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[Colin Miller]

Hello, I'm Colin Miller, CEO at the Bracken Group, and this is Fractals: Life Science Conversations. Bracken is the professional services firm for life sciences and digital health organizations. Our intelligent ecosystem fulfils consulting, regulatory, marketing and analytics needs with an integrated and strategic approach.

 

Today, our conversation covers the importance of pharmaceutical innovation, the challenges of biotechnology leadership and the complexities of capital markets. As you can appreciate, it's a broad conversation, but it's one that requires both depth and nuance, which is why I'm absolutely thrilled to welcome my colleague, Dr. Graham Lumsden to the audio stage today. Graham is a Doctor of Veterinary Medicine and a seasoned leader in the pharmaceutical and biotech industries, with an extensive experience in both large and small companies across the US and international markets.

 

His career highlights include starting as a large animal veterinarian. He was recruited by Merck to assist in the UK launch of Ivermectin and led the US launch of Omeprazole for equines at Meriel. Transitioning to human health, he held global responsibilities at Merck, working on Crixivan, Fosamax, NuvaRing, amongst others.

 

He has experience in microbiome therapeutics, commercialization, clinical and non-clinical development, M&A integration, regulatory affairs, finance, intellectual property, patent litigation and government affairs. As CEO of Motive Bio, he led the company through two IPOs, raised over 125 million and completed two phase three clinical studies, culminating in an NDA submission to the FDA. Graham has also led private biotech companies specializing in fundraising, corporate restructuring, financial audits and a CRO management.

 

And with that, Graham, welcome to Fractals and thank you for joining me today.

 

[Graham Lumsden]

Thanks so much, Colin. Pleasure to be here.

 

[Colin Miller]

 

And what an impressive career and background. I'm just highly impressed. In fact, I was at a networking event this morning and your name came up several times on some of the variety of aspects that you've been involved with.

 

And so, as we know, science is always changing and so is medicine. And with it, our careers often do and yours has. And you've covered such a wide range of therapeutic areas.

 

And I guess the other part of it is that you started off on the commercial side at Merck and then transitioned into the clinical development side, if I understand it correctly.

 

[Graham Lumsden]

Sort of. One of the good things, I think, that we did at Merck while I was there was we set up what we called franchises. And I had the opportunity to lead one of the franchises, one of the global franchises.

 

And that meant I had dotted line responsibility for clinical development, clinical research, operations, regulatory, non-clinical, early-stage discovery, legal, finance. So, I got an opportunity to see the whole spectrum and how integrating everything together was so important.

 

[Colin Miller]

How did that translate into a future career when you left Merck? I mean, that ability to have the wider perspective.

 

[Graham Lumsden]

Yeah, it was hugely important to me because when I decided that I'd been at Merck long enough and it was just becoming very, very slow moving and bureaucratic and I wanted to try something faster moving, more entrepreneurial. And I had the opportunity to join a biotech called Motif Bio as CEO. And one of the reasons I was given that role was it was clear to the chairman, who, by the way, was one of the co-founders of Celgium, Richard Morgan.

 

He could see that I had experience at Merck that ran across the whole development and commercialization pipeline. And I put that into practice at Motif Bio. I was the first full time employee.

 

So, I brought on an expert in finance, an expert in medical, phenomenal chief medical officer, former Pfizer guy. Volunteered at the weekends in the VA and the infectious disease group. I brought in a regulatory expert.

 

I brought in a team of non-clinical development experts because I knew how well that fitted together. We had IP experts and that was because of what I learned at Merck. And that's how we built Motif Bio from the ground up and managed to in-license a late stage antibacterial ready for phase three studies and raise sufficient capital to take it through to successful phase three studies.

 

So as the saying goes, to be successful, surround yourself with people who are a lot smarter than you and just let them get on with it.

 

[Colin Miller]

Yeah, makes a lot of sense. And I agree with the philosophy there, totally. Moving on, you know, without breaching confidentiality, can you share an interesting and/or unexpected finding as part of a client project?

