Pharma Marketing, Compounding, and the GLP-1 Gray Zone | Sabrina Johnson (2/4)

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, Sabrina shared growing up between Rome and Phoenix with entrepreneurial immigrant parents, being steered into biomedical engineering by a clever high school teacher, studying at Tulane and University College London at the dawn of biologics, and climbing from worst to first at Clonetics simply by dropping the act and being herself. If you missed it, check out part one.

In part two, Sabrina talks about a serendipitous name tag moment at an industry event that led her to Advanced Tissue Sciences, where she supported US and European product launches in tissue engineering and got her first real education in what pharmaceutical marketing regulation demands before a recruiter call that arrived just weeks after her husband's rheumatoid arthritis diagnosis pulled her to Cypress Bioscience in 1998 in what she describes as one of the most serendipitous and best moves of her career. She shares the forward-thinking talent philosophy of Cypress CEO, Jay Kranzler, and what it felt like to be at a 50-person publicly traded company on the verge of a major launch, setting the stage for thirteen years that would shape everything that came after.

Jon Chee - 00:01:58: So now you're just, like, grand slamming. You're just, like, hitting it out of the park. Like, where you're like, okay. I could spend a career in sales, or you're like, oh, I need to get back to marketing, kind of, like, where was your head at?

Sabrina Johnson - 00:02:10: You really hit on it. So I got that sales experience, and I thought, okay. This is great. And I definitely understand why everyone, not someone, literally everyone suggested that I get this experience and start here. But to your point, I really wanted to get into marketing. That was my goal, and I really wanted to get into marketing of therapeutics, prescription products. That's really where I wanted to go. And I had a funny situation where there was the customer relationship manager system that we had at Clonetics. There was a rep before me and had the accounts I was assigned to. So I would see her name right in the record files for my customers, and her name was Pam Logaman. And I was at this event, and I see this woman with the name tag, Pam Logaman. And I thought that's not a very common name, and I thought in that, the Pam Logaman, he's—

Jon Chee - 00:03:04: On all of—

Sabrina Johnson - 00:03:05: Was the rep before me and all of these accounts. So I went up and introduced myself, and it was that Pam Logaman. And she had moved on, and she was at this company called Advanced Tissue Sciences or ATS that was doing tissue engineering, and tissue engineering both for therapeutic products. So for therapeutics products, so for burn victims, diabetic foot ulcer patients. So three-dimensional, tissue engineered skin. And they were also, and that's what Pam was doing. She had started up a business unit, and she was really kind of the general manager for this business unit to sell that artificial skin to academic institutions for testing, things that they used as a three-dimensional skin model while they were still waiting for the FDA therapeutic approval and just really another arm of the business. So we got to talking, and I shared with her I'm really interested in being more involved in the marketing side, ultimately, their therapeutics. She was always a salesperson and said, well, ATS is probably the perfect place for you because you could work. And I'm hiring into my business unit right now, so you've got the perfect background to come in here, and I'll expose you to different things. But, you know, long term, ATS is doing therapeutics, and you're gonna be at a company where there were kind of possibilities for you, which did not exist at Clonetics because Clonetics only did the cell culture. So that was how I ended up moving to Advanced Tissue Sciences and started there initially in sales working with Pam Logaman using this three-dimensional skin product for in vitro testing. And then, ultimately, the products that were advancing through the therapeutic products advanced through their clinical studies successfully, advanced to their regulatory approvals, and I got to be involved in both the US and the ex-US commercialization of those products. So it ended up being exactly the experience I hoped it would be, and it was that wonderful then transition point of being able to take the sales, the skills I've learned there, and transition them into marketing as related to therapeutics.

Jon Chee - 00:05:10: I love that. And I can see the cross-disciplinary picture coming together. And, like, again, it's kind of like, get a little bit of experience, and then it all kinda comes together and makes you just way more effective. You get the one plus one equals five. And, also, I got a question for you. Was ATS a start up, or was it, like, a very large organization?

Sabrina Johnson - 00:05:32: Great question. It was in between. By the time I left, it was probably 250 people. I was there for five years. When I joined, gosh, it was probably closer to 50 people, so I saw it go through a very meaningful growth phase. And it was really because their products were transitioning from clinical stage to commercial, ready, regulatory. So I was there during a lot of that transition and growth.

Jon Chee - 00:06:00: Yeah. I was gonna say that's like a front row seat. Again, you're drinking out of the fire hose here. Like, company scaling up. And you said it's global.

