Orasis CEO and Chairman Share Their Strategies for Success

podcast episode 230

Podcast Episode 230

Elad Kedar, CEO of Orasis Pharmaceuticals shares his strategy for successfully completing a Phase 2b clinical study in preparation of their phase 3 of CSF-1 drops for temporary correction of presbyopia. Jeffry Weinhuff from Visionary Ventures joins the conversation as Chairman of the Board to explain how he evaluated the Orasis technology and what VCs look for.

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OIS Podcast Transcript:

Intro:
In this week’s OIS Podcast we hear from Israeli based Orasis Pharmaceuticals CEO Elad Kedar and US based Chairman Jeffry Weinhuff, Managing Partner for Visionary Ventures. In this episode, Elad shares details on their Phase 2B clinical study results and Jeff discusses the funding side of the equation. Let’s listen in.

Ehsan Sadri, MD:
Good morning everybody. This is Dr. Ehsan Sadri, board certified ophthalmologist here in lovely Southern California. I am honored and pleased to introduce my two guests, both friends, one of them is a brother of mine, Mr. Jeffry Weinhuff who is the Managing Partner of Visionary Ventures here located in Southern Cal. And Mr. Elad Kedar who is the CEO of Orasis. Both friends, both brothers. I’m just absolutely delighted to have you guys here on OIS podcast today.

Jeffry Weinhuff:
Thanks Ehsan. We’re pleased to be here.

Ehsan Sadri, MD:
So Jeff thank you for coming on. I know you’re really busy with everything going on at Visionary. For folks that don’t know about Visionary and yourself I love to just, whenever I have a guest on, I love to introduce them a little bit of background maybe of yourself and the fund. Then we we’ll dive into a little bit of your philosophy for Orasis.

Jeffry Weinhuff:
Okay. Happy to do that. So Visionary is investing out of its second fund. The focus is very narrow compared to many other venture type funds in that our focus has been historically all ophthalmology and we’re now moving in to include medical aesthetics as well. So, the Visionary differentiator is that we have over 75 key opinion leader doctor investors in the fund who serve as our eyes and ears into innovation into the ophthalmic landscape. So, you know, for instance, Orasis is an excellent example of how this process works. One of our doctor friends Sherri Rowen brought this company to my attention and at OIS in New Orleans I had a chance to meet with Elad in person. They kind of met our criteria and we liked the people and liked the process and we proceeded. So, that’s kind of our 50,000-foot version. We’re generally a later stage clinical investor. You know kind of think A or B round investments as our first round, often the first professional round. And, that’s our focus so we’re investing out of our second fund.

Ehsan Sadri, MD:
Very good. You have recently just finished a financing round. Perfect timing. Can you tell us a little bit about that? Update on that and what your focus on the next fund?

Jeffry Weinhuff:
Well the most recent financing round we completed was an investment in TearClear where we were able to add Bob Dempsey as the CEO. And the last round we did for Orasis we did about 18 months ago to finance the Phase 2b trial. We’re pleased to say that that went well. And we’re now getting ready to finance the Phase 3 trial.

Ehsan Sadri, MD:
Terrific, Terrific. Thank you for that update. Elad, it’s so good to see you again. We saw each other I think last time at OIS@AAO. We were able to connect, and we did a short interview with OIS. Due to COVID-19 we are having to do this podcast which we are delighted to have and both you and Jeff were really nimble in getting on and we wanted to get everyone an update. So, tell us a little bit about your background. I know you’re younger than me. It’s an inside joke, Elad is a few months younger than me, and he resides in Israel. Tell us your background and why ophthalmology and also tell us, I saw you have a law degree. Give us a little snippet of your background and Orasis.

Elad Kedar:
Sure. So firstly, thank you very much for the opportunity to speak today and share the progress of Orasis with the OIS community. It’s actually one of my favorite channels for getting updates on ophthalmology. So, yes, I have quite a different background than maybe people that come directly from the science background. I did study law and accounting as my first degree and then did my MBA at INSEAD in France. I actually have been almost 20 years in the pharma industry. I started my career at Eli Lilly which has been a great school for me. After several years at Lilly I moved to smaller companies, startup and mid-size companies, into more entrepreneurial roles. And really now looking back at my career I really had the opportunity on the one hand to see how things are done in big corporate, in established processes and on the other hand things that are done in small startups with agility sometimes creativity. Hopefully now I am able to combine them and take the best out of the two, so this is on a high level. That’s my background

Ehsan Sadri, MD:
That’s great! Tell us about how you then came across this technology. Tell us a little background about the market and what’s your focus now.