 

[Graham Lumsden]

I think the most obvious one is whether you're dealing with a contract development manufacturing organization, a pharmacovigilance group or at the end of the day, the fundamentals of marketing strategy are the key in driving how successful that company is. And a marketing strategy, you know, is nothing more complicated than getting the positioning right. How are you going to differentiate your company from the others that are competing with you?

 

What's the reason for a customer or a client to work with you rather than anybody else? Have you identified the different segments of the market or groups of customers or clients that behave in the same way? Which ones make most sense to target?

 

And then what's your positioning? What's your—how are you going to be seen? How do you want to be seen by your customers and clients as different?

 

And my experience since I've been with The Bracken Group is that that is just fundamentally the same across any groups that I've interacted with so far. You've got to get that piece right. The fundamentals of building a positioning statement in your marketing strategy drive what you're going to do down the road in terms of execution, whether it be promotional aspects, social media, website, that all has to follow.

 

What's your strategy? How are you going to go out and position? To the world and, you know, there's some there's some very good examples that people are probably familiar with in the consumer world.

 

I don't know how many people are familiar with the fact that Starbucks wants to see itself as the third place. It's they don't want to see themselves as a coffee shop. They want you to view your home, your work, and then the third place, Starbucks.

 

So that's why they have free Wi-Fi, comfortable seating, food as well as coffee and other beverages. And that's the that's their positioning. That's how that's what drives their business.

 

So I think that's the fundamental that's really important for the companies that I've been interacting with since I've been fortunate enough to be part of The Bracken Group.

 

[Colin Miller]

Thank you. An interesting insight into—into Starbucks and from our homeland, it was the it was the local pub that was really the third place, I think.

 

[Graham Lumsden]

Yeah, fully agree.

 

[Colin Miller]

I'm not certain that Starbucks is going to support that in the UK, but maybe over here. Never other than. Yeah, that's that.

 

No, going back to your insight onto the the marketing, the go to market strategy, appreciate the insight there, but also to to thank you because you get involved with our marketing team and help clients understand that aspect of it. And our marketing team builds on the go to market strategies that you're building. And it's—it's highly impressive.

 

And the fact that you are able to tackle it because of that background that…you you've gone through once before and the training, but also you've done it multiple times in multiple companies. Sometimes the clients haven't even thought through that themselves. And I wonder if, you know, you've just given the example of Starbucks.

 

Are there other examples you can think of where they've totally missed their marketplace that you then go, hang on, guys, you know, really should be thinking of this, not where you are today.

 

[Graham Lumsden]

I can share a pretty specific example from my Merck days, actually, which shed some light on—on the importance of marketing and positioning. So, when I was brought on to the global osteoporosis team, Fosamax was riding high. It was back in the days where a three-billion-dollar annual revenue product was, was really exciting, whereas today it's like 10x that is is some of the some of the blockbusters.

 

But anyway, Fosamax was doing really well. And our research and development colleagues had come up with the concept that the vast majority of patients with osteoporosis don't have enough vitamin D. Vitamin D is essential for calcium absorption.

 

So, the whole thing fits together with bone health. And so, they came up with the idea, why can't we find a way to put a week's worth of vitamin D into the Fosamax tablet? And it was it was a big undertaking.

 

It had been a big undertaking to move Fosamax from a daily tablet to a weekly tablet. And then now to try and load in a week's worth of vitamin D was—was quite a challenge. But the Merck scientists were able to do that.

 

And so, it was up to me to, to figure out how to launch that. So, applying the principles of marketing strategy, what we decide what I decided to do and got the team in the global marketing group to get behind was that we needed to build off of all the great things about Fosamax, but really get our customers to see this as something new and different. And so, we wanted to launch this new product with the brand name Fosamax, Advanced Fosamax.

 

We thought, I'm not sure we're going to get that name approved, but let's—let's have a go. Anyway, for one reason or another, the U.S. team, which was the biggest chunk of the business in the Fosamax franchise, disagreed. I couldn't persuade them.

 

They said, no, there's so much brand equity in Fosamax, we're going to call it Fosamax D. I said, really, Fosamax D? How much thought went into that?

 

So, tell me how the interaction between the sales rep and the physician will go. You walk into the physician's office, great news, doctor, I've got something new to talk about. It's called Fosamax D.

