One Percent Of A Hundred People's Efforts

By Louis Garguilo, Chief Editor, Outsourced Pharma

Hilary Schultz, CEO, Persephoni BioPartners, has created a venture studio that presents a financing and operational model for biotech formation – sort of an outsourcing of the biotech itself. That was described in Part One. 

As promised in that initial editorial, we’ll turn to Persephoni’s newly hired Chief Scientific Officer, William Heath – a 36-year veteran of Eli Lilly – to provide his advice on working with CDMOs. 

First, though, a bit more from Schultz on the driving tenet of her creation of Persephoni, and what she’s trying to solve for in our industry. 

Real Estate Realization

At the age of 22, Schultz began putting together deals for underutilized assets in real estate, and began cogitating on business-scaling models overall. 

How can you mobilize supportive mechanisms to improve the scale of your operations? 

At that time, her business mentor shared a quote from John D. Rockefeller: 

I would rather have 1% the efforts of 100 people than 100% of my own efforts.

Rockefeller intuited the full potential of leveraging collaboration. It's much the same principle upon which we base our development and manufacturing outsourcing. 

As for Schultz, she intuited “you can build a mechanism that enables persons, regardless of their specific subject-matter expertise, to utilize certain tools to execute at scale and improve operating efficiencies.” 

Executive-In-Resident

Subsequently, Schultz began working for the state of Pennsylvania, as an Entrepreneur in Residence (EIR) helping to grow the biotech industry. 

“It was a ratio of one EIR for one asset. You are the executive and you stand it up, but it does not require one hundred percent of your time all the time,” she explains. 

“So I changed the model. I said, ‘I've supported three companies by leveraging external experts, and gave them equity in deferred terms to make it work. I’ve operationalized and scaled the model.'” 

That experience became the basis for her creating Persephoni, and now standing up biotechs around initial inventors/entrepreneurs and their assets, and hiring executives and other staff to drive development operations.

“As an executive of Nucleate Bio, an international accelerator, I saw clearly the rate limiting and influencing factors that are pervasive across ecosytems," explains Schultz.

"I saw it in Singapore, Taiwan, the U.K. in places like the Oxford Research Triangle, and surprisingly, even in the esteemed tier one research centers domestically … these same rate-limitation mistakes happening.  

“They are the result of a lack of adequate resources of all kinds, and uneven decisionsdecsions on licensing or tech transfer by first time entrepreneursentreprenuers trying to progress assets.” (also see part one)

Working With CDMOs

Schultz says that in the Persephoni model, “CDMOs will be incredibly important in a year or two from now.” 

Among her team of executives and operating managers with experience in development and manufacturing outsourcing, is Persephoni’s own Chief Scientific Officer, William Heath, who joined the company after 36 years in various leadership positions at Eli Lilly.

Heath provided us with thoughts on development and manufacturing outsourcing that will inform Pesephoni-led companies for future CDMO collaborations, and will add to our understanding of outsourcing overall.

We started with three questions. (Replies have been slightly edited.) 

1. What are the important components of working with CDMOs (other than mentioning “communication”)? 

WH reply: 

• Understanding the CDMO’s full range of GxP capabilities plus capabilities specifically for phase-dependent work.
• There is a ‘fit’ depending on modality to take into careful consideration. Related factors include understanding the market overall; for example, drug-substance capacity is more readily available than drug product for parenteral products. 
• I believe that CDMOs with integrated capabilities are most optimal, and strong analytical capabilities are highly desirable. Another consideration for selecting and staying with CDMOs are specialized capabilities – think spray-dried dispersion – which can become rate limiting.

2. What are those drivers to finding/engaging/selecting the right partner, and then managing that CDMO relationship?

WH reply: 

• It’s key to make your best efforts at due diligence to understand the overall and specific experience of the CDMO’s leadership team. 
• A practice to follow is to pressure test the CDMO’s quality system [with smaller projects, or example]. Well documented equipment cleaning and maintenance practices are a must have.
• Once a CDMO is selected, challenges will occur if the sponsor does not provide sufficient guidance on needs, expectations and anticipated outcomes. 
  • However, this can be somewhat of a double-edged sword. At the same time, sponsors do not want to micromanage the CDMO. Your CDMO was hired for its experience and expertise, and that should be leveraged. 

3. What are some other thoughts regarding today’s CDMO marketplace (e.g., capacity, pricing, geographies) and biotech-CDMO relationships?

WH reply: 

• I’d place an emphasis on selecting CDMOs that have a strong history of producing high quality reports capable of being leveraged for regulatory interactions. 
• Currently, there is a strong push by regulators, and major sponsors, to reshore work to lessen vulnerabilities in supply chains. This can’t be ignored.
• As alluded to above, I suggest avoiding what might be considered disjointed development caused by spreading work across multiple CDMOs without having a strategy or the actual ability to integrate.
• Always a principle of outsourcing: You get what you pay for. Be wary of going for the lowest price. 
• Something that drives the need for an organization like Persephoni: the failure to progress an asset can occur because a sponsor does not have the requisite internal expertise to guide and accurately assess the work being done at the CDMO.  
• Don’t confuse overall CDMO performance/reputation with the quality and capabilities of the specific site doing your work; many larger organizations have acquired sites of variable capabilities and customer service.

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Outsourcing continues to take on new shapes, and those shapes are formed by combining some fundamental outsourcing practices with new ideas for uncovering and funding assets, and forming the companies to take them forward.

I began part one by saying I wasn’t sure Persephoni would be an apt subject for our publication. I’m sure readers will agree it was fortuitous we got to speak with CEO Schultz about her venture cafe model for biotechs, and we got to learn from CSO Heath on outsourcing.