Veteran Advice From The C-Suite with Citius' Leonard Mazur

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I'm Matt Pillar , and if you're a biotech exec who's tired or beaten down or dejected or struggling , coming off of failure , running out of money , contemplating your next move or any or all of these things , this episode is for you . My guest today is Leonard Mazur , co-founder , ceo and chairman of multimodal biopharma Citius Pharmaceuticals .

He's a guy who , for more than 50 years , has been in the life sciences business leadership role . He's got 50 plus years in his rear view and he just can't seem to stop . He's won and he's lost , he's scrapped and , most recently , he's bootstrapped to drive Sidious forward in its multimodal , multi-indication quest to address cancer , infection , ards and more .

Today's episode will gain insight into some of the lessons that Leonard's learned about highs and lows on his long journey as a biotech exec , and we're going to glimpse into the mentality that's kept him motivated all these years . Leonard , welcome to the show .

And speaking of that conversation we had a couple of weeks ago , I remember it started out with a pretty profound and explicit statement that you made where you said hey , buddy , I didn't have to do this and when I say do this , I mean co-found , sidious . So tell us , why did you ? What would you do it for if you didn't have to ?

All right , I have enjoyed every minute of being in this business and that you can have as many challenges as you want in there , and it can be difficult at times , but you've got a really I think a lot of the people that I associate with in the business .

They actually have a passion for the business and a good number of folks that I've met are like that , so we have a unique industry in that regard , but the challenge is what I like , so that's why I did it .

So it's not like you suddenly have big venture capital fund behind you and there's a lot of security there and so forth , but when you start from zero , you're on your own and it's on your back and it's up to you to make it happen .

So with Sidious , I was fortunate also that there was a co-founder with me , Myron Huluviak , who used to be a president at Roche Labs . I've known him for a long , long time and I think we always wanted to work together with each other and finally we created that opportunity .

It just did not work out the way we thought it could . So then what happened was I had had some previous experience in contact with MD Anderson on a drug that they were working on at the time . At one point I incubated a dermatological products company that acquired we acquired Miniso from Wyeth and what happened was which was an acne product ?

It was an antibiotic for acne . So we had a dermatological company with DermSale Force and everything that was trucking along really nice .

And about a year after we did that acquisition , I get a call one day from the Department of Defense and they said to me they said we're contacting you because we are treating soldiers that were wounded in Iraq and Afghanistan in a hospital in Germany for a certain type of bacterial infection with minocycline IV and we can't continue the treatment here because the

drug was pulled off the market a number of years ago . What happened was Wyatt had the minocinidia out there with the regular , with the capsules as well , but they launched another hospital based antibiotic , so they didn't want to have two , so they dropped it . So his request to me was can we bring that drug back ?

I said first of all , I said we're not even a hospital company , we're a Durham company . We have no expertise in that and no coverage , nothing . He begged me to see if we could do something . I sat down . At that time I had a partner . He passed away but he and I sat there we discussed it and I said look , let's do the right thing here .

Let's do this out of loyalty . It's not out of profit or anything like that , certainly not going to make any money at this thing , but let's see what we can do to bring it back . We were fortunate we had a good regulatory person in our staff and it took about a year and we got it qualified . I mean to get . All this setup was complicated .

It had overseas sourcing and all kinds of issues . Then what we did is we put two people on it . That's all the cover hospitals Okay , this is so absurd , but nevertheless we did that . At one point I noticed we're getting a lot of revenue out of MD Anderson . I arranged to go down here . I meet with the chief of infectious disease , dr Issam Raad .

I find out that they're not buying a drug to treat anybody . They were buying it . They were doing experiments . He was trying to come up with something that would work for infected catheters . So early on there was nothing I could do with it .

So basically what happened was ultimately we sell off the Durham company and everything and then a couple of years go by . So my and myself go down to the MD Anderson and we meet with Dr . Raad . We found out that he had really evolved his drug or his concept and what he was looking for , because he was experimenting with a bunch of different antibiotics .

So he was already getting ready to go into the clinic . He had something that they thought would work with minocycline in it . So we funded the phase two be worked . That's how we got started and it was only because of the fact that that drug came back the way it came back that he was able to do that . But that was kind of the beginnings of the company .

