On this episode of BioTech IQ, Ammon Rivera interviews Robert Foster Pharm D, PhD, CEO of Hepion Pharmaceuticals. Robert brings 30 years of experience to this discussion and shares with us details of his background that led him to where he is today. We also discuss Hepion Pharmacetuicals current clinical trials to development treatments targeting chronic liver diseases including NASH, cancer, and chronic hepatitis virus infection. A quarter of the people in the US have fatty livers and of those, about a fifth will likely develop NASH. It’s a big problem that affects a lot of people. The company’s lead drug candidate, Rencofilstat, reduces liver fibrosis and hepatocellular carcinoma tumor burden in experimental models of NASH. Tune in to learn more about their pharmaceutical development process and other possibilities with the drug in terms of treatment.
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Can Hepion Pharmaceuticals Develop the First Treatment Approved For NASH? With Robert Foster, Pharm D, PhD
Our guest is Robert Foster, who is the CEO of Hepion Pharmaceuticals. He holds a PharmD and a PhD. He’s an Adjunct Professor, a Faculty of Pharmaceutical Sciences at the University of Alberta, and is a Board Member of Transcriptome Sciences. He also brings years of experience here in the industry to this discussion. He has himself participated in developing a treatment that was gone through discovery all the way through the clinical trials and has been successful. He’s worked and helped structure a major licensing deal with Hoffman-La Roche for a kidney transplant immunosuppression drug.
As I mentioned, he’s the CEO of Hepion Pharmaceuticals, which is a company that he helped to found. It is a clinical-stage biopharmaceutical company. They’re focused on the development of targeted therapies for liver disease. There are a couple of different indications that they can target with this, including NASH, chronic hepatitis, virus infection, as well as even cancer in the kidney. A couple of other interesting points are that I flew out to Edison, New Jersey, where Hepion Pharmaceuticals is based, and I personally had the opportunity to go in and do an in-depth company review with Hepion Pharmaceuticals.
After this interview, I sat down with Robert and had another discussion where I captured that on video, and I’ll be putting that out on YouTube. I also got to sit down and talk with their chief financial officer, senior director of clinical development, as well as an associate clinical trial manager to get an inside look at what it’s like to work at the company and what the company culture is like. I’m going to be putting out this in-depth company review video soon. Stay tuned for that.
Thanks so much for reading. If you liked this, please consider leaving a review on whatever platform you’re on. It does help and don’t forget to share the episode. Also, where I live most of the time in terms of social media is on LinkedIn. Go on LinkedIn and search me, that’s Ammon Rivera. You can find me, shoot me a connection request, let me know that you read the show and we can connect from there. I do have a company page for BioTech IQ up on LinkedIn, that you can also go on where we share upcoming information and things that are happening on a regular basis. Without further ado, I will go ahead and get you to the show.
Welcome to the show, Robert Foster, CEO of Hepion Pharmaceuticals.
Thank you, Ammon. It’s great to be here.
I appreciate it. As was mentioned, Hepion Pharmaceuticals is tackling NASH. NASH has been a challenging indication based on the history of approved treatments, which is none. We’ve got some cool things to cover. Before we do, I’d love to jump into your background a little bit. What was the motivating factor for you to get into the industry and drug development?
I spent my first ten years after graduating with my PhD in Pharmaceutical Sciences at the University of Alberta in Edmonton, Canada and I was a Prof at the University and a Faculty of Pharmacy and Pharmaceutical Sciences, teaching about drug discovery and medicinal chemistry where you’re talking about how do you make drugs. For example, penicillin is called penicillin G and penicillin V, and then downstream amoxicillin and cloxacillin and all these different drugs.
I was in the environment of teaching about how to develop drugs but I wasn’t developing drugs, and it was something I always wanted to do. Most academics would agree with this, is that if you are successful and you get a fairly sizable grant, that grant is not going to anywhere come close to what you need to develop a drug. The funding is not there at a university level to develop a drug, at least not all the way through the different stages.
At that point, I decided, “If I’m teaching this stuff and seem to be jazzed about it, then why wouldn’t I try and put my money where my mouth is?” I left the university. It’s funny looking back at it now with the years of wisdom and experience but I went to the Dean’s office and I said, “I’m going to leave the university and I want to start a biotech.” He looked at me like I was from Mars. He said, “Are you kidding me? You’ve got a tenured faculty position. You’re a professor and got everything here. You’ve got a great package in terms of all your benefits, pension, and all those different things. I said, “I know but it’s not quite doing it for me.”
I left the university and started my first biotech in 1993 for the sole reason of trying to develop a drug. I was convinced, rightly or wrongly, and a lot of people thought it was wrongly at that time, that I could develop a drug and it was successful. Ultimately, I did develop a drug that is now on the market. I’m going to try and do it again within the context of Hepion. That was what pushed me into the industry.
You’re in an academic setting, teaching drug development and then you’re like, “I’m teaching this and telling people this work so I should go out and do it.” Was there something, maybe in your childhood, that prompted you to go into studying pharmaceutical science and doing what you are doing?
