CDMO Collab with Scorpius BioManufacturing's Steve Lavezoli + Fina Biosolutions' Dr. Andrew Lees

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So I've said it before and I'll say it again now CDMOs are typically not in the 10 ring or the sweet spot of guest selection for the business of biotech podcast . We like to focus on new and emerging biotech execs with their own therapeutic pipelines , or , in other words , the sponsor companies that CDMOs work with .

However , when a CDMO exec can bring along a sponsor exec for a transparent look behind the scenes of what can at times be a complicated relationship , I'm all in .

You might recall that we did this a few weeks ago when Ray Therapeutics , Jenny Holt and Forge Biologics , John Maslowski , gave us some up close and personal perspectives on the contracting and execution of the sponsor plus CDMO relationship . That was a well received episode , so today we're going to do it again . I'm Matt Pillar .

This is the business of biotech , and here with me today are FINA Biosolutions Scientific Director and owner , dr Andrew Lees , and Scorpius BioManufacturing VP of Business Development and Client Partnerships , Steve Lavezoli , Steve and Andy welcome to the show , thank you , nice to meet you , nice to see you . Yeah , pleasure to have you guys on the show .

I appreciate it . Lavazoli , am I pronouncing that close enough to correctly ?

It's not a bone that I have to pick with you , but I do want to just point out and put you on blast here publicly for stealing one of my favorite people in the world , sniping her away from our company , abby Sorenson , who , by the way , into her credit , helped me arrange this interview and get you guys both on the horn at the same time .

Thank you to her . But , boy , she's one of my favorite people of all time and you got a good one there , buddy .

People know who it is .

We were , you know , looking around . I thought , well , let me just see what they are . And I looked at it . I thought they kind of had a weird logo I do a little origami and I thought , and then I , you know , passed on .

But then , you know , we were looking more and more seriously at a new CDMO and they had also penetrated our commercial officers , radar and the CMC group that we work with .

And so they came to our attention and we met with Steve and Abby I think it was at BPI and met there , had dinner , talked , and that chemistry was really what you know from that meeting was really what started us down the path of considering them . So that was .

I mean that , you know , once in a while a cold call and a random email does work and penetrate . It's getting there at the right timing .

I started phenobio in 2006 , based on my expertise in the area of protein polysaccharide conjugate vaccines , specifically the chemistry , and early in my career I developed chemistry that is now widely used , particularly for new manufacturers . It was licensed originally to Glaxo but because there were no patents in China or India , I began working .

When I started phenobio , I began working with the Serum Institute of India and the idea would be that , although I can't affect prices , I could affect competition , and so by helping to bring in , teach the chemistry to new manufacturers , I could bring in some competition in the developing world to help reduce the price of these conjugate vaccines .

And in fact that we've succeeded . The Serum Institute's Numom and Injukako vaccines are the lowest priced vaccines in these classes . So part of the model which I call my not-for-much-profit model is I don't have any investors , so what that means is I can make licensing arrangements and do deals without having to make money for investors .

So in terms of the royalty rate , I looked at what did I used to get when I got royalties from India after it trickled through everybody else and I said , if I was happy with that percentage , then I'll take that percentage from the Serum .

And it was low enough that I essentially turned what was a service contract into a royalty stream and that is now helping to fund the current work . The next phase we were invited to .

We were asked to see if we could develop the protein component of these protein polysaccharide conjugate vaccines , which had been one of the most expensive components , and , remarkably , a scientist who had been laid off from Glaxo came on , starting as a volunteer , and then when we got a small contract from the non-profit path , that set us on the path to develop

this protein and as part of that we developed the scientist developed a E coli strain that can make soluble disulfide bond proteins in the cytoplasm without needing to refold and which grows remarkably well , and so that set us off to be able to produce the lowest cost version of this protein , and I deliberately set the price as low as I could rather than as high

as I could . This was not from any particular business smarts , but it had to do with I didn't have to make money for other people and I was frustrated as a scientist that I could not afford to buy this protein previously .

So as part of the because we had no money to do a GMP project what we did was execute a license essentially a license exchange with the company Invent Prize out in Seattle , which was founded by the former director from the Syram Institute of India . It's funded largely by the Gates Foundation , again to develop low-cost conjugate vaccines .

