BoB@JPM: Peter Anastasiou, Capsida Biotherapeutics

Peter had a few stops along the way and those stops are on the agenda for our talk about the lead up to his tenure at Capsida and how he's navigating the ebbs and flows of the gene therapy space . Peter , it's great to see you again . Nice seeing you too . Thanks , man .

I appreciate you taking the time out of a very busy , busy week to spend with the business of biotech . Yeah .

At Lilly I was embedded into a drug development team that was focused on coming up with a successor for Prozac . Prozac was the biggest drug for Lilly at the time . So we had this . It was like a Manhattan project to get a successor to the important franchise that was already created .

So I got a deep exposure to drug development , even though I represented the commercial function by being embedded in that team , and I saw the value of what we were doing in terms of commercializing a product was only possible if we had products to commercialize .

So the discovery team , all the preclinical work that was going on , the clinical work certainly regulatory is what enabled us to ultimately commercialize those products . And so I had a desire , as my career progressed , to want to be involved more broadly in drug development and later commercialization and not just commercialization .

You know , every time a study would be in , blinded and looking at the study results . Or even , you know , making the shift from phase two to phase three .

And how do you design , you know , a phase three program that captures all the important elements of phase two and not makes a lot of changes , because obviously the more changes you make , the more risk you take that the phase three won't repeat . But at the same time you learn things from phase two .

So it's that knife's edge of how do you , you know , make the necessary change without making too many . So there were always these sources of adrenaline , excitement , enthusiasm . You know regulatory , you know the negotiating labels with the FDA and what you know can you get into the label which then enables you to uh , to tell your story commercially .

All of those things were different levels of uh , of a rush , yeah , uh , but at the end of the day , you know , uh , all that stuff that we do is to get a medicine to patients , and so there's a lot of those points that create a lot of enthusiasm , sometimes some tears . There's a lot of failures along the way , but it helped me all of that .

But we developed a product first of its kind in the CNS space , got it FDA approved and then launched it . So you know being part of that whole journey FDA approved and then launched it . So you know being part of that whole journey . And then at Lundbeck . So Lundbeck is a hundred year old company . But in the US Lundbeck didn't have any presence .

They had always sold their products through other companies , primarily forest pharmaceuticals . So I got joined as part of their concerted effort to build out into the US . So at first I came on board to be the head of a business unit , to create a business unit actually from scratch , which we did .

Then I became the chief commercial officer across all the commercial functions and all the products and then became the president of US and then later North American operations .

We had to deliver for the investors . We had to report back to the investors . So it was a very similar experience of going from very little kind of a little bit of an embryo and then growing and building and the growing pains that come from that . And all of that has been applicable to the kind of stuff that we're doing at Capsula .

And so I love that experience and I wanted to get back to an experience like that , which is ultimately what drove me to to capsule .

So a lot of parallels and similarities that I really learned from and that I apply every day in what I'm doing at Capsida .

You know , I was joining Capsa in January 2022 , right off of 2021 , which was the best year in biotech ever , arguably . The fundraising environment was great , the investments people were making , the progress that people were appreciating , investors were appreciating , because of the COVID pandemic our industry and what we do and we're willing to put money behind it .

And then that kind of came to a screeching halt in 2022 , right around the time I was joining Capsa . So that was a challenge to deal with and we navigated through it very successfully , and a big part of the way we navigated through it was we have great investors in Westlake and Burson , great support and great guidance that they give us .

But also we embarked on a partnering effort and so throughout 2022 , we talked to a lot of companies but all ended up towards the end of 22 and beginning of 23 , consummating new partnership relationships with Lilly and then expanded partnership with AbbVie , and so those were great validation of the work we do , but also were an important source of capital for us to

not only support their programs that we just partnered on , but also the other work we were doing in terms of building capabilities and moving our own programs forward .

And gene therapy has had so much promise and some really good successes with , like the old Algensma and Alvedis with you know , and DMD with Sarepta but also had a lot of challenges too , some safety issues , underperformance , issues in terms of efficacy , but also commercial performance .

And so what we do is we exist to solve the challenges that some of those , many of those first generation gene therapies space , and so the partnering effort really is by starting , by having a solution to a problem that exists . And so , specifically , what we focus in on is delivery .