 

And I think the physician will go, OK, vitamin D and Fosamax, that's great. Thanks. I already recommend that my patients take vitamin D.

 

Whereas walk into the doctor's office as a sales representative and say, hey, I've got this great new product I'd like to talk to you about, it's called Fosamax. Oh, what's that? Tell me more.

 

So how this played out was we launched it as Fosamax in Europe and it did spectacularly well. We launched it, I managed to get them away from Fosamax D to Fosamax, I tried to get Fosamax Plus, they wouldn't accept that. We got to Fosamax Plus D, launched it as Fosamax Plus D in the US and it just never took off because the doctor said, OK, it's Fosamax Plus vitamin D. That's great. Wonderful. Thanks.

 

And so that's a great example to me of the importance of positioning marketing strategy and how it played out in Europe versus the US.

 

[Colin Miller]

What a fascinating case study. Really interesting. Just the same product, different go to marketing strategy, different name.

 

[Graham Lumsden]

Precisely.

 

[Colin Miller]

What a challenge. So what are the, from your experience, what are the other critical factors when you're evaluating commercialization partners and licensing candidates besides the go to market strategy?

 

Just go back stream a little bit. What else do you look at when you're seeking commercialization partners?

 

[Graham Lumsden]

I think the most important thing is a strategic fit. So again, when I was running Motif Bio, we could see that it was going to be a really stupid idea for us to try and launch a new antibiotic as a small biotech company. We were looking at other players in the field who were getting an approval from the FDA for a new antibiotic and they were public companies.

 

It was all publicly disclosed. They were burning through $150 to $200 million in cash in the first year to put their commercialization team together. And it was not getting investor support because there's no way a new antibiotic is going to sell anywhere close to $200 million in the first year.

 

And so, we were looking around for commercialization partners and we started with the other antibacterial companies and we looked at those who maybe were focused on the grand negative antibacterials. We had a grand positive. So, it was the opportunity to go to a hospital with the whole suite of antibacterials that the hospital would be requiring.

 

So strategic fit is really, really good. And of course, it had to be a win-win. So, what's in it for them and what's in it for us?

 

So that was the approach that we took looking for a commercialization partner. At one point, we were looking to go above and beyond antibacterials. Because, as I said earlier, it was losing investor support because hospitals weren't willing to pay for innovation when they thought the old generic antibiotics worked just fine.

 

We decided, what do we have in MotifBio above and beyond antibacterial expertise that we could offer to potential partners to in-license something? And we recognized that we were a public company. So that was really attractive to some smaller private companies to have access to the public markets in terms of capital.

 

But we also had a great finance group, a great medical team, regulatory team. So, we built the capabilities within the organization. And so, we ended up, we were very, very close to bringing in a gene therapy for age-related macular degeneration.

 

We had the financing with an investment bank teed up. And at the very last minute, J&J came in and scooped it up for more than we had offered. But the learning from that was, if you've built a team of experts that know how a biotechnology company can grow and be successful, that is very attractive to companies that are perhaps earlier stage.

 

No matter what therapeutic area they're in. This was a gene therapy for age-related macular degeneration. We were an antibacterial company.

 

But we almost got it to work because, again, there was a potential strategic fit between what the partner wanted and what we were looking for.

 

[Colin Miller]

That makes a lot of sense. Yep. I can see the strategy.

 

And I guess that really leads to the next question. How, as a scientist and a business professional or a vet on the medical side, how do you balance the demands of scientific innovation with the needs to deliver a shareholder value?

 

[Graham Lumsden]

Yeah, again, I think it just ties back to unmet medical need first. Is it a commercially viable proposition? And then work really closely with the scientists.

 

So one of the other things that we, I think, pioneered, at least within the Merck system when I was there, was something called LAD, Label As Driver. And basically what we did was when the scientists had come up with a novel mechanism in whatever therapeutic area, we would immediately say, OK, if this comes all the way through to market, what does the PI or the label need to look like? What are the competitors in the space?

 

What do we need in the label to be successful? And we would literally draft the whole PI in many, many pages with all the details, the indication, the patient population, the PK. You know, was this an injectable, an oral, was it daily, was it weekly?

