AI & Capital Efficiency: Building a Lab-Free Biotech | Caitlyn Krebs (Part 4/4)

Intro - 00:00:06: Welcome to The Biotech Startups Podcast by Excedr. Join us as we speak with first-time founders, serial entrepreneurs, and experienced investors about the challenges and triumphs of running a biotech startup from pre-seed to IPO with your host, Jon Chee. In our last episode, Caitlyn shared getting blindsided by Medicare on maternity leave, turning a shutdown into a future cofounder relationship, watching the digital health boom from inside Rock Health, selling an Alzheimer's test to Japanese insurers as the only woman in the room, and sharpening her capital discipline at BlueStar Genomics. If you missed it, check out part three.

In part four, Caitlyn unpacks how founding Nalu Bio with two VCs shaped the company from day one: no lab, no university royalty burden, and a capital-efficient CRO and CMO model that lets the AI platform do the heavy lifting before a molecule is ever synthesized and why she sought out the world's leading endocannabinoid expert at Indiana University to anchor the science. She also breaks down why CB1 and CB2 GPCRs are among the most druggable targets in pharma, how Nalu's platform has accelerated drug development fivefold while doubling phase one success rates, and why she believes the endocannabinoid system is the most overlooked therapeutic frontier in medicine, one where two hundred million women desperately need better answers.

Caitlyn Krebs - 00:01:53: And so, again, taking that to where I am today, I think sometimes when you're strapped for capital or you have less capital, you're very efficient in how you use it and how you stay on target, stay focused.

Jon Chee - 00:02:08: Exactly. Exactly. And I say that because I think those are absolutely imperative skills that you gotta have. That's like an entrepreneurial lesson. Right? That's universal. Like, it doesn't even have to be biotech. Like, I've seen basically high schoolers just get insane checks, and then they go and—

Caitlyn Krebs - 00:02:27: High schoolers?

Jon Chee - 00:02:29: Yeah. Yeah. Basically, just like—yeah. Like, virtually, they're basically like math Olympiads. Yep. And, like, the AI space have convinced that the—I don't know. I'm not in this space, but they're virtually just math Olympiads. It's an AI company. I can't pretend to know anything about it. And then they get a massive check, and then they just go and blow it.

Caitlyn Krebs - 00:02:49: Yeah. I'm just like—crazy.

Jon Chee - 00:02:51: No. Like, I'm not against being well capitalized. I'm not saying that. But I think there's something to be said about it. It's like, constraint is like the mother of creativity.

Caitlyn Krebs - 00:03:02: Mhmm.

Jon Chee - 00:03:02: It's kinda like that. Even if you're not resource constrained, like, truly. But creating that kind of confine just really starts to help anything you're doing become way more creative and focused and you get shit done versus, like, oh, here you go. Everything at once. Oh my god. I'm gonna go—we're gonna have an off-site halfway across the world, like—and anyways. And I see that time and time again. I was like, goodness.

Caitlyn Krebs - 00:03:29: I absolutely agree with you. You hear entrepreneurs talk about how much runway they have left. You know? Okay. I've got six months left. I got twelve months left. I've got twenty-four months left. But you have to reframe that. It's like, how much capital do you have to get to the next inflection point? And one of my mentors has just hammered this in. It's like, it doesn't really matter how much money you have. Like, tell me where the next value inflection point is. Like, okay. It's like for us, IND submission or our phase one or our phase two or for our platform. How many molecules do we have off the platform? And so I think that's really when you think about fundraising, it's like you just need enough capital to get to the next inflection point to increase the valuation, then fundraise again. And so I think some entrepreneurs get lost in "I need two years of capital." What are you gonna do? Like, what does that actually mean?

Jon Chee - 00:04:21: It's that reverse engineering you're talking about.

Caitlyn Krebs - 00:04:24: Yes. That's exactly right.

Jon Chee - 00:04:25: It's just reverse engineer it. Just like work backwards.

Caitlyn Krebs - 00:04:28: Yeah. Work backwards. We're like, where do you need to go, and how much money do you need to get there? And raise that a notch.

Jon Chee - 00:04:33: Yeah. You act because a lot of the time is the other way where they don't reverse engineer it, and it's just like then it's just an open-ended thing where you're just like—

Caitlyn Krebs - 00:04:42: Yeah. And then you try to do everything. You're like, oh, this is interesting. We'll do that. Yeah. And it just—it doesn't—

Jon Chee - 00:04:47: It's like what Munger says, just like always invert?

