With apologies to Tom Petty, as biotechs go it’s the starting that’s the hardest part. No one knows this more than Jeff Wolf, who’s responsible for more than a few biotech startups. We caught up with Wolf for a candid talk on the toughest aspects of birthing a biopharma.
Any time we have an opportunity to talk with Jeff Wolf, we take it – especially when the conversation tackles the highs and lows of leading a biotech startup. Currently the founder, chairman, and CEO at the clinical-stage immuno-oncology biopharma Heat Biologics (HTBX), Wolf previously founded or co-founded Avigen, Elusys, TyRx, Generation One, and Seed One Capital Ventures. Those are some pretty impressive biotech chops, especially for a guy who’s picked up his biology learnings along the way. Wolf earned his M.B.A. from Stanford Business School, a J.D. from New York University School of Law and a B.A. from the University of Chicago, where he studied economics. He zeroed in on biotech early though, serving as managing director at the biopharma-focused VC firm The Castle Group for five years before taking the leap into his own first startup. I recently sat down with Wolf to address a list of open-ended questions about the most challenging aspects he’s faced in several disciplines of biotech entrepreneurship – from getting the business off the ground to navigating the regulatory and legal gauntlets of biopharma.
What's the hardest thing about getting a biotech company started?
Wolf: The most challenging—and important—thing about putting any company together is developing a story that resonates with people. If it doesn't resonate, you're not going to find people who believe in what the company is doing enough to want to work for the company, and you're not going to find investors. The story has to be relevant with a clearly articulated upside, one that resonates with people so they can clearly understand what's going on and what the upside is.
In biotech, that starts with the relevance and potential impact of the science. It often requires a lot of creativity to weave and tell story in a way that people can understand it. The story has to be contextualized to make it accessible to people who might not be as enamored by the science as you and your scientists. In this business, some of your most important stakeholders and allies will care less about the science than they do the story.
What’s the biggest challenge to getting started in the fundraising game?
Wolf: The biggest challenge, by far, is securing that first money. Very few people want to be the first to invest in a new concept. It’s an agonizing and gut wrenching time, because you know you have something interesting, something you’ve been working hard on and building a good story behind, and you might hit brick wall after brick wall because investors tend to want to put their money into companies that have momentum that you don’t yet have. Those early-stage investors who commit the resources necessary to create that momentum take on the biggest risk.
It helps if you have what I call, for lack of a better word, a rabbi. Someone who's well-respected and who can become the first one in to take the lead to validate the science and whose reputation can help to connect you with good investors and partners.
You’ve mentioned the importance of the science as the backbone of the story. What’s the most challenging thing about ascertaining enough confidence in the science to say, “I’m going to build a company around this?”
Wolf: You’ll review the science, and you’ll have other people review the science and give you their opinions. And, of course, there are certain boxes that you have to check, such as intellectual property to ensure you’re not infringing on other people's patents. But it also has to be something more visceral than that. You have to jump in and commit and believe that there’s something special about what you’re building, what you’re putting all your time, effort, and cash into. Checking the boxes is just the prerequisite.
What’s the most challenging aspect of conducting clinical trials?
Wolf: The immune-oncology landscape is changing very quickly. There are companies that have designed trials and spent three years running them, only to find that the setting they’re running those trials in is no longer valid or relevant. First line treatments are changing rapidly, so drugs approved for use with those treatments today could be obsolete before the trial is even over.
This risk is especially present in immuno-oncology. It's a very hot space, you just need to be very careful about designing a trial that's relevant and that will remain relevant when the trial is over.
What’s the biggest HR challenge in biotech?
It's really acquisition of talent. It's very difficult to hire not only good people, but people who you can share a common vision with and work with effectively. There are plenty of people who know their technical stuff, but if you don't see eye-to-eye on big strategic issues or if it's difficult to work with them because your work styles or personalities are so different, it's difficult to move things ahead.
I try to focus candidate interviews on communication style to determine if it’s in line with our approach. If a prospect’s communication style is very different from ours, they’ll have a very difficult time understanding what we’re doing and why. I also interview for vision. I have to hire people who can see things broadly, who aren't myopic about the way they view their positions, because their positions will interface with many others. We bring a lot of people to the circle to help make decisions from very disparate parts of the organization.
Heat Bio is deep into the clinic at this point, so you’ve had plenty of exposure to regulatory challenges. What’s chief among those challenges?
Wolf: There is so much strategy that goes into regulatory interactions. The discussion and negotiation with the FDA are constant. We need people who really understand that piece, because it's not something you can take lightly. And again, the challenge is related to how you design clinical trials. Exploratory trials take years, and in the end, you get very little data that’s going to help you get to registration. Yet, you have to be registration-focused from the first meeting with the FDA. So, the problem with designing a regular registration trial too early is that you don't have to take risks when you don't have all the data. That's why large pharma does exploratory trials. But as a small biotech, when you're doing exploratory trials, it's very expensive and time consuming. You don't have the resources to do massive cohorts and spend gobs of money to get data that's going to help with the registration. You have to take on more risks to get to registration fast and efficiently. The way you perceive the regulatory strategy is highly dependent on what type of organization you are and the level of resources on hand to manage the process.
What's your day-to-day level of consciousness around stock expectations and what’s the biggest challenge about managing those expectations?
Wolf: Running a biotech company, especially in a dynamic company, requires a focus on the end game. That's getting our drugs through to approval and bringing on the right people to do that. So the operational aspects really take priority, because if we can deliver on what we're promising, then the patients, company and the shareholders are going to benefit. Along the same lines, we want to understand what our investors’ expectations are, hear their good ideas, and take their concerns seriously.
Earlier, you mentioned intellectual property in the context of embracing a biologic product’s potential. Is that the primary legal concern associated with running a biotech?
Wolf: We take the IP piece very seriously, and we have great IP attorneys. We have number of issued patents and a number of patents that are working their way through the patent office. We have unique technology platforms, including our proprietary gp96 Platform and our PTX-35 co-stimulatory antibody, and other candidates in the pipeline. So the IP is very important to us, and my best piece of advice on that front is to get great IP attorneys and make sure you don’t publish before the IP due diligence is done.