James Mackey 0:00
Thank you for joining me on the show today, and for everybody tuning in we are here with Leen Kawas. Leen, welcome, thank you for coming on today!
Leen Kawas 0:08
Thank you for having me.
James Mackey 0:10
Yeah, I'm pumped, we got some great topics to talk through today. I'm really excited to get your perspective, just because you do have quite a unique background. And so I think that that's probably where I think we should start is just sharing with the audience a little bit about you and your background and where that's led you to where you are today.
Leen Kawas 0:36
Yeah. So I think I have a really interesting background, starting my career as a pharmacist. And I'm in the pharmaceutical industry and bringing that real, I guess, experience from the market, into my scientific journey into drug development. Starting a company, I started Athira Pharma, and now I started the fund Propel Bio Partners, being on the ground if that makes sense. And now I'm an investor, and I'm trying to help the next-gen companies to really scale and become successful not only in raising capital, but also in building companies, sustainable companies, scalable companies, and successful products. So having that, I would say, full spectrum experience, gives me a unique vantage point.
And with my company Athira, I went through the whole thing from a single-person company, slugging through the first million and ultimately raising 400 million, taking the company public, late-stage products in clinical development. It's been an amazing experience. I always try to say this, I didn't grow up here in the US, I came here to finish my education, and get my Ph.D. from Washington State University. But there's something very special about the US, which is entrepreneurship innovation, and, you know, people who are passionate to be in industries that could have an impact on people's life.
James Mackey 2:15
Yeah, for sure. And I think this is just such an exciting time to be in everything related to biotech, and pharma. And in every other correlating industry that we're seeing, there's just so much innovation right now and so I'm really excited to dive into that. I think one of the most interesting things that you alluded to is just how you from having a unique perspective understand so many different parts of the business, everything from both the scientific perspective to the financial aspect and what it actually takes to be an operator and a company. So I think that that's the perfect combination as a venture capitalist and thinking about what is the next wave of technology that's going to create meaningful products that change the world.
And so I would love to kind of get your thoughts on more specifically how this influences your strategy as an investor, and everything from how you think about picking entrepreneurs and products, and so on and so forth, as well as how you think about diligence, I'm sure it’s slightly different than how a lot of VCs are. You have more insight. I mean, I'm sure that really helps just from a diligence perspective. So can you walk us through that lifecycle from valuation, and diligence to moving forward with a company?
Leen Kawas 3:43
Yeah, that's a great question. So we do investments in both private and public companies, and the areas that we really focus on starting with the science, it has to be exciting science, something that is addressing an unmet need. A lot of people think about just huge indications, you know, Alzheimer's, Parkinson's, some sort of parts of the oncology, but there's a lot of unmet medical needs. So we start with the science, the team entrepreneurial team is very important. And it doesn't have to be the traditional entrepreneurs that already had entrepreneurial experience and successful exits. It's really the mindset that we're looking for, James, people who have a growth mindset, who acknowledge the value add that they bring, but are willing to bring other expertise and listen to feedback. The team is very, very important as we evaluate companies.
Because sometimes drug development is very risky. If the first product didn't work, I need to feel confident that the team is going to continue to create value. And then the other part is the corporate structure, how the company operates internally is very important, as how they're managing their studies. If they are a clinical-stage company, it's very important for us to evaluate how they're thinking about their clinical trials, that the focus is on the patients, and patient centricity is something that we focus on. Because we believe if companies at very early stages, start to try and understand the patients, how they're impacted by the disease, and the family around the patients, then they will build a more effective drug development and clinical strategy. How they plan, to how they're going to manage the relationship with FDA regulatory strategy. That's a very important part of how we evaluate companies and it turns me off when a company says the FDA is a big barrier, they're gonna like shut us down.
Actually, from my experience, the FDA has been very collaborative, and very innovative, and they think outside of the box. So that's the type of company that we're looking for. And of course, on top of it, the financial strategy, financial planning, and strategic fit, because we're looking at larger companies to acquire the companies that we're looking to invest in or have invested in. And that's very important for us, I feel from my experience, as an entrepreneur when I interact, I've interacted with a large number of funds. I've seen the whole gamut. Some funds, unfortunately, are too scientific, focused on the basic science and they miss out on the big picture. And there are funds that are on the other extreme, where they're just financial, and they focus on the financial, I think that having that holistic overview gives us an advantage. And even after we write the check, we want to be a value-add, we want to support the entrepreneur and increase their probability of success. So we work with them, we carry them out, and we try to support them beyond their investment after we make a decision to invest. It's the journey.