So it was interesting . It was taking a chance on something way back , not even taking a chance . We did it not for taking a chance , we did it because of patriotism , loyalty . I served under US Marine Corps reserves , so anything for people that are willing to fight for their country , fine . If we can do that , let's do it .

You I wanted to ask you a few questions about the funding of cities , because I know you've got a lot of your own skin in the game . So at what point in that you said you funded the phase two be study , was it around there that you started investing ?

So that's when we we we we raised some money privately , but for the most part , what we did is there was a public entity called Sidious that I knew about . I had a relationship with the people there , work with them , at one point even had a minor role inside the company , so the we merged in with them .

They were public and then , ultimately , what we did is that was 2016 . We did an uplisting to NASDAQ 2017 , roughly and we we had a great investment , a good investment bank that we work with to help us raise capital HC Wainwright and we started that . We started our journey really in that .

How I want to kind of dig into how , having invested your own you know , having your own skin in the game , having invested your own money into the company how that sort of affects the on a couple of different , in a couple of different contexts . One , how it affects your I guess your the impact .

What's the impact on your decision making , like your leadership of the company ?

We had , we have a great CFO , so and that that really helps a lot because His attitude and the way he ran things that was like his own , like his own money was there . So and that , again , that that helps an awful lot .

You've got to have somebody that can control that , that cash for you and highlight for you If there's a potential issue or or or something that you need to be thinking about . And we were always conscientious about what our forward obligations were looking like and what we needed to take care of that .

We always wanted to make sure that we had sufficient cash reserves in the company to be able to go out for 1 year and beyond . So and that that was always a guiding principle For us , and and we and we ran things that way . So it's because , if you , I was very accustomed to running a revenue producing company .

That was my real experience base , doing acquisitions of revenue , producing drugs and and managing a business in that fashion . When you get into the research based side of this world , it's totally different , because you don't have that constant , you can't turn to spick it on and all of a sudden here comes a flood of revenue . You can't do that . It's not there .

In fact , what's happening is the water is slowly being drained out of your cash . All right , your cash is like a water , like I'd been in a bathtub and pull the plug and it's going down . So you need to be conscious of that all the time .

So I had to , we had to raise capital and we had to keep that revenue flow going . So that was the equivalent of that . So I kind of that's how I rationalized it in my own mind about it in terms of management .

But and it's not an easy thing to do , especially if you're really accustomed to P and L I was , I was so grounded in those principles the P and L , your P and L , is your burn rate here . So you've got to really be really , really on top of it .

All right , so I recognized pretty quickly that the earlier stage you were the lesser probability of getting anything done with a , with a , with a partner , with a big company or anything , or out licensing or trying to do something like that .

But that was not really in the carts with time being so , and so consequently , my business development activities centered on raising capital . Anything else , and that took the same business development principles that I had elsewhere , and ultimately what that evolves into is relationships become really critical . They're really important in terms of capital raising .

I went in side by side with the funds that we're putting money in . I think that the fact that I was willing to do that really helped us . It helped us get there . It really helped advance us . It gave a lot of people confidence . It gave our bankers for sure , a significant confidence .

The end of the day , and approval is the capstone of what you're doing . You've got to deliver that . We know that .

I always found that fascinating .

I mean , sidious has taken steps with its pipeline , I think , to , I guess , temper failure We'll talk about that in a minute , the pipeline and the strategy there , but knowing how do you reconcile being a risk taker in a business where failure is so common . This is the part you said something about psychoanalysis . This is the part where I psychoanalyze you .

Also , I think what we try to do is really manage it by virtue of the fact that the asset that we've chosen to work with here take the one that we licensed out of MD Anderson we really went further with that .

We went further , we took it deeper and deeper , as , because they had a good data set , they had a phase 2D trial that looked really great and with that we thought we could , we can bring this to the market and get it ultimately approved . So I wasn't . I had a lot of confidence in that Same thing with when we had when we got lymph beer .

All right , there was a drug that was on the market once and had been taken off the market by ESAI at the time because they had a reformulation requirement from the FDA to remove some unfolded proteins .

So basically and they didn't have enough inventory to go either way , both ways so they decided pull it off the market , complete the reformulation , bring it back to market , and the FDA asked them . When they did that , they came back with the results . They said this is a new drug . You got to do a phase 3 study with 71 patients in a lead-in trial .

