From CFO to Founder: Building a Women's Health Biotech | Sabrina Johnson (3/4)

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 the name tag encounter that took her to Advanced Tissue Sciences, supporting US and European commercial launches in tissue engineering and the entirely serendipitous chain of events that landed her at Cypress Bioscience in 1998. If you missed it, check out part two.

In part three, Sabrina talks about the hallway eavesdrop that changed everything, volunteering to build a searchable 35-millimeter slide database over the same weekend she was moving apartments and negotiating her first FDA meeting as the price of admission. That moment of initiative with CEO Jay Kranzler unlocked thirteen years of opportunity, VP of marketing, a CFO role she accepted as interim and held for nearly a decade, and the COO title as well. She also walks through two of the most formative moments of her public company career, watching the stock fall more than 50% in a single day when a fibromyalgia phase three trial came in at p 0.058 and navigating the brutal gap between knowing something and being legally allowed to say it before Cypress ultimately sold in 2010 following a hostile takeover push.

Jon Chee - 00:01:53: So you've now gone, like, the trial by fire, 50-person company. You've done global marketing launches, publicly traded companies kind of front row seat on everything that goes into it. Were you like, okay. I could spend the rest of my career here, or were you like, okay. I need to find my next challenge?

Sabrina Johnson - 00:02:11: I have to say, I'm definitely not someone who was always looking for the next challenge. I shared the story of going from Clonetics. I wasn't looking to leave Clonetics to go to Advanced Tissue Sciences, but I saw Pam Logaman, whose name I recognize and talking to Pam, realized what an interesting opportunity Advanced Tissue Sciences could be for me at that point. Had I not run into Pam, who knows, might still be at Clonetics.

Jon Chee - 00:02:32: Mhmm. Mhmm. I'm not exaggerating.

Sabrina Johnson - 00:02:34: But similar thing happened. So I was at Advanced Tissue Sciences. I was loving my job because I was getting to work on this US supporting this US launch of Dermograft and the European launch of the burn product, which at that time was called TransCyte or Dermograft-TC in different markets. And exciting, right, fun, learning so much, really interesting stage. And I get a call from a recruiter one day, just randomly, about an opportunity at this company called Cypress Bioscience. It was for a director-level position. I wasn't at a director-level position yet. In marketing, it was a director-level position, so it would step up for this company, Cypress, that I would have not moved, quite honestly, or even paid more attention to the recruiter, except she said they were gonna be launching a product for rheumatoid arthritis. And weirdly, my husband had just been recently diagnosed with rheumatoid arthritis. Not bad. Like, he was being well managed, but I thought, wow, that's weird. Like, I didn't even know what rheumatoid arthritis was until, you know, he got the diagnosis and how random that I'm being called by a recruiter for this director of market research position, which meant I was gonna get to basically learn who are all the key opinion leaders and what is all the latest in the standard of care and what's coming next for rheumatoid arthritis. And so I just said, yeah. I'll interview, and I interviewed and got the job. So I left ATS for this very random, very personal reason of sort of, this seems like a great way to learn about this diagnosis my husband just got and get paid for it.

Jon Chee - 00:04:06: Yeah. Yeah. Yeah.

Sabrina Johnson - 00:04:07: And, right, and meet all the opinion leaders. So I went to Cypress for that reason. This was in 1998, and it was honestly one of the best moves I ever made because the CEO at Cypress was really forward-thinking in how he thought about talent and people and helping people grow and giving them opportunities to grow. So I took this role at Cypress in this market research function, and Cypress was about 50 people at that time. So I was kind of going back to sort of where we were in the early days at ATS, but it was also at this growth phase. They were just under review at the FDA for this new therapeutic for rheumatoid arthritis, which is why they're bringing me on for market research, to put together the marketing strategy and the plan to commercialize it. So it was really kind of fun and interesting to get in that point.