So , you know , a lot of these gene therapies are using naturally occurring viruses , like wild type , like AAV9 . And for certain tissue targets that's great , like if you're targeting the liver , you injected IV and most of it accumulates in the liver , so that's no problem .

But for other targets , like the brain , where there's biological barrier , like the blood-brain barrier , it's really tough to get to the brain .

And so what we do is we engineer capsids , we take those viruses , we engineer them to be able to cross the blood brain barrier and we're not just CNS focused those are elite programs but any tissue that has a biological barrier , which most do .

So getting tropism to where you want to go and , at the same time , engineering them to not accumulate where you don't want it to go , and in this instance , the liver . So , and as a result of that , we're able to deliver IV .

So it all starts with the solution that we're offering to the problems of first-generation gene therapies that a lot of these pharma companies have had . So that's what enabled us to get a lot of meetings . We kicked off at this meeting , jpmorgan 2022 , a partnering process , and it was because of that solution that we have that we were able to get those meetings .

We showed them the progress we were making . We had a great CBO who has great relationships and managed a beautiful process , and that's how we ended up having not just one partnership , but two that came out of that effort in 2022 .

So without getting too propeller head on me , can you talk a little bit about the engineering that enables this , because you know there have been , it seems like for years there's been discussion around , you know outside the liver , right , so can you share with us just a little bit on like sort of the fundamentals , I guess , of that in a very high ?

So what they did was they take that virus and manipulate the amino acid sequence on the surface of the capsid and that creates literally billions of variants . By doing that , manipulation creates literally billions of variants . By doing that , you know manipulation . You use directed evolution to create billions of capsid variants .

And then what we have built is a screening process using robotics and that automation that can filter and screen , you know , all the different nhp tissues .

The important part is we're doing all our work in NHPs and in human cells , not just in mice , and so we go from the billions of capsids down to thousands of capsids , down to dozens of capsids , down to the one that has the criteria we're looking for for each disease .

So for any disease you set out in advance , almost like a target product profile , like you would for , let's say , a clinical stage product . Here we create what's called the target capsid profile and say , okay , if we want to get to Parkinson's , here's the cells we need to impact , here's the brain regions we need to get to .

And so we set up that criteria in advance and that filtering process , screening process , allows us to get down and identify that capsid . So that's hopefully that wasn't too- .

And now that platform has created assets that are on the cusp of going to the clinic and helping to treat patients that have our target diseases .

So the first time we did it took a little longer and every single time that process has shrunk down now to the point where it's , you know , in the weeks and not months .

You know , don't ask me what investors are thinking the partner you're looking for , but you've got to differentiate right . You've got to create something that keeps genetic medicine in the you know therapeutic du jour . Tell me about that , like , what's that been for you and what levers and buttons do you have control over to navigate that ?

solve the challenges that led to this falling out of favor .

So I think what's fallen out of favor is some of those generation one therapies that are using , you know , aav9 and can't be delivered IV without accumulating the liver or you have to do direct brain injection , and so all the things that have made genetic medicines , at least in our space and gene therapy , fall out of favor is why we exist to solve those

challenges . So sometimes it's a little frustrating that we get swept up in that broad view , but the important part is that the progress that we're making and it's tangible progress , I think will certainly help continue to differentiate us out of the pack of the group that has kind of been a little bit laggards .

But I also hope we're going to be at the forefront , or the tip of the spear , of helping bring a new set of enthusiasm and a new era of enthusiasm to what we're doing .

So thanks to our investors again Westlake and Burson , who understood that and were willing to make an investment in our own manufacturing facility , so we have a 15,000 square foot manufacturing facility that's in our same building where our research labs are in Thousand Oaks in Thousand Oaks , and so we have complete control over timelines , cost , quality through that

manufacturing facility and on top of that we build in manufacturing screen room that screening process that I talked about , going from the billions down to the one .

Not only are we looking in that screening process for capsids that meet the profile that we're looking for , but we're also looking for capsids that are manufacturable at least in as much quantity and scale and ease as AAV9 .