Sabrina Johnson - 00:06:09: Yes. I mean, I learned so much even though I was really, I mean, relatively junior at that organization. But because of the size, you got to see so much, and I learned so much about partnerships. They had a partnership in place with Smith and Nephew. In a small company like that, you're also getting—they were publicly traded. So you also got to see, well, what does that mean exactly? And watching what the leadership kind of went through, how they handled team meetings with us, hard information, good information, setbacks, positive. So it was small enough where you really felt like you could see everything, but big enough where there was enough going on where you were learning.

Jon Chee - 00:06:51: Yep. Were you guys publicly traded when you joined, or did you, like—

Sabrina Johnson - 00:06:55: Yeah. They were already publicly traded when I joined. Yeah.

Jon Chee - 00:06:57: Okay. Got it. And I'm going to imagine as you're kicking off, you're basically the foundational marketing elements for the products, there's a lot of regulatory kind of tied to it. Right?

Sabrina Johnson - 00:07:09: Oh my gosh. So much. And that was—talk about it. I have been processed. I remember my first promotional piece I worked on, the meetings—

Jon Chee - 00:07:18: Mhmm. With—

Sabrina Johnson - 00:07:18: The legal and the regulatory. Yeah. Right? Like, what we wanted to say, like, that whole process that people refer to as medical regulatory legal kind of in our review. I wanted to know what that was when I started there and all of the considerations. You realize how we work in a highly regulated industry, and we often think about it being a highly regulated industry when we're thinking about developing the products, manufacturing the products, ultimately getting an FDA approval for the products, but it doesn't stop there. It's a highly regulated industry all the way through. So every word, every word in a marketing piece for a health care provider, every word in more detailed instructions for use for one of our products that we really wanted a very detailed instruction for use and video, what you had to go through to get there, what it took, all the different perspectives that had to be taken into consideration. I had truly never seen anything like it before that experience. And to this day, I still struggle with, like, how can we make this as simple as possible? Because even in a company like Dare, fast forward to where I am today, and I'm the CEO. Even at Dare, I'm like, gosh. This is okay. Is there any way to make this more efficient? Because it's still, it's the same thing. Right? It's theories of red lines and different perspectives, and you're going back and forth. Okay. This word—oh, I see there's a problem with this word. Okay. How about this word? Oh, that's not better? Why is that not better? Okay. It's a process.

Jon Chee - 00:08:51: Yeah. And who's the one that gives it the stamp of approval?

Sabrina Johnson - 00:08:54: So, ultimately, in those processes, every functional area has to sign off. That's the other challenge of the process. It's sort of consensus by committee. You gotta, everyone's gotta be satisfied that they can sign off with the hat they're wearing. Right? So legal compliance has gotta feel comfortable. Right? Medical needs to feel comfortable. Regulatory needs to feel comfortable. Right? So everyone for their own domain has to sign off. So it really was. It was a learning process of how do you get there and how do you get there efficiently. And like I said, even at Dare, we do this at Dare because we have products that we are commercializing and launching and every word. Like, I think people don't realize this, and it's so different from things that maybe to the consumer seem the same. Right? So if a consumer is on a website buying vitamins, and they're telling you how this ingredient does this and this ingredient does that and you're getting a prescription and you're being told the active does this. To the consumer, it feels the same. Right? It feels like people are using the same words scientifically, evidence, scientific. They're using the same language. The standards are so different. Right? I can sell you a vitamin and talk to you all day about all the benefits of vitamin C in a vitamin that maybe the vitamin C isn't even stable in my formulation or isn't going to be bioavailable, and that's okay. Right? In a therapeutic, you can't do that. Right? It's all about what the drug has actually been demonstrating to do, not in someone else's product, in your product. Like, in the. So there's not a broad appreciation, I get it, because if you haven't worked in it, why would you, of it's a complicated industry. Right? Prescription, it's a complicated, highly regulated industry for good reason.

Jon Chee - 00:10:49: Oh, yeah. For sure. Absolutely. To get to that point where it's like everyone has said, yes, we're good to go. How long does that usually take?

Sabrina Johnson - 00:10:56: Oh, it can take weeks. At Dare, we make sure it takes days, not weeks, because I just want a certain level of efficiency. But in a large organization, like, when I was at ATS in a large organization like that, it could take weeks.

Jon Chee - 00:11:09: Oh, man. And I guess this is a question about just, like, I've seen, like, there's, like, this movement for, like, direct to consumer. Even just, like, on social media, I just see it, like, GLP-1s are everywhere, and I'm like, how are you advertising this on social media?