Caitlyn Krebs - 00:04:50: Yes.

Jon Chee - 00:04:51: You're just like always invert? I mean, it sounds straightforward, but it's like sometimes it's hard when you're—

Caitlyn Krebs - 00:04:57: Right. When you're in the weeds, it's hard to kinda pull back and see what is the two-year goal, what is the five-year goal, what is the reimbursement strategy. It's hard to think that far out. Discipline.

Jon Chee - 00:05:08: Yep. It is—really is. So it sounds like BlueStar, they start narrowing down the focus. And for you, at that point, where was your head at? Were you like, I wanna ride this wave with BlueStar, or did you start thinking about your next venture?

Caitlyn Krebs - 00:05:23: So, actually, the woman, Phyllis, who I mentioned, who, you know, I was breastfeeding my son and trying to sell off the assets of Tethys, called me up and actually said, "Hey. I'm thinking about starting a company." I said, okay. Tell me more. And she started talking about the endocannabinoid system. And I started doing research and realized that we all have something called the endocannabinoid system in our bodies. And the receptor—largest receptor system in our body, it controls all major functions in your body: reproduction, cardiovascular, inflammatory, immune—and I had never heard of it. Most people don't know that they have an endocannabinoid system. They've never heard of it.

And so we just started talking and realized that these receptors in your body are actually GPCR receptors, which are the most druggable targets in pharma. About 30 to 40% of drugs on the market target a GPCR. And so it's really an untapped therapeutic opportunity. Like, pharma, because of the stigma that's associated with cannabinoids and CBD and THC and because of the regulatory environment, getting back to that, CBD only became legal in 2019. So it was really, again, kinda cutting-edge new frontier. And if we could use my background in modeling and simulation to develop drugs faster, more efficiently—so it's this marriage of the endocannabinoid system and really a huge gap in the market that we could fill.

Jon Chee - 00:06:56: Very cool. So, Phyllis, ring a friend. He's like, hey. This—like, check this out.

Caitlyn Krebs - 00:06:59: Phoned a friend. Yeah.

Jon Chee - 00:07:00: Yeah. Phoned a friend.

Caitlyn Krebs - 00:07:01: "This is interesting, Phyllis. Okay." And so she had another venture partner who is also very entrepreneurial. So the three of us—Randall, Phyllis, and I—started the company together basically to develop endocannabinoid therapeutics. And we focused—we looked at 11 different indications, and we focused on endometriosis and post-surgical pain.

Jon Chee - 00:07:24: Very cool. Tell us about the early days, like, the three of you, and what was that like? I mean, you've had the startup experience already, but now three of you guys are cofounding this thing. What were the early days like?

Caitlyn Krebs - 00:07:36: The early days were really challenging. So trying to get this company funded, we were lucky enough that one of my cofounders also was part of a fund, and so he actually put the initial dollars into the company. That was really helpful. We also actually—the founding scientist, we thought was gonna come out of Stanford, a chemist at Stanford, and that didn't work out. So talk about early dynamics of founders. And so we ended up actually developing the technology with some chemists out of Canada. So that was initially kinda where we started. And so it's all homegrown. We didn't actually license the tech. It was gonna be Stanford, and then we decided, you know what? We'll just do it all in-house.

Jon Chee - 00:08:20: Wow. So that's very unique and different about what we're doing.

Caitlyn Krebs - 00:08:23: Very cool and really interesting because, I mean, the economic profile of that is very different.

Jon Chee - 00:08:30: Very different. Yes.

Caitlyn Krebs - 00:08:30: We don't owe a royalty back to one of the large academic institutions. So it's possible. You know, if you have a really good idea and you can actually execute on that, that's definitely an upside of the business.

Jon Chee - 00:08:46: I think too a lot that, like, the traditional track is to spin it out of insert institution, but I love that, you know, it is possible. Like, you don't have to. There is a different way to do it. And so, obviously, the Stanford thing did not end up something out of Stanford. You ended up building it homegrown. When it came to fundraising, did that change the discussions? I mean, for I guess, for, like, when you raise capital, they're like, oh, there's way more upside for us.

Caitlyn Krebs - 00:09:14: Yes. There's way more upside, but then I think there was a lot of questions like, "Well, where did the tech come from? What do you mean? It didn't come from a university?" And we had to just explain. No. Actually, we developed it with our team internally. So I think, ultimately, investors recognized that there was more value, but it was like another question that you had to answer in the fundraising process.

