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 part two, Örn described the culture at Merck, the network that brought him to Transform, and the team decisions that helped create value for Johnson & Johnson. If you missed it, check out part two. Next comes the question at the center of his later work: How do you deliver RNA into cells quietly and at scale while building the manufacturing capability to make it real?
Jon Chee - 00:00:57: So talk a little bit about the J and J experience. Like, I guess, what were the key learnings while at J and J? I'm assuming J and J and Merck operate very differently.
Örn Almarsson - 00:01:05: They do. They do. Merck was much more of an internal organic drug at the time innovator, you know, but J and J was much more of a combination. It was a bigger company in the sense that it had not just pharmaceuticals. It had medical devices, and then it had the consumer the all-important consumer line, which baby powder and Band-Aids. So that was interesting to get exposed to all of that. And then it was really I met some very cool and interesting people from different places in that large organization.
But on the pharma side, they were much more prone to just buying a drug when somebody else and a biotech or somewhere had to the point where they could now because they were commercialization focused. So I got a window to that, which was very interesting, and, you know, I appreciated my time in J and J, which was almost three years. But, you know, startups sorta or, you know, smaller always beckoned for me somehow.
Jon Chee - 00:02:01: Yeah. I'm always curious about that too, like, on when organizations decide to grow via inorganic growth or organic growth. Because, like, Excedr, we haven't done any acquisitions. We're just purely organic. But my cofounder, who's on our board, his company, purely inorganic. Just like well, they do organic growth, but they're heavily emphasized on acquiring companies. And I have no idea how that works. And I would you know, it sounds like J and J is taking a more inorganic growth. Like, let's get this asset added into the portfolio versus, like, kinda like what Merck was like, we're just gonna develop internal pipeline and see it through ourselves.
Örn Almarsson - 00:02:42: Yeah. I think that's right. You know, that was the case back when I was there. But even like Michael Cima, who I am still in touch with, professor at MIT, he came up with a really cool cancer drug device combination, which J and J acquired that company, and they put it on the market for bladder cancer. And it's a wonderful thing, and they do a great job. I have to make sure I credit that J and J knows how to market things, but they like others to do the basic science and, you know, derisk to a point and oftentimes, all the way to commercialization or registration. But I think it definitely is the Brits say, horses for courses. You know? Some companies take that model and play it, and others are more prone to taking the risks on the discovery. And that's what biotechs have to do because that's the reason to be.
Jon Chee - 00:03:30: At least what I've noticed as, like, an outside observer is that the large pharma folks are leaning more towards almost primarily due the kind of, like, what you said, the acquisition once something gets adequately derisked, and there's, like, not as much internal R and D taking place. Do you think that's a good or bad thing?
Örn Almarsson - 00:03:49: It's sort of a dynamic process. We find ourselves in a very M and A active phase now, but it's not always like that. But then there are really huge companies like Eli Lilly who have the internal research, which they do very well, and then they have the money because they just are doing so well. They have to find a way to continue to develop growth. And so that's what they do, and very active right now. And I hope I'm right when I say waxes and wanes, but, you know, right now, we're—
Jon Chee - 00:04:17: Oh, yeah. Right now? Like, I mean, we were getting beat up for, like, a few years. I was just like, is anyone gonna get acquired, or is anyone gonna IPO? And now you're just, like, weekly, just, like, poof, just, like, rapid fire. You're just like, oh, like, okay. I guess everyone woke up and, like, we're back to doing business.
Örn Almarsson - 00:04:34: That's so far so good. 2026. It may continue.
Jon Chee - 00:04:38: Yep. Okay. So now you're wrapping up your time at J and J. Did you know what was next?
Örn Almarsson - 00:04:43: No. And I was doing a lot of travel because I had a responsibility across the organizations, both the one that was still legacy Transform in the Boston area, but also in New Jersey and Pennsylvania. And then I did have to spend time with the folks in J&J PRD in La Jolla and support them. And that was all good, but it was a little hard on the family, and I was on the road a lot. Because in J&J, it's very much relationship. You have to be there. And that was a little bit cause of fatigue. And I was thinking, you know, what is my next thing?