James Mackey 7:03
So are you also actually helping with the FDA? Because that a process that it sounds like you're very familiar with, so is that one of the strategic value adds that you bring to your portfolio is saying - Hey, we can help you navigate this process, or is that something you essentially have an expectation for them to already know, prior to investing?
Leen Kawas 7:25
Some come with knowledge, and we appreciate that, and others don’t, and even from us directly, but we also have an amazing operational advisory board that has a lot of experience in the different aspects from inventing an idea or a drug, up to commercialization of multibillion-dollar markets. So we do support the companies and we bring our feedback to them.
For me, what I look for is how they're thinking about it, they don't have to nail it, and they don't have to have it like fully because you have to be adaptive, right? Get to know more data and capture more data from your clinical trials. You need to be adaptive and also somewhat proactive with the FDA to try to optimize and increase the chances to deliver treatments to patients that obviously need them.
James Mackey 8:19
Sure, sure. You know, I guess just diving more into that, as an investor and also as a founder, where should companies, and startups be thinking about building an innovation right now? What do you think are the biggest opportunities and today's market to disrupt Pharma?
Leen Kawas 8:38
It's been very interesting. I think the overlap between Life Sciences and Technology, companies that are nimble and fast in adopting a lot of technological advancement into their discovery, and drug development and clinical development are going to move much faster and will become more efficient. And from my point of view, they're probably going to have a higher probability of success. We believe that because life sciences and drug development are very rich in data and people who empower their product development with technology, using software or hardware, to capture data and analyze data and use predictive models to help them have a continuous real-time optimization, I think are gonna benefit significantly whether they're doing personalized medicine, there's protein aggregation or protein degradation.
There are a lot of companies that we're excited about that work on protein degradation technologies, but the way that they're thinking about it is. And there are so many companies we, you know, we've been excited about a couple that we felt that they're approaching the science, basic science, clinical development in a, in a continuous way. And they're looking at translation, and how they can use technology to enable the acceleration of their product development and potentially increase the probability of success.
James Mackey 10:25
So it sounds like though some of the potential products could be actually developing the software, these data sets, these data tools, and software tools that help accelerate product development, right? I mean, because otherwise, it's like you're developing the software, plus your core product, it's like two different things.
Leen Kawas 10:46
Exactly. So that's part of what we're looking for. We call it healthcare IT or look for companies that are developing tools for drug developers to use but the point is, we want drug developers or product development, whether it's a device or a therapy, to think outside of the box, approach these potential partners and guide them to develop products that can help them in their clinical development. And that's important. I think my background as a pharmacist helps me and I had clinical pharmacy experience so I did interact with patients. It's very important for drug developers and technology developers to really understand the patient.
To simplify it, to talk about who are the patients, the patients are the customer of the life sciences industry, to really understand the patients and how can we use technologies that can help us test for drug effects in patients. Also, how can we use technology to empower us to accelerate personalized treatment and drug development? This is where we're looking for innovation. We're looking for amazing teams that have a growth mindset, a beginner's mindset where they can use all of their knowledge, but they're still approaching new challenges from a fresh perspective. That's what we're looking for.
James Mackey 12:31
Sure. So would you say personalized drug treatment, can you give me a little bit more insight into what you mean by that?
Leen Kawas 12:39
Personalized, I think a lot of people connect personalized therapy or personalized treatments to genetic profiling. If I want to be more, you know, exotic maybe epigenetic, which is the coding on top of the DNA. People think, okay, these are signatures that we can understand, and if there's a mutation, we take the patient and treat them with a specific drug that targets that mutation or protein expression, but I look at it in a more comprehensive way. It's a gene, the genetic basically coding, epigenetics, and protein expression. On top of that, we need to look at the phenotypical presentation, enzymes, and biomarkers.