But what ended up, like I said, making it such a fantastic opportunity, and I was there for ten plus years, thirteen years, was the CEO. Because right away, there was a situation pretty early after I joined the company where I was head of market research, so I'm in a very much a marketing role. But I overheard the CEO talking to the chief medical officer about this upcoming FDA panel meeting. It was kinda gonna determine the fate for the product. And the reason I told you in 1998, 1999 at this point is that we were still using, at that point, slides around these 35-millimeter slides in this carousel. And to prepare for an FDA meeting, they had all these slides for potential FDA questions. And they were talking about, oh gosh. How are we gonna organize the slides to make sure we pull the right slides at the right point to answer a question? And I overheard it, and I was like, hey. I know I shouldn't have been eavesdropping, but I'm an engineer. I can just build you a database for this where we can wherever the question is, a searchable database that will point us to the right slide based on the question, and you'll have it pulled up in a second. You're gonna seem so brilliant. I said, I'm happy to do that, and it was gonna be urgent because I was gonna have to build it that weekend because we're leaving for the FDA on Monday. And I was moving that weekend, so it's kinda—

Jon Chee - 00:06:19: Big deal.

Sabrina Johnson - 00:06:20: But I said, I will do this, but I would love to be able to go with you to the FDA. I've never been to an FDA meeting. That would be really fascinating for me to see. It's important to me. And I think they both thought, who knows what she's gonna build, but I think they liked the kind of initiative that I sort of offered and had my ask. So, anyhow, I got to go to the FDA, and it worked, and it was successful, and that product got FDA approved. It was fantastic. It went beautifully.

Jon Chee - 00:06:45: Yeah.

Sabrina Johnson - 00:06:46: But I think that CEO, my fortune in being at Cypress, was the CEO who kind of embraced that. And then once he saw that initiative in me, he just opened doors for me there. So when it was time to launch that product, you know, I got promoted to vice president, head of marketing, and got to be responsible for that launch and the sales force. When we did a pivot, we ultimately successfully sold that product to another company in that business unit. It was gonna be hard for him to keep me in a sales and marketing function when there was nothing to sell or market. We only had a research-stage product at that point other than the one that was on FDA approved. He said, well, you know what? We need a CFO. Would you like to be CFO? And this is a publicly traded company.

Jon Chee - 00:07:28: Oh, shit.

Sabrina Johnson - 00:07:29: Yeah. Yes. Exactly. That's what I said. So he said, I don't think you want me to be CFO. I'm like a marketing person. I took a couple accounting classes in my MBA. I focused on marketing. Yeah. But he was great. And that's saying, look, a CFO of a public company, you know, make sure we have a really good controller that you feel really good under you. And he gave me the authority to go ahead and hire someone new under me that I could really feel confident in. But he opened that door for me, which I first—and this was in 2002. So at first, I thought it was an interim thing. And I told them it's just interim because I don't think I'm gonna be a fit for that role for what I imagined it to be, and you need the opportunity to think about maybe hiring someone else, and no harm, no foul, but I'll do it for a while because we're in the middle of a public offering at the time too.

But it stuck. I mean, I was there at Cypress until 2010 when we sold the company. So I stayed in that CFO role to February 2010 and took on other hats then as well. Then I ultimately became chief operating officer as well. And then our next product FDA approved, and we built out a commercial organization again, which was under me. So, you know, I share all that because sometimes we make a move for not that totally thought-out right reason. This wasn't a career stepping stone. It was a recruiter call, and my husband had a condition, and I thought that sounds like something I should do, kind of serendipity. But it turned out, honestly, I don't think I would ever have had the experience with all of the functional aspects of the business that gave me such comfort to starting Dare, which I started and being the CEO here, had I not had that experience at Cypress and gotten to work with that CEO.

Jon Chee - 00:09:08: That's so rad. Because first off, you did ten years as a CFO when you're like this is gonna be interim.

Sabrina Johnson - 00:09:15: I know.

Jon Chee - 00:09:16: You know? Like, that's good.

Sabrina Johnson - 00:09:18: Say. I know.

Jon Chee - 00:09:20: I guess my first question was like, how was that experience? Because talk about being a CFO for a public company. Yeah. It's very different.

Sabrina Johnson - 00:09:29: It's so different. But you know what? It goes back to those early conversations where people told me get sales experience. I tell everyone now get sales experience. It doesn't matter what you're gonna go into. Even if it's get a job at the Gap, whatever, get the sales experience. Because when I moved into that CFO role, it was so different from what I thought it was gonna be. Right? In the end, a CFO of a public company, you absolutely need a strong controller, a chief accounting officer, someone who's doing the real heavy lift on the accounting. But the chief financial officer role, it is selling. You're talking to investors about your company, which is essentially selling. Right? You're understanding what is their investment thesis. Is there a fit? How do I answer questions? It's strategy. Right? It was so different from what I thought it was going to be. And in fact, that CEO, his name is Jay Kranzler. He said to me at the time, no. You're gonna be fine. Like, a CFO of a public company is sales. And I kind of rolled my eyes, like, I don't think so, dude.