You almost hit a nerve there. There wasn’t anything in my childhood that was pharmaceutical-related, even though I grew up in the ’60s, but there was a huge influence on my childhood in business. In fact, my father was a businessman his whole life. He had a totally different type of business. It was in the logging industry, sawmills, planing mills, heavy machinery, and all that. I grew up in that environment which is about as far as you can get away from the pharmaceutical environment that I’m working in now.
My brother also went into business and in fact, he did his PhD in Finance. He went into that very formal training in business but that was probably the biggest influence on my background. It’s having grown up in a business environment. Even from the age of 4 or 5, I remember sitting in my father’s office playing with an adding machine, things that people don’t even know about now.
As we come to now, business has always been exciting to me. I’ve always wanted to be in a business where you can essentially to some extent develop your own future and own business. You can’t do that at the university going back to what my previous comment was and again at the university, you’re not ever going to own equity. For me, it was important to have an equity stake in whatever I do to be able to take the business and the equity and go into in my case, the business of science. That’s where all of these things coalesced to where it is now.
What I find interesting about the biotech industry is that you’re taking science and entrepreneurship and putting them together. If it’s done right, you have amazing outcomes. The value that you create not only creates a product that maybe makes people’s lives more convenient, but you literally can change people’s lives and their health. Without your health life can be pretty difficult. There are people out there suffering a lot.
I don’t know if I could think of a better gig because I’ve got the business, science, doing things that I love doing, and working with the best people I can imagine. It’s not even the people inside the walls of Hepion but it’s people that I’ve interacted with over the years. It’s bankers, analysts, people from the investor relations world, public relations world, and industry. It’s so amazing to hop on a plane and go somewhere and virtually any major city in North America or even in Europe and some parts of Asia. I know people and they’re close friends after many years.
When people say to me, “Are you ever thinking of retiring?” It’s like, “Retire to do what?” A lot of people want to go golfing. They say, “I’m going to go golfing, enjoy things, and travel.” To me, this is better than golf, especially if you’ve seen me golf. I get to travel and do all these things. Why would I ever want to change it? It’s too much fun. We are making differences in people’s lives so you feel good about that. If you can say, “Somehow I entered this world, I did something. When I leave the world, I can say that hopefully there is a benefit to what I did and there was a positive impact.” That’s what it comes down to.
We’ve got this insight into your background a little bit. That’s one of the things I love digging into is the people behind the creation of many of the treatments that were on the market. You left the university and you go through this process. You develop and built a team that helped develop this treatment. Tell us a little bit about that, what was the treatment and then, what was it like going through that process?There are a lot of things that lead to NASH. That’s another reason why we need to figure out how we treat it and cure it, if we can cure it. Click To Tweet
When I left the university, I started my first biotech in 1993. Back then, I was teaching medicinal chemistry, which is in this case, we were teaching what we call the homologous series. You start with drug A and then slight improvement. It’s almost like going from Tide laundry detergent to new improved Tide, to even better improved. We make all these iterations of the laundry detergent. It’s not a lot of difference when it comes to pharmaceutical development if you follow that same path.
You can have penicillin and then you go to the next version, maybe ampicillin, amoxicillin, ticarcillin, piperacillin, and all these different cillins. What I was looking at is there is a drug called cyclosporine which is an incredibly good drug. It was doing over a billion a year easily for organ transplantation and also the treatment of auto-immune disease, where your body essentially attacks itself.
It’s well-known that cyclosporine had a lot of drawbacks. For example, it increases your blood pressure. They can have a negative effect on your kidneys, what we call nephrotoxicity. They can disturb lipids, cholesterol, triglycerides, and things like that. There are all these drawbacks to cyclosporine but that’s far outweighed by the clinical benefit you can have if you’re a transplant recipient. Let’s say you have a new kidney. Cyclosporine enables you to live and do quite well for many years but you will be taking that drug for the rest of your life and it has certain drawbacks.
I went back to the old chemistry notes and I was thinking, “Can I make somehow a better version of cyclosporine?” In fact, I could. What I had done, even before 1993, is I traveled over to the people who were making cyclosporine at the time over in Switzerland called Sandoz which is now, Novartis. I said, “I know how you can make a better drug.” They didn’t quite laugh me out of the room but somebody pulled me aside and he said, “You will never get endorsement here because it’s an NIH syndrome.” I said, “What’s that?” He said, “Not invented here.” I said, “If that’s the case, I’ll do it myself.”
That’s why I went off and I started my own company to do exactly what I was proposing that would be done over with the big pharma. Fast forward to 2021 in January, the drug got approved for auto-immune disease treatment. In this case, it was approved for lupus nephritis. There’s a big page flip that I have to mention here because what I did is I discovered the drug and it’s never always one person. I can’t take all the credit but I got the ball rolling and we developed a team around it.
We walked it all the way through the clinical trial program, even into phase three but I did a licensing deal, and then the company I licensed the drug to I wound up acquiring. Then we adopted that company’s name, which is now called Aurinia Pharmaceuticals, which is also a NASDAQ traded company. Aurinia pushed it forward in lupus nephritis.
