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CEOCFO CEOCFO Monthly Analyst |
"To print this page go to file and left click on print" A new generation of Anti-Sense Healthcare Hybridon, Inc. 345 Vassar Street Stephen R. Seiler CEOCFOinterviews.com Bio of CEO, From 1991 to 1995 Mr. Seiler worked
as an Investment Banker for Paribas Capital Markets in both London and New York. He was founder of Paribas’ pharmaceutical
industry investment banking group. In that
capacity, he initiated and worked on a wide variety of transactions including IPO’s,
privatizations, M&A, debt and equity offerings and derivative transactions. Mr. Seiler received a B.A. summa cum
laude in History from the University of Notre Dame in 1977 and a J.D. (Honors) from
Georgetown University in 1980. He is a member
of the bar in New York, Arizona and Missouri. CEOCFOinterviews:
Please explain to my readers, who is this company. Mr. Seiler:
Hybridon is a leading company in the discovery and development of therapeutic and
diagnostic uses of synthetic DNA. It is
synthetic DNA chemistry, which runs through the core of all of our technologies. More importantly, Hybridon is now in the position
to accelerate the transformation of technology into drugs.
We’ve spent the last decade or so since the company’s founding
building up our technology base. We have
reached a point now where we can begin the process of transforming our company’s
technology into drugs and we are bringing those technologies and drugs to the clinic
today. CEOCFOinterviews:
Why is it important to have this synthetic DNA? Mr. Seiler:
We actually have four technology platforms. I’ll
list them for you now and then talk more in detail about them later. The first technology platform is Immunomodulatory
Oligonucleotide technology, which I like to refer to as IMOTM for short. There we use synthetic DNA to stimulate the
body’s immune system. The second
technology platform is Drug Potentiation where we use DNA chemistry to increase the
activity and potency of an existing, marketed chemo therapeutic. The third technology platform in our therapeutic
area is antisense. This uses synthetic DNA to
shut off the production of disease-causing protein at the cellular level. Our fourth technology platform is functional
genomics. We can use antisense for functional
genomics. So, we are involved in a number of
technology areas, but the key to what makes each of these work is synthetic DNA chemistry. CEOCFOinterviews: I know this company has gone through a little bit
of a transition here. Let’s talk a
little bit about that and what it has done for the company. Mr. Seiler:
You are, no doubt, aware that our first drug candidate GEM®91, which is a
first generation antisense drug targeted toward HIV, was withdrawn from the clinic. We started to look at the reasons for that
failure and we discovered that the compound contained a DNA motif, which, in effect, the
body recognized as a bacterial infection. Consequently,
the body was reacting with a very strong immune response to this drug which made it
inappropriate as a therapeutic. However, the
insight as to what caused these problems led Hybridon to do two things. First, we went back to the bench and created a
second-generation chemistry for antisense which is more specific, has a longer life,
reduced toxicity and is potentially orally available.
We believe this is a very exciting chemistry. To the extent that antisense, as a science, will
fulfill it’s potential, we believe that second generation chemistry is necessary. The other thing that we did following
the withdrawal of GEM®91 was to explore what was causing the body’s
immune system to react to GEM®91. We
decided to try and harness this activity in ways that may be beneficial, as opposed to
toxic. You can imagine there are certain
types of situations when you want to up-regulate the body’s immune system, for
example, in the treatment of cancer. Cancer
cells are recognized by the body’s immune system, but this recognition is notoriously
weak. In certain types of situations, giving
a drug like an IMOTM for cancer therapy might be beneficial. Likewise, if you want to give a vaccine and get a
high antibody titer, up-regulating the immune system could give you a higher antibody
titer than you might otherwise get. Our IMOTM
technology could be used similarly in conjunction with antibody therapies. Finally, IMOTM technology may also be
helpful in the treatment of asthma and allergies. So, what came out of the problems of
our first clinical trial was, in effect, two technology platforms: the first being second-generation antisense
chemistry and the second being the IMOTM technology. CEOCFOinterviews: I
was reading on your website that it’s actually working in combination with other
drugs for the treatment of solid tumors. Mr. Seiler:
This is GEM®231. GEM®231, the company’s lead compound, is a
second-generation antisense compound directed to solid tumors. The antisense target is PKA. What we have been doing in our clinical trials is
combining GEM®231 with other existing chemotherapeutics and we are in the
process of wrapping up Phase I/II trials with Taxol® and Taxotere®,
and we hope to have those completed in the next couple of months. In March of this year we announced the initiation
of a clinical study combining GEM®231 with CPT-11. The reason we started that trial is that we have
seen in a number of animal models--and we’ve probably done over ten now--that the
combination of GEM®231 and CPT-11 seems to increase the activity of CPT-11 in
a very surprising and unique manner. The
animal data is exciting. We have started a
clinical trial to see if we can get the same result in humans. CEOCFOinterviews: It’s becoming very exciting for you as you
get into the additional phases. Mr. Seiler:
Absolutely, the way a company like Hybridon adds shareholder value is to take drugs
through the phases of clinical development and each time you take a step forward,
hopefully the market recognizes the value of that step in terms of share price
appreciation. So, the combination of moving
our GEM®231 trials forward, as well as beginning the process of filling an IND
for our lead IMOTM compound to take that into the clinic next year, will help
raise our visibility on Wall Street and hopefully provide additional value for our
shareholders. CEOCFOinterviews: Where do you think the value will be in the
future? Will it be in partnerships or within
the company itself? Mr. Seiler:
If you look at the value creation model for Hybridon, in the near term what we are going
to do is create value for our shareholders in two ways.