Jon Chee - 00:10:31: Yeah. Yeah. Yeah. Yeah.

Sabrina Johnson - 00:10:32: Different than that, but it was. I mean, it really was. It was those fundamentals. Again, it's just different customers. Right? Your customers—you have a lot of customers. You have a lot of stakeholders. And, honestly, that's what it is being a CEO. Right? You have investors. You have board members. You have partners. You have your team internally. Like, these are all customers and stakeholders in different ways. And a lot about being a public company CFO is understanding, yes, you're watching the business and you're watching the dollars and you're thinking that strategically. And also wearing the COO hat and CFO hat was interesting because you're sort of don't spend. Yes. Spend. Right? At the same time, but you're kind of operationally dealing with that.

But in the end, it was that kinda eye-opening experience that it really isn't the role I thought it was. And it kinda went back to something also we talked about earlier around just communication and being able to communicate an idea and not just the science behind the idea, but what's the wow about it. Right? Why does it matter? Right? What is the impact of this? And that's a lot of what a CFO is doing, whether you're overseeing your reports that you file with the SEC. Right? You're in a report on form 10-K. There's a whole section about your business. Right? What is your business? What are you doing? What about your business matters to shareholders? What's material? Right? It forces you to think about that because there are laws and rules and disclosure requirements about that. But that is great experience to have to think about, is this material? Like, if an investor—would this change your mind about whether you're making this investment? And if it does, okay, we need to think about how we—

Jon Chee - 00:12:08: Communicate that. Yep. Yep.

Sabrina Johnson - 00:12:09: Right? So I know it's not an opportunity that everyone can have, but just being in that public company framework, it does force you to think about things in a different way than in the private sector.

Jon Chee - 00:12:21: I can imagine your ability to communicate under regulatory confines on the scientific side is very similar to how you talk about your business to the street and whether it's institutional investors or retail is heavily regulated and you need to be careful about how things are represented. And at first, I was like, those are so different. Like, the roles are so different, but I was like, oh, no. Actually, it sounds like there's a lot of overlap.

Sabrina Johnson - 00:12:50: There's a lot of overlap. There's a lot of overlap. And, also, part of what you're communicating is around that, like, what is the company worth? Right? What is it worth what we're doing, and how are we building towards that and connecting those dots, which again is a communication story. And it's a marketing story. Right? Marketing is really simply around how you communicate the message clearly to the consumer that you want them to believe where there's gonna be a call to action from them. And here, right, the call to action is you want them to be comfortable to be an owner, to be a shareholder, and to have a clear ability to connect the dots as to why they should do that.

Jon Chee - 00:13:27: And through that experience, like, were there any moments of managing the street that was, I guess, a painful learned lesson? My wife works at a publicly traded company. And when we sit on the earnings calls, it's just like, oh, this is so and so from Wells Fargo, and you just get hammered? Do you have any stories of your time at Cypress where—

Sabrina Johnson - 00:13:48: Oh my gosh. We had one circumstance, and it was such a learning experience for me, frankly, on a lot of levels. So we were developing one of the first products towards an FDA approval for fibromyalgia syndrome, which at the time when we were running our clinical development program, there was nothing approved for fibromyalgia, which is a chronic pain condition primarily affecting women. It's very idiopathic, hard to know what causes it, but has certain hallmarks to it. And we had been working very closely with the FDA on the endpoints, and we had run a successful phase two. And then we were running two phase three trials in parallel, and they were staggered. That we would get one readout six months or so before the next readout. Right? And that first trial reads out, and it's very negative. We were going for a p-value of statistical significance for the endpoint of a 0.05, which is normal, and it reported out at a 0.058. But it failed. Technically, that's p-value good binary. Like, it failed. And it's a registration trial, so there's kinda no wiggle normally, no wiggle room.

