Episode 10: Commercialising research: the collaboration between tech transfer and investment - TRANSCRIPT

Transcript of Episode 10

Text has been edited for context and clarity.


Dr Anne Lane

Hello, and welcome to our 10th podcast from UCL Business Big Talks on Big Impacts. UCL Business is the commercialisation company for UCL, and this year-long podcast series celebrates the company’s 30 years of collaboration and impact.  I’m Dr. Ann Lane, CEO of UCL Business and I’m delighted to be joined by Dr. Chris Hollowood, CEO of Syncona Investment Management Ltd. Welcome, Chris.

Dr Chris Hollowood

Thanks very much for having me.

Dr Anne Lane 0:49 

So UCL and UCLB, and Syncona have worked together for several years, almost from the inception of Syncona. Chris joins me here today to talk about that collaboration, what we’ve done, and some background on Syncona.

Chris, really, first I wanted to ask you how you came to the job because I know you’ve got a science background. I know you did natural sciences, and then organic chemistry, and you did a PhD. Your latest role before Syncona was at Apposite Capital, which was also in healthcare. But I think what would be interesting to me, and to our listeners is really how you made that transition from scientist to investor. What really got you about investing rather than carrying on?

Dr Chris Hollowood

Well, so I like to think of myself as a scientist, although it’s a bit tenuous to claim I’m still a scientist (I have been out of the lab so long) but it really starts with a passion for science. So, I did do in natural sciences as undergraduate, I did my PhD in organic chemistry. And I loved the scientific method. I loved all of the things about science except the lab work.

And I think like a lot of my peers at the time, they wanted to stay involved in science, but didn’t necessarily want to pursue an out and out research career, or maybe career within the labs of industry, and so, I looked for something else, as they did. And there’s many things you can look at.

Venture capitals seem to me to be something that had high science content but would allow you to embrace a lot of other facets of the commercial world; investing, IP, the clinical side, and it brought it all together.  My route to it was actually – no one was going to hire someone into venture capital straight out of a PhD – So, I slugged it out as a healthcare analyst on the buy side for a mutual fund; that actually gave me quite a lot of basic training in investing that sort of married my scientific training. And then I got a break to join the Rothschild Venture Capital Group. They were actually spinning out at the time. They were looking for chemists to join their team. So, they very much valued kind of my scientific background and content, and then it took off from there.

So, from there, I went to Apposite. We had a very successful run investing both in healthcare services, and life sciences. And then 10 years ago, just over 10 years ago, the Wellcome Trust, started Syncona, very much on the premise that high science is the best place to have high clinical impact, and biotech companies – the venture capital backing of biotech companies – is an absolutely key part of the ecosystem to connect those dots. So that’s how my role in Syncona kind of came about.

Dr Anne Lane

I can understand that transition from the PhD and not liking the lab work, because I did very much the same thing myself.

So actually, I was going to ask you about Syncona, and how that came about. And obviously, you know, it evolved from the Wellcome Trust. But what was it about? I mean, you’re very closely located to UCL, and I can remember Martin Murphy, who was then brought to set up Syncona, coming to talk to me and saying “We don’t do very much with UCL. We really need to talk to you more” and, you know, here we are now, with four companies that you’ve invested in, which have been very successful so far.

But what was the thinking at Wellcome then about setting up Syncona and, and how to get involved with it? And was it really just universities that they’d intended on investing in first, or were there other things they thought about?

Dr Chris Hollowood 

I think it started from a broader premise; it started from the fact that, you know, the Wellcome Trust, has a foundation that it wants to invest, to make money to feed the charity. And the charity, does a lot of investing in basic research and clinical translation; and I think there was a frustration that a lot of that great seminal work often done at UCL was not making its way all the way out to registered product that was impacting patients, and that after all, was part of the charitable mission, of the Wellcome Trust.

What they saw, which was I think I was in the industry at the time and something I saw, was that in Europe in particular, there was a disconnect between the lifecycle that it takes to take cutting edge research all the way to a health care product, and the life cycle of the investor horizon to do it, number one, number two, the scale of capital and ambition, anyone was willing to put against that.

So, they want to solve those two things.

So, on the first one, what they did, is they incorporated us as what’s known as an evergreen fund. It means that we have no timeline on which to deliver a return. You do need to deliver a return, we’re a commercial fund, but we can connect the dots from science coming out of a lab at UCL all the way through to a biotech company that’s running a phase three trial, and we can invest in each round of that company as it grows, and I think that’s hugely enabling for the, for the companies we build.