But then it came to me. It has always happened. The one time I looked for a job at Merck. And so I was approached, and this is again the Merck network here at work because a good friend of mine, Elizabeth, who's retired now, but she ran the Montreal pharmaceutical R and D team under Colin Gardner. She reached out to me and said, do you know Elliot? Because he's looking for someone kinda like you, and I wanna introduce you. So I was introduced to Elliot Ehrich, who at the time was running. He was the chief medical officer and head of R and D at Alkermes. And Alkermes, I don't know if you've ever heard of Alkermes, but it actually is a mid-sized biotech here in Boston with a long history and an excellence in as we oral is a controlled release drug to make new products.
And so I got introduced to Elliot, and he has really been a great mentor for me. Just so grateful for the opportunity to work with him at Alkermes. And we developed some products together, and that became organic new product development in a way that was different from what the legacy Alkermes had been doing, which was also very cool for me. Transformation on the technology base and the product line as well as culture. You know, we changed from being very engineering heavy to being sort of more chemists and balanced. It was an interesting time and great respect for the legacy work and history of Alkermes, but I am also proud that it's the ability to contribute to a new wave of that company back in the sort of 2008, 2013 time frame.
Jon Chee - 00:06:47: Very cool. What I'm kind of seeing is they talk about, like, the PayPal mafia. Like, sorry. All these stories, you have, like, the Merck mafia.
Örn Almarsson - 00:06:54: Yeah. There's such a phrase. Yeah.
Jon Chee - 00:06:55: That's like again, just like kind of this network. Something's in the in the sauce, in this, like, class of, like, folks at Merck, it sounds like. And, like, talk a little bit about, like, working at Alkermes. Like, it sounds like you're blazing new trails. What was it like to blaze new trails for a company that's known that's doing something that like, focus was in the legacy perspective different? Like, were they receptive to this? Did you have to, like, really push it? How did you get it done?
Örn Almarsson - 00:07:22: In any organization, there's always apprehension when it comes to change, and there was no difference on Alkermes. But we had external forces essentially demand changing ours. An example of that was just a couple weeks after I joined in early 2008, there was a major product development effort with Eli Lilly that was discontinued, and it was a loss of revenue of something I if I'm not mistaken, it might have been to close to $30,000,000 a year. So we had to unfortunately go through layoffs. And I come to the situation, and I have to start by laying off people, which nobody ever wants to do that.
But here was a chance then to say, okay. A reality check. We're gonna be doing something different now. We gotta lock arms and be brave and support one another. And, eventually, we were able to I mean, we had to bootstrap for a bit, but then we were able to hire back eventually. But the opportunity then was to hire differently so we could actually do the things that were the future of the new outcomes that we were building at the time. Again, full respect to the technologies that have been developed, and they were still generating revenue, important revenue for the company.
However, we needed to grow this, and that's what we were doing. And, unfortunately, we've done that. I'm very proud of, for example, of ARISTADA, the product line that it treats schizophrenia with, like, once every two months injection. So it's very long-acting, very elegant, and very safe and useful product. 200 some million a year now just in the US because it's a smaller market because depot injectables. But it really was a case of a really good experience among many good experiences, which I was so happy to get and work with Elliot. I was not planning to leave, but there's always things that happen.
Jon Chee - 00:09:12: Yeah. Yeah. Absolutely. And what really stands out to me is just, like, the need to kind of, like, almost, like, refound the company. It almost feels like it's kinda like that thing where it's just, like, what got us here won't get us there.
Örn Almarsson - 00:09:23: Something about that.
Jon Chee - 00:09:24: And it's painful. You're like it is painful because, like okay. Like you said, like, as humans, we don't do well with change.
Örn Almarsson - 00:09:32: Well, it's always scary. You feel like you're swinging out of line, and this is comfortable. But then you know it's gonna come to an end, so what are you gonna do? You gotta be thinking ahead like that. And some people embrace change and do it easily, and a lot others resist it. And that's natural. It's just people are different, and you gotta work with them. You gotta meet people where they are, and it's, yeah, it's really important.