Jon Chee - 00:09:37: For sure. And I feel like you have had no shortage of having to kind of bleeding-edge a little bit different, explain and bring people on board to a novel thing. Yep. And you had great success at doing that clearly. And so I guess maybe just to set the table a little bit, can you just tell us what the state of the market is when it comes to endometriosis and how your guys' technology is seeking to disrupt that status quo and what the current options are out there?

Caitlyn Krebs - 00:10:07: Yes. So endometriosis—large population, it's about two hundred million women worldwide. So out of ten women, one person will have endometriosis. So this is not a small disease. This is not a rare cancer. The other thing is that endometriosis causes forty percent of infertility in women. So it's young. It's like women—it actually starts in your teens, but the way they size the market, 20 to 45. So there's two hundred million women in the ages of 20 to 45. And the therapies are NSAIDs, so, you know, Advil, Tylenol. So it's abdominal pain, and then you have these lesions in your abdomen as well. And so it's pain. They'll start off on an NSAID. They then go on to opioids. No young women wanna be on opioids long term.

And then when the opioids don't work, they put you on a hormonal therapy, which in your background dampens estrogen and progesterone—basically shuts it down. Well, what happens when you shut down estrogen and progesterone? You go into menopause. You're 20 years old. You're on hot flashes. You have bone density loss. You're miserable. You can't get pregnant if you wanna have a family. And so there are no real good options for these women. This disease is also very complex. There's a pain component. There's an inflammatory component. There's an actual lesion. Almost think about it as like a tumor. There's a lesion component, and so the biology is very complex.

And so pharma has typically either focused on a single receptor to handle the pain or disease modification—just shut off estrogen. That's the best way we know how to do it. So there is no good nonhormonal solution out on the market, and that's what we are developing. So something that you can take that is as good as opioids, as good as NSAIDs, and you can still get pregnant. You're not in what they call chemical menopause, and we're using AI to do it. So based on all of my background in modeling and simulation, why wouldn't you use technology? Again, recreating the feedback loop. Right? So in a model, in computers, how can we actually model the endocannabinoid system and develop kind of these precision-engineered drugs to solve for that?

Jon Chee - 00:12:27: That's amazing to hear because, actually, a very close friend of ours has endometriosis, and, literally, the options are nil.

Caitlyn Krebs - 00:12:36: They are.

Jon Chee - 00:12:37: And a lot of it ended up becoming, like, invasive surgery.

Caitlyn Krebs - 00:12:40: Yep. Multiple surgeries. These women have multiple surgeries.

Jon Chee - 00:12:43: It's brutal.

Caitlyn Krebs - 00:12:44: Hysterectomy. It's brutal. And then they're like, "Well, if you want the pain to go away, we'll just give you a hysterectomy." And they don't have kids. Like, they won't be able to have kids after that.

Jon Chee - 00:12:53: Yeah. And I'm just like, what the fuck? Like, yeah. Big time. I'm just like, you're telling me this is how we handle this? Like, it's mind-blowing.

Caitlyn Krebs - 00:13:02: It's under-researched. They don't believe these women.

Jon Chee - 00:13:05: They're confused. They're super confused. The clinicians are super confused, and everyone's, like, pointing fingers and no one knows what's going on. And our friend is just—it's just awful. I kinda saw firsthand that, and I was just like, jeez. Like, this is brutal. And love to hear that you guys are, you know, tackling it from this perspective because the alternatives are not fun.

Caitlyn Krebs - 00:13:29: The alternatives are not fun. And this is the thing about endometriosis is it starts really young, which they're—we're learning more and more about the disease, but it basically starts at, like, a woman's first period. So she's a teenager, and it shows up as GI issues like bloating, constipation. But here's the thing. It's completely under-researched. It's underfunded in women's health, but it causes forty percent of infertility. Imagine if there was a disease out there that caused forty percent of male infertility. If forty percent of males were infertile, the world would be turned upside down. It would be the number one blockbuster drug on the market—more than obesity. Right? Yeah. Like, that's what men care about.

And so that's the thing that is so mind-boggling to me. And so it's a huge market. It's a huge opportunity. And the fact that the endocannabinoid system has a direct effect on pain, inflammation, and reproduction—you understand kinda estrogen and where it plays in the biology. The receptors that we're targeting, CB1 and CB2, they are at that point. So imagine that we are as good as a hormonal therapy without the side effects of these hormonal therapies. So our compounds—we're in preclinical—but our compounds actually modify the disease so they shrink the lesions. So it could either prevent the growth of these lesions or, after you have the surgery, prevents them from growing back and shrinking them.