Me, I think personalized medicine should also be more holistic regarding gender, socio economical status, treatment history, and any other concomitant medications. Baseline vitals like weights, and heart, there's so much that we can then look at the human body as a system and make informed decisions. That's like the big vision. And we've seen, like exciting companies that are taking pieces of that, but I think the future would be how can we truly create a personalized treatment strategy end to end to really change? Like if we have a patient we can, like look at it as a whole system, not just in a silo and just focus on one thing,
James Mackey 14:27
Right. I think the other thing is that I would assume doctors are thinking about personalized treatment. There's so much knowledge and so many things out there, and there are so many things to consider I would assume that if you have some technology that is powering this, it's gonna be a lot more consistent and data-driven in terms of the approach to personalized care, right versus you know, an imperfect person, no matter how knowledgeable is not going to be able to provide probably the level of consistency or effectiveness as a technology would. Right?
Leen Kawas 15:07
Exactly. I mean, but it's the two, right? It's the two things, how can we empower executive decisions with comprehensive data? Basically, we need the data to inform our decision making ultimately, hopefully, long term we'll have machine learning, and deep learning that will capture the executive ability. But what I'm looking for is for people to move away from the very traditional drug development, because, for example, Alzheimer's disease, is an example that I like to give. I've worked on Athira’s drug for phase three, Alzheimer's, and we've done a lot of things in a very different way. We brought the patients very early on, we looked at the protocol, and we brought the patient's voice into the protocol. People were like, nobody does that.
And then we partnered with the sites, the physicians. And then one thing is I was working on a new way that we can capture the global change in the disease because Alzheimer's drug development is very hard, right? It's very hard to measure cognitive improvement. The example that I wanted to give is Adas Cog which is one of the tools, the main tools that we measure cognition, and Alzheimer's drug development is older than me. It's been developed in 1984. I was born in 1985. And for us not to have the motivation, to say we need obviously, it's not the perfect tools, because, yes, the drug has been failing.
But it's more than that. I would say like, Biogen has been great, even Lilly, they're trying to push for different ways that Alzheimer's drug development can be approved. Athira when I was there, we were also pushing for innovation in how we think about drug testing and clinical development, and how can we bring effective treatment that measures endpoints that are meaningful for the patient and the caregiver. And this the same type of approach that can be applied to a lot of other indications and drugs that are being developed currently in the marketplace.
James Mackey 17:39
So when it comes to drug development, though, is the primary reason for lack of innovation a mindset thing or an education thing? Or is it a regulation issue? My assumption as an outsider, and this is what I want to be corrected on, but as somebody who doesn't know the space very well, it would just it would seem to be - Oh, that's a regulation issue. But it also sounds like there's just a mindset, or people are kind of stuck in the patterns, if you will, doing the same repetitive motion. So I'm kind of curious to get your thoughts on what seems to be the issue there.
Leen Kawas 18:15
Okay. I just want to say there's a lot of innovation. It's amazing, the industry is doing so much work to really have an impact on people's lives. And that's something I get excited about when I see a founder that has this motivation of - “I want to develop this treatment because it will help people, it will improve their quality of life.” Now, why we don't see this level of innovation translate into treatments at a faster rate? I think you're right. I think that a lot of people leave it here. It's the regulators, it's the FDA, they're so rigid. My experience with the FDA has not been like this, they care about two things. The FDA cares about two things: if the drug is safe and does it work.
If you come to the FDA with a package that gives them confidence that the drug is safe, and the drug works, they're not gonna block treatments to get to people who are needing it. That's not their job. Their job is to make sure that the drugs that work that are safe, get to the marketplace. So I feel it's like the scapegoat. Anyone who's like, oh, it's the FDA. I have to say being a scientist, one person, I have a few colleagues that agree with me, but I don't think that the FDA is the biggest barrier here.
James Mackey 19:49
What do you think in terms of the founders, what are the most common traps they fall into or roadblocks that they hit through the process?
Leen Kawas 19:57
For me, the biggest barrier is the term industry standard. I’ll tell you a story. So I was working with the CMO of my company Athira. And I wanted to do something new with the clinical design, the protocols, and he kept saying - Leen, you cannot, the FDA will never accept this. A new term that I learned also was - “this doesn't pass the red face test.” Like what do you mean? Like it's scientific, the data that we're going to produce from this design is going to support the efficacy of the drug. And then the other term that I learned also, in that experience, is you cannot have the cake and eat it too. I don't understand, it's science. And then we go to meet with the FDA, and they agreed on everything.
