusion . We then went to the board members and said how much of this did you know ?

And they said between five to ten percent is like 6.7 percent of that information do the boards have . So when a board is making a decision , it's making a decision based on incomplete and , a lot of times , relatively selected information they're receiving . So a lot of times when boards turn around and say look , can we get you guys as Treehill to step in ?

We want you to work with management . We don't want to get into any sort of running battles . Can you just lay out the plan that we have ? We had this call this morning . It's a board that has invested 250 million in a company . They're trying to figure out where they go next . They pulled us in .

These are people who put their own money , in their own blood and sweat and tears and they're saying Trehill , we want an honest opinion , tell us what you think we should do , work with management to get us to a place where we think we need to get to .

So actually , contrary to what you think , boards actually pull us in , but they can only pull you in under a couple of guises . One , they're asking an honest question and they're expecting an honest answer . Two , they're asking you a question which you're going to answer in a selfless manner .

Two , they're asking you a question which you're going to answer in a selfless manner .

So a lot of times you give people advice that doesn't result in more money for tree hill and they need to know that when they're looking into your eyes , you're giving them the honest advice , which is the best advice of the company , not the best advice for you as an advisor .

When the scoreboards come out , they look at it and say okay , were you first , second , third or fourth . So privateers need to act and behave and compete at a , a standard which is , which is , which is , you know , world leading when it comes to , um , that specific type of racing .

When you're developing a drug and you want that drug to be licensed by GSK , astrazeneca or Novartis , what would make you think that you can develop that drug in anything but exactly the same high-quality manner as a GSK , astrazeneca or Novartis ?

If you develop the drug to your standard and not to their standard and you think your standard is any different , do not expect at any point they're going to pick up your drug . So can Treel be helpful in your journey ? We think we can . Will we be stronger together , make less mistakes together ? I think we will be .

And if we work well , you're receptive and we're lucky . And if we work well , you're receptive and we're lucky , we might be able to hit the GSK and AstraZeneca and Novartis and Roche standards .

If we are driven by ego and by desire to be right as opposed to doing the right thing , we're not going to be matching the levels of your large-cap farmer and we're never going to win a NASCAR race . We're just not going to be matching the levels of your large cap farmer and we're never going to win a NASCAR race . We're just not going to .

Now , what do we like ? We like the Carroll Shelby story . Why do we like that ? Because we like the underdog we want to show . But then Ford couldn't get there on their own . Ford had to get carol shelby in and and carol shelby had to bring his own driver in . Did ford actually did the ? Did the um middle layer of ford fight that ?

They did fight it because it was showing their inability to actually deliver . And why should carol who's carol shelby to be able to um to help Ford ? You wouldn't expect a group of 10 , 15 individuals to be able to change a behemoth's behavior .

And what we found in that example , which is again sticking to the racing analogy , is that people were receptive enough and humble enough to understand that Carroll Shelby and his team could actually make a difference to Ford , and that relationship continues to today . What we do at treehill we're not arrogant , in a sense of we know , have the answers .

We have seen a lot of mistakes . We have been in the trenches when difficult decisions were made or right decisions were made but had bad outcomes . All we do is to sit down with you guys and say look , we've got a big team . Everyone on the team has 20-25 years of drug development expertise .

We together can hopefully make better decisions , better informed decisions , and either prevent us making mistakes in the future and if things have gone wrong . I can't think of a better , more seasoned team that people sit in and say I was in that room with the FDA when I got a complete response letter .

I was in the room where they dropped my file of API and I can't start a clinical study . I was in the room when that CRO did this . I was in the room where my share price went down 80% for something that I you know .

So being in that room all it does is gives you enough scars and enough experience to say just think about this , as you're making a decision and your company , your decision . This , as you're making a decision , and your company , your decision . This is how we could .

We are providing additional um a lens that is against self hopefully selfless in you making the best decision you can make yeah , uh , we're running short on time , alley , but do you have time for a couple more , a couple more , couple more ?

We're coming in objectively and I imagine , if you think about what motivates emotionally , what motivates a biotech leader and the biotech leader's teams , it might be a sense of purpose , altruism . It might be a sense of purpose altruism .

It might be money , it might be that adrenaline rush of discovery , societal impact Any number of things motivate these leaders and every single one of those things has a strong emotion tied to it , and not everyone can show that emotion . It's not easy to be objective when you have an emotional attachment to what you're doing . So how do you manage that ?