Jon Chee - 00:09:55: Absolutely. And especially in science. Right? Like, it can, like, switch on a dime. And if, obviously, like, the world is go undergoing a lot of change with, like, AI, but I feel like as scientists, we see this all the time. It's just like, okay. That readout was bad. We need to course correct. And scientists, we're just like we're just kind of like, oh, yeah. This is like another day.
Örn Almarsson - 00:10:15: Absolutely. And that's why Big Pharma is good because they can balance their risk with many things. But if you're a single asset biotech, everything rides on one thing, and you're trying to commercialize science where it really is it's nothing like building a car where you have the blueprints and you just have to go through and get the parts and put it together right. Did you see that? No. It's what you thought was gonna look like a car might be a motorcycle at the end. You know? And I'm stealing this analogy from a business school guy that I learned a little bit from. I spent a week in business school, you know, Harvard business school. It was a contrasting of biotech and pharma, really interesting and educational.
Jon Chee - 00:10:54: What you're describing of, like, having to do these hard pivots, I'm like, is there a way and I don't have the answer, but I always, like, wonder if there's a way to smoothen out the volatility in biotech because it is a cyclical thing. Right? Like, you talk about, like, M and A is hot, then sometimes it's not. But, like, what makes it difficult is, for me, it's just like, damn, these are people's livelihoods. Right? It's kind of part and parcel with it comes with the beast. Right? But I do wonder if there's, like, a whether it's, like, a different way to capitalize a company or, like, how can we build in more kind of, like, resilience to these kind of, like, structural shocks to a company so we don't have to go through this. And if you like you said, it is no fun to have to, like, restructure. That's, like, the absolute worst.
Örn Almarsson - 00:11:41: So some of this has to do with patents on important products, and sometimes those products came into being without somebody had a modest for market forecast, but then everything just went like this. And now it's all of a sudden Keytruda or something like this. And I remember at the end of the last century, there was a patent cliff, and we talked about the patent cliff from Merck on Zocor, and we were, you know, stressing about that. And it's I've learned because I've been around long enough now that there's a patent cliff all the time, and now it is Keytruda and things like that.
But, yeah, it's a fair question, and I don't have a good answer, but it is a bit of feast and famine, especially when you find products like that that according to the sort of social contract, patents are there to help you recover investment and make some money, but then you do have to enable others to follow that later once the patents run out. And that is then the challenge for those big hits. You know, how do you do another greatest hits, you know, up to the great hit? No good answers there, except that companies are insuring themselves through M and A and other things and being very careful about how they derisk not just the R and D process, but the commercialization and so forth.
Jon Chee - 00:12:58: And I guess the reason why it, like, fascinates me, just, like, speaking for me, is because, like, being in San Francisco, it's like a software town, and it's way less volatile, like, way less volatile. And I'm like, we could use some of that. And we're like, obviously, you're absolutely right. The patent system is the patent system. It's like the patent's there and then it's not. And so kind of like there's like an intrinsic volatility to that. But I'm just like I've always like one of the reasons why I'm so hyper focused on Excedr is to derisk the infrastructure aspect. Like, that's our one piece that we try to help is, like, derisking the infrastructure part. But there's, like, for a biotech startup, there's so many risks that you have to derisk. Like, you have biology risk. You have, like, everything else. Just the cost of getting into a clinic like, getting through clinic is, like, impossible. It's, like, how do we as a community smoothen this thing out? I don't know.
Örn Almarsson - 00:13:54: I mean, the one thing that I neglected to mention in addition to patents, there's regulatory exclusivity. And with biologics, which are really complex products to match compared to small molecules, there's a longer tail on that and a more difficult transition into not generics, but biosimilars. And for proteins, we started to see that now. And companies that used to never work in generics are doing biosimilars. That's interesting. I see that. But it's an evolving thing because for RNA, large RNA products, the mRNA and such, there isn't yet any biosimilars pathway there. And it's I'm just fascinated to see what happens over the next twenty years if I'm granted the time on this of the observant. I put a point being that I think we could smooth out that way because when you find a good hit, you're not gonna be eroded as quickly on the back end of, say, patent life.