And the CMO, when we left looked at me and said - I guess, Leen, you can have the cake and eat it too. And I'm like, No, it's not about that, this is a logical drug development strategy that gives confidence to the FDA that we're going to understand the efficacy of the drug and the safety in a meaningful way for the patients. How can the FDA say no to that? How can anyone say no, but there is like - This has never been done before. This is not the industry standard. And ok, but the industry standard is not working, we need to think outside of the box. And this is where I want to see people like, Okay, we learned from the failures, these key points, and I want to apply them to optimize my drug development, and to increase the chances that I will be successful and work collaboratively with all the stakeholders, patients, physicians, FDA, supply chain and manufacturing, all of these, put them all together, operational team, scientists, and work together as a single unit to increase the chances of a successful outcome.
James Mackey 21:59
For sure. And so in terms of investing, are you bringing on additional LPs that specialize in different areas? Or what do you think about platform services or bringing in specialists to support your portfolio that essentially need this ecosystem to be successful? What are your thoughts on that?
Leen Kawas 22:20
I love that. Thank you for asking this question. When I started Propel, as I looked at okay, what are the areas that each entrepreneur is going to go through when they're developing a product that is in the life science industry, and the different areas whether it's drug development, device development, diagnostics, on top of that, the healthcare IT. So we did bring a number of people, Ron Farkas, he was with the FDA, he wrote actually, the guidances drafted several of the guidance and what I love about Ron, for example, he's an FDA guy, okay, like, he is very logical.
How can you not trust that FDA is going to be logical when people that are coming from the FDA are very logical, and they give very clear concise feedback? That's the other thing about it. It's very concise, there's no confusion about how is he thinking about something. Ron was the Chief Medical Officer of Glaxo Smith and had 25 drugs approved. You would expect someone like Ron like, not to be willing to do work or going to come for like very tough questions. He actually rolls his sleeve. That's the other thing for me with Propel. I told the team no mediocracy everyone needs to roll up their sleeves and do the work. And what I'm looking for is even if someone has 30 years of drug development experience, Ron brings a lot of innovation.
That's why he has 25 drugs approved because he didn't approach every drug development strategy in the same way. He brings innovation and he works hard. That's the thing that blows my mind is how hard he works. And he's also very humble when he goes into a new product, he doesn't say I did this and that and that and I'm very successful. He tried to understand what are they trying to achieve and help guide them in the thinking process to help them optimize their product development to increase the chances. And we have experts in the supply chain, CMC, and supply. CMC is Controlled Manufacturing for products and we have experts in that.
Eric, he worked on the manufacturing and supply chain for the three top COVID drugs. So also having that deep experience is very important. And you know, when we work with a company, that's what I love, is when we're not just on the board, we're not just trying to give them what we believe or what we think they should do, we try to work with them. And then when a company is facing a challenge it’s bringing the right experts to support them. And we don't want the experts that come in and say, This is how it's done. You should do it this way. We want experts who are able to listen and help guide and not make decisions and take over if that makes sense.
James Mackey 25:32
Yeah, it makes a lot of sense. I feel like just having partnerships and relationships in the ecosystem that understand just the different phases of what a startup is going to go through and being able to plug in the right resources at the right time is so important. And that's really, I mean, that's the differentiator it's like the investors that really can support the startups at each phase of drug development in your case, are going to be the ones that probably are going to end up having the best deal flow as well. Because you're going to, you know, you're going to be able to show that value proposition.
I want to learn a little bit more here, so let's say you get the FDA approval, what does the lifecycle of the startup look like at that point in time? Is it licensing out to a distributor? Is it selling the product altogether? What are the different strategies, from that point forward once you have FDA approval? Can you walk me through that?
Leen Kawas 26:31
Yea I mean, there are multiple options, for example, we also have Mike Gibbs and Sylvia Mcbrenn who commercialized several products, and they have extreme success in that area. And there are different options, right? If it's a smaller company that has an innovation, and they really get in, they have an engine for innovation, and they have no interest and taking it to the next step of commercialization very similar to the tech industry, they would partner with larger Pharma. And that's, you know, pharma right now is we believe, at least, as we're doing our analysis in the fund, large pharmaceutical companies right now are in the cycle where they're looking for innovation to build up their pipeline.