And I guess not only how do you manage it , you and Treehill , but150 or $180 million investment in a phase three trial . That's emotional stuff . I don't care how objective you pretend to be . So what do you do ? How do you work through that emotion when your consult is , I imagine , sometimes , maybe often , not exactly what your client wants to hear ?

If you're looking for longevity , you need to make sure that you have a coping mechanism and that coping mechanism isn't alcohol-based or drug-based or some sort of self-harm-based . So you need to find a positive outlet , whether it's travel , motorsports , whatever it is .

There needs to be a positive route , because you're absorbing a lot of negative input , absorbing a lot of negative input and you need to be able to stay um in in the moment and you need to be um , calm and collected and the ice cold when you're coming to making decisions .

Now , the minute you step out of that context and the patient does is , as you know , you've dealt with a patient situation .

You can go home and cry , but , but you're paid and your role as a professional in that moment is to be ice cold and and and I've , over the past 30 years , I've been criticized that many times like you , don't show any emotion , but you're not paying me to show emotion .

Now I can go home and cry , or I can do whatever I want to do , or or you know kind of kind of , you know punch a wall but I was , by the way , real , real quick .

hill . Over time it's evolved because I can sit there and I can talk to ceos and chairman and say I sat in seat . I sat in the seat where we had , you know , $10,000 left in the account as a CEO . I sat in that seat where I realized that , you know , our information was being leaked to a competitor .

So , as you've gone on in the game , as one has gone on in the game a lot of times , it's easier to talk to someone as a peer as opposed to kind of sitting there , you know , on a bit of a pedestal and saying , well , it's kind of obvious this is going to happen , because it's never obvious in the moment . So that's one way we do it .

Second is in the moment where things are difficult and we've been in very difficult situations with Bayer , for example . We've been in difficult situation with Novartis , so it doesn't have to be smaller companies beya , for example , we've been in difficult situation with novartis , so it doesn't have to be smaller companies .

And you turn up and you get on the flight and you go and sit with people and you walk through a situation in this altana in 2005 where they're whether , whether you know study read out the wrong way . Get on the next flight , go and sit with people , have dinner with them and say what just happened and how do we work through this together ?

And you roll your sleeve up and very quickly the emotion dissipates and people start finding a way to look at solutions , as opposed to a way that people are looking to blame .

Now , people and this is a bit of a using a medical analogy of someone passing people either go down a healthy mourning process and the mourning a death , for example , or mourning a negative event or people get arrested at mourning and they just need to blame and they'll blame management or the management blame board , and then they blame us and then they blame the

molecule , then they blame , you know , the trial center , et cetera , and hopefully you can get someone over that hump and but sometimes people get into that arrested morning and they can't end , they can't get out of that loop and they will destroy the situation .

And when you get into that negative situation you just need to walk away and say , look , this is one . You need to just close shop , not because you can't get out of it , but your dynamic isn't allowing you to get out of it .

Where emotions take place and what we do at Treehill is and I'll use a police analogy for this if you look at frontline police officers and the study showed that they should really be online frontline for about nine months then they're going to need to sit in an office for six or 12 months to resensitize and be able to kind of normalize and then they go to

the front line again . But we see , you know , we see um , I see a lot of um , uh , kind of um . Police officers come to to to the emergency room , for example , and they've been on on in the front line for 10 to 20 years and you get burnout from that .

So from our perspective , what we have is a team where , if I start getting emotionally involved , max steps in . If max starts getting emotionally involved , max steps in . If Max starts getting emotionally involved , I step back in Damien steps in , for example , if you saw more biotic restructuring than anyone I've ever met .

So we have a team where every single person is being chosen by us as a group , because everybody has an independent voice and if I'm stepping out of line or I'm getting emotional , there is no one in the team that will hesitate for a second to pull me back .

So you have a team that helps mean reversion as a as opposed to a team that kind of cheers each other on and you become emotional . So a lot of times Trigo will be seen as the non-emotional team , but we're emotional within it . But by the time that people see a surface tension .

So we had a company that had a market cap of 7 billion , lost about 60% of the share price and we went back in 24 hours and said this is what we think you need to . These are the speech points for your . We've gone through your investor day . We've gone through why shareholders have responded the way they have .

We understand why your share price reacted and we think these are the 10 things you need to do . We could be on the next flight within 24 hours and walk down each of those pathways Within a week . We're appointed and the company said you know this is highly effective and efficient and you guys aren't emotionally attached to it .