What we knew, because we had had a conversation about the outcome with the FDA before we needed to do the press release, was that we didn't have it in writing yet, and we weren't gonna have it in writing for a long time because it was gonna be back and forth a little bit back and forth. But it was very clear to us that the FDA was likely to go ahead and accept that as a successful trial. Right? But we had to make some decisions around what do we disclose and talk to legal counsel. Right? Because we didn't have assurance of that. And do we say probably and so we worded it as best we could to say, you know, it did miss, but we learned all these things. We said we believe there's opportunity to utilize this as one of the registration trials. But as you can imagine, we put out the press release. Our stock plummeted. I mean, we went down, you know, 50% or more in that one day right after the news went out. Investors were very frustrated.

And it was just such a hard experience because, you know, on the one hand, I kept feeling like, but you guys, we know they're going to ultimately take this. We are so confident. But you can't. We didn't have a 100%, so we had to use all these we believe and as our opinion and our best estimation, you know, all these sort of risks that whatever. And the market reacted that way. And, you know, fast forward, they did accept it, and the product got approved. And the next trial was successful. They let us even make a change in how we analyze the data from the second trial and apply that to the first trial, all the things that we felt very confident. So it was a really good learning experience because if you were a private company, you would be sharing all that with your investors. Probably doubled down, right, and said, oh, this is even more likely to get approved. Like, this is fantastic. And just being public, there are different standards, right, around disclosure and what level of assurance you have to have and what level of disclaimers and risks you have to put out when you don't have something as a 100% assured. So it was really eye-opening and very much a learning experience and just watching that all happen.

And similarly, that company, we ended up having another big regulatory success, another big success on that product in terms of then launch with our partner doing very well. And then we ultimately what started as a hostile takeover, which again was eye-opening to me, where investors were sort of like, this is a success. You should sell this now, and don't do any more research on anything else. Right? Like, we just want to be able as an investor to take this success, this big success, and not have you have the ability to invest in the next your pipeline. We had other programs in development. Right? That ended up forcing a strategic process, so we did end up selling the company, but in a very thoughtful strategic way to someone that also then kinda took care of the pipeline and did the best to move things forward. But that was also really, in my opinion, important to remember that a publicly traded company, you are owned by the shareholders. And while you might be the management team doing the day-to-day, ultimately, the company belongs to the shareholders. So that was a really good lesson to me of how important it is to understand the shareholders, listen to the shareholders. And if you're going to be thinking that there's a better way to create value for them that is not what they are seeming to prefer, it's on you to communicate it, right, to them. Again, it goes back to sales. It goes back to communication. It goes back to marketing. And as I look back on that experience, I think we probably could have done better in how we communicated the vision for the portfolio to the shareholders in a way that maybe would not have prompted that desire to sell and capture the returns that they were able to capture at that point, done a better job of showing them how those would have been so much bigger, right, if we had just given another year on these three things and you're gonna be here versus here.

Jon Chee - 00:18:49: Mhmm. Mhmm.

Sabrina Johnson - 00:18:50: So I think back in there's a lot because they were very important lessons.

Jon Chee - 00:18:54: Sounds like a baptism of fire, to be quite honest.

Sabrina Johnson - 00:18:58: Yes. No. We also had great—I mean, the notes are like this. Right? I don't remember the successes of the—Yeah.

Jon Chee - 00:19:02: Yeah. For sure.

Sabrina Johnson - 00:19:03: Great launches and great regulatory successes. It's those are the two experiences that just I look back on a lot.

Jon Chee - 00:19:11: Formative. And I was gonna say too, like, a question for you. Is this an argument to stay private longer?

Sabrina Johnson - 00:19:17: I do think there's this weird thing that happens where sometimes being a public company, it's a path to exit, right, for private investors. It's a path to exit. It doesn't mean it's actually the right thing for the business. So now I made a decision for Dare to become public, although we did not IPO. We did a reverse merger where we merged into a shell and then took over and maintained it. And that was a thoughtful strategic decision around access to capital and what structure would give us the best access to capital to execute the vision in a way that could lead to the greatest return for shareholders. And so at that point in time, the best way to do that was to be a public company.

But I think often what happens is it's not that strategic decision. Right? It's often that investors—oops. It's been three to five years. We are ready to get out, and what is the exit path? And if you're not generating revenues yet, how can we kind of get? And so I think if you're an early stage development company, it is hard being public. Right? I think of being public, it's sort of you're on your years in three-month increments.

Jon Chee - 00:20:31: Yeah. Yeah.