So what happened was when we got to that , when we got to the point of where we were on a buyout of that license , they were on their very last patient on a phase 3 trial , last patient in . And I really believe I thought for sure , and I'm still maintaining it will happen is that this is approvable , that since it's got a history to it .

It was on the market , it had acceptance when it was on the market . It's a very rare disease . It had all it had a real . It's not going to require a giant investment to go out and market it . So there were , there were actually attributes about it and one of the other attributes that it had a very unique mechanism of action .

So basically , what we try to look for is , if at all possible , it's the uniqueness , the uniqueness of what we're working with . That's another aspect . Menaloc , the antibiotic lock solution from Andy Anderson , is a very , very unique product . There's nothing like it on the market , nothing being studied .

So that again is another attribute in terms of at least from my point of view , the risk-taking side can work in your favor .

You know several different modalities that you've and indications . I mean there's a broad swath of indication . What's the strategy there ?

We've more or less just put a put a hold on it for a time being , until we see if there's any further developments . Yeah so .

Yeah , I'm going to keep it out of that Because you know , I've encountered , I've seen that in the past and that's a very bad driver at times . So you get to the point you've got information , you've got good information , so I'm going to keep it out of that , Okay .

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You also told me when we talked a couple weeks back , you made a comment about this business being entirely different , completely different operation than it was 10 years ago . I want to dig into what you mean about that .

Do you mean this business , meaning the specific business that you're involved in and running , or do you mean the business in the sense of the greater industry ?

The percentage increase equates that All the people that we brought on board are all professionals . It's not like we've got four secretaries in here or four mid-level . We don't . They're all high-caliber professionals and in various disciplines . When we were at six , we didn't have that .

We contracted everything out in terms of expertise and it was just managing consultants , more or less . Now it's actually managing that effort itself and with your own staff . That's very different compared to where we were . That was our evolution . The industry itself I've seen this industry go through . I think it's gone through changes .

It used to be , for example , spec pharma . You don't even hear that anymore . That term Spec pharma was hot Buying revenues the beta I'm talking about . If you think about the valiant model and what they did , and others as well , there was a whole host of the cadre of people operating in that universe . Then one day it all dried up .

It all dried up financially completely . That whole segment of the market just disappeared almost . On the biotech side , biotech will always have the same principle going forward , that is that it's very high risk . A lot of it is very early stage . You're investing in some basic scientific breakthrough concept that you've got to recognize .

You've got to put the money up to take it all through that whole preclinical side to get it to a point , to get it into the clinic . That universe is really bifurcated those that are on a preclinical side , those that are in a clinical side and those that are in between . It's bifurcated , it's tri-furcated . That side has not changed an awful lot .

At least that's my perception . I think what happened here also is that it's probably the financial side is where the pressure points have evolved . That is that the capital raising for the earlier stage companies was a lot easier five years ago or longer , maybe a little bit longer . There was a lot of new companies got created in that process .

Now the rubber is really starting to hit the road in here and the capital is not that easy . Forget about the IPO flow . Forget about it . It's low . It's nowhere near what it was . There's changes there and it's cyclical .

That part of it is another aspect Whether people want to admit it or not , there's a cyclical aspect to what's going on , more in that world than I would say in a pharma world .

Does that put you in an advantageous position .

I guess the general question where I'd start with this one would be like what advice ? I mean , you've got a lot of experience with these things . You've worked with the FDA for a long , long time . You know what's coming down the pike .

What's your advice to folks who maybe haven't seen some of those ups and downs in terms of navigating the company through them ?

What happened with us is we actually had positive indicators including , let's say , within a month of that CRL letter , which was a month before the Padoopa date , we were already engaged in a process for negotiating the labeling package insert , full disclosure , all that , and usually in that process the experienced folks will tell you that's a great sign that you're on

your way to an approval . Well , it didn't happen that way . So we had a gap . We had one thing that was not in that filing and it had to do with manufacturing a manufacturing test of all things on the final finished product .

So we had a test that was completed but had not been validated , and the validation would not be complete until the end of , let's say , end of October or thereabouts . So we thought the FDA was going to give us a conditional approval , and basically with the condition that that validation test be completed .

