Doug Janzen has been involved in the Life Sciences industry for the past 19 years. He is currently the Founder and President of Northview Ventures, an organization which invests in and provides strategic advisory services to a number of technology companies. Mr Janzen was part of the founding group of Aequus Pharmaceuticals. Previously, Mr Janzen was President and CEO of Cardiome Pharma, a NASDAQ listed drug development company that raised over $300 million from investors, and completed over $1 billion in licensing deals during his tenure. In 2010, Cardiome’s lead product, Brinavess, was approved and launched in Europe by Merck. Prior to that, he was an investment banker with Cormark Securities, acting as Managing Director of Life Sciences. Mr Janzen is Past Chair of LifeSciences BC, has served as a Director with Biotech Canada and currently sits as a Director on a number of public and private boards.
You previously led a pharmaceutical company to bring publicly traded on Nasdaq and doing over $1B in transactions. Can you tell us a bit about what that company did, how you built it and why you think it was so successful?
I have been working in the biotech industry, first as an investment banker and analyst and then as an executive since 1996. Based on my investment banking background I developed a lot of experience executing transactions and deals within the biotech industry. The first company I was CEO of had a cardiovascular drug in Phase 2 when I joined. The drug had potential both as an IV injection and as an oral pill for 2 different patient groups. We focused on validating both markets in the eyes of potential partners and were able to execute a $130M partnership with Astellas for the IV version, used that money to advance and develop the oral version and licensed that to Merck a few years later in a transaction that could have exceeded C$1B in total payments and milestones. Investors are familiar with the term “cost of capital" and usually think of it as it relates to share price. But I also think of it as it relates to partnerships and the value you can derive from them. For example, our first commercial deal at Aequus was with Sandoz for 2 products that we co-promoted, meaning Sandoz still owned the products and we just got paid a fee to sell the products to doctors and hospitals. This deal had a very cheap “cost of capital” for Aequus considering we paid nothing up front in the transaction. We leveraged that first co-promotion deal to build a sales infrastructure and are now doing exclusive licenses for products in Canada that have much better terms in our favor. That evolution in how we steadily increase our value with each deal is seen in the relationship with Medicom around a number of new products for Canada and potentially jointly launch products into the US. We have come a long way from our first deal with Sandoz and are excited with what we can do moving forward both with Sandoz and Medicom and with other groups.
You’ve been a long time participant in the life sciences, biotechnology and speciality pharmaceutical world. What do you find so compelling about this space and the opportunity?
Biotech is definitely a challenge! You are putting experimental products into sick people, dealing with difficult regulators and customers at every turn, needing to access a lot of capital and then having to actually commercialize the products in an incredibly competitive market place. Its HARD and 90% of companies and technologies fail. But it is an industry full of brilliant people who want t make a difference and don’t shy away from the challenges.
Why did you found Aequus Pharmaceuticals? What was the core problem you were trying to solve when you first got started with Aequus and has that changed in the years since?
I had spent a lot of time in the drug development world and was interested in finding a way to advance products that didn’t take 10 years and a Billion dollars to develop. We started Aequus around some reformulated development products. These were existing drugs that we developed new ways to deliver into the body that benefitted the patient. At the same time we wanted to generate revenues early in our company’s evolution and spotted a market inefficiency as it related to Canadian products. The biotech world doesn’t wake up each day wondering where the next $5-$10M Canadian drug product will come from so there isn’t a lot of competition for these assets. We did some early licenses for Canadian rights to successful drugs in the US and voila – our commercial arm was born. We followed that with our first deal with Sandoz, a relationship that continues to this day and is likely to be extended. In hind sight it was a good thing that we built the commercial arm because most of the reformulated products that we started the Company around ran into problems during their development and only 1 of the original reformulated products is still generating interest.
What do you think people don’t know about speciality Pharma and how different that is from traditional Pharma? What does a great speciality Pharma company look like and how do they create value for patients?
Pharma companies invest in innovation. They take huge risks to create and develop new drugs, and when successful they make a lot of money from those drugs. Specialty Pharma deals more with branded generics, reformulated products and other niche products. Our goal for Aequus would be to create a profitable business with a diversified portfolio of products and strong relationships with Canadian clinicians and health care providers.
How do you go about finding de-risked medications that are already available globally and how do you ultimately bring those to Canada and make those same medications available to new patients?
Our sales team talks to roughly 40 Canadian clinicians every day. In those meetings we ask them what products they see available in other countries that aren’t in Canada. An ophthalmologist in Toronto goes to the same conferences as ahis colleagues in LA or Berlin or Tokyo. They know what products are being used and often these products have not been launched into Canada. For example in eye care, Europe moved to preservative-free products a few years ago because they were less irritating but North America has been slow to make that transition. It was conversations with our Canadian doctors who said they wanted more preservative free eye care products in Canada that caused us to find Medicom, partner with them, and now we are on the verge of launching our first preservative-free suite of eye care products.
Can you talk a bit about what you are currently most excited about right now at Aequus and what potential impact it could have?
We are very excited about our suite of dry eye disease products that we will launch this fall. Dry eye disease is a huge market and continues to grow at over 10% per year. We have a number of strategic opportunities in front of us in this space and have the potential to jointly expand into the US with our partners at Medicom. It will take a few years but our current portfolio of preservative free dry eye products could be generating $10 - $15M in annual revenues one day.
How are your products currently sold? Have social distancing protocols had any effect on your sales force?
Our sales force has been having virtual sales meetings with customers during the pandemic and has been finding new ways to engage with Doctors. We are seeing a growing shift to on-line purchases of products and are setting up our own on-line presence for our products that we are very excited about. On-line has revolutionized many retail industries and is starting to have a big impact on the pharmaceutical market. We want to be on-line as soon as possible and give patients alternatives regarding how they receive their medications.
How does Aequus evaluate new potential products? How many new products is the company usually considering at any one time, and how long does that process usually take before you are ready to begin taking orders? What are the approximate costs associated with this process?
We usually are reviewing 5 products at any time and actively negotiating 2 deals at a time. That being said not all negotiations end with a successful deal. Diligence and negotiations usually take 6 months but the process can often start and stop prior to completion. For every product we talk to clinicians about the product, what patients they would use it in and where would they not. From that information we can make a patient model based off the number of Canadians with the disease. We heavily use physician surveys that we create to really stratify what type of patient would benefit from the product and how hard is it to identify the appropriate patient. We then talk to the Reimbursement groups and get a sense to what the Payors are willing to pay for the treatment. From that information we can make a financial model and begin to make business decisions which can then lead to business negotiations. We are very good at this process and do most of this work in-house up until the point where the lawyers are needed.