Jon Chee - 00:14:57: That's amazing. Because at least what I've learned through the process or of hearing that, it's like the physical intervention, it sounds almost barbaric. They're almost like—it is. Like, it sounds really barbaric. Like, they go in and then they are basically just like—it was almost like cauterizing.

Caitlyn Krebs - 00:15:13: That's right. Scraping and cauterizing, and it's all over a woman's abdomen. And it can be what they call deep infiltrating. It can be on top.

Jon Chee - 00:15:22: Super invasive.

Caitlyn Krebs - 00:15:24: It's like kind of like tumors growing inside your abdomen, and they go in and they just start chopping them or cauterizing them. And then they grow back and they go in again and they remove them again.

Jon Chee - 00:15:33: I was like, what? This is like medieval. Like—

Caitlyn Krebs - 00:15:36: It is. It is. Here's the unlock is that women are so desperate. 55% of women who have endometriosis use cannabinoids—self-medicate with cannabinoids, CBD, THC. Fifty-five percent. You talk to all of the top OBGYNs in the country. I start talking about the endocannabinoid system. One physician who does surgeries in Southern California, he stops me. He's like, "You do not have to convince the pope to be Catholic." Right? He's like, "I'm a believer in these molecules." He's like, "These young women come in and they say this stuff works." He's like, "But I don't know what brand, what the dose is. There's nothing approved by the FDA." And so we're taking the real-world data, the market data that says product-market fit. People are already using this. We're just making it better, and we're making it something that your doctor can prescribe. And we're bringing purity and consistency and quality to it.

Jon Chee - 00:16:34: Very cool. Very cool. And as you're thinking about your pipeline and you talk about platform as well, how do you balance pipeline development versus platform development?

Caitlyn Krebs - 00:16:45: Yeah. That is the million-dollar question. It's very hard. Right? So we started off building the platform so we can create these new chemical entities. We can see how they bind to the receptors of interest, model them. That piece has just accelerated our drug development by about five times.

Jon Chee - 00:17:02: Oh, wow.

Caitlyn Krebs - 00:17:03: So it's very fast. But it's not just about the acceleration. It's actually about the biology. Like, do these compounds actually do what we believe they're set out to do, kind of precision-engineered? Also using AI, the phase one, so the safety studies—those success rates go up by about fifty percent. So, like, a typical phase one study has a forty percent success rate. This is just efficacy. Like, is this thing safe? Using AI, it goes up by two x. So it's, like, 80 to ninety percent success of phase one. So why wouldn't you be using AI drug discovery tech in your drug development? Like, if you're not, you're behind. You shouldn't be doing this.

But the pipeline versus platform is really hard, and so pharma values the pipeline. They value the assets. Right? Depending on the investor, the investor values the pipeline because you can generate a lot of assets and then license them to pharma. So the end customer cares about the asset, but the people who are investing in the tech care about both because you can continue to generate billion-dollar molecules, drugs.

Jon Chee - 00:18:15: Absolutely. And you're balancing this. It sounds like right now, everything is just internally developed, or are you now—already have found external partners already to partner with?

Caitlyn Krebs - 00:18:26: Everything is internally developed. We will license them. Our business model is licensing them at phase two. So get them, prove the safety, prove the efficacy—initial efficacy—and then let pharma kinda take them into phase three. That's our strategy.

Jon Chee - 00:18:41: Very cool. And when you do that licensing at that point in time, I know they can be structured in different ways. Do they give you—is it anything where you're getting big upfront with a potential tail? Or is it just an outright sale or kind of like—how do you think about when it gets to that phase two stage?

Caitlyn Krebs - 00:18:58: Most biotech deals are, as you say, an upfront and then milestone-based. Right? So if it's successful phase three, you get a milestone. Successful FDA, basically approval—another milestone. You're on the market—another milestone. And then royalties, like a small percentage of royalties. Again, it's a big market, but the actual single-digit royalties. So that's how these are typically structured. But you can imagine with a platform, once you have one or two of these, you're a good target for a takeout and acquisition via pharma.

Jon Chee - 00:19:33: Got it. So it's kind of like you have this platform, which is like this engine, and you can't neglect the engine. Gotta show it some love, but also at the same time, if you only do the platform, then the pipeline will languish. So it's kind of this thing where you're having to—

Caitlyn Krebs - 00:19:48: Yes. You have to feed the engine, but then you also have to kind of bring your children along and partnering them out. You end up partnering out your first child to fund the second child and the third child.