Well , they chose to give us a CRL , so in their infinite wisdom order . So that was very , very disappointing to all of us . But we had to move on and we adapted very quickly to that situation . We're confident we're getting this drug approved . So it's for rare cancer and it definitely will save lives or extend people's lives .

I should say over time , so that it should be , it will be approved .

So basically , it's important to maintain that your staff , your team , has same attitude that you have , that your , your enthusiastic , your positive , you're going to , you're going to overcome what this is about .

And they and you have to respond , you know , very quickly to the FDA , get back to them with your plan , what you're going to do , how you're going to your resubmission .

So they so that's a word , we jump very quickly on that and we got , we got a response back from the FDA that indicated their in agreement with what we're doing , and so we'll be resubmitting somewhere towards the end of the year , beginning of the year , somewhere in that timeframe , and then the FDA will give us a new pedupadate .

So we'll see what that looks like then at that time . But it's , you know , psychologically , initially , when you get hit with it and you weren't expecting it , it's , it's a blow . Yeah , it's things . You just took a punch in the mouth , all right , and you better step right back and get back in there . Yeah , and you can't , you can't , you can't .

Dwell on it too much , I don't , I don't like dwelling on anything like that , so you just got to move ahead .

It's all a sudden a few , something they have to repeat a clinical trial or or something like that . That's an issue , that's a real issue . But this , not to say it's not an issue , but you can . You can basically overcome it efficiently .

So , and we were , we were fortunate that we were able to bring this asset on board and fear to really help defray that . You know the risk that's there . So we're , we're , we're in a much better position as a result of that . Yeah . So , and we were a single product company actually for the longest time . Right .

So and I and I always , even though I felt confident about it , I just I was never comfortable with the fact that it was a single product company for the most part . Yeah . Even though you know you can talk about those other assets , but yeah , that was the principal one , that was it .

So , and look what happened COVID came along into late art clinical trial , so so , as a result , bringing something else , we it worked out that and , by the way it was , it was not an easy process for us to get that asset . We had to go through an auction process so , and that had its own set of characteristics .

So , but an auction process is an auction process , it's it's . It's a real interesting .

So I appreciate a deal on your financial terms , as opposed to suddenly the auction dictating what those financial terms are . Yeah , that's a different story .

Time to catheter failure is a comparison of our LOC solution to what I termed a home brew that the hospital mixes up . What happens is , with patients that have infected catheters , the standard of care is to remove the catheter and replace it with a new catheter .

Usually , what happens is , initially , the catheters are placed , inserted subclavically by the collarbone . It has to be surgically implanted and it gets threaded to the heart . If that catheter gets infected , they have to remove it surgically and then they have to replace it surgically . Usually , a lot of times , the new catheter is placed down by the groin .

It gets threaded up . There's about a 20% adverse event profile associated with it . What happens ? In a certain percentage of cases , though , there are patients that no longer have access points that can be used for a replacement catheter . The hospital will mix up I call it a home brew , an antibiotic solution that they'll try to salvage that catheter if they can .

That's what our trial is all about . Our goal is 92 events . We've crossed a 92 event line , but we're taking it over in order to give us a better margin in terms of on a statistical side , just to make sure that there are no issues on the patient counts .

When we get there , somewhere in the course of somewhere in 24 , we'll have a top line data readout on this and then we'll go to the agency with the data . Very good .

You have the counter market that has products like Preparation H , but Preparation H can handle grade one hemorrhoids , not grade two , three , four .

We thought , all right , since they were working on a formulation that they had , that it could be a category , if we don't spend a lot of money on it , that if we can prove some efficacy we can sell it off to a major player , because I think it's a market potential . It's gigantic .

There are several million patient visits to doctors' offices annually in the United States for hemorrhoids . This requires somebody with a larger sales force direct to consumer advertising . It's not our model . We've been working with a formulation that contains Halo Betazol , which is a fluorinated high-potency steroid combined with lidocaine .

We've just completed recently a phase 2B trial that looks positive . We're going to go to the FDA with it and work out a phase 3 protocol . The phase 3 protocol has a number of patients that makes it really economical for us to execute on it .

We will in order to put it in a better position for ultimate license or sale to a pharma partner that , like I said , is far afield from those other two drugs . Sure is yeah .