Elad Kedar:
Sure. So really the initial investor in the company was Sequoia Capital and they reached me and that was almost 5 years ago. I helped them with the due diligence, and they fell in love with the product and technology and I fell in love with it. When they decided to invest in the company, they offered me to join as the CEO. That was almost 5 years ago and since then I’ve been running the company with lots of pleasure. So really the product is pharmaceutical eyedrops for the treatment of presbyopia or to be more accurate, for the temporary correction of presbyopia. So, presbyopia as we all know, a giant segment; almost 2 billion people globally, about 120 million people in the US. 8 out of every 10 people above the age of 45 have presbyopia so this is really almost inevitable and yet the most common solution is reading glasses that obviously are effective but come with few key limitations such as aesthetics, convenience and therefore there is a real unmet need for additional solutions for presbyopia. There have been many attempts in the past years but there hasn’t been so far a solution which is effective, safe and simple to use. This is where we come in at Orasis. So, our product CSF-1, that’s the correct code name for it, not the commercial one. It’s basically pharmaceutical eye drops that work thorough a miotic effect, a temporary correction of presbyopia. It’s a proprietary combination of existing and well-studied molecules that have been administered to the eye for many years in other indications. The product has shown to be very affective, three-line improvement to be exact, which is the formal FDA criteria. But also, very safe and tolerable. As I mentioned earlier, simplicity is also very important here. It’s a quality of life drug. It’s very simple to use. You put one drop per eye. It starts working very very fast and works for several hours. You feel very comfortable when you administer the drops and that’s basically the beauty of the product.

Ehsan Sadri, MD:
That’s wonderful. I mean as a clinician seeing a lot of patients, it’s often very frustrating for us because this is a big unmet need as most ophthalmologists know. Most of us really rely on reading glasses and a lot of patients can’t really tolerate contact lenses and Lasik as you know is not the solution for this. Maybe RLE is a little aggressive, actually very aggressive for someone who’s emmetrope and can see distance acuity perfectly fine. What I found in my practice, which is what’s really astonishing and really a testimony to how this marketplace and what you’re going after is such a good target, is the patients don’t want to do anything invasive at that age group. They’re healthy, they have no issues and they are just annoyed but they don’t want to do the surgery so this is great space. Jeff tell us, I know we are in a COVID-19 and we’re hunkered down and we are wearing masks and stuff. You know, relying on how big this market is and how strong the clinical data phase 2 was, tell us about your confidence level of doing your next fundraising round.

Jeffry Weinhuff:
Well it’s never good to be too confident because the world changes on a dime but, this is a significant issue and people have been going to OIS and every other conference that I am aware of and discussing the need for a temporary correction of presbyopia drop. So, I think attention is high and, you know, if you have, as this company does, strong clinical outcomes I think interest will be strong. What we are seeing is that Visionary is continuing to invest carefully through this crisis as are a number of other people who are considering the Orasis investment. So, by no means is the life science market shut down the way some of the tech investment market is and, you know, what happens in the investment market is largely unrelated to public stock prices. So, I think we’re confident that we have a great asset and that people will see its value.

Ehsan Sadri, MD:
Do you feel that the health sciences as a sector, someone who’s involved in investment, is different in nature or do you think it is subject to the same market sensitivities and really at the end of the day can be vulnerable? Do you think there is any delineation there?

Jeffry Weinhuff:
It depends on the stage of development. So, if you have a company that is actively selling product and doctors clinics are shut down it’s a big deal. It’s a big deal for the ophthalmologists who are not able to do surgery in the current environment and it’s a big deal for the producers of product. But for clinical-stage assets its more of a modest delay instead of something that fundamentally turns the lights out. So, you know, investing in life sciences is kind of like living in a walled garden. It’s a place that between regulation and reimbursement is something that’s very specialized. So, you don’t have people just wondering around blankly writing checks for any and all deals. It’s very careful how you have to structure these deals and so I think that skill set and the knowledge of the market is very important to our ability to invest successfully and I think it also proves a barrier to entry and keeps us moving along. We’re in good shape but we have to stick to our discipline.