Sabrina Johnson - 00:11:24: It's so fascinating. I actually just wrote a Fast Company piece about this, an op-ed piece about this because it is really interesting. Just the explosion in, basically, this direct to consumer of compounded products, how compounding is being utilized, which is different from how it was, I think, intended to be utilized, and how difficult it is for a consumer to understand the difference between, for instance, a GLP-1 that's being offered still for prescription on a telehealth platform, that as a consumer, I may not even understand that it's not the same thing as the FDA approved product. Right? I hear GLP-1 prescription, and I just think, oh my gosh. How cool. It's so much cheaper here.

Jon Chee - 00:12:12: Yep.

Sabrina Johnson - 00:12:12: Yep. Right? I wanna save. I'm gonna get this version, not understanding that they're not held to the same quality standards. It doesn't mean it's going to perform the same way. Right? But those of us in drug development know that I can put the same active pharmaceutical ingredient in the exact same concentration in 20 different formulations and have 20 different outcomes because formulation matters. Right? How you're delivering it matters. What else is in there? How you make it? But the consumer doesn't understand that. So I think we're in a really fascinating place in medicine where I think there's a big opportunity to help consumers be their own advocate and help them discern the difference between junk science and something that is actually truly been an end product that has been demonstrated to have the effect I want and what we should want as consumers. So I definitely think it's a very interesting time we're in right now.

Jon Chee - 00:13:06: And when it's compounded, is it just, like, kind of in this weird, like, limbo where you can, like, talk about it kind of, like, it's not as highly scrutinized?

Sabrina Johnson - 00:13:17: Yes. So it's really fascinating. So compounding has been something that the FDA has allowed at the pharmacy level for a very, very long time, and that's most of what you're seeing with these products like the GLP-1s. It's what's called 503A, which is pharmacy level compounding. And sometimes I'll talk about second 503B. And pharmacy level compounding is something that the FDA, like I said, endorsed years ago because it was meant to be: this drug is only available in pill form, and it has some excipient in it that Sabrina is allergic to, but she really needs this medicine. So Sabrina's doctor would write a prescription for Sabrina to a compounding pharmacy. Think of the movie, It's a Wonderful Life with a pharmacy sitting in the back mixing up the pills to a compounding pharmacy to make it special for Sabrina. And that's been around for a long time. And then more recently, 2012, 2013, the FDA said, okay. For certain drugs that are available kind of in limited forms in the FDA approved forms, and drugs have been around for a long time, the FDA could allow larger scale manufacturing at these 503B facilities. They have to register with the FDA, and they have to follow normal pharmaceutical good manufacturing practices. But pharmacies don't. They just have to follow the quality standards they put in place. No one ever, when all of these rules were put in place, no one ever thought of kind of where we are today. Right? Where are we today? One, GLP-1s. Right. No one thought of a product that everyone would want.

Jon Chee - 00:14:50: Yep.

Sabrina Johnson - 00:14:50: Right? And maybe aren't all true clinical candidates for the FDA approved version, which means they're gonna have trouble getting insurance to cover it. They're gonna have trouble getting it. And that really created this opportunity, and I'm gonna get to your question on what can they say, for pharmacy compounders to fill in. Say to health care providers, hey. If you happen to have, or telehealth platforms, hey. If you have women or patients that want a GLP-1 and you're looking for a cheaper form and by the way, if they might have a little bit of nausea, we can formulate a special one that has something in it for the nausea and the GLP-1, and we can make that available to you as a compounded product. Right? Because compounding is supposed to be for when someone needs a form that is not available in the FDA approved form. Right? So sometimes the way to get around that is they'll sneak a little like, oh, I got the special nausea agent in there. And from a promotion perspective, it's kind of no different than an FDA approved drug. You can't make claims or make statements that you do not have data to support. Right? Because that's truth in advertising, Federal Trade Commission, truth in advertising. That applies to everyone. Whether you're approved, doesn't matter. You can't make statements that are not supported by the data. So competitive products typically are not studied. Right? So all they can say is they have this ingredient in it. This is the price, and they can say it's a GLP-1. But with GLP-1s, that's all you need to say. GLP-1.

Jon Chee - 00:16:19: Got it. Right? Got it.

Sabrina Johnson - 00:16:21: But they could never say—for instance, they could never make the kind of claims that the FDA approved drugs can have in terms of rate of effectiveness, proportion of weight loss, other metabolic just benefits. They can't make any of those claims. They can talk about what the active pharmaceutical has been known to do, but not about their formulation.