My impact and role were about phase two or phase two B and then after 21 years of being the CEO there, I left and started to do what we’re doing here now at Hepion. This is where I need to give credit where credit’s due. The team at Aurinia took that ball across the goal line here and they’ve done a good job of doing that. Kudos to them for getting it done. It is a team effort. You do need a lot of people, and in the case of cyclosporine, my prior drug, there were hundreds and hundreds of people involved and thousands of patients. Ultimately, it worked quite well.
One of the things that I strive to capture here on the show is exactly what you talked about, and that is the entire process, the details, what you went through, and how you figured this out. I know there’s a lot of detail there so I appreciate you touching on that. The other thing I’ll say on that, which is very interesting, is the indication that you originally were pursuing for that drug ended up being completely different, in the end. You were able to discover throughout this whole process, “There’s also some benefit here. What if we pursue that?” It’s a long process but congratulations and to your team as well that they made it happen.
I can’t say enough about the team and the current team at Aurinia. These guys are doing a great job at commercializing. I’m not a commercial guy. I love to develop drugs, as I mentioned, that’s the way I golf. That’s my golfing equivalent, it’s developing drugs but when it comes to the commercial world, that’s where I do need to hand the ball over. Let the experts do what the experts can do and then I go back to my lab world and start developing another one. It’s fun to do.
They’re very different processes. Let’s go ahead and jump into Hepion and talk about what is that you’re doing. For those of you reading, you can go to the website, it’s HepionPharma.com. Hepion is tackling liver disease and one of the main indications is NASH, which is Non-Alcoholic SteatoHepatitis. That’s a fatty liver disease and is not related to alcohol which can lead to cirrhosis of the liver. What’s the genesis of this? How is it that you decide to go this route and tackle this particular indication?
We had a molecule. As I mentioned, I’ve been the CEO of my past company, Aurinia Pharmaceuticals for 21 years. When I decided it was time for a change of scenery, I wanted to start a new company and then go again after that, the hunt, which is looking for a new molecule. We had about 200 early-stage molecules within Aurinia at the time. Aurinia was moving into the commercial world. When I was leaving, I said to the board, “I’d like to take those early-stage molecules and further develop them because I see a ton of promise here.”
They agreed to do that. We came to a purchase agreement when I purchased these molecules at that time. I set up a new company. That private company that I spun out of got acquired into today’s Hepion. When we were looking at these 200 molecules, we started running them through these different screens. You could call them the pharmacology screenings to see what exactly these molecules do. As I mentioned, the first drug, voclosporin, that was a new improved version of cyclosporine that suppresses the immune system.
The big key difference between that voclosporin and what we have now, these 200 molecules, is that all of these molecules, we design them so that they would not suppress the immune system. They would attach to or bind to certain enzymes that are proteins called cyclophilins, but they would not have this immunosuppressive property. When we started screening these things based on the literature, we knew that these cyclophilin inhibitors could do a whole bunch of things, including treating viruses. For example, HIV, Hepatitis C, Hepatitis B, Hepatitis D, and even some Coronaviruses.
We started looking at the landscape of what these molecules could do. One of the things we realized, even from the literature, is that they had the potential to have an anti-fibrotic effect. When we looked at what are the types of diseases that have fibrosis, there are tons of them. The list is almost infinite, but we thought liver disease and liver fibrosis might be a good thing to chase after because one of the interesting things about these cyclosporine-related molecules is that they’re taken orally.
Once they cross the gut, the first thing that happens is they encounter the liver. In simple terms, they get stuck in the liver. It’s what we call hepatic first-pass extraction and because they got stuck or extracted by the liver so extensively, we thought, “Let’s target liver disease. As they are anti-fibrotic, let’s target fibrosis of the liver. What would that be? It’s got to be something like NASH because it is a fibrotic disease of the liver.” That’s how it all came together.
I was watching that video talking about the mechanism of action that you have on your website. It animates it all too so you could see it. There are some still shots of the cyclophilins binding. It’s basically what you’re explaining. Each step of the process of the mitochondria, the damage, and then everything that comes after that. Do we know what the cause of the disease is? You’re working on a treatment to figure out how to fix this problem for people that already have it, but do we know what’s causing a non-alcoholic form of steatohepatitis?
There are things that lead to it and it’s very common, which is another reason why we need to figure out how we treat it and cure it. From an FDA or patient perspective, there are no approved medications out there now to treat NASH. You’ve got this prevalent disease with no real treatment. When it comes to what causes it? The first two letters in NASH are NA means non-alcoholic. It’s an inflammation of the liver and you’ve got a lot of fibrosis. Fibrosis is a word that describes the laying down or deposition of a protein called collagen, and that’s a scarring of the liver. You’ve got this fatty component of the liver, fibrotic component, and inflammation happening.
The ultimate outcome of all that is that your liver starts to lose function and it can progress. If it progresses far enough, you can develop cirrhosis. A lot of people are probably more familiar with the word cirrhosis, but if you have cirrhosis to some extent, you can compensate and it’s called compensated cirrhosis. You can still somewhat function but if it gets even worse, you might need a liver transplant, you can develop liver cancer, or you can die. The downstream clinical consequences of NASH can be quite severe. It’s something we need to treat but I believe it’s multifactorial.