We are going to continue the development on a very limited basis of our own
compounds. What I mean by that is we are
going to focus on GEM®231 and our lead IMOTM compound and we will
take those into the clinic ourselves. But,
more broadly, both our IMOTM technology platform, as well as our antisense
technology platform, are susceptible to partnership arrangements. For example, if you look at antisense, clearly the
pharmaceutical industry has become a target rich environment as government, academic
institutions, and pharmaceutical companies have spent billions of dollars to understand
the human genome, looking for and finding genetic targets.
The challenge for the pharmaceutical industry, as it goes forward, is to
turn all of these genetic targets into drugs. We
believe that our antisense technology can make us a key partner for many of these
pharmaceutical companies in helping to turn these genetic targets into drugs. So, in addition to taking our first two compounds
forward ourselves, we expect to use our technology platforms as the basis for multiple
collaborations and partnerships with the pharmaceutical industry. That is the near and immediate future. Beyond, two to three years down the
road, I fully recognize that Wall Street values drugs more than partnerships and licensing
agreements. So, as we build up our financial
strength, as we build up our management strength, and as we build up clinical and
regulatory abilities, I believe Hybridon will take more drugs into the clinic itself, but
will also continue to partnership going forward. CEOCFOinterviews: Someone looking at the company now, says wow look
at all that is going on, but cash, obviously it is a value commodity for this company, how
is it getting it’s revenues, how is it getting its money to stay afloat? Mr. Seiler:
Well, now, we have approximately two years worth of cash in the bank, our current burn
rate is $12 to $15 million dollars a year. We
have about $30 million dollars in cash and an additional four and one-half million dollars
due from one of our collaborations next year. That
puts us in a reasonably good financial position in the biotech space today. Going forward we will be getting revenues if we
enter into collaboration agreements: up front
fees, licensing milestones, and if our products work and see the light of day in the
pharmaceutical world, royalties from collaborators. But
we are still an early stage company, primarily focused on research. A product revenue stream, meaning a product in
the market, is still many years away for us. CEOCFOinterviews: You joined this company nine months ago, and you
mentioned earlier about reorganizing the team there.
What was the biggest challenge you were faced with when you joined? Mr. Seiler:
The company had reached a very interesting point in its development. It had spent about two years restructuring its
balance sheet, selling off non-core assets and reorganizing its capital structure. It successfully completed that process by mid-last
year. The challenge for Hybridon going
forward is to take the value of its technology, which I believe is considerable, and begin
to exploit it in ways which are meaningful. We
are beginning that process of exploitation and, as I said, that will take two forms: developing some of our own clinical compounds like
GEM®231 and our IMOTM compound, and to begin licensing broadly our
technologies with other pharmaceutical and biotechnology companies. I think this value extraction process is going to
be important for Hybridon over the next year or two and hopefully will create more value
for our shareholders. CEOCFOinterviews: When you came aboard obviously you wanted new
team members. Do you feel you have a good
management team in place today? Mr. Seiler:
We have a very good management team in place, and we have a strong scientific, development
and financial staff. Since I joined we have
made some additional key hires in finance, preclinical development and in business
development. We are going to continue to hire
as we move the company forward but I do believe we have the basis of a very solid team. I am generally pleased with the progress we have
made so far. You never have enough good
people, but I think we have an excellent group, and a very solid team. CEOCFOinterviews: To a potential investor looking at this company,
what would you say to them? Mr. Seiler:
We have a number of important milestones for the company going forward. I can just briefly touch on some of them. At the beginning of this year we had three
clinical milestones, one of which we have already actually achieved. Those three milestones are to begin a Phase I/II
clinical trial combining GEM®231 and CPT-11.
I talked a little bit on that earlier.
We announced in the beginning of March that the trial had commenced,
so we completed our first clinical milestone for the year.
Our second clinical milestone for the year will be to pick a lead compound
for our IMOTM technology platform and begin the process of submitting an IND on
that lead compound. We hope in the next
couple of months to make that announcement. Our
third clinical goal for the year will be to submit an IND on that lead IMOTM
compound by year-end. On the financial side, our goals for
the year are to complete two or three licensing agreements with pharmaceutical
collaborators to validate our technology and provide some value inflection points for Wall
Street. Another financial goal for this year
is to re-list Hybridon on a major exchange. We
are currently traded on the bulletin board but we would like to see if we could get to
either AMEX or NASDAQ by year-end. Although
there are no guarantees, we are hopeful that we will be able to accomplish this. We have a number of important
milestones for the company and clearly articulated corporate objectives. This will allow shareholders to see what we are
doing, to look at the scorecard and judge how we are delivering against what we had
promised. CEOCFOinterviews:
Would you work with companies overseas? Mr. Seiler:
We, in fact, have had some ongoing conversations with potential partners overseas. My experience, though, having lived overseas, is
that European partners are slower than American partners and Japanese partners are even
slower than European partners. Consequently,
I would expect our first collaborations will come from North American companies, which
tend to move much quicker than European or Japanese companies. CEOCFOinterviews: But sometimes it seems to get the actual drug
through it goes a little bit quicker overseas than it does here. Mr. Seiler:
It depends on the drug, and it depends on the country.
There are certain times when you can get products approved in Europe first. But, again, I would expect our first product
approvals and partnerships will come from North America. CEOCFOinterviews:
Any closing comments? Mr. Seiler: My objective today was to talk about our technology platform, which I have. I also wanted to set forth our goals and objectives for this year. I think that is ultimately the basis of how people will judge our performance. It is up to management to deliver the goods. Clearly, Hybridon is what you would call a “story stock”. The challenge for our company is to show that we can execute against our goals. That is the scorecard by which we should be judged, and I expect to be judged by our shareholders.disclaimers |