Jon Chee - 00:16:40: Oh, okay. But to a—

Sabrina Johnson - 00:16:42: Health care—but think about it. Right? To a normal person who's not in this industry doing this every day, you see an advertisement from a telehealth platform for a GLP-1, you will be hard pressed to know the difference between that and Lilly's product or Novo's product. To you, it's the same. It's a prescription, and they're telling you it's a GLP-1.

Jon Chee - 00:17:05: Yeah. And it's already like, it's so much in the zeitgeist already. Like, you don't even—exactly what you said. You don't even need to add anything else to it.

Sabrina Johnson - 00:17:13: Right.

Jon Chee - 00:17:13: Like, everyone's been talking about it and, like—Exactly. So interesting.

Sabrina Johnson - 00:17:18: It's really fascinating. Yeah.

Jon Chee - 00:17:20: It's a kind of interesting time for this because I can imagine there's, like, so much demand for it, and they're just not really gonna be able to accommodate it on the—if you're on one end of the spectrum of, like, work, like, you're purely prescribed. Exactly. So what do you do? Do you just neglect it and just let people figure out their own way of getting it? Or do you have to make room for it in a different avenue?

Sabrina Johnson - 00:17:45: Yeah. I think it's hard. And I think as a pharmaceutical drug developer, we know how much goes into developing a drug. And like I said early on too, particularly where I am now at Dare that I started, we work with a lot of different formulation technologies and deliver drugs in a lot of different ways, and I've worked for a long time. You understand fundamentally that formulation matters. You understand fundamentally the importance. The things that the FDA has you do, the nonclinical work, even if you're using excipients that have been used in a 100 other products and an active pharmaceutical ingredient is using that part, you still have to do that nonclinical work, that safety work, that toxicology work with your specific formulation because things act together in a certain way and surprising things can happen. So you still, you have to do all those studies. So I think as pharmaceutical drug developers, I understand the patient need for pharmacy level compounding and, like, a 100% support it on a named patient basis and why it might be important for one patient to make me a special pill just for me. I have a real issue with that as an industry to serve a lot of people when you don't have data on that specific formulation that you've made where now you're going to do this at scale. And so I think it's finding—But I also, on the other hand, can see that for some products, and we're doing this with one of our products, it can be, especially if you can do the 503B where you're still manufacturing under good manufacturing practices at a facility that's been FDA inspected and subject to that and FDA reporting and you got all those standards, it can also be a way kinda to your point of getting something to people broadly, quickly, and potentially even at a price point that is lower than what it would be ultimately having completed a full FDA approval process. So I think it's this really interesting tension between wanting to meet patients where they are today and recognizing that we want what we want. We're more informed. Right? We want the solution we're using. Right? All the AI platforms to diagnose ourselves and know what we need, and we want access to it. We wanna do it from home and we wanna get it mailed delivered to our house and tomorrow. How do we do that but still practice responsible drug development and responsible medicine?

Jon Chee - 00:20:12: Absolutely. And I was just thinking about, like, if there's a market for it, do you want it to be a market where there's actual oversight or do you want it to turn into a black market?

Sabrina Johnson - 00:20:20: Right.

Jon Chee - 00:20:21: You don't want that.

Sabrina Johnson - 00:20:22: Exactly.

Jon Chee - 00:20:22: Like, because if the demand is there, people are going to find it.

Sabrina Johnson - 00:20:26: It will. It will happen.

Jon Chee - 00:20:28: Yeah. It'll show up. People were just like, alright. Great. I know somebody who's got a script, and I'm gonna fumble around and try to get that script, which is an outcome I'm guessing the regulators don't want.