 

We'd put everything together in the PI and then go back and work with the development team, usually the clinical development team, to say, this is what we need. Can you build the phase two, phase three programs so that we end up with a label like that? That was, again, transformational at Merck.

 

[Colin Miller]

Interestingly, so LAD, Label. Label As Driver.

 

[Graham Lumsden]

Label As Driver.

 

 

[Colin Miller]

Okay. Almost like a TPP or a target product profile. Would that be the same similarly or is there a slight difference in the two concepts?

 

[Graham Lumsden]

I think the difference is the Label As Driver, it took a long time to build a complete prescriber information document with all the detail and identifying not just who the competitors are today, but remember, these are assets that usually weren't even in phase two.

 

So, what's five to 10 years down the road? Who else is working in this area? What are they going to be doing? What are we going to need to be better? So, yeah, it was kind of like a target product profile, but it was literally the label that you would want to take into a doctor's office. Now, run me the trials so that I can have that label.

 

[Colin Miller]

Right. And would you update that periodically? Would you all go and review it during the course of development and seeing what the competitive landscape was changing, etc.?

 

[Graham Lumsden]

Yes, absolutely. It was continuously updated based on what competitors were doing, what the marketplace was doing. So, yeah, you know, maybe we started with, yeah, it would be great to come to market with a once daily oral, but then two years later, it might be this isn't going to work unless we have a once weekly.

 

[Colin Miller]

Interesting. So someone actually had ownership of that document and that process.

 

[Graham Lumsden]

Correct.

 

[Colin Miller]

Was that on the commercialization side or on the clinical development side? How did that figure and how would you recommend it in the future?

 

[Graham Lumsden]

Well, it came back to putting together these core franchise teams where everyone was working together. Ultimately, it was a franchise leader, which when I was there, it was kind of shared leadership across commercial and development. So it was up to those two individuals to work very, very closely together. But yeah, it was clear that it was an expectation for this Label As Driver to be reviewed at least on a quarterly basis to make sure that we were still on track.

 

[Colin Miller]

Well, that's that's quite a regular basis. So, do you now recommend that for other companies you consult for as you go into an organization and take a look at it? Do you recommend the same sort of approach?

 

[Graham Lumsden]

Absolutely. At Motif Bio, when we were in phase three, I, together with my head of commercial, put together a Label As Driver process. And we went out and looked at the marketplace, went out and looked at antibacterials, particularly in our case gram positive antibacterials for hospital use, because we had an intravenous formulation.

 

And we put together the label that we needed. And that was how we designed our phase three program and additional studies and additional work that we did along the way. And so, to give you a very specific example, the standard of care in a hospital setting for gram positive infections.

 

So, the first line antibacterial was, and I believe still is, vancomycin. And vancomycin is remarkably effective, even though it's been around for over 20 years. There is a little bit of resistance, but it's remarkably effective still.

 

The issue with vancomycin is that in about 10, 11, 12% of patients, put them on vancomycin, patients develop acute kidney injury, AKI. And what we learned was you can identify which patients are likely to end up in that 10, 11, 12% bucket. And so what we learned from the label as driver process was that was our obvious target segment for Iquiprim, which was our novel antibacterial.

 

We could never compete with vancomycin for all of the patients because it's cheap as chips, as we used to say. But what we could do is say, if you give vancomycin to that 10% of patients, which we can tell you who they're going to be based on a number of predictive factors, you would be better off, not just for the patient. Unfortunately, the hospital also needed to know economically why they would be better off.

 

And the story was, if you treat them with vancomycin and they develop AKI, the insurance company or Medicare is not going to pay for you to fix the AKI. That's on the hospital's dime. And so, there was a compelling story that we put together to say, if you use Iquiprim for that 10, 11, 12% of patients, you're going to be better off for the patient, obviously.

 

And you're actually going to end up being financially better. We put together the whole pharmacoeconomic argument to support that.

 

[Colin Miller]

Impressive case example. Wow. Thank you.