So that could be an option for companies who are close to approval, they don't have to get FDA approval. Typically large pharma, just want to get information or data that gives them confidence that this company is going to be successful. But sometimes it happens at approval, sometimes it even happens when the company starts commercialization and they figure out that this is not what they want to do, and they find the right partner or pharma looks for opportunities within the smaller companies. The other thing is, there are different ways that you can commercialize a product there's an orphan indication, orphan indication is where you have a small number of patients, and they have special treatment from both the FDA and reimbursement, basically, the FDA, there are accelerated pathways for approvals, and there's a lot of benefits for an orphan indication because they want to incentivize companies to develop products for the smaller markets.
And then the pricing margin is also more healthy for an orphan indication. So revenue can be meaningful for companies that are developing orphan indications. These are a smaller indications, a lot of the smaller companies are very successful in taking on this, smaller indication while making a significant profit. And then another option is the companies that are planning to build everything in-house, it kind of takes time and is very expensive and high risk. But some do. I don't say that it's wrong, I wouldn't like to come directly say - No, it's not the right thing. But there are some specifics around each company. And then finally, companies that partner with distribution, like similar to any, there are distribution partners that have their own fleets of commercialization, and that's something I think companies should even small companies, they should understand their options.
They should understand what they can do at the commercialization stage because it will help them negotiate. If pharma comes in and they're interested, but the smaller company, they don't understand the commercialization optionality that they have they're going to undersell themselves, right? So understanding that is important when CEOs and Boards of Directors negotiate for any type of transaction with pharma.
James Mackey 30:02
That is really, really interesting. Well, thank you for sharing your thoughts on that. And I want to make sure that we have time to cover what's going on with the anti-inflation act. How we should be looking at this and how it's going to impact the industry? Do you have specific thoughts on this, what could you share with us on this topic?
Leen Kawas 30:23
You know, overall, the anti-inflation act, it did trigger a very negative, I would say, especially from large pharma, and on the small molecule, large molecule differences, like the exclusivity or ability for payers to negotiate price after I think 9 years versus 13 years, that created a lot of angst in the industry. I think there were some aspects of the orphan indication that also created some reactions. For me, the way that I look at it, it's first of all better than what people expected much better. So that's a good thing for our industry. And then the second part is, there are two parts when you're thinking about commercialization or product, it's the price and access, the higher the price, the lower the access, the more reasonable price, the higher the access.
So your revenue, pricing your product at the upper end doesn't mean that you're going to have higher revenue. It's actually not easy to price a product because if you overprice it, you can end up with a flop like one of the Biogen drugs for Alzheimer's, which went out with $58,000. That was a very high price tag. I think that led to Biogen stopping any effort, this could be a multibillion-dollar drug, but just trying to price it at the upper end created this, and eliminated access so I feel the anti-inflation act, one way that we can look at it, it's going to increase access, which is why we are working in this industry, right? If you have the ability to manage pricing and that negotiation with CMS is not that they're gonna like not pay for any drug. It's the highest-priced 26 drugs, they're going to try to negotiate that. So I don't think it's that severe and I do think that if we work with that it could increase access.
James Mackey 32:37
Wouldn't the argument be though if there are potentially price ceilings or whatnot, that there potentially could be less innovation?
Leen Kawas 32:48
It’s not a price ceiling, let’s be very clear.
James Mackey 32:51
Can you explain that to us, please? How does that actually work?
Leen Kawas 32:52
Yes, so there's no price ceiling, okay. And I agree with you, that's the thing, there was a fear that there could be a price ceiling impact on patents and all of that. It's not that, it's just that the companies after 9 years or 13 years. If it's a small molecule - 9 years, if it's a large molecule - 13 years. After they commercialize it for this long, they have to go and renegotiate pricing, well negotiate a lower price. So I mean, if that happens, it means that there's more access to patients so I don't think it's going to have that severe of an impact. I do think I talked to an analyst and I said, Why did you create that difference between small molecule versus large molecule? Small molecules are chemicals that are easier to manufacture. From my point of view, small molecules, they're typically oral, or sub-Q injection and they have really large access as a product profile, versus biologics, a lot of them you have to go into the clinic, it's more demanding.