Getting back to your original question. There are a lot of things that can cause or lead to it. We’re still trying to figure out to maybe better understand all of these things that can lead to it. It could be genetic, lipid, and protein components. There are all these different factors that can lead to NASH. Part of what we’re trying to do now is to better understand the disease itself.
I don’t believe that everybody, for example, who has NASH, all looks the same, in terms of their liver morphology or the way their liver looks. I believe that there’s quite a heterogeneous type of disease, meaning that one treatment in the future may not apply to all people with NASH. You might have several different types of treatments for NASH as the catch-all phrase of trying to describe this multifactorial and very heterogeneous type of disease.NASH is a very heterogeneous disease. It’s not a one size fits all. Click To Tweet
What has been the biggest challenge thus far that you’ve seen in people discovering something to be able to treat this disease?
One would be the diagnosis. When we look at people with NASH, it would be a more severe form of non-alcoholic fatty liver disease or you could call it fatty livers. To try to put that into context, about one-quarter of the global population has a fatty liver. If you think about that, probably one-quarter of the global population is not complaining of a fatty liver saying, “I got to see my family physician. I got to see somebody to have a look at my fatty liver,” because they’re asymptomatic and they don’t feel anything. They don’t know they have it.
By the time they do show some signs, maybe they’re getting somewhat jaundiced, not feeling right, and lethargic. They go to see the physician at that point and they realize that their liver enzymes are maybe elevated so something’s going on in the liver. They might need a biopsy of the liver. Finally, there’s a diagnosis of NASH.
Step one is having a good diagnostic. If we have high blood pressure by comparison and again, asymptomatic, you might not have any idea. You’ve got high blood pressure until you go for your annual checkup with your physician. Then they put the blood pressure cuff on you and say, “Your blood pressure is high. Let’s put you on some medication.” It’s almost that simple but it’s not that simple when it comes to NASH.
Believe me, a lot of people are looking at, “How do we better diagnose NASH? How do we get a jump on it early enough?” The keyword there is early enough. The other challenge we have is that it’s almost like the disease process can move somewhat slow. You may not progress from one stage of NASH to the next stage. It could be several years in between stages for the full-blown disease to occur and then cirrhosis and whatnot to occur. It’s a little bit slow-moving.
When you go to the clinical trial process and you’re trying to develop a drug to address something that’s somewhat slow-moving, it advances somewhat slowly or can, and then if you try to reverse it could also be slow-moving. If you think about it, how long do your trials need to be? If you’re in the clinic and you’re doing your testing on your new molecule, do you test it for 6 months, 1 year, or 2 years?
You see some of these NASH trials can be quite long. They can be 15 months, 18 months, or 2 years. It does take time and the thinking there is that if you develop fibrosis and you’ve got a very fatty liver, a lot of inflammation, and other things going on with your liver, question one is, “Can you reverse it?” Question two, “How long will that take?” There are a lot of pieces that I don’t think we fully understand yet and that’s part of the challenge.
First of all, how do we diagnose it, and secondly, how do we design trials to be able to show that we’re making improvements? Then, how long do those trials need to be and what drugs are needed? Ultimately, do we need a combination of drugs? Do you need a drug to address the fatty component? Do you need another drug to maybe address the inflammation or a third drug to look at fibrosis? What do you need? It is a mind-boggling experiment but it’s a necessary experiment because it affects so many people.
Of those one-quarter of the people that have fatty liver, maybe 20% of those will go on to develop NASH. It is a big problem. If you put it in the context of the US population, there are 17 million people that have a fatty liver and 20% of those can go on to develop NASH. NASH will be the leading cause of the need for a liver transplant. We need to do something about this. It’s quite urgent. There are a lot of companies working in the field and I’m hoping and praying that we can do something quickly sooner rather than later.
The short answer to the original question is there are so many factors. It’s hard to pinpoint and we’re trying to figure out how to diagnose and see what stage people are at. The 17 million people with the fatty liver that could then eventually develop into NASH, in the US then that makes me think, “What about places like Canada or around the world?” It’s a major unmet medical need that you’re tackling here.
When I said 17 million, I should’ve said 17 million NASH people, it is a big problem.
It’s 17 million with NASH. There are likely many more people that are in an early stage that don’t know it. They could eventually go that direction or route. I wanted to jump one more thing here. You mentioned sooner rather than later. Now, it looks like your lead candidate here is in phase two. Where are you at with this? In terms of phase two, how far into this process are you? When can you expect to move into phase three?
We finished a phase two A program, which is a smaller shorter trial. What we were trying to do with the outset of phase two A is we had done our phase one as you always do in healthy volunteers and you look at safety, tolerability, and PK, which is pharmacokinetics. We did that successfully in phase one and the drug worked well in terms of meeting its endpoint. It’s very well tolerated and seemed safe. We easily could characterize our PK profile or pharmacokinetics.