You're probably a mentor to several people at this point , I'm sure , in your career and have been over the years . But you told me stories about Parker G Montgomery , who is a man who , as I understand it , he's like 100 years old . He's got to be close 93, .

All right , so , and I you know what happened was I started out on the sales side and I got promoted after about a year and a half to being a market research analyst , and a short period after that I found myself , you know , putting a deal presentations together . I was in .

I got at one point I got promoted overnight from being a product manager to being responsible for strategic planning , and it was done by a leader or not , it was done by him . We were all at a strategic planning meeting in the Poconos then and it was on .

The Cooper had invested in a small eye care company that was doing like $10 million in revenue and Parker wanted that business to really get up there and become a hundred million dollar company quickly . But you know I so .

So during that session , what happened was at one point he just turned around and said okay , leonard , you're now , you're no longer going to be in marketing , you're going to be in strategic planning and I want you to come back here in 90 days . I want to plan on how we're going to get to $100 million .

And at the same time he said to me he said you're also going to do all your bosses paperwork , because he used to do paperwork . So that was , that's how it was .

I set up a dermatology company . We had a vino as our principal drug back then . So I witnessed firsthand I'll give you an example on something I witnessed firsthand how it was a great growth story . The company acquires a tiny little toothbrush line doing less than a million dollars in business at the time . Yeah . RLB . Yeah , rlb .

It became the world's largest selling toothbrush . Yeah .

We bought everything in site Bakeaway multiplication . Iols had the very first extended wear contact lens , called Perma lens , on the market , and Parker was a risk taker . He was not a technical guy . He had Harvard Law , harvard undergrad , was an assistant to the secretary of state at one point and he started the company himself . He was a real entrepreneur .

So , which is incredible , he was really the one who pioneered deal making and the way it was done , way back in those days . Yeah . So I just I had a hand at home . I'll give you an example of how that risk taking side worked with him . So , because I was part of the group that was doing the evaluations . So what happened was they ?

The company had this extended wear technology but it still had to go through a phase of FDA testing and all the outside advisors that came into Cooper told Parker and the company don't do it , you'll never get it cleared through the FDA . So what happened was Parker had a science advisor , full time science advisor on staff and he was a PhD , brilliant .

And he told Parker take the risk , you'll miss a pass . After all , these outside experts said I'll never pass . And he said okay , we're doing it , we're going to go . All right , it worked , it got approved . I saw that happen several times within . Like I said , he was not a technical guy in the least bit .

I interviewed people that come out of the large companies today and they tell me they don't even know who they . You know they don't even interact with the vice president , marketing , let alone the CEO of the company . But you know , we had to give presentations to the CEO and the entire company all the time . Yeah , you grew up . That you know .

You grew up very quickly . It was in that kind of environment . Yeah . It was a great place to be and for me , he was really . He was the best .

You know the intention would be to take that and give it to someone who knows that business does that . So you've made quite , quite over the years . You've made quite this transition into , you know , the biotech business , which is , which is not consumer facing .

Is there , like in your risk analysis and risk approach , is there any nuance , like between what you learned early on and this business that we're in now in the biotech space ? Is it different , is it more challenging ?

By the way , that company was a prescription product company also , oh Well , so it wasn't just consumer packaged goods , so so , yeah , so , basically , you know , I , I think this environment , the biotech environment , compared to that environment , was that the company was still bottom line managed , financially managed because it was public .

It had a report , quarterly earnings . So you had to be , you had to be very conscientious of it .

As a matter of fact , I'll tell you something interesting the thing that when , again , when we were , when I was a product manager with Parker Montgomery , insisted upon that all the product managers have detailed knowledge about cost of goods , he wanted them , he wanted everybody to know how cost of goods were calculated .

Well , went into that formula and and and all the elements of it , the overhead element , all that from an accounting side . Yeah , and you know , talk to you , talk to marketing people today . They want to . They want to . All they know is just a line out to them doesn't mean anything . That's not . It's not how you view it , so it was good for us .

If you like listening in on conversations with biopharma leaders like Leonard , subscribe to the business of biotech podcast . Sign up for our newsletter at bioprocessonlinecom backslashbob . Also , be sure to leave us a review and let us know how we're doing . And , as always , thanks for listening .