Historically, 20 years ago, biologics were developed by biotech companies, smaller companies and small molecules were developed by large companies, but now it's completely mixed, there are small, and there are a lot of small companies that are developing small molecules. And this is where I asked him, Why do you have that difference? And he's like - Because we want to give small companies incentive to continue to develop large molecules biologics that are considered more innovative. And you know, large pharma, they don't need it for their small molecules, but you understand that that's not the reality of the industry.
There are small molecules being developed by small companies and large molecules being developed by large companies. I think that sometimes not understanding the industry patterns, but at the end of the day, I don't think it's going to have a big impact, I think there's a fear in the industry that it's going to apply to every drug, it's not just the highest, the drug that costs our system the most, it's gonna reach through to other drugs. But for now, I think it's reasonable and I do think that it could help increase access to treatment.
James Mackey 35:26
Could it also incentivize, I'm just thinking this through, could it also incentivize companies to set their initial price higher because they know they're going to have to negotiate down after a certain period of time?
Leen Kawas 35:38
That’s why I’m saying I think the pricing is an art. So if you try to overprice it because you know, you're gonna have to lower, it's not gonna work, you have to be very thoughtful. Now, this is a very new thing that you need to add to the equation. But it's not going to be the only thing, it's one additional factor that you include. But it's an art - pricing, and if it's only driven to be thinking that if I increase the price, I'll increase my bottom line revenue, no, it's going to fail, you have to think about the patient population access and understand the market to be able to price it correctly.
James Mackey 36:23
So it doesn't sound like you think this is really a game changer.
Leen Kawas 36:27
Oh no, I think it means it’s going to have a lot longer, more long-term issues. But I think we can work with it and it's at least removed a lot of uncertainty about a much worse situation that we could be in. But for me the most important thing it could potentially, if it's used effectively by the government and the payers, and the drug developer, could increase access to paid treatments, and access of innovative treatments to patients, which is why we do everything.
James Mackey 37:00
Right. Yeah. Curious to get your thoughts on how pharma startups are being impacted by current market conditions, just with overall venture capital funding going down. How do you feel like that's going to impact startups in this sector in comparison to the greater startup environment? What are you seeing out there and how do you think it's gonna play out in pharma over the next 12 months?
Leen Kawas 37:35
Yeah, I think a lot of people talk about this. And for me, that's why the team is very important when you're evaluating a company, because how can they adapt to continue to clearly create value in this environment? It is very hard to raise money in this environment, we're seeing much fewer deals at this point. Luckily, for Propel, we're fresh funds. So we don't we're not licking our wounds if that makes sense. We're looking for innovation, we're looking for opportunities to invest in an effective way. But that's when we evaluate the financial strategy for a company, how they're going to manage their capital that they have to continue to advance their programs.
And one thing that it's part of the corporate structure that we look at, as we evaluate any company if it's a company that has a huge employee number overhead, and because this is how it's done, this is how it's historically been done. You build these huge teams, hierarchy, corporate structure, top-down like, this is a huge turnoff for me because it means that the management, they're not hiring intentionally, right? And they don't know how to outsource effectively. Now, everyone is quite effective in our industry, they build relationships with experts and service providers. And you need to decide what functions you want to keep in-house and what functions you want to outsource. And how are you going to build a network that connects everyone, all of the stakeholders or the people that are part of the project as a unit? So you have a group of people, whether they are on your payroll, or outside of your payroll, I call it strategic outsourcing, how can you build that to be adaptive, and flexible, right?
If you don't have employees on your payroll, and you have an outsourced outsource function, still a key function? They are still part of your team. You can put it on and off if you like, you could pause it for a while you composite to make strategic decisions, right? Because if you need to make a strategic decision around your pipeline, and you have 200 people, and the part where you want to make a decision, you have to pay for 70 people, you are paying for them while you're making the decision. But if you have an outsourced component of your workflow, then you're more flexible and managing your overhead, and your capital, because capital right now is very expensive, right? And that's, that's another thing companies need to think about strategic outsourcing being innovative in the corporate structure network, not top-down corporate, that's like, dinosaur time for me. Really thinking about how can I be also innovative in the way that I build my team and outsource strategically so I can overcome the recession and continue to have a viable company post this tough period financially.