So that's one of the early screens that we do to help us select the capsid and that wouldn't be possible if we were using a CDMO or if we didn't have that capability and I'm sure there's great CDMOs out there no criticism . Or if we didn't have that capability , we would and I'm sure there's great CMOs out there no criticism .

But you lose control and anytime you do a tech transfer , you introduce risks and you can't have the screening as early in the process as you would like and you don't have that collaboration of being in the same building between the research team and the manufacturing .

For all those reasons , we made the decision to invest in that facility and it's been a wonderful decision . And not only has it enabled our programs but , quite frankly , we're enabling our partners' programs . So I mentioned the partnerships that we have at Vietlili .

We also have a partnership with CRISPR and Stally , but we just got an option as an example , opt-in for one of the lead programs from the AbbVie Collaboration in Neurodegeneration . We are going to be the manufacturer for that program , so that's a great validation .

But not only did building that facility enable our programs , but it's enabling the AbbVie program to go forward . We have a relationship with a sister portfolio company in the Westlake Burson portfolio called Kate Therapeutics , and they don't have a manufacturing facility and we do . So we've created a relationship in 2023 where we would be a manufacturer for them .

Novartis bought them and now they're a Novartis company and they're going to continue to use us as the manufacturer . So that capability has been gold for Capsida , but it's proving to be that for the Abbey program and hopefully other programs from Abbey and for these now Novartis programs .

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On the business of biotech , do you have any insight into what kind of a heavy lift it took to convince investors that manufacturing analysis is the way to go .

The question is , if we have these great programs and they weren't manufacturable on the right scale or quantity and we had to then go to another CDMO and do a tech transfer and then you know a delay in our programs or you know hopefully you know having any kind of not having any quality issues or the FDA shutting you down because of your quality issues would

have been way more expensive than making that initial investment . And , like I said , we have great investors that had enough wisdom and willingness to make that investment . I'm thankful that they did .

Obviously they are not manufacturing in-house , but I would imagine that would be a pretty big sort of shape shift , not only to do in the first place but to maintain . So three years in now , as CEO , tell me about how you're maintaining expertise qualification momentum in that manufacturing facility .

They're a really great team that has a lot of them have worked together for a long time and kind of came over as a team and they've been great for the rest of the organization as well in terms of culture , and so they are pretty self-motivated . But yes , of course there's a few , you know , pivots that you make .

You kind of pivot from being a platform to having assets , from having assets to getting them into the clinic , which that's the state we're at and going from , let's say , on the manufacturing side , kind of vector production , small scale for animal experience , to then expanding to suspension , broad-based manufacturing for humans , and it's different quality level of

specifications , and so all those have been super exciting pivots that we've made successfully up until this point . And the next and most important pivot we're making is filing INDs , which we'll do here in the first half of the year .

Two INDs one for our program , developmental and epileptic encephalopathy caused by a specific mutation , by the STXBP1 mutation , and then a Parkinson's program caused by GPA mutations . Both of those knock on wood will be submitted and approved INDs in the first half of the year and hopefully we'll be treating our first patients in Q3 for both programs .

So all of those have been exciting evolutions , next steps that , at the end of the day , you know , one of the things that we've talked about is the great science that we have isn't just for science sake . We're not an academic institution , we created the science .

So then it helps in the service of patients , and so that's also been kind of a North star for all of us , whether it be the research team , manufacturing team , certainly the clinical team why all of us are here , and so it's a really exciting time for us making that big , big pivot . Will that manufacturing facility support clinical trial supply , gmp ?

Actually , we just finished the GMP manufacturing for our first program , the STX BP-1 program , and we're in the middle of finalizing our GMP for the Parkinson's program , and so that is at the FDA's quality specs . We've had pre-ID meetings where we've submitted the data that we have and we got positive or supportive feedback from the FDA .

But yeah , so this is a clinical and commercial grade manufacturing facility .

Yeah , so you were talking about like indications . We purposely picked indications that would well , first of all , that have an unmet need that we think we can help these patients . That's first and foremost . But we selected them to be kind of bookend .

So if , to your , to your point , in gene therapy a lot of the traditional programs are in pediatrics , ultra-rare or small diseases . So the STX-BP1 program is certainly not ultra-rare but it is considered rare it's about 5,000 patients in the US and Europe and in pediatric population , that's kind of the traditional place gene therapies are played .