Ehsan Sadri, MD:
Very good. Elad, let’s go back to you a little bit for our listeners. You know a lot of the young entrepreneurs, and you’re very young obviously, younger than me, they enter this market, and now 5 years has gone by and let’s say they’re in the company and they’re beginning to see like whack a mole there’s other competitors coming down the pike. How does that influence what’s going inside your company? The tempo of things going on. I know you are ahead and you’re beginning your Phase 3. What do you think about that? What do you think about the marketplace and presbyopia and how that is kind of changing? How is that influencing you and how you’re navigating forward?

Elad Kedar:
Sure. So, you know, in every successful segment, in every successful space if you are launching a successful product eventually you will face competition. That’s inevitable. You need to prepare for that in advance. You need to understand what is the right profile for your product, how you can differentiate yourself from others. I think a company that has a good strategy starts thinking about those things already at very very early stage of process and development. This is what we have been doing for the past more than 4 years now. There are several elements that maybe in other products or other sectors you would expect companies to start dealing with at much later stage we’ve been already addressing many of those at very early stages of development. For example, all the products TPP – Target Product Profile, all the relevant implications from the desired target product profile on our clinical program, on our clinical studies, on our manufacturing, these are all things that you as a company and obviously as the CEO of a company, you need to think about them in advance. Particularly in the pharma market where processes take a long time, sometimes years. I mentioned manufacturing. Every small change in manufacturing can take literally years. You really need to think a lot in advance. Have kind of a giant Gantt Chart that is constantly moving and changing based on reality and needs and risk identified etc. And this is what we have been implementing always at Orasis.

Ehsan Sadri, MD:
That’s great. For those of you listening, it’s really good – worth noting as you’re building a company. I think Elad has done a great job of also looking at the landscape and making sure that you’re also cognizant of the marketplace and natural potential competitors. Tell us real quick about your Phase 3. Are you ready to go? What’s your biggest challenge right now so far, other than COVID-19?

Elad Kedar:
Sure. So, Jeff mentioned earlier we finished Phase 2B, very successfully last year in the US. It was a well-powered study and actually when we designed the protocol of the Phase 2B what we had in mind was that we would do it as similar as possible to Phase 3. So, by the time we would reach Phase 3, assuming Phase 2B is completed successfully, we know that we significantly de-risked the program and this is where we are now. So apart from a couple of minor nuances the protocol of Phase 3 is essentially not very different from what we have already accomplished, and this is why we feel pretty confident about the execution of the study and hopefully also the outcome. We finished the FDA meeting, the end of Phase 2 meeting, we finished it just before all the lockdowns began in early March. We finished it very successfully and now we are advancing in preparations for Phase 3 in all relevant aspects and we hope to start it as soon as possible.

Ehsan Sadri, MD:
Very good. So, as you are doing that, what is your biggest challenge other than funding? What are any words of advice for young entrepreneurs when they’re trying to start Phase 3s?

Elad Kedar:
Well, you know, obviously one thing is think about Phase 3 when you are already at Phase 1 and Phase 2 and build your program towards Phase 3. So, by the time you reach Phase 3 you know that all or at least most of the things you have already tested one way or another. I think that’s really really important because you know the de-risking in a development stage company is something that is always looked at and building all your program towards eventually coming to the starting line of the Phase 3 so you know what you need to do in Phase 3 in terms of the protocol. And you know that you already accomplished many of those things in the let’s say the dress rehearsals before. That gives you and your team and your investors a comfortable feeling that you are on the right track. So that’s one thing. The other thing is obviously Phase 3 is bigger scale and there are lots of logistical challenges coming with that. You need to be prepared for that. You need to make sure that your expectations in terms of timelines, in terms of the team involved are really realistic and you need to address those and communicate those to all relevant stakeholders both within outside of the company so people really understand what you are up to, what are the relevant timelines, what are the challenges and how are you going to achieve them. So, this is basically what we have been doing.

Ehsan Sadri, MD:
That’s really good. Jeff, at this part the focus that I like to have at least for some of the audience that are in the startup world, entrepreneurs, physician entrepreneurs, is really guidelines. As someone who has already been there done that, given your success I would love for you to give us some insight on if I am a young Jeff Weinhuff and I am trying to be a managing partner or a leader of a fund or even thinking of starting a fund. What are some of the pitfalls that you can address for our audience please?