We then moved into phase two A which is the first time where we use the drug in NASH subjects and for that, we wanted to assess safety, tolerability, and PK. That’s the primary endpoints that we’re looking at. Those are the key drivers of the study. For that, we wanted to do a short study, in this case, it was 28 days. Once a day oral dosing for four weeks but while we’re in there, looking at these subjects, as I mentioned before, it could be a long process here to see any changes. We thought, why not take a look at how well the drug seems to be performing if there’s any movement in what we call biomarkers.
There are certain markers of collagen, for example, maybe fat or inflammation, those types of things. We wanted to see, “Is there any movement at all? Are we tickling any biomarker in a short span of only four weeks?” The shorter answer is yes. We did see some movement of some of these biomarkers and meaningful movement as well. We saw a reduction, for example, in one of the liver enzymes called ALT, which indicates to us that we had a reduction in or are at least moving in the right direction on the inflammation. We saw also one of the drivers of what we would call fibrogenesis so the laying down of the collagen and fibrosis, one of the things called Pro-C3, we saw a reduction in that as well.
From the standpoint of inflammation of fibrosis, we are convinced that we’re seeing something here. We have a whole bunch of other things that we’re working on as well. In fact, we’re still analyzing data but what we want to do is set the stage for a phase two B program, which is quite a large program. We’re looking at about 336 subjects and this is a phase two B program, where we’ll be giving the drug once a day orally for a year. We’ll then do a month follow-up and that’ll be an extensive program that will kick off the second half of 2022 but closer to the middle point of the year.
The reason I’m not giving a specific month whether it’s June, July, or August is that it depends on drug supply. The drug is being made over in Europe and they were shipping it over to North America for encapsulation and whatnot. There are a lot of moving pieces to this but as best as we can estimate, it’s going to be middle of the year.
Again, that is going to be a long process because you’re recruiting enough subjects that fit all the criteria. That’s probably going to be 12 to 14 months and then we have a one-year drug treatment. After that, we take the results to the FDA and then we start a phase three. If you walk it all through, we’re looking at several years here but they’re very meaningful years. You can certainly build value. One of the things that we are going to do because this is a blinded phase two B trial, is we’ve also set up a safety monitoring board or committee that has a certain mandate to look at the safety of the drug but also to have a little peek at efficacy markers.
Even though the trial is going to be long in terms of patient recruitment, we’re blinded and the whole trial is yearlong, they will be able to have a look. Let’s say, a third of the patients get six months into it, we’ll have a committee meeting and they’ll be able to look at and assess safety, tolerability and efficacy. Hopefully, at that point, they’re going to say, “You’re all good to go. The drug is looking good and we’re seeing some efficacy signals.” That’ll just keep us moving forward.
We fully intend to have that happen and we’re planning for success. That’s a long-winded way of saying, “We’ll get there, even though it is a blinded trial and it’s a long trial. We sincerely plan on having it so that there are no crickets.” I know this for sure because I’ve been doing this for so long, that if you run your trial so long and you don’t have any news flow, they get fatigued. Investors are like, “What’s going on? I haven’t heard anything.” We fully intend to try and keep some meaningful news flow and not fluff either. That can also hurt companies if you put out these fluffy types of press releases. We try and walk that line between meaningful press releases and on the other hand, avoiding the crickets.There are so many good buying opportunities if you're investor. Now is a good time not just for biotech, but for lot of things. Click To Tweet
I appreciate you going through and explaining that. That’s a lot of great detail to understand and capture the amount of planning that has to go into what it is that you’re going to be doing. It sounds like you and your team had sat, talked, developed, looked at things, and have decided, “This is how we’re going to do this. This is what we can expect.” Along the way, you’re going to discover different things and you’re going to have to pivot maybe on certain things and figure out what to do.
You’ve mentioned, “Along the way, you might have to pivot,” and that’s an important phrase because you pinpointed exactly our thoughts, which is we’ve got this great asset, now called Rencofilstat. As I mentioned, when we first started working on these molecules, we knew that they did a whole bunch of different things. One of those things was they have the ability to have an oncology indication or an application.
Also, the drug is trapped in the liver. We think that liver cancer could also be a great play here. We wouldn’t be blinded so we can go straight away into a phase two trial in liver cancer and the molecule has got great potential. We show them pre-clinically in a number of different models, a very consistent antitumor effect so we’re drilling into that. One thing that is overarching amongst all of our programs, whether it’s the NASH program or what I would call HCC, which is hepatocellular carcinoma, is an artificial intelligence that we have developed ourselves.
As I mentioned, NASH is a very heterogeneous disease. It’s multifactorial and not one size fits all. That’s true for a lot of diseases that we still don’t fully appreciate. Now what we’re doing with our AI that we’ve developed internally with a fellow who’s been working with me for at least 30 years but he’s been a pioneer in AI. He’s pulling all this in to what we call a multi-omics analysis. Multi-omics means proteomics, genomics, lipidomics, and transcriptomics.
Even on a short, small trial like our phase two A trial using multi-omics approach, you can identify probably millions of data points that you could never possibly bash through if you were to use an Excel spreadsheet. It would take several lifetimes. What Pat Mayo is doing, who’s leading the charge on our AI, is he’s pulling together all of our own data, and then he’s going to the public domain as well to pull and synthesize all this data to do a couple of things.