So they needed our CRM197 , the carrier protein . We gave them the license to use it for their vaccines in exchange for their doing GMP manufacturing , and so that created the first batches and got our GMP product established .

But they need to now focus on their own vaccines and we need to establish our phenobio as having , you know , being a reliable supplier of the protein .

So if your clinical program depends on our protein , you want to make sure we're going to be around , and that's why we decided we needed to move to a larger manufacturer that could support the phase three and licensure .

So a few runs would likely supply for the foreseeable future and it would be very easy to scale up beyond that . It's just because it's E coli , it's very simple to grow and we have a relatively simple purification process .

What , from your perspective , made Fina a good fit for Scorpius , but also sort of your take on how Fina fits into the broader landscape of Scorpius clientele . Like you know , it seems maybe a little bit atypical , but I'm curious about how they kind of line up in terms of I'll jump in .

I mean I think you know I came from large CDMO world and you know in the large CDMO world someone like Andy and his program , it would have never gotten any kind of attention from , you know , a big CDMO , it's just you know , and that's not a shot at Andy or a shot at Fina , it's just the Really where the focus is of that scale of a CDMO .

So I mean we'll think about Scorpius . You know we're focused on both microbial and mammalian programs . We're also focused on a certain clientele , right . We want to be partnered with these smaller to mid-sized biotechs and essentially they can't get the type of attention .

You know certain expectations from a CDMO as far as willingness to work with them , and I think that you know Fina fits right into that , andy fits into that , his personality , his willingness to kind of do things like this podcast and also do joint publications . You know those are all important to us .

It's important to Fina so that they can grow their business and it's important to us from a new CDMO in the space . And it really made sense , you know , after we met with Andy and I think he mentioned , you know , abby was with us and Abby does join a lot of those . You know initial meetings .

I don't think that's even something that's characteristic of most . You know CDMO partnerships . You normally don't bring your marketing manager along with you to a dinner and it's really so that Abby can understand , or the marketing team can understand . You know what are the pains of Andy .

How can we help him support his business , grow his business , promote his business and do things that other CDMOs just aren't doing right . And hopefully Andy sees the value in that and you know we'll continue to do those kind of things because it's important for him , it's important for us , and not only that .

You know we're extremely dedicated to getting his program through . You know GMP manufacturing and making sure that he could bring you know really , really cool technology to the industry that maybe he wasn't able to do if he didn't have a partnership like Scorpius . So you know that's the great thing about you know this relationship with Andy at Fina in my eyes .

The so so it's really , but without having an established manufacturer and demonstrating that you know we're going to be around in the for the future . It's kind of this chicken and egg thing where we got to get established and Steve and Scorpius were willing to recognize that and accommodate .

You know that kind of scheduling and it's , from that sense has been a really good partnership and it's really the people I mean . After this . You know the business meeting , we began meeting with the technical people and there was no question when we met with them , from the questions that they asked , we felt very comfortable . You know , working with them .

This close communication Steve is on my joke of the day list that I send out and you know we talk almost every day about about various issues and if I have you know there are there is a concern , it's just as easy to talk to him first and it's it's . That part has been very successful .

Yeah , the whole contracting process was extremely straightforward and working . You know , working with Steve is really been . Steve has really been a major part of why we're able to work together .

His approach and willingness to to see both sides of the of the issue , of the problems that we hit , that we have both Scorpius and ours , because they got to get , they need to move forward as a CDMO and and be sick . You can't . You can't survive if you don't make some money .

You know I've learned through doing interviews with CDMO plus sponsor execs that even in the more straightforward like Steve , maybe you sign a contract with someone who's manufacturing an antibody seems pretty cut and dried , but it's not always cookie cutter , it's not always . There are always nuances In this situation .

Andrew just said it was a pretty straightforward contracting experience , which surprises me a little bit , I guess , given that it's sort of an atypical it's not quite true , actually , straightforward , I mean , it went , we got through it and I had a lot of .

It's been a challenge , right , it's been a challenge to even get credit to you , Andy , for agreeing to come on . It's been a challenge to even get sponsors to come on and talk about the work they're doing with their CDMOs .

But , to the extent that you can , can you just kind of walk us through what that contracting experience looks like in such a way that might offer some advice ? For we cater to new and emerging biotech leaders . So in such a way that might offer some advice to those who maybe haven't contracted with the CDMO before but are entering that phase of their growth .