Sabrina Johnson - 00:20:33: Every time you have to do a quarterly report, it's kinda like, what did you need for me this quarter? And we're not in an industry that works in quarters. Yep. Right? We're not an industry that works in years. And so if you don't—like, lucky for Dare, we thoughtfully built a big pipeline. We have a cadence of news flow and announcements across the portfolio because of how the portfolio is built and also how we're also—we've leveraged non-dilutive funding sources. Right? We're not always having to go to the equity market. We've got grants and foundation support. But, otherwise, I think it's hard if you're at a certain stage to be public. And I do see companies that have had an opportunity to IPO or go public when probably strategically, it wasn't the right move. Right? It was a nice move for investors.

Jon Chee - 00:21:20: Yeah. Gotta be super deliberate.

Sabrina Johnson - 00:21:22: Yeah. Also, it's expensive being public. I mean, you have listing fees. You have audit fees that are more extensive. You have legal fees.

Jon Chee - 00:21:30: I guess, just for a ZIP code, what is the cost? All those things you kinda talk about.

Sabrina Johnson - 00:21:35: I've heard so many times $2,000,000, 2 to 2 and a half million dollars batted around. It's just the annual cost of just being a public company, and I think that's probably about right. Yeah.

Jon Chee - 00:21:46: Okay.

Sabrina Johnson - 00:21:46: Yes.

Jon Chee - 00:21:48: Goodness. No.

Sabrina Johnson - 00:21:49: It is. Right? And so that's why, like, you're very used to make strategic sense because you're paying for it. Right? You're paying for it. So it has to be like anything else you pay for. Right? Anything you're spending on, what is this doing to move the company forward? And so if you're going to be public, it needs to be doing something for you.

Jon Chee - 00:22:08: Yep. Absolutely. And so you had this formative experience, and you basically have worn pretty much all the hats.

Sabrina Johnson - 00:22:16: Yeah. All the hats.

Jon Chee - 00:22:17: Yeah. Yeah. And so what was up next for you? Like, did you know what was up next, or did you take a moment to decompress? Both. Both.

Sabrina Johnson - 00:22:26: So what happened—so when we sold Cypress, the fun thing or not fun thing about being in the chief financial officer, chief operating officer role of a company, when you sell the company, often the CFO is the last person, right, from that company there because you really are so critical in the transition, especially when someone is buying your business to have it be still an operating business. Right? So my particular deal, we sold the company at the 2010, and I had a requirement to stay on board with the new owners until late 2011. So, basically, a year, which at first seemed—I thought this is not—you don't need me for a year. I kept trying to tell them, you don't need me for a year. Like, really? Because it was contractual.

Jon Chee - 00:23:11: Yep.

Sabrina Johnson - 00:23:12: And they kept saying, yes. They did. And they were right, actually. So so, yes, they did need me for a year. And, selfishly, that year was really good for me because it allowed me to think about, well, what do I want to do next? Right? As opposed to feeling like, okay. We're done here. I gotta go jump to that next thing. It gave me time to just really think about what I wanted to do next. And I mentioned that last product that I worked on at Cypress was fibromyalgia, and the one before that was rheumatoid arthritis. Those are both conditions that primarily affect women disproportionately. So it got me thinking, right, as I had this year to just think, it got me thinking about women's health and conditions that affect women and how funny it was that those two products, that was the first time I'd really worked on something that was so disproportionately affecting women. How fun, frankly, it had been working with those patient organizations that we did a lot of work with, just working with all those women and the women leaders in those organizations.

So as you can see, it got the wheels turning around women's health. So I decided, okay. I know. The next thing I wanna do is women's health. Not that I wanted to start a company. Yeah. I just wanted to go work with someone who was working in women's health. But, unfortunately, as I was looking around and looking for opportunities, what I saw in 2011 was the pharmaceutical industry really leaning out and the biotech industry getting out of women's health and not getting in. And there were not opportunities that I could find. The closest was, and I did take it and do this for a while, was to take a position with a global nonprofit called WomanCare Global that was not doing drug development. They were kind of they were doing the next phase. They were really focused on supply chain. Right? Once a drug is through a stringent regulatory approval, how do we make sure it gets to the women who needs it? Right? So it's really that market building, supply chain piece of it. They focused on low and middle-income countries. So it was not doing this here in the US, but how do we do this in Africa, Asia, parts of Latin America?