Number one is to first understand the disease because again, one size does not fit all. Once he understands the disease then he can say, “Here’s what’s happening with our drug based on our phase two A product.” Even going back to our pre-clinical work taking, for example, animal tissues, like a liver from a mouse saying, “Here’s what happened to the genome in that liver. Here’s what’s happening to the clinical picture with the genes and the transcripts,” and whatnot. Pulling all that together and saying, “Here’s what Rencofilstat is doing to the lipids, proteins, transcripts, genome, and all the rest of it. Here’s where our drug best fits.”
Even though I said there are 17 million patients in the US with NASH, it may not be that our drug fits all 17 million. Maybe we narrow it down but in this case, we know that we’re not wasting time, effort, and money. We can say, “If you fit the following picture as a patient that has NASH, this is the drug for you, but if you’re over here, our drug may not be well suited for you.”
We’re going to target a very specific patient population. That patient population can be quite huge but we want to be successful in our clinical trials. I’m not a commercial guy but I do know enough about the commercial world to say, “We don’t want to waste people’s money and the third-party payers.” If we can say, “Here’s where our drug works and there’s a high likelihood that the drug will be beneficial. There’s a more likely case to be made that the drug will be reimbursed eventually.” All these pieces need to be pulled together and believe it or not, AI is central to that theme.
I did notice that on the website, the AI power trademark that you have. That adds a very unique aspect to your company and to what your team is doing. AI is on the rise in terms of being able to test and prove, understand the data earlier, and being able to help you see things at the earliest. You’re already past that but from a discovery standpoint, there’s a lot of talk about AI being able to accelerate that and to shorten some of the processes there and some of the things that take place in that area.
That is a big challenge in the NASH development too because a lot of companies are working in a space, and there are even some late-stage companies that are working in the space. What I’ve noticed from my standpoint stepping back a bit is the response rates, in terms of what the FDA wants to see. The FDA wants to see either your resolution of NASH or the fibrosis score coming down by at least one point. In Europe, they want to see both those endpoints being met. In the US, it’s like either/or.
The response rates we’re seeing clinically in some of the clinical trials that have been posted, which are publicly available, are quite poor. Maybe you’re getting response rates of 30%, 40%. If we were to take other medications, going back to treating high blood pressure, you want to say that your blood pressure medication is going to work.
At 30% or 40% working, it’s probably not high enough in a lot of instances for a lot of diseases. We need to elevate the game. Part of the problem is, if you try to put your drug in certain types of patients, it may not work because of what I was mentioning, this multifactorial approach that we need to pay attention to. The only way we can reasonably pay attention to that is by using AI. That’s what could be one of the keys to our success. It’s almost like the old saying, “Work smart as opposed to working hard,” and that’s what we’re going to try.
I love that saying work smarter, not harder, but the reality is that if you combine hard work and smart work then you multiply your output. This is a great conversation. Hepion is headed in a pretty interesting direction. I was checking out your financials and looking at some things earlier on Crunchbase and there are some exciting things happening.
A headline off of recent news and activity on March 2nd, 2022, Pulse 2.0, “Hepion Pharmaceutical stock, quite jumped up now.” You’re publicly traded. I know the news cycles are here now, gone tomorrow then back the next day, gone the next day, that’s how it is. Let’s pivot the conversation and jump to these final three questions.
Before we do, you were talking earlier about all these different factors that you’re considering and all these different almost like milestones, “We’re going to do this and it’s going to take a year. We’re going to this and it’s going to be a couple of years.” I remember asking one of my very first guests on the show. I used to ask this question, is there ever a time in your career when you could go back and say, “There was one decision I made and that changed everything.”
The answer that I would normally get from people is, “Drug development is such a complex detailed process that you make hundreds, thousands of decisions almost every day, week, month, and it’s hard to try and pinpoint it to one.” I wanted to comment on that because when I asked you, “What’s next? Can we expect to see a phase three?” It hit home for me how complex of a process this is. For those out there doing this, if you’re reading and gleaning any little details off of this, recognize that. Final three questions here, I love to ask this question, which is if you could go back to the start of your career, what advice would you give yourself?
A lot of people won’t say and admit this but maybe in the back of their mind, they do admit it but I’m going to say it publicly. If you’re going back to what you want to do at the beginning and giving advice to yourself looking back, I would say, “Aspire to be the dumbest person in the room.” I read a book years ago about Enron and what a disaster that whole thing was. Parts of that book that they talked about, whether it was the CEO or the CFO at the time saying, “We’re the smartest guys in the room.” When you say that, it’s a dangerous thing. That’s my own humble opinion.
I’ve always tried to get into a room and surround myself with the brightest and best. What I can say is that in the past, whenever I’ve made a mistake, I haven’t surrounded myself necessarily with the brightest and best. Sometimes, it’s a little bit hard to admit, I’ve surrounded myself with friends that had a certain background. I’d say, “This friend of mine has a certain background. I should bring him into the fold.” It may turn out that your friend may not be the smartest, brightest and best in the room and that’s a mistake.