And then, you know, ambition, because it’s very scary being a biotech investor, because most things fail, and it’s probably one of the most humbling jobs there is. But unless you start like you’re gonna win, you will never win.

Too many investors within Europe in particular (and a little bit in the US) have been burned so many times by the cycle, their natural reaction was to retract from it; so, invest less in the opportunity.  We came with a different philosophy, we came actually, the problem was, we weren’t investing enough.  I always try to come with the analogy of “it’s dynamite to blow up an oil well”; doesn’t sound like it should work, but it does.

And so, we started doing, as you know, quite big series As, and that’s become kind of routine now in Europe. Back at the time, it was almost heresy to be breaking the model in that way. And I think you embraced it with us and, you know, a couple of the early UCL companies that we did were absolute flagships for that model.

Dr Anne Lane 

Yeah. And I think, I think we’ve really benefited from that. I was going to ask you: do Syncona just invest in UK universities, or will you invest internationally?

Dr Chris Hollowood

We have no mandate to just stick to the UK; so, we can invest globally, and we have made a number of investments outside the UK.

That said, when you think about our model, which is the only ubiquitous source of non-derivative science is great universities, and the way to translate that great science into really impactful clinical products, is to build companies, buildings and local game, and the UK has a lot of great universities. So, it matches our model to do it locally.

We can build better companies when we can walk across the road, chat to you or chat to the scientific founder, have a coffee, say “This is the issue we’ve got. How do you want to do it?” as opposed to that person being five time zones away. So, the efficiency of company build is very much helped by it being local.  And because there’s so many good things here, why deviate?

I think the vast majority of what we do will be UK-based, but with an eye to the international because these companies can start local to be successful, they do need to address other markets, other regulatory regimes, and they need to be built in order to do that.

Dr Anne Lane  8:28 

And what areas is Syncona looking forward to investing because all of our companies have been selling gene therapy based? UCL is a leader in cell and gene therapy, but are there other things that you would..

Dr Chris Hollowood

Yeah, so we have a lot of discussion internally, that, you know, we’re not the people on the cutting edge of science. We are people that love science, and I think, can engage with people on the cutting edge of science in a collaborative and productive way.

Our skill set is not to prescribe what it should be. Our skill set is to recognise it when someone has it. And so, I can’t tell you what it is, is the honest answer to that!  Well, I think at the base of this industry, certainly on the on the clinical product side, is it’s all about insight around target. And if you have a biological insight around a target that’s going to have high impact and a horrible disease, that’s the base on which you build everything else.

We did do a lot of cell and gene therapy at the beginning of Syncona (and we still love cell and gene therapy and UCL has been a great source of cell and gene therapy for us), but if you think what cell and gene therapy does, it accesses targets that weren’t accessible by any other modality, or accesses them in a way where you can exercise more biological power against a known target. So, you take CD-19.  Everybody knew CD-19 was a good target. That wasn’t new. No one could hit it with enough power, and cell therapy came along and that did it.

So, Haemophilia B – Everybody knows that’s a monogenic recessive disorder where you’ve got a mutation in the gene that encodes factor nine. It’s not rocket science what the target is. Right now, to solve it, though, you have to take enzyme replacement therapy three times a week, or if you’re lucky to get the long acting, and maybe it’s every two weeks, but that is for a lifetime.  What gene therapy does, we can now hit that target with precision, and do it once.  And so, it was always target-based, not modality-based and that’s what led us.

Now, just so happen, investing those modalities open up tonnes of targets; and so, we spent a lot of time doing that, and we’ll continue to do that. But we’re looking for that person that has that special insight around that piece of biology that has clinical revelance and then we will bring the rest. We will partner with that person and bring our skill set around strategy, commercial planning, team building, accessing other people’s capital and build a company.

Dr Anne Lane  11:00 

And that leads me very nicely into the next question, which is on Autolus, because that was the first company that Syncona invested in at UCL, and you put a lot of money in right at the beginning. I think it was the biggest Series A in Europe at the time. So, can you take me through the Autolus story, and what attracted you about that? I mean, presumably, it was a lot of the things that you just talked about.