It started to be , you know , we're going up steeply and then they took a sharp drop and so I no longer had the money to go forward . So a year later at bio last , a year ago , june or this last June I guess we put out another RFP and invited Scorpius to participate , because now we knew about them .

They didn't exist for the previous one and looking at the entire package , you know we selected them out of that and it was the , you know , the , the getting to know the CDMO ahead of time so that we had some idea about who to , you know who to talk , who to talk to and what we were looking for .

The first time , this using the RFP Navigator , was extremely useful . In comparing , I really had no idea how this whole thing went through and that platform really helped . The second time , I can't say it was as helpful for me , because we sort of had had our criteria set up , I knew what I was looking for , but it still made it much simpler .

But having some you know the outside guidance . If you don't know anything about the CDMO world and the contracting and the pitfalls and what's , what's this , particularly these change orders and what that's going to involve and why one cheap con , you know low price contract may be the most expensive one , that's .

That is something you really have to have to know about and innocent people like me are not going to know that .

The first is the details in the proposal are critical and you know , sitting down with Andy you know we probably had five sit downs together where we talked about what he was looking for , you know what his program needed , talked directly to his scientists about what the program required , and that really gives us , you know , a special understanding of exactly what

they need in their proposal . So that we're not looking at , you know , multiple , multiple change orders .

It's very easy to throw a proposal out there and just basically say , okay , yeah , we're going to do your program for X dollars , because once Andy signs up , then he's really on the hook and I can change order , change order , change order to the point where I put him out of business . Right , he is understand up front and that is critical .

That then feeds into the RFP navigator , right ? So so I would say that you know , any small biotech that's looking to do a CDMO partnership early on work and the person that's listening to you as a , as a potential business partner , is really critical to them as a CDMO , a CDMO relationship with their , with their business , and we're supposed to .

Second point is we're supposed to be a consultant , right , we are not . We are not there to dictate to Andy what he should do with his program . We're going to guide him and what's best for his program , based on our experience and what we think is going to get his program to the endpoint , which is GMP material , you know .

But at the end of the day , he owns the program . His scientists own the program . It's his business . We're there as their manufacturing partner so we can make recommendations .

At the end of the day , it's his decision , so , or the decision of the business , and I think those two things are critical so that they can be , you know , as successful as possible when it comes to selecting their CDMO partner and then getting material out for their whatever phase clinical trial that you're doing .

So thanks for those nuggets , andy , because that's the key point .

We rely on outside people for this and , you know , feeling like we are a major client even though we're very small , is important , and feeling like , yeah , I can call you up and ask for advice and suggestions , and that's not just about how you're going to make more money off of us .

Is there a regular cadence of you know , weekly or bi-weekly , or monthly or quarterly meetings where you're just touching base and making sure that everyone's paddling in the same direction ? What's that look like ?

So we're looking at at additional data as it gets generated before the actual meeting and we get get the , the slides and , you know , ahead of the meeting so that we can review and prepare for for the questions . This , you know , our process is not an academic process that we're tossing over to , you know , phase one GMP manufacturer , because it's our .

Our product has already been made GMP , it's already been in clinic , it's into clinical phase one conjugate vaccines . We have a pretty good handle on the product and it's it is not like a , it's not functional in the sense of an enzyme or an antibody , where it has to have . It's a protein .

So it's , in that sense , it's simpler than you know , some other projects , but our the protein is also very finicky and that that's the challenge of of manufacturing it .

Andy has to feel comfortable enough to call me and say hey , did you hear about this ? And how are we handling that To make sure we're all lockstep in getting his program to the end point ? So those are all open doors and clear lines of communication about what we need to do In order to get his anything moving in the right direction .

And we're not able to get to Texas now to go visit Scorpius , but that is high on my list of things to do to meet with the people in person . You know , it's good to know the personalities of the people and there you know . So the face-to-face meetings are important .

That is something that we haven't gotten to , but that does relate to another reason why we picked Scorpius . The other lead contender was a Northern European and it's just , you know , sending things back and forth . The time difference was all going to create issues for us .

Very easy for us to ship material back and forth because we're you know we're making the material at essentially the same level in our own lab , just as you know , we're doing the five-liter scale , not the larger , that we're mimicking stuff . So material can go back and forth for us to evaluate and for them to evaluate .