Jon Chee - 00:14:48: Exactly. And another aspect to that, like, of why this conundrum or, like, problem to be solved is so fascinating to me because it's like because of the capital markets. Right? I know plenty of investors who have boatloads of capital who are just terrified of science because of this element. They're like, nope. It's like they get spooked. Right? So, like, now the access to capital is just, like, way harder because you have to have, like, a very specific temperament to be able to get through this, both private and public. And we could use, like talk about an industry that needs capital, like, badly. We do. Like, we need it, but we just don't get it.
Örn Almarsson - 00:15:28: It's high risk, and, legitimately, people are shy are sometimes been shy. And it's not for the faint of heart. But I think, you know, if you take enough good bets and you constrain the variables, this is what investors want you to do. Nowadays, especially in biotech, it's we're in an asset-focused cycle where tell me one thing you're gonna do and you're gonna execute, and then make it about as few variables as possible so that you can make and commercialize your product. And don't talk about platform because I wanna hear about this. The platform, secondary. At the moment, but in early 2021, it was the other way around, and everything is cyclical in life.
Jon Chee - 00:16:06: Yep. Absolutely. And especially now, like, too, like, even with just, like, the patent system as well, I know folks who are just, like, staying stealth longer. And then surprise, like, this is, like, a fully formed company that's just, like, already, like, so deep in the development process. It's just it's interesting to see how these things shift over time. But it sounds like, you know, when you're at Alkermes, you're getting the, basically, the full exposure of drug development company buildings, big companies, small companies, turning a company around. You're really starting to, like, build your tool belt, like, all the way around. After you blaze that new path for Alkermes, talk a little bit about, like, when did you know it was time to leave, and what was the next opportunity?
Örn Almarsson - 00:16:47: I wasn't planning on leaving Alkermes. In early 2013, we just come from the very successful end of phase two meeting on ARISTADA at the FDA, and the mood was very buoyant. You know? We're gonna execute this, finish this study, make this product, and it did get made, and it did get registered and commercialized. But, actually, what happened was Bob Langer, MIT institute professor, guy had influenced my career already at that point. He messaged me and said, I'd like you to speak with Stéphane Bancel because he's building a company that's gonna change the world. And I'll never forget that big thinker, extremely big.
But I was curious. And coming from sort of the small molecule world, I went and spoke with a couple of the folks there. Wonderful. I remember a really long evening of just whiteboarding that the president of Moderna, Stephen Hoge, did. And the reason he spent so much time with me there is one of them was that his family was in New York City. He was in the process of moving up to Boston, and so he had nowhere to go. So I'm sitting there. I think I got there at six and around 9 PM, he says, are you hungry?
Jon Chee - 00:18:02: Yeah.
Örn Almarsson - 00:18:03: We should get something to eat. I'm like, oh, I just I think I have to go home.
Jon Chee - 00:18:08: And
Örn Almarsson - 00:18:08: So he so I left, and then my head was spinning, though, because I just found this premise and the concept and the data that was already presented to me just so compelling. And I thought to myself, well, you know, I'm a bio organic chemist. I knew what mRNA was, but I also was one of the people who thought, well, that is really hard to make into a drug. I can get proteins done introduced on that. DNA is a little hardier and easier to to keep around. mRNA, though, by its very nature, you know, it's not supposed to stick around.
So as a chemist, I thought, well, how do we do that? And how do we get into cells quietly and do the job that it needs to do without causing immune system reactions and so forth? And the whole problem, the opportunity just caught fire within me. And so I made this decision to change and take on the lead role as the head of delivery sciences there and getting into lipids again. I was not looking to leave Alkermes, and I was really I was actually very sad to speak with Elliot about that. I think he was sad too because we had such a good team, and things were going great. I'd like to think my legacy there was that I set up a really great team, and they executed. And they did great things themselves, and I'm proud of that. And meanwhile, in a sense, I got to go and be a postdoc again because I had there was so much to learn. Everybody there was learning in hyper driving at Moderna because it was a hard it is a hard problem still, but it was really challenging back then.