Dr Chris Hollowood

A lot of resonance. It is a great case study for what I’ve just mentioned. So, the central of Autolus, is a guy called Martin Pule. He’s rather brilliant! And we want to work with brilliant people. And so, that was key to our attraction to it.  It’s not just that he was brilliant – he was someone who was straightforward that we could collaborate with, and therefore, we could build a productive partnership. Because, if you can’t build that trust between the founder and the founding investor, then you’re second guessing every decision (if you have to second guess every decision, you’ll trip over yourself, and you will fail). So, it was both.  And he had come up with a novel insight on technology around T-cells, CARs in particular, but a special twist on it that was pretty exciting. We saw a great opportunity in that platform technology to take it forward. So that’s what attracted us.

I think we went in with an initial premise around maybe one section that technology. But then as we got to know Martin, (we) saw the wider opportunity with everything in his lab. And that then became a £30 million Series A and a big company to build, but that was the initial attraction.

Dr Anne Lane

And to talk through Autolus, what would you do differently, if there’s anything you’d do differently?

Dr Chris Hollowood

So, let’s be clear – Autolus has been a fantastic success is about to file a BLA. So as a company, to go from a university startup, to filing a BLA is a journey very few make and so, congratulations to that company for me.

Enroute, as an investor, it’s not going to be our greatest ever return. We will make a return out of it, which is fantastic. And so, there are judgments around capital use (which programmes to back, which programmes not to back within that general envelope, the management teams and boards made all the time as a company develops), and of course, with hindsight, in any company I’ve been in, even the best one I’ve ever been in, with hindsight, there’s decisions you would have optimised differently. But it’s a company that’s made the rare journey from A to B and that’s fantastic.

Dr Anne Lane

Yeah. And it’s been great for UCL and UCLB because it was the first one that went public and listed on NASDAQ, and the first of five for us, which was great.

I think one of the things that that I wanted to ask about too, was how was working with UCLB because obviously, this is UCL B’s 30th anniversary. And you’ll have seen there’s a lot of narrative around technology transfer offices and universities and how well do they spin-out companies. It’d be really great, from an investor point of view, to get an insight in what we did right, what we did wrong, and overall, the ecosystem in the UK?

Dr Chris Hollowood

Well, I think, you know, like all things, when you’re partnering with someone, you need to learn their priorities, in order to make sure that their strategy can mesh with your strategy for a win-win. We’ve always found UCLB very easy to collaborate with, very transparent on those aspects and very practical, frankly, in how we solve particular problems that we come across.

Clearly at the beginning, we were learning too, you know, we’ve not done this before when we started; so, we were learning too.  And there’s some bits there, where looking back and looking how we now do it, we waste a lot of time on that. But, you know, that was just the learning process, and it was all done in good faith.

Now, I think when we have an opportunity within UCL that we like and we come to you, it’s actually pretty slick to get it done. So, we enjoy working with you. And I know there is a narrative around kind of European tech transfer offices etc. I think that the press around US tech transfer offices being so much more sophisticated and so much easier to deal with and all of that stuff, is slightly overdone.

Dr Anne Lane  15:57 

That’s always good to hear. One of our business managers who actually was the instigator, really, I think, between putting together the patent families and the patent portfolio that went into Autolus.

Chris Williams now works for Autolus; is a Vice President there, I think. He’s done really well, and he didn’t go in immediately.  One of the things I encourage as a CEO at UCLB is actually I like the team at UCLB, to develop their careers, either within the company or outside of the company, and I think going into a spin-out company is actually one of the career paths that a tech transfer professional can take. It’s always hard to get good people into tech transfer.

Are there anything, any pointers that you could give to someone who, who might be actually a scientist or even working in business, to encourage them to potentially take up a role in tech transfer, or to work in a spinout?

Dr Chris Hollowood

Yeah, I realise tech transfer offices are a great vantage point on lots of interesting things, where you might end up doing what Chris did. And I think, on your side of the table at tech transfer offices (and) where I sit in the investment, if people are going or if people leave our organisations, but they’re joining the ecosystem, that strengthens the ecosystem. So, that is a good thing all round.

People going through what you were thinking back when you’re a scientist (still are a scientist, Anne. We are still scientists, just don’t do lab work). They’re going through that thinking “I really enjoy scientific method, I really want to have an impact in science in medicine, but I don’t really want to do it through lab work”. There’s lots and lots of choices. And actually, a lot of those choices, open the doorway to other choices. And tech transfer is one of those.

And I think, you know, if people are thinking about it, listening to podcasts thinking about it, you know, you’re not committing yourself to life to tech transfer. If you’re joining Tracktown for you join, you might love it and want to stay. But it introduces you to a whole suite of people and a whole different set of roles, whether that be spinout companies, may that be investors that you will meet that will open you up to potentially following those careers as well.