Forget about those friends because you can always make new friends. It sounds crass to say that but when you’ve got a company to run and want to be successful not for your company but for the future of the patients that you’re trying to help, you can’t afford to do that. Make sure you get the best and the brightest in the room. It’s almost like sports. It’s the same thing. If you’re coaching or managing a team, you want to make sure that, as a Canadian, I am very familiar with hockey, make sure you’ve got the best team on the bench. If you put all your friends on the bench, you may not ever get to the Stanley Cup.
That’s a good sport and great advice. There’s a lot out there that people can read that talks about teams. To what you said there’s also an element of humility, basically admitting to yourself that maybe you aren’t the smartest person in the room necessarily. If you can rally that team of the right people, you can accomplish more versus if you’re the type of person that’s like, “I know this. I’m the smartest person in the room so everyone should listen to me.” You’ll accomplish quite a bit less.As long as there's human beings on this planet, we're always going to need new ways of treating disease. We're going to need diagnostics. We're going to need drugs. Click To Tweet
I’m a professional recruiter and that’s what I do for a living. I’ve been doing a lot of the shows but I spent a lot of my day working with people like yourself and helping fill certain positions. You’re always going to go to your own network first. You’re going to have good people in your network when you’re recruiting. You make a great point of aspiring to find the right people and not the person that you know you’ve got a good relationship with. A good relationship is great but if they’re not the right fit for the job and you’re giving it to them because you are friends, as you said, you’re going to run into challenges and not accomplish as much.
You mentioned reading a book on Enron. I love reading books or listening nowadays. I listen more than I read. I’ve got a stack of books that I’ve tried to pick up and read. I’ve got a list of books that I’m listening to and all the different podcasts because I’m a podcaster. I love podcasts. I try to learn from those but what books or books have you read throughout your life that you feel have made the greatest impact?
I don’t know if there’s any one particular book that’s made the biggest impact, but I think of buckets of classifications or whatever of a book that might fit into a bucket. Years ago, when I was getting into this drug development, I read a book by Nuala Beck. She was talking about the new economy and at one point, our economy was based on things like coal and whatnot.
People recognized it as a polluting and horrible way of creating energy and moving along. Automobiles and all the way along into the digital world and how everything’s moved into this new economy. That was one thing I wanted to get acquainted with, how things move. As I’m getting older, I want to keep up. I don’t want to be one of those guys who say, “Back in my day.” I want to keep up and I’m jazzed by technology. That’s one bucket.
The other bucket is I would call maybe history. There’s the new economy bucket then there’s a history bucket and Antony Beevor writes a lot about military strategy. A lot of that military strategy tells us a whole bunch of things. It talks about whatever happened in the past can dictate what happens in the future. If we don’t learn from our past mistakes, we can see things in the future that, “We’re doing it again.” People haven’t learned from their mistakes. That’s important to me.
Also, as a side note, my dad was a World War II vet who landed on Normandy. I was going to say that, he never talked about it. I did know that he was there and he would always roll his eyes at any conflict and say, “We never learned. We never seem to learn.” Believe it or not, a lot of military history can teach me as a CEO how to best strategize moving a company forward because I don’t want to be an armchair general. I don’t want to be one of those guys that say, “You guys go out first. I’m going to stay back here and you guys jump out of the trenches and you run into the onslaught.” I need to be at the front. That’s another bucket.
The third bucket may be the most important. I’m sure family would say that it is the most important but family is important. Another bucket I read, a very good friend of mine wrote a book called, Far Side of The Moon. A lot of people are familiar with the Apollo program, but we’re most familiar with the Apollo program because that’s when man landed on the moon. We’re very well versed in all the things that happened there and the technology, but what we’re not very familiar with probably is what about the family members.
Far Side of The Moon, which was written by Liisa Jorgensen, talks about the family dynamics between Frank Borman and his wife, Susan. Frank was the commander of Apollo 8. When you think about being a test pilot, where basically one test pilot a week was getting killed, all the way to the Apollo program, which was tons of risks. You’ve got all that technology, all the risks in a way cold war dynamics, the US and Soviet Union back then, and then you roll in the family dynamics, “How did these people contend and how did these poor wives of the Apollo astronauts even stay sane?”
It’s almost talking about all of this because not that I would even think for a moment that being in a biotech world is similar to being an astronaut because it’s not even close, but it is the dynamics of the family unit that can also have a huge influence on the success of a business. All of that plays together. Those are three buckets that are important.
The family dynamic is huge. I like that you put them into buckets versus specific books but more like topics. I’m married and I have four kids. It’s difficult and you’re balancing all of that. I’d encourage everyone to go back and read that section and think about that for a second. The last question I wanted to ask you is about generally where you think biotech is headed? What’s the trend that you’re seeing and where is it that you see us headed?
Biotech these days is getting a little bit kicked. The early part of 2021 was a good time for the biotech world but towards the end of 2021, it was not so good. Now, it’s down and we’ve hit bottom. I’ve seen this cycle a few times, which explains a few of these gray hairs but 2008 was probably one of the worst, and 2009 wasn’t a lot better. We’ve hit bottom or close to it. There are so many good buying opportunities if you’re an investor that now is a good time. Maybe not just for biotech but for a lot of things. It will be good and I’m hoping 2022, the rest of this year, we’ll start picking up.