So I took a role originally as CFO and ultimately president doing that. And it was an amazing experience. I mean, just the travel I did and just the impact of getting some of these products that had been on market here for years, and we're just getting to women in these communities for the first time. You're just that's meaningful. But I just kept coming back to I missed drug development. I missed all of those operating roles that I had done in that. Right? Designing the study and doing them. Right? Picking the products. Mark really coming up with it. Right? Taking it through that development piece. And so I literally was on a weekend. So I kept having this conversation with my husband. Someone should start. Like, no one's doing this, but there's so many, like, interesting promising products out there on women's health, which I would see at WomanCare Global. Because sometimes people would try to pitch me on something that wasn't quite FDA approved yet, but where they had promising phase two data as, hey. This should be your next thing. And I would always have to tell them, oh, we don't do that. We don't do development. Like, definitely super exciting, by the way. Wow. Great data. Come back to when it's FDA approved because then I can register it in Africa. But so I kept seeing these products. So I knew there was a lot of promising science that could make it to the finish line relatively in biotech world fast—

Jon Chee - 00:26:39: Yeah. Yeah.

Sabrina Johnson - 00:26:40: And reasonable amount of capital. And so I kept saying to my husband, why is no one doing this? Why is no one doing this? Why is no one doing this? It was literally a Saturday morning when you have one of those, like, wait. I'm somebody.

Jon Chee - 00:26:51: Yeah. Yeah. I could do this. Yeah. Yeah.

Sabrina Johnson - 00:26:53: Why am I looking around the room? Like, I could do this. And I went into WomanCare Global that Monday morning and reported to who I reported to and let them know and to the board, I really wanna do this. I think we need to do drug development. If there's a way to do it here at WomanCare Global, fantastic. I don't think there is. I've thought about a lot. I can't kinda get there. If there is, let's do it here. If there isn't, I think I need to go do this. And we talked that morning and decided there's really not a way to do it in this nonprofit structure and with the mandate as a nonprofit that WomanCare Global had in the timeframe that I wanted to do things.

So it's lunchtime. I go out with my friends at lunch. I called brunch, my female biotech friends. I was like, oh my gosh. I just quit this morning. I'm starting a company. Yay. And we all go to lunch. And by that afternoon at 4:00, I was kinda like, wait. What am I doing? I have no products. I have no idea how long it's gonna take me to, like, bring these products into the portfolio and get funded. And this is crazy. And so I called Peter Schultz. He's been in the San Diego life science community for a long time. He started—he was at Scripps Research. He started companies, and he had started this translational research organization called Calibr. And he had been reaching out to me since the start of Calibr, which had been a couple years prior, to try to entice me to come there as a CFO because I had a lot of, again, operating experience. Right? And I had done a lot of pharma deals, and I had a lot of operational experience, and I was CFO. Kind of an interesting profile for what he was doing at this research institute that was really gonna focus on translational medicine.

That afternoon at 4:00, I was at risk—4:00, I call him and I was like, hey. I have an idea for you. Are you still interested in having me come as CFO? Here's what I can do. I'm interested in starting a company. How about I work at my company a couple days a week. I work for you part-time. It's a win-win. You get me until, really, Dare needs me full-time. This is perfect, and that was great. That was, like, such a just great transition. And I was there at Calibr. I started at Calibr basically the same time I officially incorporated Dare, which was 2015. And I was there until we did the reverse merger and went public until in 2017. So I was there for two years, and it was just great. I was there part-time. And then even after we got Dare funded with the reverse merger, we kept our offices in the Calibr building for another year.

Jon Chee - 00:29:34: Wow. Well, first off, that's super baller. Like, just like, dude, that's super baller.

Sabrina Johnson - 00:29:41: We're crazy. Yeah.

Jon Chee - 00:29:42: Yeah. It's kind of you had the, like, the was it burn the boats kind of just like—Yeah. Exactly. Very burn the boats kind of, like, element here. So, like, talk about the driving force for Dare for you to found it, and also what were the early days? You said it was that you had offices in the Calibr offices. What were the early days like? And for, like, early team.

