Scott Johnson

Myelin Repair Foundation


Good morning. My name is Scott Johnson. I am president and founder of the Myelin Repair Foundation. For those of you who have no idea what myelin is. Myelin is the insullation of the nerves in your central nervous system and peripheral nervous system. And in multiple scelerosis, it is damage to the central nervous system, i.e. the brain and spinal cord that is the problem. I will talk more about that in a minute. My quick overview today is to first of all talk about how medical research is done, and what that process is, from basic science to working with pharmaceutical industry, and making a case for why that system is completely broken and not performing the way that people in this room would like it to perform. Then talk about a solution that we're implementing to deal with those that slow down the current process, then talk about our results to date, and talk about what we see for the next few years. That's a quick overview of what we'll talk about.

The title here- a new paradigm for medical research. The system is completely broken, isn't providing treatments that we need, and a new way of doing it cuold have a dramatic impact. We think taking 50 to 70% of the entier process is doable. That's what we're about to demonstrate here. So, here's how it works. Basic science is done in academic institutions all over the world, driven by principal investigators in their lab. That work is funded primarily by governments like the NIH, which provides $30B/year for medical research. There's another $20B provided by other governments, agencies, by other private foundations and individuals. So about $50B spent per year on academic medical research. If anyone wants to take a guess, the tyypical way that output is measured is either measured by dollars given, or how many papers are published as a result of that $50B. Does anyone in the audience want to take a guess about how many academic medical papers are published? 40k? 50k? 400M? 250k? It's over 800k/year, that's how manyp apers are piublished every year. There are some good news and bad news. That's a lot of great science discovery. That's a lot of papers for industry to wade through for them to figure out if they want to commercialize it. The reason why we show these circles.. is that basic science is pretty random. There's no research plan. No disease organization actually has a research plan. They put out a request for proposals, they peer review those, and those that get the highest ratings, that's what gets funded. Most academics would say that it should be random, since you can't know where they are going. Well, in some cases you want to be outcome directed. On the right hand side, you have the pharma industry, and they $50B to $60B per year on R&D. In between the two, you have the valley of death. There's a big gulf between the academic scientists and Big Pharma. This gap has gotten larger as more science is moer narrowly focused, and Big Pharma is increasingly removed from the academia.

On the right hand side of this diagram, there's a very small arrow coming out. Between 1995 and 2005 the amount of money on academic research and on R&D in Big Pharma doubled in real terms, and yet the number of new treatments coming out the end, that right-hand arrow, actually declined. To me, that's insanity. If you keep pouring more and more money at something, and you expect new results, well, that's fucking crazy. You have to do something different. Academic research is not equivalent to drug discovery. There's a huge disconnect.

I talked about the peer review process for grant money. The end result of peer review is that only incremental experiments will get through. They won't put in a grant application for a breakthrough. THere's very little competition- you have to have these narrow silos deveoped over the years, and there's no mechanisms in academia for silos to work coordinated on a specific problem. Without a research plan how are you going to coordinate your efforts to solve a problem? Some of the issues we saw was that many academic things don't get patented. Academia thinks that the information is free then. The problem for industry is that if there's no protection of the IP,t hen they are reluctant to spend hundreds of millions of dollars to develop something and move it forward. The R&D has doubled, but the FDA approvals has not .. one thing that is interesting is that that 50 or 60B per year that industry spends, it's for R&D, but what has happened over the last few decades is that industry doesn't do research, but they do tons of development. There's a policy called NURDO- No research, development only. The industry over the past few decades has relied on the biotech industry for research. Big Pharma would just buy the promising ones. Unfortunately what has happened is that the returns on venture capital in biotech, the amount of money going into venture capital for biotech has declined, so that has gone away.

Another part of the issue in terms of the system, is that there are many different players or participants in the value chain, and nobody is out there thinking about how to coordinate that. One of the things that is unfortunate, is that NPOs for the last 5 or 6 decades, they have patted themself out to the NIH, like the American Cancer Society, they have adopted the NIH peer review grant system as the gold standard so they give out the grant money in the same way that the government does. That's too bad, because they are government industry, you have to give out money in a completely unbiased way, because their hands aer tied. Non-profits do not have this restriction. A key thing that NPOs play a unique role, if they function this way, is to be this coordinating unifying force across the entire value chain and across all of the different participants. For all those reasons, we characterize it as a completely broken system.

What I did, the reason why I got involved with this, I was diagnosed with MS when I was 20 and an undergrad. I was able to pursue a business career. 8 or 10 years ago, after having the disease for 25 years, I was just assuming that research was being undertaken at an organized fashion. What struck me was that there had to be a simple and straightforward way to organize the science in a rapid fashion. our mission as an organization is- it's great to have an idea for a modle- unelss you prove it, nobody is going to believe it. We're developing and demonstrating this model for myelin repair for multiple scelerosis, so that we can show the model works. Our major goal is to change the way that all medical research is done. We want this model that we're pioneering to be adopted by every other disease organization out there. We have raised $43M over the last 6 years, and almost exactly half of this money has been from people funding us because of their interest in the model. Half of the funds come from MS participants. It's how narrowly our research is- myelin repair, $21M has come from people who jjust want to see this model proven, because their disease for their family is Alzheimer's or Parkinson's, and they want a model that will dramatically change things.