Jon Chee - 00:19:59: Absolutely. And it sounds like you guys have all—clearly, you've seen the value of being AI-first when it comes to this. And I guess when it comes to company building, I'm going to imagine that also enables you to be lean, mean, and just like—you're probably building your company differently than what a non-AI can keep up.

Caitlyn Krebs - 00:20:22: Correct. Yeah.

Jon Chee - 00:20:23: So talk a little bit about company formation and how it's structured, especially with your lean into in silico type stuff.

Caitlyn Krebs - 00:20:30: So having two VCs as cofounders, you build your company very differently. So they're very focused on capital efficiency because they know that that will drive outcomes for the company. So we actually use all CROs and CMOs, so we don't have a lab. We don't have the infrastructure of a lab. And we basically built this platform to efficiently get to the best compounds before we even make them through chemistry, getting back to like the organic chemistry conversation. So very efficient upfront and fast, making sure that whatever we're actually making in the lab through chemistry has the best shot on goal. And then leveraging CROs, CMOs—we do a lot of work in China. China is a very efficient place to outsource a lot of your development and studies, so we are as capital efficient as we can be.

Jon Chee - 00:21:26: And I think too is just like, when folks are embarking on this, it's like you can—like, there are folks who—like exactly what you said, you can partner with CROs, CMOs and get it done.

Caitlyn Krebs - 00:21:36: Yes. Yeah.

Jon Chee - 00:21:37: You can get it done. And a question for you is, I guess, do you work with American or, like, North American CROs as well, or is it all Chinese CROs and CMOs?

Caitlyn Krebs - 00:21:47: We do. We've worked with a number of folks here in the US, also in India—all over the globe, obviously, China as well. We'll run our phase one in Australia. So, again, the beauty of really leveraging this distributed model is you can kind of take the best from around the world and bring it into the company.

Jon Chee - 00:22:06: So a question for you: what is the each region's strength compared to other CROs and CMOs? Like, why would you choose one in America versus elsewhere?

Caitlyn Krebs - 00:22:18: India is very good in chemistry. They're very good in following a specific route in this case, but really, like, protocol, and it's cost-effective. And we are less worried about IP. So China—we're not necessarily giving them our chemical syntheses, but we're doing in vitro and in vivo studies there. So it's—I think it's knowing the company, knowing the technology, and also the environment. Here in the US, though, the companies that we've used—when it comes down to very complex protocols or complex data analysis where you really want that partner—you know, there's no language barrier. They can bring kinda scientific expertise. It really just depends on exactly what you're building and knowing which area is best suited for that.

Jon Chee - 00:23:08: Makes sense. And I guess a question as well outside of regions, what about small versus big?

Caitlyn Krebs - 00:23:14: Yeah. Smaller groups are faster. There's no doubt. They can move, you know, on contracts and getting projects started. I mean, because there's part of it is just you don't wanna lag time. You know? You don't wanna take a month or two months to get something started. But then larger—from a data credibility, we've tried a couple different CROs for the same study, and some are definitely better than others. Quality of the operators, quality of the reports. And so I find that the larger organizations, you can really trust the data. If you need to move fast and maybe it's more of a test case, go with the smaller guys, but larger credible is definitely been, in my experience, the best.

Jon Chee - 00:24:00: Interesting. Because I know some CROs just want to be end-to-end. And I always wonder, do you go for the end-to-end, or do you want to pick the specific player for the specific purpose and then piece that together that way? But it sounds like it's more of like the piece-it-together.

Caitlyn Krebs - 00:24:17: We piece it together. We have some really good also scientific advisers that have really guided us. Like, these guys are best in PKPD. These guys are best at animal studies. These guys are best at the chemistry. And so it's really a patchwork to get the best outcome—best data that you can from the provider. Yes, end-to-end—there are some companies that will do beginning to end, but, like, typically, they're not experts in all of these areas.

Jon Chee - 00:24:45: Yeah. It's hard to be.

Caitlyn Krebs - 00:24:46: It's hard to be.

Jon Chee - 00:24:47: Very interesting. And so you've been on this journey, and let's say, like, just the first one to three years—talk a little bit about what that era was for Nalu Bio. And then now, years four through six and beyond, how has that changed from the kind of the first half to the now kind of bringing up to present day?