James Mackey 41:02
Sure, and more specifically, what specific functions should startups think about outsourcing, what do you absolutely say - Okay, this has to remain in house, versus these are logical areas to outsource to the business.
Leen Kawas 41:18
Okay, so every company is different, but you need someone, let's say, let's give an example for clinical development. In clinical development a lot of people, hire a lot of companies, especially small companies, they go into a full-service CRO. This means they do their clinical operations, medical monitoring, data analysis, and safety, or they bring it all in-house, which is crazy, you want to build all of this infrastructure, or you want to lose complete control and give it away. So I try to tell companies, small companies who don't fully understand the functions is first: interview people, understand the functions, and understand the workflow, and the goals of your project or program because every program is slightly different.
And once you understand that, then you hire groups, I prefer the petite groups, smaller groups that do data management. Data management, absolutely, you need it independent from anything else. And the statistics group, also statistics everyone thinks data and statistics are the same, it's very different. Medical monitoring, you know, having an MD, I think this should be in-house, having a medical monitor in-house. You could have an external consultant, that is full-time work, either you don't have to have this person on, but having someone that is wearing your brand, regardless if they are a paid consultant or employee. Medical Monitoring is important to keep in-house or. And then project management in-house, okay, like don't outsource project management you need someone who you fully trust that knows where every piece is moving, manufacturing, everyone outsources manufacturing some biologics, it's in-house, that's fine.
That's why some companies are different, but manufacturing everyone, outsource, but at the same time, you need a project manager in-house that understands the supply chain and all of these insights. For clinical development, this is for everyone, especially first-time entrepreneurs, even old-timers, like this is your clinical trial. You need to interact with the physicians, you need to interact with the sites, don't have anyone in the middle, and you need to respond to the key stakeholders, key stakeholders are the clinical sites because they interact with the patients and don't create a barrier between you and the clinical sites that are testing your product. There's typically a CRO and this is something a lot of people, nobody ever when I was running here, not we've never seen a sponsor that wants to like you pay the CRO millions of dollars, like Yeah, I paid them, but I want to be successful.
So I need to take the extra effort to make sure that the sides have what they want and make sure that the quality of the patients and the quality of operation is up to the standard that I want. So that's what I'm saying, and of course, the CEO has to be him in a small company. If I call up a site and they don't know the CEO's name that's a problem because, in a small company, you're not the CEO of Lilly or Pfizer, you’re the CEO of a small company that they need this product to be successful. So being involved and engaged as a CEO, external partners that you outsource the work, need to be part of the team you interview, not only the business development people interview, the actual person that is going to do the work. Because, yes, they're not on your payroll, but they are your team, and they need to feel your vision, your mission. And, and this blame-shifting, if they're not all, if you're not successful in creating a single unit, you're gonna have blame shifting and a very weird dynamic. So this is where management comes in and really tries to create this single-unit network structure. And that's another innovation that we're looking for in our companies.
James Mackey 45:49
Wow. Yeah, this is incredibly interesting and I thank you for walking us through this and sharing so many of your insights. We're coming up at the top of the hour, we just kept going so we’re coming up on time here, and I wanted to just say thank you so much for sharing all of your insights with us and joining us today and giving us this masterclass I know is going to be very helpful for VCs that are looking into pharma, as well as founder CEOs that are trying to raise capital in this environment. So thank you so much and Leen, if people want to engage with you or Propel what's the best way to do so?
Leen Kawas 46:24
LinkedIn, we have a LinkedIn page on Propel, but also I'm very responsive in general, if an entrepreneur needs help, I would love to do that. I'm so grateful I ended up in the US and was exposed to the entrepreneurial journey so giving back and helping entrepreneurs be successful, I would love that.
James Mackey 46:46
I love it. I love it. Well, I hope people tuning in take you up on that.
Leen Kawas 46:48
Thank you. Thank you very much.
James Mackey 46:51
Yeah, for sure. Thanks for being here. And for everybody tuning in, thanks for joining us today and we will see you next time. Take care!