And on the other end we selected Parkinson's , gba , adult population , neurodegeneration , bigger patient population , about 300,000 patients in the US and Europe . So we , you know we wanted to show the bookends of what's possible with our capsids , with our cargo optimization capabilities , everything , and so that's why we picked those two as elite programs .

And it also , to your point , showcases what's possible on the manufacturing side too , to be able to accommodate both of those adult patients that require more and broader populations as well as you know , the rare condition in the spin a younger patient population .

So I think those indications , besides those programs , besides being best in class to help patients who are desperately suffering , also are a great showcase of what's possible through our technology .

What's different in terms of your approach to the partner investment community in broader indications than what you know , these small like ultra rare indication developers are experiencing ? Is there a difference ?

There's investors that have a thesis and you know , and each can , and so you know everybody they have to be focused on where they invest , so they can't invest in everything , but it's been a receptive conversation . I think you know even the rare disorders . I mean , look at a company like Sarepta and the success they've had .

I just saw that they announced that they're performing ahead of their plan in the commercial uptake of their product . All that creates great momentum for the types of things we do .

And while there have been challenges in CNS , even on the or I'm sorry , not in CNS in gene therapy , on the commercialization side , in the CNS part of gene therapy , there's been some good successes with , you know , avexis , navivartis and Zolgensma and Sarepta and what they're doing with Elbetis , and we think we're going to have similar success even in the rare

population and certainly in the broader population with the nerdy generation program .

Like I said , certain diseases , it's perfectly fine to use AAV-based therapies because you can easily get to certain tissues , but for those you know , more difficult tissues to get to , like the brain and like many other organs , I mean , the kidney has biological barriers , the lung has biological barriers , the eye has biological barriers .

So , just being smart about the indications , being smart about the delivery technology that's being used , and then , of course , cargo and things like that .

But I really think that , again , I'm quite hopeful that , with some of the successes that are happening , particularly in some of the CNS gene therapies that I mentioned , but also progress we're making and , quite frankly , others are making as well , I think will help , I hope , but I think will help to restore some of the momentum and enthusiasm Because at the end

of the day , it's undeniable the benefit that gene therapies can have for patients if they're done right . I mean if you have a clear genetic cause of a disease and you can fix that genetic cause , whether it be through a gene therapy or , you know , a gene editing approach . Those are disease modifying and possibly curative , so the power is undeniable .

These aren't symptomatic treatments , you know . Like you know , in our Parkinson's program I mean , levodopa is so critical but eventually it wears out . I mean it's a symptomatic treatment . What we're trying to do is alter the course of the Parkinson's caused by the GBA mutations . That's just so powerful , and I think there's a lot of companies that understand that .

That's why there's many that are still quite engaged in gene therapy and there's a lot of investors that see that . So then it's incumbent upon us and others to deliver on that promise , and that's why we exist .

Again , we're about to be in the clinic and so you know I'm a believer , like when I think competition brings the best out of people . You know , fear competition that's . You know , the old saying is the best thing that ever happened to Coke was Pepsi . And so there is something about having .

You know , all boats rise when a couple of members are in a category and are working together . You know , working together but are working towards solving problems . It just brings a little bit of vigilance and a little extra something from all of us . But I wish you know anybody who's in this space .

I want the whole field to succeed Because again , it'll bring momentum back to the field , it'll bring more investors in , it'll bring even more pharma companies in and ultimately it'll just help more patients . So that's how I kind of think about the competition field . Yeah .

We've had pre-IND meetings with the FDA , we've done dose range finding studies , we've dosed our GLP-THOT studies and we've done manufacturing scale-up for one of the programs or almost done with the other .

So now we're just waiting for the final results of those studies and then we'll package those INDs both in the first half of this year and in parallel we're preparing for the clinic .

So we have a great chief medical officer who's hired , a great team and also a network of you know CROs and outside consultants that are busy talking to sites and getting those sites up and ready . You know we don't want to start that process after the IND is approved .