 

And I know you still have your foot in both animal medicine as well as human medicine. How do you compare commercial launches in those two, for example, differently? As our old schooling would have said, compare and contrast the differences.

 

I'm just intrigued because, again, I'm not in the animal world.

 

[Graham Lumsden]

I would say the similarities are, it's very difficult for a small biotech to successfully commercialize a new product, whether it's animal health or human health. Just the scope of the undertaking and the financial resources required makes it very difficult. So, the similarity that rises to the top for me is the importance for biotechs to think about strategic partnerships, to think about M&A early on.

 

So, to go above and beyond with things like IP and doing more studies than you might need to, because you're probably going to partner with a strategic partner. That, to me, applies to human health and animal health.

 

One of the biggest differences is the nice thing about animal health is there are no PBMs. There's no Medicare, Medicaid, no private insurance, very little private insurance. It's all cash pay. So, you don't have another, I don't want to say barrier, but you don't have another piece of the equation where you have to go and do pair advisory boards on the human health side.

 

Because, you know, nowadays, I'm old enough to remember the good old days when if you came up with a new product, all you had to do was go and talk to physicians, prescribers, and say, is this something you'd be interested in?

 

Nowadays, that doesn't matter because if the physician doesn't have access to be able to prescribe that, the only way to get access is to have insurance companies or Medicare, Medicaid willing to pay for that new medicine. That doesn't apply in the animal side.

 

[Colin Miller]

So, would you say the animal side is still very much like the old style was in the pharmaceutical world, just go and talk to the vets and see what they're prescribing?

 

[Graham Lumsden]

It's very much driven by what veterinary clinicians need, what they see as gaps, what they would be willing to prescribe, what they would be willing to do. Are they interested in an intra-articular injection or is that beyond the scope of a primary care veterinary practice? The answer is probably no, depending on what the joint is.

 

So yes, it's much more driven by what the veterinary clinician wants and needs and is willing to prescribe.

 

[Colin Miller]

And it really is just down to the local level still. That's not so much, as you described, the central pharmacy, it is very much the local practice.

 

[Graham Lumsden]

Absolutely. And I think more and more veterinary practitioners are recognizing that whilst the pet parent, as I believe you call them nowadays, is interested at the annual visit to get the vet's opinion on fleas and ticks and worms, they're probably not going to buy the product to control the fleas and ticks and worms because they can get it cheaper from an online store. And veterinary surgeons are very frustrated about that, but they need to be reminded that, again, it's back to the fundamentals of marketing strategy.

 

Where can they compete and differentiate themselves? It's in the services that online stores can't provide. And that's what they should be focusing on.

 

[Colin Miller]

Of course, it goes back to the go-to-market strategy as well. And how do you present yourself? Exactly.

 

So, with the backdrop and with that perspective online, if you were suddenly given $100 million to invest in industry or society, where would you invest it and why?

 

[Graham Lumsden]

I think the biggest issue that we have with healthcare is, how shall I put it, a misunderstanding, an unwillingness to understand the cost of developing innovative medicines. It's amazing to me how short people's memories are. It was the pharmaceutical industry that saved probably millions of lives during the COVID pandemic by dramatically fast, quickly developing vaccines that basically shut down the pandemic.

 

Everyone seems to have forgotten about that. Most recently, a part of the IRA was announced, the negotiation of 10 of the biggest selling medicines, and the headlines were up to 80% reduction in prices of some of these medicines. I don't understand to this day what the impact on patient out-of-pocket costs is because of the complexities of the insurance, the PBMs, the Medicare system itself.

 

My point is, there's remarkable science that comes out of the pharmaceutical industry, and we just do a really horrible job of explaining the value to society. I just don't get why people see it as a cost unless you're having to pay a co-payer, an out-of-pocket or whatever. If I had $100 million, I think there should be a way to employ some of the new artificial intelligence models to say, how are we gonna solve this moving forward?

 

How are we gonna get pricing right? How are we gonna solve the PBM issue where a higher price is good to them because then they can give higher rebates? It just doesn't make sense. And why is it that we're willing to provide Europe, Asia, other parts of the world with the same medicines at a much lower price? The answer is because the pharmaceutical interest rate puts patients first.