Jeffry Weinhuff:
I think that more broadly, whether you want to be an entrepreneur or whether you want to be a venture investor, there are a handful of things that are important. For me the first is solving an unmet need that is very sizeable and where the standard of care can be surpassed by a large measure. So, in this case for instance our benchmark is eyeglasses which are relatively inexpensive but the convenience and comfort of using a drop is a big big game changer compared to the rest. I think the second is that, so the first is devote your time and energy to a field where if you’re successful, it’s a big success and not a small success. And the second is I think it’s super important that you listen to what practitioners would choose to have and don’t invent a solution for something which is not truly a problem. So, in our case, talking to our KOL group and listening carefully to the medical and scientific advisory boards at all our companies gives us insight. So if you’re starting a company talk to leading doctors in your field who can help you think about what’s important and whether the idea that you have is something that’s relevant because it can be a number of years and many millions of dollars before you get to the finish line. I guess strong IP is critical. None of us with invest a nickel in something where we can’t protect the intellectual property and have a patentable product. And then I guess the last piece is, you know, work with a team that embraces knocking risk out of the equation early and in a thoughtful manner. So, I think Elad is giving you a great example of superb execution on how you think about what could upset the apple cart and how you deal with it. So, you know, the team at the end of the day is, if you have a great product and a lousy team, you probably have a lousy investment. But if you can line up all those things together then you’ll have a winner and that’s kind of the way we look at things. So, we want to be involved in things that are important and that can add value to patients and make practitioners life easier in surgery or in their medical practice.

Ehsan Sadri, MD:
That’s a great overview for our audience. I think it’s exciting to be able to listen and learn on some of the things that Jeff was describing, especially when you’re thinking about getting investments from the outside and you’ve exhausted your friends and family. I think it’s a really good template. There is not a day that goes by that I don’t get a call from someone who’s got a really great idea, but they need some support and structure there. So, I think for those listeners listening to this, it’s huge. Elad, let’s go back to you. Same question. Young CEO trying to be successful in a competitive world, in a new world – I don’t know what that looks like. Nobody does. What are some of things that you described? What’s a successful CEO? And what are some of the challenges you’ve had to overcome?

Elad Kedar:
Sure. I think something that probably many other CEOs would tell you is surround yourself with the right team, with people that sometimes that are smarter than you. I think we have done quite a good job there at Orasis. We have a great team both within the company but also, we have a great advisory board and board of directors. And I think what I like about our team, and this could be one very good advice for younger entrepreneurs or CEOs who build their company, obviously it’s very important to have big names on your corporate deck but eventually when it comes to execution you need people who are willing to roll their sleeves and really help you at the relevant strategic decision making points. And I think not only our team members but also some of our advisory board members who are really senior key opinion leaders, all of them are people who are really willing to roll their sleeves and help us in all the nitty gritty details that require for example going through a study protocol or preparing the target product profile and really in that sense I think that is really essential to have such a team around you. Another element is, as a CEO I think you need to know how to maneuver between the big picture and the small details. I mean as a CEO you obviously need to be constantly looking at the big picture. But sometimes I see CEOs that are just afraid of going into the details. And I think if you are not having the ability and the willingness sometimes to even delve into details in those specific areas that require your attention as a CEO, you are losing quite a lot. So, the maneuvering and being able to identify where you can look at it from a bird’s eye view and where you really need to go down and dive into all relevant details, this is something that I think is acquired with time. But you need the attention for that because otherwise you may miss important things. And then maybe one last thing related specifically to development stage companies. Always run by hope for the best but prepare for the worst. You need to be optimistic as an entrepreneur, no doubt, but you also need to understand that there are many many obstacles out there. Constantly run risk management and potential mitigation plans and make sure that you are ready not only for successful days but also for rainy days and these are probably a few of the things I try to practice almost every day in my life as a CEO. Hopefully that helps a bit.

Ehsan Sadri, MD:
That’s terrific. Mark Cuban has a saying. He wakes up every day and basically imagines how his entire business, everything can be taken away from him. Not to sound negative but really protecting the downside like Warren Buffet says. That’s a realty good description. You know, I wanted to make sure that the audience really understood that. I think you guys did a terrific job. I was delighted to have you on. There is a lot more we can talk about but you’re probably out of time. I want to say thank you for you and your families to be safe and if have any further things you need you can always email us, reach out to the OIS staff and we will be more than happy to add more questions and content. So, with that said I want to thank both of you for spending time with us. Wish you the best and safe journey through this COVID-19.

Jeffry Weinhuff:
Thank you Ehsan and thanks to the OIS team.

Elad Kedar:
Thank you very much. Bye Bye.

Outro:
We hope you enjoyed this episode of the OIS podcast. Keep an eye out for the OIS Virtual Innovation Showcase and panel discussions. For more details visit OIS.net or email Maureen@healthegy.com.

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