We started that process months ago so that we're ready as soon as the IND is approved that we can start . You know , planning for and first patients to get treated . So that's what our focus has been . I mean this has been the company's been around five years . This has been the and actually the people at Caltech were working on for many years before .

This is the culmination of the work that's gone on for many years is to get to this point , to help patients .

Give us some insight , I don't know advice , if you will , to aspiring biotech builders on that element of it , like obviating for the next step being a step ahead and embracing the risk of being ready for the next step .

But if we're all fooling ourselves and we think it's going to be a completely straight line , no setbacks , that's just not reality . But I think it's a mindset that someone needs to have . You were asking about my career earlier . Even though it was a little bit different , it was the same kind of experience that I had at Lundbeck .

So , when we were building and taking on risks of , you know , developing products , licensing products , buying companies all of those take risk . All of those have setbacks . You know you're building new capabilities . You know you have SOPs . You know you make some mistakes and you learn from those mistakes .

It's all you know , very similar as you know the capabilities . It's all you know , very similar as you know the capabilities we're building . You know building a clinical regulatory team building . You know all the moving from . You know a new phase of manufacturing , moving into the GMP scale . All of those are exciting , fun .

There's challenges you run into that you have to overcome and I think you have to be ready for that ride .

And then the other thing I would say is , especially as a CEO I mean , sometimes people expect the CEO to be an expert at everything I personally think the best CEOs are those that understand what they're expert at and hire people who are expert of the things that they're not and creating a clear strategy , creating a clear set of objectives and goals , that they

hold people accountable towards delivering , inspecting on what's happening but at the same time , and holding people accountable but at the same time giving people the latitude to exert the expertise you hire them for latitude to exert the expertise you hire them for .

And also , as a CEO , to be the biggest champion , storyteller of the company , chief , fundraiser , all of those things . So , for those who are interested in a career or aspire to become a biotech CEO , I think those are some of the thoughts I would share .

All the rest of the funding has come through pharma partnering and we've been very successful at that , but not having the kind of momentum in the macroeconomic environment and kind of biotech or the momentum behind gene , genetic medicines and therapy . Those things haven't been fun .

You know , this is the biggest meeting of the year and kicks off the year and couldn't be better timing for us because of the transition we're about to make from , you know , preclinical to clinical , and it really is that transition , in addition to the presentation that we're communicating here to pharma companies , to investors , about the progress that we made and

getting these lead programs on the cusp of being in a clinic and treating patients . So it's mostly awareness building around the progress We've always maintained and worked hard to maintain relationships with pharma companies , investors , et cetera , and make sure that they know what we're up to and the progress that we're making .

I'm a big believer that you don't just show up to somebody when you're looking for something , whether it be a partnership or an investment .

I think telling our story , building awareness , creating a base of knowledge for those communities of what we're up to , just makes it so much more easy when there is something specific or tangible that you're working on , whether it be with pharma companies or with investors .

So it's mostly awareness building about , as you used , a phase shift that the pretty significant one we're about to embark .

So I'm curious if you can give our listeners some insight into the mechanics of that meeting . So I'm assuming you'll be presenting , yeah , I'll be presenting , you'll be presenting . Now did you bring ? So you'll present you'll . You know , you'll do the pitch deck , you'll hope that you got all the right points right . A lot of prep that goes into that .

Now , did you bring like a support team ? They got some more more scientists that go on propeller cut floats , who are going to , you know , kind of take questions off stage Like what does that kind of look like ?

But it's interesting when you say off stage , my time on stage is total of 25 minutes and we're here for five days , Right , so most of the action that is for us , but almost everybody , is not even related to the specific conference . It's the magnet , the conference that has attracted all these people that are here .

So it's really outside of the conference that we're having . Well , this conversation talking to pharma companies , talking to investors , meeting with our current partners . You know we have the partnerships with Abbey , Lilly and CRISPR .

So we're taking advantage of the fact that we're here and working with them , meeting with them , update on the programs , the progress meeting with our own investors , programs , the progress meeting with our own investors . Since we're all in the same place , it's an opportunity to make sure to communicate , stay connected with our current investors .

It's like an eight to 11 day you know that's , that's probably conservative .

I guess If I had hair I would say I could let my hair down on Thursday afternoon .