So to speed things up , for example , while they were doing , before they got to the fermentation , we sent paste that they could use for downstream processing and to start that in order to speed things up . So things didn't have to be done entirely in a linear fashion . I think that would have been harder to do with an overseas manufacturer .

Is it more or less challenging in a relationship with , like FINA's , where you're probably having both those conversations with Andy ? I get the impression that regardless of what level the conversation is on , you know , like that batch , that product , that long-term strategy , andy's probably the center of that conversation .

So , you know , andy does a pretty good job of wearing the hat at the time and I think he knows that I'm not the scientist on the calls , so he definitely dumps it down whenever he and I have a discussion and it's more about you know , kind of the meat and potatoes of what he's trying to get across .

He doesn't go on about conjugated vaccines and what I need to do in order to help in that matter . I mean , we're more on the business side . I have a technical degree , but by no means am I at the level of the scientists that are at Scorpio . So , yeah , so he , you know , I think , making sure that we direct the conversation to the right folks .

If it starts to get a little bit too technical , then I'll pull on the strings of the people that need to get involved in that . But yeah , I'm there for the business side and support . Never do I want to be the person that is directing or guiding this program . We're going to rely on the experts to do that and yeah , yeah .

We have someone who's really good on details and staying on top of stuff I'm not much of a detailed person and we have someone who met , who , on our end , who's the project manager , keeps track of all of our paperwork , all of the communications , and that's really important .

And then , you know , on the technical side , we have a mentality of the scientists who develop this , this , the whole process , and she's the one who really supervises the technical stuff . But , for example , you know we're looking at at the tech transfer and we know we're going to make another change in the process .

So there's no point in trying to get the tech transfer perfect knowing that we're going to make changes down the road to something that's going to affect that anyway . So we know the process has been transferred and you know now we can .

So my decision was let's not make it perfect at this stage , let's let's get to the next phase and and then we can worry about the subsequent part . Yeah , so there is , you know , there is the certainly the business part of managing the work , the kind of the money , workflow , what's going to when things are going to happen .

So we , you know , we know when we need . I think we're going to need the material , but we want to make sure that we have the money in place to get there .

It strikes me that there are probably multiple opportunities for third parties , for fourth parties , fifth parties , right to have their , if not in real time , to have their tentacles sort of intertwined down the road to so which , which can be , I mean from your perspective , steve , that that could be a goldmine down the road , right , like that that could be , at

least , let's say pragmatically , that it could open up some new opportunities for Scorpius . But in the in the short term , it can also introduce complications . So tell me a little bit about that , like to the degree that you can talk about , like what , what sort of third party elements are involved , third party and beyond , and how it's managed .

In those cases the best thing again for me is to advise Andy on who he should potentially go with that might be a good fit for his program . There's a bunch out there . Again , Andy's going to run into those situations where he doesn't know necessarily who to work with or maybe doesn't have experience .

But my ears on the ground , as it relates to those relationships and the capabilities of other I guess what I would call contract manufacturers , but not necessarily on the GMP drug substance side I could make those connections for Andy . I can say hey , andy , these are the folks you want to talk to . I can certainly do it on their behalf .

Essentially , continue to manage that with our project management . It really depends on how Andy wants that relationship to look . We can craft it however Andy wants that to be handled .

Sometimes companies don't necessarily want the CDMO to handle clinical packaging and distribution , but if they want us to handle it and they want us to be that conduit between the clinical packaging business . We're happy to do those things . It's really all a car . Whatever he wants to do , we'll do it for .

I like to have a network of people In the same way and that's why I'm happy to be on programs like this . I like to work with other people . What I've found is , as I've run my company , we're not trying not to be transactional , try to make it relationship-based .

Somebody will come around and maybe I don't need their product , but I can refer them somewhere else . I can help them . I've made a new friend .

In the same way , Scorpius has really been helping me in reaching out to other people and other companies and I'm able to bring in referrals to Scorpius Some of them they can't do , but it's still bringing in business and helping to get their name out there . Helping other people is how you help yourself , is the philosophy .

At the same time , I think about experiences that I've had being in business with family that have gone awry . It doesn't always go well when you care about the person you're doing business with . Sometimes those relationships do not juxtapose cleanly . Let's talk about expectations and measurables .

How do you keep the business part business and chart the measurables and the expectations and work toward them ?

It's a lot of money and we need to have a product at the end .