Sabrina Johnson - 00:20:39: No. Well, and it's kind of like what we've decided to sort of take a position on this and do something about this. We have a product at Dare that we have been developing with the FDA for arousal disorder in women. So it's the same active that's in Viagra for men. It's been specifically formulated in a cream formulation for women to use on demand for physical arousal. We've studied it. Right? We've been going through the FDA process. So we've done all the right—all the toxicology and reproductive toxicology and nonclinical and all the studies. Phase one in men and women and phase two and transfer. Right? All the things. And saw when we published our findings from our phase two study, we saw that a lot of pharmacies started making a cream formulation of Sildenafil because our data basically was the proof point that, oh, giving Sildenafil in cream form to women can have therapeutic benefits. Right? And I have to give credit to a number of health care providers. They're the ones that came to us and said to come to tears, it's not literally a black market because it's all legal. But they came to us and said, look. Providers, there is a need for this, and there is a demand. And your data have now kinda validated that need and demand, but yet we don't have your product available to us. And we're not going to for years because you're still negotiating phase three with the FDA. Right? So when is that gonna be available? Isn't there anything that you can do about this now? So I do think, and that's where the responsible compounding can come in place because I do think if there's a way—to your point, how do we not have that black market? Right? Again, it's not truly a black market. Right? But how do we create a mechanism where a provider who wants to prescribe this product can get their hands on something that has been studied and has data? And, yes, there's more data to be generated to ultimately get to an FDA approval. And I think that's where it's interesting for some drugs where the 503B compounding pathway can be very interesting, and it's what we partnered with the 503B. We basically gave our formula to a 503B facility to be able to do that, to say, good point. Right? People want this, and I'd rather that they are able to get their hands on our formulation that we know has been studied, that as a clinician, you—it's phase two data. Right? It's not approved, but it's phase two data. But at least you know what the drug did in phase two and can make a decision for your patients that way. So you raised that wonderful point. Right? It's about how do we do that, right, so that there can be an ecosystem where people can get the products they need in a trusted way when maybe the traditional way we did things isn't ready to support the demand or the system.

Jon Chee - 00:23:21: And is the FDA, like, supportive of this kind of, like, transition or just what's happening? Or are they like, oh, we need to crack down?

Sabrina Johnson - 00:23:30: Well, I'll tell you where they're really cracking down on the GLP-1s and on the compounders and the GLP-1s is on their marketing plan. You asked earlier about, wow, are they just allowed to, like, advertise everywhere? And, you know, I'm seeing that everywhere I go. Again, they are allowed to make it known that they can make formulations of those products available. They're allowed to talk about any specific scientific findings that exist for their specific formulation. That's not what's happening. Right? Many of them cross the line. So there really is an uptick in warning letters from the FDA going to compounders around, these are the rules. These are the lines. Don't color outside the lines. Stay within the rules.

Jon Chee - 00:24:15: And I was listening to another podcast. It was the former host of Reply All, but now he has his own podcast called Hyper Fixed. And he did a three part series on veterinary medicine for cats. And not to give too many spoilers, but, basically, there's this rare viral infection in cats, and there's been a known treatment for it for a very long time. And it came from Gilead, actually. Of course, a viral, but not approved in the United States. But all the cat owners were just like, are we gonna let our cats die? It's like a death sentence. And so, basically, they just couldn't get it across the line to get it all the way through the regulatory. Basically, the black market formed, and they were just sourcing it from China and basically knew the compound, and were just mailing it and self-administering. And it just dawned on me the extent people will go, like, the demand is there. Like, what are you gonna do? Are you just gonna let people try to figure out on their own or try to get it—exactly. Like, a safer, like—

Sabrina Johnson - 00:25:22: Exactly. No. That's exactly it. And that's what we felt like we were drawn on our small scale. Right? Like, for us, that's what we were sort of grappling with is realizing, wow, clinicians and women are going to find a way to get this. And isn't it more responsible for us to find a way to make our formulation—if people are gonna do it anyhow, then I'd rather they have our formulation than get who knows what.

Jon Chee - 00:25:48: Exactly. It's like it doesn't have to be so binary. Like, there can be a gradient to this. Like, it was funny because in that story too, they're talking about vets who are like, I can't prescribe it to you, but, like—

Sabrina Johnson - 00:26:02: Nudge. Wait. Wait. Here's where you yeah.

Jon Chee - 00:26:04: And it just kind of transpired, and it was a really good series, but I was like, oh,

Sabrina Johnson - 00:26:08: I like it.

Jon Chee - 00:26:09: Yeah. Really, really good.

Outro - 00:26:12: That's all for this episode of The Biotech Startups Podcast featuring Sabrina Johnson. Join us next time for part three where Sabrina recounts overhearing her CEO's pre-FDA meeting crisis in a hallway, volunteering to build a searchable slide database over a moving weekend in exchange for a seat at the table, and how that one act of initiative opened the door to VP of marketing, then an interim CFO title at a publicly traded company that stuck for nearly a decade, culminating in one of her most formative lessons, a stock that fell more than 50% in a single day over a fibromyalgia trial that missed its p-value by the narrowest of margins.

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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.