And the answer is we were actually emotionally attached but because we've done it so long , you know you could be nervous on the flight .

You could be unnervous on the flight there or on the flight back , but when you're in front of the board or shareholders very much like in a surgical theater you need to be the cold-blooded person in that room to be able to be effective . The minute you get emotional , it's difficult .

Now , on the human side of things , some of the restructuring is going to be very difficult , because not all human beings can acknowledge that they failed . So what they do is , as you step into hell , it's like using a drowning analogy , you throw the life ring to them and all of a sudden , you're the reason why they can't swim .

Ring to them and all of a sudden , you're the reason why they can't swim .

So you do , over the past 10 years , find certain individuals who come for you and they make it incredibly personal that you are the reason why they got themselves into a position they're in , and those are the ones which are the hardest ones to deal with , and that's that's driven by human beings , nothing to do with the programs you want to name names .

You know , you talk about having foresight , looking beyond nodes and looking down the road , beginning with the end in mind , as we like to say . So what's next ? What's the next node ? And maybe a few nodes down the road for Treehill and for you personally .

But what I've learned is only about 11% of ISTs actually publish the data they publish . They generate publish the data they publish . They generate . Negative data is being published and there is regulatory framework around why you need to publish data , but actually it's not desperately enforced . So companies at the moment is a bit of a Wild West .

So why is that relevant ? It's relevant because all of the information that we're using and advising our clients is based on . About 10 to 15 percent of the data is out there .

If all of these studies that have been run genuinely publish their data , as we're advising our clients on what study to do , which indication to choose , which patient subpopulation we should go for , we would be in a far better position if there was a far more robust clinical trial disclosure process than there is at the moment .

So when I'm talking about making mistakes , you know Ali can look at the world through my lens , and I can look at the world and say look , you know , we've turned around 100 companies . If I didn't realize that actually I'm only helping 1% of the fraction . Our advice could be significantly better if we had more data .

And as we're moving into a world where we're talking about AI et cetera , well , what does AI pick up ? Ai picks up the 11% of ISTs , as an example . Obviously not all trials are ISTs that are published . Well , what if we forced or enforced publication ? And why am I passionate about it ?

I'm passionate about it because when patients make an active decision to be recruited to a study , they're either on placebo , they're on experimental treatment or they're on some sort of therapy , but they're putting their lives on the line for the betterment of science .

Don't we owe them the respect that we then publish the data that comes out of it , so the next person who goes into a study isn't being subject to a treatment that we could have known , that shouldn't have , shouldn't have been run or a mechanism that we know that in that indication shouldn't have worked .

I think that industry at the moment I go as far as being saying we're quite blasé about the fact that we're fortunate that human beings , when they're ill , are subjecting themselves to clinical studies and the least we could do is have a mechanism by which that data is then published .

She's the chief business officer at a company called ProFluent , and we had a lengthy discussion about the fact that negative data is an AI company , negative data as an AI company , and we had a lengthy discussion about the fact that negative data is a giant blind spot in the efficacy and go-forward plan of artificial intelligence and machine learning and generative AI

in general , particularly in biotech and pharma .

I think over the next 12 months is to focus on how do we make clinical trial recruitment far more patient-centric , and so when you talk about patient-centricity , then I think data disclosure is a very easily fixable position or situation , and I feel ashamed that I've been , you know , in the banking industry for 20 years and I've only just learned this aha moment .

But I guess that's what it's all about , that you stumble upon these aha moments and think , wow , that was a blind spot for me . Is it a blind spot for other people ? And I think that is the next blind spot that we can address .

I'm going to ask you to come back on sometime so I'll get with your people , I'll get with your people , we'll . It's not , that's not like a a tree hill to client undertaking . This is an industry wide uh challenge . Uh , you know , I'm going to , I can . I can see your wheels turning and you want to respond . We don't have time .

We'll talk about it again next time , uh , but in the meantime , uh , this has been super enlightening , a lot of insight in in every response that you gave me . Uh , and fun . I've enjoyed the conversation , I've learned a lot and I I thank you sincerely for coming on the show .

That is under the listen and watch tab at bioprocessonlinecom . Check that out . Drop me a line at mattpiller at lifescienceconnectcom and let me know what we're doing right and what we're doing wrong . And in the meantime , thanks for listening . Bye .