Jon Chee - 00:19:38: Man, to get that phone call just, like, so crazy. It's like, hey. Got something for you.
Örn Almarsson - 00:19:45: Exactly. I mean, I found out later that Colin Gardner and Bob, they're very good friends, actually. And they were still saying, you know, this might be a job for but I heard that much later. But I'm appreciative for it. It was an amenable time. It was hard. I'm not gonna lie, but it was formative and extremely impactful.
Jon Chee - 00:20:04: Take us, though, what the early days of Moderna were like. I mean, you said just like being a postdoc again. Yeah. Talk a little bit about that.
Örn Almarsson - 00:20:11: Well, I mean, we had to build something, you know, with a very tiny delivery team. You know, focus at Moderna early doors was to get an mRNA process scaled, and that was the vision of Noubar and Stéphane, and they were building that. But mRNA being a really large, highly charged, and somewhat labeled molecule, it has to be packaged and delivered in a package into the cell. Otherwise, it doesn't survive the body, and it comes in as to get into a cell and be intact when it gets there. And then it has to quietly get translated.
It's almost like imagine a copier, you know, old style photocopier. Somebody's there copying, and it's the inside person. And then you come in from the outside and you sneak in a few things to Xerox copy. You're sort of borrowing the printer, if you will. And the printer in this case is the ribosome, which is our professional protein printing machine. And it seems like it works really well. And I often describe the challenge of delivering mRNA for therapeutic purpose with a non-immunostimulatory profile as a it's like having a delivery service, a UPS or Amazon, except it's not enough to leave the package on the stoop. You've gotta get in the house without the alarms going off. You gotta get to the right room, take the package apart, leave the goods, and then take the packaging and leave again without ever it's like a thief in the night, except it's a very useful job. You know? And that ends up being the essence of it, and it's gotta be done efficiently and quietly. Now for vaccines, you can tolerate some immune stimulation. Both the therapeutics, it's likely less of a favorable thing in most cases.
Jon Chee - 00:21:56: That's such a good analogy.
Örn Almarsson - 00:21:58: Yeah. Amazon has it easy.
Jon Chee - 00:22:00: Yeah. Yeah. Exactly. Just, like, just drop it, take a photo. Buy.
Örn Almarsson - 00:22:03: Yeah. Exactly.
Jon Chee - 00:22:05: This one said you actually gotta go in and not trip an alarm. Yeah. And, I mean, like, honestly, the early Moderna, it sounds like also just like a a monumental engineering problem that you're solving as well. Like, not just, like, the biology or the chemistry. It's like, how do you, like when you talk about scaling this thing, that's a whole another consideration. How did you guys approach that problem?
Örn Almarsson - 00:22:28: There's a couple of things there. I mean, one is to make the right mRNA sequence, you need a DNA plasmid. Somebody's gotta generate the right sequence DNA plasmid, and then you linearize that. Now that, we didn't do that initially at Moderna. We were buying those plasmids, and then but, fortunately, you didn't need so much plasmid initially. So the focus of the engineering challenge was on the mRNA process and some of the componentry in that, but ultimately, was trying to take something that people were doing in academic labs at microgram scale, like, really small, and make grams and kilograms. And that took some real engineering prowess and a lot of heavy lifting, and it works.
It's expensive. mRNA is still an expensive drug substance, but the cost has come down over the years because we got good at it. But it's an involved process. And then so you start with plasma. You do this mRNA process. Now you have to, again, make a product and a sterile product that that and the nanotechnology. So it ends up being quite an undertaking, but it's so powerful and flexible. And as you know now, I mean, Moderna has now multiple vaccines on the market for different things, whether it's variants of COVID or ambrosia for RSV. And now, hopefully, soon, the flu vaccine that got the favorable advisory committee just last month, which is really exciting for me because timing was it's almost an exact decade. It's actually a decade since we did the first flu trial out of season. It was a clinical study in healthy people, but who are seronegative to a certain flu strain, and we could show antibodies to that very clearly and very potently. And that was the beginning. But think about that ten years from very first time we did a clinical study till we had all these products. It's just amazing. Credit to Moderna for that.