This is a graphic of what our system to try to speed up the basic sciencei s. What we do is we have a narrowly defined problem, we have- we then try to set out to figure out, what expertise do we need to solve this. My background was startups, so I approached this like a startup, you want a small team of the very best people in the area of expertise, instead of an army of mediocricy, and then we found the best scientists in each of those areas, we had 5 PIs from 5 different universities, we then sat down with those guys, put together a research plan. This was a brand new experience. You think they would think broadly about the overall scope, that's just not the case. We're working over the course of a week and said, let's list out all about what is known about myelin formation, damages, and what questions. We had about 100 questions that we had, and if we cuold answer them, we could fix things. So every 3mo we update the research plan. We didn't want to move the scientists to a new building, they were all at great places, like UCSF, etc., the idea was to ccreate a virtual lab, we have a Data Cloud where every student and PI has to immediately put the data from their experiments in their system so that everyone across the entire team can see it. We have 45 full-time scientists that we're funding.

The next element was this green box, which is what we call a boundary condition which is the research plan. The other key element is the management process. The current system of all this time up front for evaluating grant system is "Fund and Forget". All this time up front, the assumption is that a paper will get published. the right approach is to pick greatp eople, and talk with them on a daily basis, by phone, email, webinar, in-person meetings, and through that process, much better science is resulted. Much of the scientists that you are talking with here, tenured and so on, they are doing better science here than they ever have, because of dealing with really brilliant people. We do protect the intellectual property, we do negotiate agreements with the uuniversities. WE pay for the patents. The universities own them, but we have exclusive licensing rights, so we can go to, for each invention, what company out there would be the best, because of their expertise to move it forward. Our idea is .. mitrition rate in drug development is incredibly high, so we want to push as many things in the pipeline as possible so at least one thing would emerge as a treatment.

It's compherensive- all of the inforamtion responsine,. biology, the blood- brain barrier, all of these are pieces of solving the overall problem. This slide is to say that the mitrition rate is so high. The high cost of clinical trials. When you look at the entire value chain of ioPharma. The majority of the cost- 2/3rds is before the clinical trials. For every 260 targets, there's one thing that emerges as a treatment. You make many small investments initially. Our objective was- after showing up the front end, was to how can we speed up the translational portion and what can we do to address that issue as well. So what's happened in the first five years? When we started in 2004, myelin repair was not even on the radar screen of a single company. It was not considered therapeutically possible, and all of the expenditures in MS research was on immunosuppression idea, they didn't think you could repair it, and just supress the immune system. Five years later, 30 companies now review myelin repair as the next generation of MS treatment- that shows how much the dial has shifted, and that's big. We've identified about 150 targets that we can take to companies to try to have them move forward. Some of them are already in trials for other indications, and those comapnies.. myelin repair possibilities. We invest in tools and models. It's very difficult to get NIH to fund that, and it's critical. So we've invested heavily in that, we've had companies come to us now who view the models we've developed as better than anything else they have, and they want to runt heir compounds through our assays to see how well they wokr.

We operate like a virtual biotech. Unlike most nonprofits, we have 5 PhDs, all from the biotech pharma world, they have drugs on the market. So we can manage the overall process. That's very different. The first 5 years will cost $25M to execute. We were able to do that for $21M. When you're talking about hundreds of billions of dollras on R&D, it doesn't take a lot to do it differently to have a dramatic impact. This graphic across the top is the various steps in the value chain. So in terms of what we seei n the second 5 years, we need to keep identifying new targets, so we'er going to continue to fund the basic science team, but we're going to validate targets as well to industry standards (which other NPOs don't do) to the point where industry can pick them up. And our next step is forming partnerships with companies to take these targets and move them forward. The costs raise dramatically each step in the chain, the sooner we can offload these the sooner the better. I only have two slides left.

This is our description of our research plan for the second 5 years. That what was what we did in the first five years, basic biology discovery. This translational part is really key, biomarkers and so on. And setting up netwroks and contracts with research organizations to take our discoveries and validate them to industry levels, and then work closely with partners. It turns out that strategies for doing this- there might be some things for spinning out companies, partnerships will form, how we can fund the validation work by others, and so lastly, the point I will leave yuo with- we believe we are the only non-profit that is focused on the entire value chain, in every step of the process and how to accelerate them. There are many oragnizations focused on curing a disease, we are the only non-profit focused on developing a replicable model that can be applied to any disease research. There is nothing in our process that is specific to myelin repair. Everything we're doing, we're doing as much as we can to develop modules that we can hand off to other people. Half of our money is coming frmo people who just want to back this moel. They want to see this model replicated, they want to see this change in biomedical research and the way research is done.