One thing I can say for certain is that as long as there are human beings on this planet, we’re always going to need new ways of treating disease. We’re going to need diagnostics and all these new types of drugs. Maybe not the old standard aspirin type of molecules and small molecules but it’s moving differently to gene therapy and things like that.
It’s a very exciting and dynamic role that biotech is going to continue to deliver. It’s going to get caught, not in 1 or 2 cycles but in repeated cycles over the years. As Warren Buffett has always said, “When people become fearful, that’s when you step in.” That’s what’s driven the market down because a lot of people were fearful and it went down, but it was a golden opportunity to buy-in. Biotech is going to come roaring back in my opinion. I hope I’m right.
I tend to agree with you. I’m not directly involved in drug development but I am directly involved with companies that are doing that. I take interest in it and want to know about it. Biotech as an industry, as you said, as long as there are humans on this earth, there’s always going to be a need for new treatments and different things out there. You keep your head up and your wits about you and move forward instead of falling victim to the doom and gloom, thinking that it’s over and then you don’t do anything.
It’s a great interview. I love having you on Robert. The readers know I started a YouTube channel and we’re looking to do some new content offering. I’m going to be headed out to your office here in the United States, as you do have your labs up in Canada, which is where you’re at now. Look for that and we’ll have some cool video coming out and you’ll get more of an inside look here on Hepion Pharmaceuticals. Thank you.
Thank you very much. It’s a pleasure.
It’s good to have you on.
Thank you so much for reading. If you liked the episode and you found the information valuable, share it with your friends and colleagues and consider leaving a review. I appreciate it. Thank you.
About Robert Foster, Pharm D, PhD
Dr. Foster is the CEO of Hepion Pharmaceuticals, based in Edison, NJ and Edmonton, Canada. He is also an Adjunct Professor, Faculty of Pharmacy and Pharmaceutical Sciences, University of Alberta, and is currently a Board member of Transcriptome Sciences Inc. He previously served as a Board member for the Alberta Economic Development Authority; a Council Member, Alberta Premier’s Advisory Council on Health; an Advisory Board Member, Industry Liaison Office, University of Alberta; Co-Chair and Board Member of BioAlberta; and on the Board of Management, Alberta Science and Research Authority.
Dr. Foster first began working on cyclophilin drug development in 1988, and brings more than 30 years of pharmaceutical and biotech experience to Hepion. Prior to Hepion, he was CEO and Founder of Ciclofilin Pharmaceuticals Inc., which merged with Hepion in 2016. Before that, he founded Isotechnika Pharma Inc. (TSX:ISA) in 1993, and was its Chairman and CEO for approximately 21 years. During his tenure at Isotechnika, Dr. Foster discovered voclosporin, an immunosuppressive drug to treat autoimmune diseases.
In 2002, Dr. Foster structured a USD $215 million licensing deal, Canada’s largest at the time, for voclosporin for kidney transplant immunosuppression with Hoffman-La Roche (Basel, Switzerland). Later, he was founding CEO, and subsequently CSO, of Aurinia Pharma (NASDAQ:AUPH) after it was acquired by Isotechnika in 2013. Voclosporin (LupkynisTM) was approved by the FDA for the treatment of lupus nephritis in January 2021. Otsuka Pharmaceutical Co., Ltd. (Japan) has licensed voclosporin for the treatment of lupus nephritis in the EU, Japan, UK, Russia, Switzerland, Norway, Belarus, Iceland, Liechtenstein, and Ukraine.
In addition to pharmaceutical discovery and development, Dr. Foster also developed and obtained regulatory approvals for a commercially available 13C urea breath test, called Helikit, for the diagnosis of H. pylori, a bacteria that may cause peptic ulcers. Dr. Foster sold Helikit in 2009. Today, it continues to generate multimillion-dollar annual sales in Canada and other countries.
Dr. Foster holds undergraduate degrees in Science (chemistry) and Pharmacy and has a post-graduate PharmD and Ph.D. in Pharmaceutical Sciences. Dr. Foster served as a tenured, Associate Professor in the Faculty of Pharmacy and Pharmaceutical Sciences at the University of Alberta from 1988 to 1997. From 1990 to 1994, Dr. Foster was Medical Staff, Scientific and Research Associate in the Department of Laboratory Medicine at the Walter C. Mackenzie Health Sciences Centre.
Dr. Foster has published approximately 200 papers, abstracts and book chapters focused on drug analysis, development, and pharmacokinetics, and received numerous awards for both pharmaceutical research and teaching. He was named one of Alberta’s 50 Most Influential People in 2002, and on behalf of Isotechnika, received recognition as both Alberta Venture’s 3rd Fastest Growing Company, and Profit Magazine’s top 100 Fastest Growing Canadian Company in 2003. Dr. Foster previously served as Division Chairman of Pharmacy Practice at the University of Alberta and has acted as a consultant to many pharmaceutical companies. Dr. Foster is named as an inventor on approximately 170 patents.