Caitlyn Krebs - 00:25:07: Yeah. So first part of it was really building the platform, understanding the endocannabinoid system. I'd say we're world experts in the ECS. I went out and talked to—I actually went to scientists at Harvard and said, "Who is the best endocannabinoid expert?" And they're like, "It's a guy at Indiana University. He's been doing this for thirty years." I'm like, okay. I'm gonna get Ken Mackie on board. Like, find the best people to help you and bring them along. So it was building the company, getting the team together, building the platform, understanding the ECS, early days of molecule generation, developing the platform, and now kind of the second phase.

So early discovery. Now the second phase is get to the clinic. Like, that's where we are now. So we've actually had a CMO involved from the—so chief medical officer from the beginning. He's been great. He has supported us along this journey, but now it's time for him to really shine and design the best studies for us, successful phase one, phase two. So kind of a typical evolution of the company. Of course, you know, it's like a roller coaster as startups are. You know? There's always peaks and valleys, but we're in a really unique place with some really strong data and a huge population that needs better solutions.

Jon Chee - 00:26:26: Absolutely. You talk about the importance of IP for your platform. This is again coming from a non-lawyer, but I'm going to imagine a pipeline asset is easily protected from an IP perspective. Are platforms as easily protected? Like, do you treat them one and the same?

Caitlyn Krebs - 00:26:43: So we've focused on the assets as you say. So it's the assets coming out of the platform. In fact, our IP attorney—I worked with her in a previous company, so kinda going back to the ecosystem. So we're focused on the assets themselves. The platform is really more about know-how and protecting it there. I don't think I'd want to actually patent it to put it out there just because then you're enabling competitors to actually build it. We do work with Lily—has a program called Lily Gateway Labs where they unveil—so, you know, Lily has billion dollars' worth of data, and they've trained some of their ML, especially their ADME models, so absorption, distribution, metabolism. We do access Lily Gateway Labs, and in some cases, their models are quite good.

We also are part of NVIDIA's Inception program, so we use some of NVIDIA's software. But our platform—it's actually a small language model. It's very focused on the endocannabinoid system, 25 GPCR receptors. We're very good at our landscape, again, being an endocannabinoid system platform, but we do partner with other organizations across the ecosystem.

Jon Chee - 00:27:53: Cool. That's an interesting strategic insight of, like, actually, we don't wanna protect this with IP because this is out there—here's everything about it. This is what is protected. But that's like giving the Coca-Cola secret recipe.

Caitlyn Krebs - 00:28:09: Right. They keep that as a trade secret. 100%. Yeah. And, you know, patent attorneys are very good about making these things very complex, so you can't actually figure out what the company is doing. Right? That's kind of what they're paid to do, but we'd rather not have that out in—even if someone's trying to reverse engineer what we're doing, we don't wanna teach them how to do that. That's a lot of the value of what we've built. It's always important—like, we thought a lot about that is: do you keep it as a trade secret, or do you patent it? And I think there are use cases where patents are very valuable, but also trade secrets are also very valid. It's hard, though. Like, trade secrets—you have to be very careful. You don't wanna disclose it. It's all internal. There's a lot that you need to keep.

Jon Chee - 00:28:54: You gotta put some guardrails—like, tight guardrails. I was having a conversation with another friend. It's also just the choice of: do you wanna be even more secretive about it and go stealth? Right? He's like, "I wanna be super secret. And these crazy scripts couldn't see the light of day." And what is the consideration about talking about what you're doing or just keeping it under wraps? I don't know. I could see value in both. But I guess for you, did you ever consider keeping it stealth?

Caitlyn Krebs - 00:29:20: So it's interesting you say that. I'm part of this—as I mentioned—the biotech sisterhood, so a bunch of female CEOs developing therapeutics. And recently, I think being stealth seems to be—I wouldn't say common, but there are a number of companies that will stay in stealth mode for all of the reasons that you just described. What I've noticed, if they're in highly competitive, particularly therapeutic areas or mechanisms—so, like, in this whole GLP-1 obesity or even in pain, like NaV 1.8, Vertex pharma. So I think it depends on the indication that you're going after and the space. For us, because the ECS is so kind of new and untapped, I didn't feel like we needed to be in stealth mode, but some people are taking that approach these days. They're definitely doing it.

Jon Chee - 00:30:15: Yeah. I definitely see it. Like, then when they debut, it's like, "Oh, this is like a fully baked—"

Caitlyn Krebs - 00:30:20: Yes.

Jon Chee - 00:30:21: Fully baked. Like, some of them are just like, "Oh my god. Like, it's a very mature company at this point."

Caitlyn Krebs - 00:30:26: Yeah. It surprises me as well.