Dr Anne Lane

That’s good to hear. And certainly, something I wanted to do, but I stuck with the tech transfer.

So, Syncona had set up four companies with us. Autolus is obviously the first and then there was Freeline, Achilles and Quell, which was the last one. Do you think that that is an area that Syncona will continue investing in or what do you think is next for Syncona?

Syncona itself has gone through quite a lot of changes as well. You merged with Basset and grew, and it’s now a billion pound, billion, dollars pounds, fund up. You’ve got 22 portfolio companies 22 programmes in clinical trials since 2012.  Actually, UCLB and UCL has got 22 programmes in clinical trials, which we were obviously very proud of. And you’ve got some great returns on that.  So, what’s next for Syncona?

Dr Chris Hollowood

Well, I think you know, what we’re trying to do is take the model that we’ve run for the last 10 years, not be arrogant about and say some things work, some things didn’t, change how we do the things that didn’t work, and build kind of an institutional capability that allows us to do this for more companies faster, build a bigger portfolio and aggregate more capital around it.  Because what we’ve seen over the last 10 years is If you take this very simplistic view of what I do, it’s the coordination of science, people, and capital. I spend, well, for the first 10 years, I spent most of my time finding people. Right now, it’s capital too because the markets have changed.

I’ve never ever sat in the UK and worried about not finding good ideas to work on. Now, all of that is true. Capital and people, if you can build the capacity of those two things, you’re going to create more companies with no dilution in quality. So, we should do that. And so that required a reconfiguration of our organisation.

We’ve hired some senior people, for instance, we had a guy called John Tsai, he used to be the Chief Medical Officer at Novartis. That means we’ve now got someone that (a) is a fantastic executive in his own right and go drive projects for us, but also can take an oversight role of all the clinical stage companies in the portfolio, that allows us to benchmark that allows us to optimise the quality of our capital allocation, and really drive our growth. That’s not something we’ve had the luxury of before.

And it also means that we have an executive on deck that can run their own companies, as well. So that brings extra capacity to us.

And so, at the core, what we believe is we’ve only just started. We need to do a digital change to how we operate in order to address the scale, we want to get to, which is what we’re going through this year. And then, I think over the first 10 years, we started 18 companies – so we did just under two a year. In the next 10 years, I’d like to say we start 30 to 40. That’s what we’re aiming for.

Dr Anne Lane 

That’s really good to hear. And hopefully, lots of those will be UCL companies or UCL based companies.

So, Chris, in the UK, there’s always the narrative that we’re good at the research, we’re not necessarily good at commercialising that research. And it’s hard to find the right teams to run spinouts when we do commercialise the research.  How have you found that both in terms of management teams for those companies, and in terms of selecting board members, because you all take an active role with your investments.

Dr Chris Hollowood

Yeah, so it’s we obviously joined the board of our best, but we build both management teams and boards to make sure our companies can be successful.

There’s an aspect to it, where the UK just isn’t the biggest market for the end products of any company, and in order to attract the sorts of capital required to get a company to the finish line of its success, is going to have to address international markets.  In order to attract the capital to allow it to do that, it’s going to capitalise those international markets.

And so, you can’t get away from the fact you’ve probably got to take U.S. capital in enroute.  We shouldn’t be ashamed of that. We should be absolutely on the front foot and planning our companies doing what we can do to make sure that we are in each investment round. So, we maintain a substantial shareholding on the team.

But you know what the UK has a fantastic set of kind of well trained, bright, energetic people that can really change how these companies actually grow. What it’s short of, is people that have the experience of building a company, or exiting a company, or taking a product to market, and that’s because it’s not done this routine in its history. It’s not a lack of capability – (it) just need to go through it a number of cycles. And each cycle is another management team that did it that can then go sit on a board of another one, or become the management team of the next one. And we need to build that.  We’ve had some successes now; we are seeing that sort of cycling a talent. And that’s what an ecosystem is. That’s what Boston has in spades. And then obviously the Californians have it a bit, and we have it somewhat here.

So, the first 10 years of our life, as I’ve said earlier, we work very, very hard on finding people. I think, don’t quote me on the stat but I think it’s some crazy stat like the first 10 CEOs we hired eight of them we relocated into the UK.  Christian, who is the CEO of Autolus, was commuting from Switzerland. And then that experience gelled with like the local scientists, the local executives, then allows the thing to operate and it will get easier over time. We are optimistic it will get easier over time.