Sabrina Johnson - 00:30:01: Yeah. So I'd had this obsession when I was leaving Cypress, kind of that last year, this realization that I really wanna do women's health, that trouble finding. And I even and I, you know, I even consulted a while at different companies before going even to WomanCare Global trying to figure out, do I really wanna do the women's health thing or whether I'd be happy doing something different? And definitely landed on that. I wanna do the women's health thing. Tried to see if WomanCare Global would be that for me. And like I said, I loved it, but it wasn't the drug development. And that drive to really start Dare was looking around and seeing this big gap in what existed. And then watching industry, again, leaning out as opposed to leaning in, where what I saw was promising science. Right? Like I mentioned, I kept getting pitched on these really interesting opportunities that often had human data on a brand new indication for women. So I see the promising science. I see clinicians that want the products. Right? I see the market need. I see the therapeutic gaps in care, and no one was putting it together. And that was really what I was looking to solve. Right? That was the question I kept asking my husband. Why is no one doing this? Like, it's just the pieces in there. Like, you normally don't get this delivered on a silver platter to you. I don't understand. And I realized part of what was missing was there was no organization that was treating women's health as a core business focus. Right? Not a side program. Not like, oh, we've got this one product for osteoporosis, which is kinda women's health, or, oh, we've got contraceptives. We got a few contraceptives. But, actually, having the commitment to build a broader portfolio, and that was built on the assumption that women's health is not niche. Right? It's half the population.

Jon Chee - 00:31:48: I was literally gonna ask why are people leaning out. And it was funny because I was having a conversation with Kaitlyn Krebs at Nalu Bio, and they're doing, like, endometriosis stuff. And the same thing is just like, yeah, women are half of the population. Why is there a leaning out element here? Like, why is that the case?

Sabrina Johnson - 00:32:08: I think part of it is because they hadn't leaned in fully. So even within their organization, there was this mentality of it being a niche business in their organization. Right? If you're just doing an osteoporosis drug in a multinational global pharmaceutical company that is working has, you know, 15 oncology products and 20 cardiovascular—I mean, exaggerate. Right? It feels very niche, doesn't it, to you in that context? So what was happening at the big pharma level is they're trying to become more streamlined. Right? They're cleaning up. They're gonna trim away, right, the thing where we only have one of these. So we can't really support all the infrastructure. We talked earlier about all the infrastructure that goes into pharma. And I think what happened to the outside world who's not in there, right, the outside world's looking at the pharmaceutical industry pulling back and are interpreting that as, oh, it must not be profitable. Right? It must not be strategic. There must not be any more opportunities. Right? They don't think they can build a pipeline around it. And it's kind of this then self-fulfilling prophecy of sort of, oh, it must be niche. And then what happens is when people think it's niche, it's systematically underfunded and undercapitalized. Right? And then what happens is you don't get the products to show like, oh, but hello. GLP-1s that we were talking about earlier, that's mostly women.

Jon Chee - 00:33:30: Mhmm.

Sabrina Johnson - 00:33:30: That's women's health. Mhmm. Right? Like, women created that market. Mhmm. And that's what I saw. Right? I saw with the right products, there's a lot of gaps. And if we have the right differentiated products that we're bringing forward as solutions, that can really make a difference. It's a moral imperative, but it is strategically good business. Right? And so that was really the vision behind starting Dare. And so, you know, when you're starting a company and you have an idea for the company, right, the first step is you have to have that idea, then you have to try to convince some other people to make it a good idea with you—Yeah. So that you can at least kinda have a team because going to pitch with that, it's just me, and I'm the only person who thought this was smart.

So I very quickly tried to think about what can I build quickly around me in terms of a management team, co-founders, really? Right? It's me going to find who are the co-founders and what skill set should they have. And so I selected for the co-founders of the company. So originally, it was the three of us. One was a former investment banker. So, again, brings that credibility of having done financing transactions, but also having in a banker role, you're picking right deals that your bank is gonna work on. So kind of that, like, halo of she picks good stuff and, you know, this is what she's getting behind. So brought her on as our chief financial officer and then wanted to bring someone on in the operations side as VP of ops. So even though I had done that in my career, I felt it was gonna really be powerful to us to have someone else in the team that had done that and could do the pitching with us.

So initially, it was the three of us, and we brought in just seed funding investors. So the same day that I gave my resignation at WomanCare Global to start Dare and the women that I went out to lunch with that day, getting to lunch, I had to get into an elevator, and I ran into literally ran into someone who had been on our board of directors at Cypress, where I had been CFO. He had been audit chair, so we knew each other very well, but we'd kinda lost touch over the year. But he got into the elevator at the same time, and he was like, oh my gosh. So great to see you, and you look so happy. I said, well, this is so crazy.