Jon Chee - 00:30:28: Yeah. Very interesting. And so it sounds like you said focus now is on the clinic. So as you're looking out one to two years, obviously, the clinic is a priority. What else is in store for you guys?

Caitlyn Krebs - 00:30:39: So, yeah, getting basically the phase two efficacy priority, but also partnerships with pharma—starting to cultivate partnerships with the right organizations who we think could be really valuable for us. And then the platform continuing with AI—you know, the environment is changing so quickly. So I'm a part of a number of different groups. So just understanding how people are using technology, what's the latest and greatest, and making sure that we're kind of on the cutting edge of all of that. And from a business model perspective, I'm just excited to watch the intersection of the direct-to-consumer world condense into traditional physician kind of detailing and where that's headed, and I think that's gonna change the landscape a lot. And there's pricing pressure too. At the government level, there's significant pricing pressure. So, again, as you say, like, looking at the end in mind, always being aware of kinda what the end game is.

Jon Chee - 00:31:36: Absolutely. And I guess a question for the pharma folks that you're looking to partner with: what would your dream partner look like?

Caitlyn Krebs - 00:31:42: So dream partner would be someone who is interested in pain and inflammation. Our first indication is endometriosis—women's health, pain and inflammation—but also someone who understands technology and kind of is using AI and ML. Because at the end of the day, that would be the best partner for us who really appreciates the value of these assets and how they were developed. And ultimately it's derisking, as you say. If you're using AI in silico—predicting how these will respond before—creating digital twins, you know, creating an endometriosis digital twin population and simulating how your drug works—like, that's where all of this is headed. So I'm really excited about that.

Jon Chee - 00:32:27: I'm gonna say—and like everyone out there, like Caitlyn's been doing this for twenty—like before it was cool. Yeah. Like, she's so not a poser. Like, very much—very much a real one from the very beginning. I love that. You know, you've been so generous with your time. Thank you again. I'm having a blast and learning a lot. And also just the endometriosis as an indication is super personal for me. And having a loved one go through it was like—I would not wish that on anybody. It's absolutely the worst. So one's like awesome that you're fighting the good fight. And I hope that many more people realize that this is important. Again, forty percent of infertility—that's a staggering number, so wake up, people.

Caitlyn Krebs - 00:33:14: So I don't know if—you know, there's this women's health bucket. Right? Endometriosis is put into women's health. VCs were complaining, "Where are all the women's health exits? Like, show us the money." So there was a company, AOA. They did a report—it was released at JPMorgan. There's been a $100,000,000,000 worth of exits in women's health in the last twenty-five years and half of that—so 50,000,000,000—in the last five years. So this is an investable. Like, this is not new. This is not niche. You know, women are not niche, and I think—

Jon Chee - 00:33:47: Yeah. Absolutely.

Caitlyn Krebs - 00:33:48: Women are not niche.

Jon Chee - 00:33:50: Yeah. Absolutely.

Caitlyn Krebs - 00:33:52: So that's the other thing is there are some significant returns to be made for investors here. But, yeah, thank you, Jon. It's been a pleasure. And the fact that you have experienced a family member or friend with endometriosis—like, you know the struggle, and you're right. Forty percent of infertility is just—it's unacceptable. Like, we just need to change it.

Jon Chee - 00:34:12: Yeah. It's just like—it's like smack-you-on-the-head obvious.

Caitlyn Krebs - 00:34:15: Yes. Yes.

Jon Chee - 00:34:16: Come on, people. Like—like, please. And so in traditional closing fashion, two questions for you. First is: would you like to give any shout-outs to anyone who supported you along the way?

Caitlyn Krebs - 00:34:27: Yes. I mean, I'll give a shout-out to my main champion, my husband, who has been along this journey with me, and my three kids. I have two boys and Nalu, my third child, and Phyllis Whiteley who brought me into Nalu. She and I obviously had worked together at Tethys many years ago. And Tom Patterson—so the modeling and simulation expert that we worked together twenty years ago, and we're back together again. The band's back together again. So, yeah, they've been great.

Jon Chee - 00:34:53: Always comes full circle.

Caitlyn Krebs - 00:34:55: Yeah. Absolutely. It's full circle.

Jon Chee - 00:34:57: Yeah. And then, also, I gotta give a shout-out to my wife too. Like, when it comes to the entrepreneurial journey and being so supportive—like, I cannot overstate how your significant other is critical to anyone who's on that journey. Without them, it's not possible.

Caitlyn Krebs - 00:35:13: It's not possible. Or great.

Jon Chee - 00:35:14: It really isn't.