Happy to go out and have a drink , we're happy to go out and have dinner , but we've got to make sure that we deliver . Andy has expectations from us as well that we need to make sure that he's attending to . We've had those good conversations as well . Healthy business .

But the way I posed the question to her was I said , Jenny , if Paul and the board were to come into your office right now , as you and I are speaking , and say you need to rationalize in clear terms the money that we're spending on our relationship with Forge Biologics , how would you do it ? And she gave me a really good response to that .

But you , Andy , you don't necessarily need to rationalize it to a board or to your boss , but you have to be able to sleep at night and I sleep at night .

You know , one of the conversations I frequently have with sponsors about outsourcing relationships is just , you were talking about tech transfer a few minutes ago , andy I frequently heard , you know , conversation with biotech execs around just how low they are to make a change , to go through that process again , which you guys did .

And , andy , obviously it was an inflection point for the company . You needed more capacity , so it probably made sense . But I guess the dark side of this question , andy , would be what would be considered cause for change ? What could Scorpius possibly do ?

And if we can't deliver , then he needs to take his program somewhere that somebody can , and that is the expectation of anyone who has a CDMO partner . You need to have material when you need it . You need to get material when you need it and the promises need to be kept .

I've been really happy with the meetings and how things are going with Scorpius .

There is always you know it's , you're working , you spent years working on this process and then to essentially throw it over a bunch of paper over the fence and expect that it's going to be duplicated exactly Is unrealistic . So you really need to be working with the CDMO .

You know , depending on your level here we've got batch records , gmp batch records to transfer . We know the process works . So it's a little bit different than an academic who's yes , it worked in a lab and now here , now just make it bigger . That never works .

Yeah , that is the classic mistake we'll do and I sort of learned that the hard way is projects come into us , so really it's understanding that it's not going to go perfect . I mean , humans make mistakes . It's how you address those mistakes that's key and I see Scorpius being willing to do this . One of the CDMOs I worked in the distant past .

You know that it was . This is the way we do things , you know . So when you give them the process to improve it , they know what they've done and they won't recognize . There's a reason you ended up with this , you know , with this step .

But at this stage in the relationship , looking back on the , you know , the contracting process , the MSAs , the expectations that have been forged , what would you , either of you , do differently if you had a redo ? You know , has there been a step in the process so far ? You're like , yeah , we probably could have handled that a little bit better .

You know , like I said , I had been doing this for a while and had come from large CDMO and I think that consultative opportunity for me to kind of give Andy guidance on what I would do if I were into his shoes . I personally like to do those kind of things , so especially for someone like Andy .

You know there are not that many companies doing this kind of thing that are still , you know , solely owned by one person , and this is not the only only . You know we also are starting a company around our E coli strain that can make all kinds of other interesting proteins , and so that's , you know , that's the challenge .

We still run our , we have our conjugation services business and then , early on , recognizing all this stuff takes time to make money . We also sell polymer based diagnostic reagents , so based on conjugation . So we , we supply modified dextran polymers for research and for , you know , commercial products , and so we take our expertise in that .

So all these to make what we think are the best , best products in this . So we really have four business areas .

The carrier proteins for conjugate vaccines is just one of them , and so keeping all these things in the air as a one , you know , as a one , one person running four businesses essentially is a challenge , and so having , you know , really reliable help , outside help is key to making all this work , and I'd say the you know , the employees at Fina bio .

I really make it , make it run , and the outside consultants that help are the other key . And again , helping other people . I found and having this We'll call it do good or approach to business means that people come in and want to , you know , are willing to help us and we get . We get a lot of help for that .

After spending the last hour with you and I hope it's not the last hour that we spend together I'd love to have you guys back on , probably down the road you know what I mean as you get closer to achieving some of those output goals that you're looking at , we'd love to revisit the relationship . Steve , it's been a pleasure to meet you as well .

I will let bygones be bygones . Let's water under the bridge . Abby's probably going to be mad that I that I even brought her up on this podcast , but but we'll let that go . In fact , steve , I'll be . You're down in the Pittsburgh area , right ?

If you like listening in on conversations with biopharma , medicine and dealmakers like Andy and Steve , subscribe to the Business of Biotech podcast , sign up for our newsletter at bioprocessonlinecom backslashbob and be sure to leave us a review and let us know how we're doing . And , as always , thanks for listening .