Jon Chee - 00:24:22: Yeah. And it kinda reminds me this is, like, prevalent in, like, material science where you have, like, something in the academic. Like, it's like we we made it, like, a tiny little, not even, like, pilot scale. Like—
Örn Almarsson - 00:24:33: A grain of something.
Jon Chee - 00:24:34: Yeah. A grain. Like, oh, the properties are sick. And then you try to scale it up. You're like, oh, shit. It doesn't scale. Like, just as a hard problem because I always get so fired up when you're like, oh, like, the properties of this are amazing. But then you get into, like, the scale up component and you just run into these, like, problems. And I don't know. That's not my expertise. How did you guys you're talking about, like, starting real small. Did you have experts, or were you just, like, we're just gonna, like, brute force this thing and, like, figure it out on our own?
Örn Almarsson - 00:25:07: Right. I mean, at the time, you know, there were very few people who had the exact experience to do this. I mean, there were bioengineers who had done either proteins or DNA or something, and then they were coming to this problem. But because nobody ever scaled up mRNA, we were learning. And I think it was really credit to the ingenuity of engineers to think about process and tackle it systematically.
And then also the chemist came to it as well because you may know that mRNA and the vaccines is actually modified mRNA, meaning the basis certain base types are actually changed from native RNA. That's the subject of a Nobel Prize in 2023 to Katalin Karikó and Drew Weissman. Really excellent work on, I know, how to make mRNA less immunogenic and usable in these products. And that componentry and some of the stuff on the ends of mRNA had to be engineered when chemists had to synthesize. So there was a lot of different things. And so people came with their own skill sets and tools, but they've never made that exact thing before. And that was so interesting.
Jon Chee - 00:26:14: That's so rad.
Örn Almarsson - 00:26:15: And so impactful. I mean, really impactful.
Jon Chee - 00:26:18: And it's kind of like you're talking about you're just, like, venturing into the unknown, but that's also where the fun's at too. Not fun for everybody. My wife, not fun for her. Like, she gets great anxiety over that type of stuff. I'd like living it. I'm like, this is awesome.
Örn Almarsson - 00:26:32: You may have heard of Flagship Pioneering. They're the company behind Moderna and many other startups. I mean, they asked the question. Right? Their approach, I'm paraphrasing, hopefully, in a fair way. If we can make mRNA at scale and get it to go and make proteins, what could we do? And the answer is so vast. It's like we could do replacement therapies. We could do gene editing. We could do all these things in therapy, you know, in in vivo cell reprogramming, which is my company, Axyleth, is interested in doing, and then vaccines. And we're doing all of that, but we had to scale that Mount Everest of, you know, getting the process down and getting all these components together. It was a huge lift.
Jon Chee - 00:27:15: Monumental. It is like massive. Monumental. And it was kind of crazy. Like, also, do you guys just like as COVID came, you guys are, like, boom, ready. But it was not, like, a overnight hit. It was, like, you guys were grinding to get it prime time.
Outro - 00:27:30: The Moderna story was not an overnight breakthrough. It was years of preparation, engineering, chemistry, and delivery work finally meeting the right moment. Next time, Örn explained why Moderna was ready before COVID-19 arrived, then takes us into his current work in vivo cell reprogramming and CAR T approaches for solid tumors. If this series is landing for you, pass it along to someone building in biotech. See you for the finale. The Biotech Startups Podcast is produced by Excedr. Don't want to miss an episode? Search for The Biotech Startups Podcast wherever you get your podcasts and click subscribe. Excedr provides research labs with equipment leases on founder-friendly terms to support paths to exceptional outcomes. To learn more, visit our website, www.excedr.com. On behalf of the team here at Excedr, thanks for listening. The Biotech Startups Podcast provides general insights into the life science sector through the experiences of its guests. The use of information on this podcast or materials linked from the podcast is at the user's own risk. The views expressed by the participants are their own and are not the views of Excedr or sponsors. No reference to any product, service, or company in the podcast is an endorsement by Excedr or its guests.