Caitlyn Krebs - 00:35:15: It's not. And especially if you have kids—like, it's really not possible without—agreed.

Jon Chee - 00:35:22: Absolutely. And then last closing question. Can you give any advice to your 21-year-old self? What would it be?

Caitlyn Krebs - 00:35:28: I would say trust yourself, trust your instincts, and also the relationships and partnerships that you build along the way. As you've seen, it's been really fun to go back through my career and progression, but it's all about the people. That's who help you build companies, give you advice, fund companies—those relationships at the end of the day. And if you can solve for pain, if you can solve and make patients' lives better—like, that's what motivates me every day.

Jon Chee - 00:35:58: Absolutely. And I think people forget sometimes that you can get so into the weeds and just so deep, which is—companies are just groups of people choosing how to spend their time.

Caitlyn Krebs - 00:36:08: Yes. Yeah.

Jon Chee - 00:36:09: That's really all.

Caitlyn Krebs - 00:36:09: You wanna like the people. Yeah. And you wanna enjoy the journey. Like, find people that you really like working with. And keep them in your circle because you will bring them back in, especially as an entrepreneur. Like, you will bring people back in from all aspects and companies.

Jon Chee - 00:36:25: Yeah. And I always think it's easy to kind of just let the inertia just carry you and just like—"I'm not gonna stay in touch." It's not like I'm not gonna actively stay in touch, but just the inertia can just—you can just feel the drift. Fight the drift.

Caitlyn Krebs - 00:36:42: Yes. Yeah. Fight the drift.

Jon Chee - 00:36:43: The drift. And try to stay in touch. Even if it's not for a business purpose, like, don't let the drift happen to you.

Caitlyn Krebs - 00:36:50: All on my Christmas card list. That's like one of the easiest things. Like, put them on your holiday—I guess I should say holiday list. Yeah.

Jon Chee - 00:36:57: Exactly. It's not hard. It's not hard. It really isn't. Well, Caitlyn, thank you so much for your time.

Caitlyn Krebs - 00:37:04: Jon, thank you. It's a pleasure. I really enjoyed this. It was a lot of fun.

Jon Chee - 00:37:08: Yeah. And, you know, we're both in San Francisco, so we'd love to grab coffee with you. I can do this for hours and hours and hours with you, but I know you're super busy.

Caitlyn Krebs - 00:37:15: You are—you are very good at this, so I'm impressed. Yeah. Like, you have honed your skill in this for sure.

Jon Chee - 00:37:21: Thank you. Thank you. Yeah. Hope to see you soon.

Caitlyn Krebs - 00:37:23: Take care.

Outro - 00:37:24: Thanks, Jon. Take care. Thanks for listening to our four-part series featuring Caitlyn Krebs. From tagging sea turtles in a Hawaiian lagoon to a humbling education at Brown, a 27-year-old running a board of Genentech and Gilead CEOs, pharma deals at a company doing AI drug discovery before it had a name, and ultimately cofounding Nalu Bio to unlock the body's most overlooked receptor system with a platform designing the first nonhormonal solution for two hundred million women living with endometriosis. Caitlin's story shows what happens when two decades of living at the bleeding edge and treating every relationship like a long game finally converge into something the world has genuinely never seen.

If you enjoy the show, please subscribe, leave a review, or share it with a friend. Join us for our next series featuring Sabrina Johnson, founder, president, and CEO of Daré Bioscience, a biopharmaceutical company committed to advancing innovative therapies in women's reproductive health, spanning contraception, vaginal health, sexual health, and fertility, built on a guiding principle she calls biotechnology for women by women. Before founding Daré in 2015, Sabrina spent over thirteen years as COO and CFO at Cypress Bioscience where she led four product launches, built a 115-person commercialization organization, and raised a $170,000,000 for a pain and CNS therapeutics pipeline, including Savella for fibromyalgia. She then served as COO and CFO at WomanCare Global International, delivering reproductive health products to women in more than a 100 countries before becoming CFO and CAO at Calibr, the California Institute for Biomedical Research.

At Daré Bioscience, Sabrina leads a growing portfolio of novel therapies designed to expand treatment options in a space that has been underfunded and under-researched for far too long. With Daré on the NASDAQ and a career spanning bench science, global nonprofit health, and commercial leadership across biopharma, Sabrina's journey from cell culture scientist to founder CEO demonstrates what it looks like when you refuse to treat women's health as a niche and build an entire company around proving it never was, making this a conversation you won't want to miss.

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