 

It would be very, very difficult to say, no, we're not gonna supply UK because you're not willing to pay a price. That would be really, really tough. So there must be a way, machine learning, AI, whatever, some of these new artificial intelligence tools that are being dramatically accelerated right now to find some solutions to how do we get better pricing models, more value understood by the different stakeholders so that pharmaceutical industry is recognized for the value it contributes instead of most people saying, oh, they make far too much profit. 8 to 9% is better than retail.

 

[Colin Miller]

Yeah.

 

[Graham Lumsden]

 

But it's on the risks they're taking in the pharmaceutical industry. We just do a horrible job. So I would put the $100 million into some sort of a program to develop…how better to appropriately price globally. It's something I'm not smart enough to figure out on my own, so that's how I would apply it.

 

[Colin Miller]

Thank you.

 

Very topical, particularly as you're—I agree with you on the those of you listening, the announcement was made of the first 10, products from the IRA that will have a price reduction, and there'll be new ten every year, that that are added to that.

 

Maybe just for the sake of the audience, for everyone who's not familiar, can you explain that PBM and what their role is in the—the scheme of things?

 

[Graham Lumsden]

Just very broadly, a pharmacy benefit manager is usually used by employers or other groups to manage their access to medicines, usually on an annual basis. And so, they contract with the pharmaceutical companies, but it's all games and chutes and ladders and snakes and all the rest of it in terms of it, nothing's transparent. One of the concerns is that PBMs make much more profit if they use higher priced medicines because they can give more rebates but still have room left for them to make lots of profits.

 

And their claim is their value add is managing the pharmacy. And, yeah, that that that that's potentially a value add. It may be not intended, but in my opinion, they're one of the biggest drivers of the cost of the health care system, at least on the medicine side. One of the other things which I should have mentioned earlier is if you look at health care in general, I don't know the exact number, but medicines represent less than 10% of annual health care spend. And if used properly, they're not a cost. They're an investment because they prevent additional hospital costs.

 

So, this is why you can probably tell is a pet peeve of mine, which is why that's where I put my $100 million. We really have to solve this disconnect between perception and reality.

 

[Colin Miller]

I couldn't agree more, and thank you for that. And, yeah, it actually becomes quite fascinating when you consider the whole health care costs that if pharmaceutical products are less than 10% of the total health care, costs, which they are, I totally agree with you, even if you reduce the cost of the pharmaceuticals globally. Not globally, but within the US by 10%, you're only gonna reduce the total cost of health care by 1%. The difference is the individual that's seeing it in their pocketbook at the end of the day, but they're not really making a—a change. And they're not potent—they're potentially, it's not affecting it's—it's actually counterintuitive to changing the life expectancy and quality of care.

 

[Graham Lumsden]

It is. And there are now data to prove that the venture capital community is avoiding investing in small molecules.

 

Because so far, this annual ten products that that that have price negotiations, they're not negotiations at all, are targeting the small molecules, not the biologics. And so, the VC community is saying, why would we invest in that? You're shortening the lifespan of that new medicine. We're gonna invest in biologics. So, it's already having, I'd like to say, unintended consequences.

 

I think it's…I don't care about the consequences because it's politically the appropriate thing for us to do. So yeah.

 

[Colin Miller]

Mmm. Fascinating area. Another conversation, perhaps another day as we see this continue to play out. We're in the earlier stages of it, but we we've certainly seen it in the industry. Well, Graham, thank you so much for your time today. Thank you for the opportunity to hear a little bit more about your career. Some of the insights, absolutely fascinating, across such a broad spectrum of clinical development and pharmaceutical and animal health medicine. Really, really appreciate it. Thank you for joining us today.

 

 

[Graham Lumsden]

My pleasure. Appreciate the opportunity.

 

[Colin Miller]

Fractals is brought to you by Bracken, the professional services firm for life science and digital health organizations. Subscribe to Fractals via your preferred podcast platform.

 

Visit us at thebrackengroup.com or reach out directly on LinkedIn. We'll be delighted to speak with you. I'm Colin Miller wishing you sound business and good health.

 

Thanks for listening.