We’re already seeing people from Nightstar (sorry, not to UCL one) But companies that ended up getting bought by Pharma. We’re seeing people recycled to companies that we’re now starting. That’s fantastic to see. That’s absolutely what we need.

Dr Anne Lane

Yeah. And I think as well, that actually having failures is very good training, too. So, I think it’s, as you say, it’s that lifecycle and being in the industry for long enough to see that happen, and to experience it makes a big difference.

Dr Chris Hollowood

Yeah, there’s a, there’s a huge amount of value in knowing what not to do because that means you can narrow what you do to a set to things that are more likely to work. That’s what experience gives you.

Dr Anne Lane

Yeah, and now I’m going to put you on the spot. What do you think the next big thing is? Or what’s the most exciting area of research that you might currently be working, if you can tell us about it?

Dr Chris Hollowood

Yeah, so I think we’ve got to a point now in kind of the tools available to us, whether that be genetics, whether that is some of the modalities, CRISPR, etc, etc. where we can do what I call hypothesis-free holistic experiments.  Sounds very grandiose. What I mean by it, is in the past, when you were looking for a novel insight to a target, a professor would research a particular pathway for 20 years, then he or she would come to me and say, “I think this works because of these experiments I’ve done.” It runs high risk of confirmatory bias as an approach to science. And ultimately, it does work – things do get drugged, and pilots get approved.

But if you look at the statistics on the number of drug approvals where the initial discovery was through pathway biology, or the number of approvals where the initial discovery was through phenotypic screening. Phenotypic screening gives you a much higher probability of success.

So, you take that observation, and you go now to it, whether it’s the cancer screens where you can take 100 cell lines, and you can use CRISPR to knock out 1000 targets. So, you have no hypothesis as to which target is going to be synthetic lethal, for instance, to use that’s as an example. Then you’re effectively doing a digital phenotypic screen.

And I’m hugely optimistic that that is going to lead to much less risky drug development, much more impactful medicines, because you will hopefully, by definition, not found a good target, but the very best target for that given situation. And I can think of… and we are already seeing a lot of settings, where that is being applied.

And then you link that to go back 20 years, if you found an interesting target, you go, should we use a small molecule or an antibody, and that was your choice. Now you go, small molecule antibody, CRISPR, anti-sense, RNA, the list is endless, gene and cell. And so, you have a huge toolbox and modality that you can now match to your holistic target experiment. And the power of those two things is beyond anything we’ve had in the industry today.

So, I don’t see the next big thing being a brand new modality turning up, as it was 10 years ago with cell and gene therapy and CRISPR etc, I do see the next big thing being that methodology research and the jeopardy now being, pairing the wrong modality to your target.   Because if for instance, we’ll take one that I worked on dry AMD. That is a disease, horrible disease, patients will go blind as asymptomatic for the first number of years, but you need to intervene in the first number of years. And a drug just got approved, which is an intravitreal injection once a month. So, patient going blind needs to be taken to a clinic once a month have an injection in their eyeball when they see no impact of it early because it’s asymptomatic.

Now what gene therapy does in that setting, is it’s a single injection for life.  And so that’s what I mean, what the company with a first approval has done is, it found the target, but it’s gonna get disrupted because it didn’t have the right modality match. So that’s a really interesting conundrum that’s coming. Now you need to think very hard about target and modality. If you get both of those right, I think you build yourself and exclusivity position in a market that’s very hard to disrupt. So, there’s a lot of prize for getting right, if you do.

Dr Anne Lane

Yeah. And I suppose that brings with it a whole load of health economics and how you then price those drugs and all of those things, so it’ll be interesting to see what happens.

Dr Chris Hollowood

Yeah, I think there’s a lot to play on that front.

Dr Anne Lane

And one last question, do you regret not staying in the lab?

Dr Chris Hollowood

So, I don’t know.  I felt wonderfully privileged because if I stay in the lab, I will be an expert in a particular thing, and in this role, people when they feel when they’ve really got to the point of high insight around something no one else on the planet knows, they come and talk to us.  And as a scientist hearing that, what’s not to like?

Dr Anne Lane

I think that’s a very good place to stop. It’s been great talking to you. I hope we’ll carry on many more conversations and investments too. But thank you very much.

Dr Chris Hollowood

Thank you, Anne and thank you for the invite.