Jon Chee - 00:35:42: I just

Sabrina Johnson - 00:35:42: Quit my job today.

Jon Chee - 00:35:43: I'm here.

Sabrina Johnson - 00:35:44: I'm starting a company. I'm super excited. I see you literally in that elevator said, you know what? I wanna be your first investor. I was like, what? And I thought he was kidding, and then I called him. So then once I got the other two with me, I thought, okay. I'll call Roger. I called them and said, no worries if you were just kidding. Like, please no pressure. But were you serious? And he said, well, I need you to tell me what your plan is, but yes. Like, I'm serious. So he became our first investor. He brought in all of the other seed investors we had. So we raised $800,000 through Roger Hawley and his network, and that was all we raised until we did the reverse merger to become public.

Woah. Because we went pitching. So in the early days of Dare, then it's just me and my two co-founders, Lisa and Mark, and we go pitching the normal way. Right? You start out private, and you go to venture capitalists that understand health care, right, and biotech. But our story wasn't a fit. Like, we were talking about bringing in all these different assets from different companies, different therapeutic modalities, different indications we're gonna pursue. It's not your normal biotech startup story. It's not a specialty pharma story yet because nothing was FDA approved. Right? We just didn't fit. Right? So we didn't fit with the growth investors. We didn't fit with the biotech venture capitalists. We weren't medical device. We just didn't fit anywhere. And after a year of doing that, I thought we have got to figure out something else, and I'd spent all those years in the public market. So one, I knew about reverse mergers because I would see them happen. So I knew sometimes biotech companies fail, but they're left with a public shell and money. So I knew there was an opportunity to try to merge into one of those. And at least being public, it didn't mean it was gonna be easy. I knew it'd be very hard because when you do a reverse merger, it's really hard out of getting to be a micro cap. We're still a micro cap. It's really hard to get out of that because all of your investors are retail, and that just tends to put you in that micro cap place. But at least I knew the ways to raise money in that environment. Right? I knew the tools that I could have in my toolbox.

So, really, those first two years at Cypress, so '15 to 2017 was just the three of us, and it was figuring out how do we get this thing funded. And, ultimately, we did the reverse merger. And then once we did that and we had the public listing and the company that we merged into, at the end of all of that, had $10,000,000 in the bank. So we could finally, like, get started, start to bring stuff into our portfolio that would allow us to raise more money, which we did. So then finally in 2018, we got to really think about building the team. And then it really came down to I really wanted to keep it small, like 25 people. There was a point at Cypress when there was 50 people when I went there, and then we got down to about twenty, twenty-five people. And I realized, wow, that is my sweet spot. I mean, eventually at Cypress, when we sold that, we were back up to, like, a 150. But 25 people was just so that was kinda my vision. I wanna keep it small. I wanna really build the virtual team so we have all the core functional areas that I learned. Right? We need represented, but just one person. Yep. And then their team is consultants, right, and contractors that then they can bring in as needed, which would give us a lot of financial flexibility, allow us to be super efficient. And, also, because we're gonna be working across a lot of therapeutic areas in women's health, we work from contraception through to menopause. And so as you can imagine, there's all kinds of different considerations and different drug delivery platforms. It was a structure that was gonna allow us to then bring in whatever talent we needed on a consulting basis that was, you know, like, really specific to our product. So we did a lot of hiring in 2018 and 2019 and really haven't done much since. Like, we pretty much built the team in 2018, 2019. And it was that very thoughtful, like, okay. What are the pillars of expertise? Right? We want clinical operations. We want manufacturing. We want quality. Right? Like, what are those pillars of expertise that we need and really leverage, like, the power of the network? There are very few people at Dare, maybe out of the 20, a handful that are more than one degree of separation—

Jon Chee - 00:39:58: Wow. Yeah. Yeah. Yeah.

Sabrina Johnson - 00:39:59: From someone on our team.

Outro - 00:40:03: That's all for this episode of The Biotech Startups Podcast featuring Sabrina Johnson. Join us next time for part four where Sabrina recounts the post-Cypress year that gave her space to ask what she really wanted, landing on women's health, then a role as CFO and ultimately president at WomanCare Global, delivering reproductive health products to women in over a 100 countries. And finally, the Saturday morning epiphany where "someone should do this" became "I'm somebody," leading to a Monday morning resignation, a 4 PM panic call to Peter Schultz at Calibr, and the founding of Dare Bioscience.

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