S2, E2: Fauna Bio tapping animal evolution and AI for drug development with CEO Ashley Zehnder and Prof Elinor Karlsson, Broad Institute (MIT/Harvard)

[00:00:03] Welcome to the Raising Biotech podcast. I'm your host, Surani Fernando and thanks for tuning in.

[00:00:08] This podcast has a mission of exploring biotech's raising impressive funds to develop ambitious medical breakthroughs.

[00:00:15] I speak with CEOs and founders to get origin stories, missions and future visions for the company

[00:00:21] and I also talk with relevant medical and industry experts to get more context on the company's potential

[00:00:26] to really make a difference in healthcare.

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[00:01:04] Now let's get back to the show.

[00:01:06] Today I'm talking to FaunaBio, an early stage company hoping to tap into animal biology and evolution to unlock novel targets to treat human diseases.

[00:01:19] The company was launched in 2018 and has raised a total of $19 million in financing since then

[00:01:25] but has most recently made headlines with an almost $500 million partnership deal with big pharma Eli Lilly to study obesity drugs.

[00:01:34] What this company is doing is truly novel and unique.

[00:01:38] Not only are they trying to tackle human diseases with a completely fresh scientific lens

[00:01:43] but their scientific thesis is really only made possible in this booming new era of artificial intelligence and machine learning.

[00:01:51] In this episode I speak with CEO and founder Ashley Zender.

[00:01:55] She talks about how the company came together with its trio of female co-founders out of Stanford,

[00:02:01] its early financing journey, road to signing big pharma partnerships as well as what the company has in store over the coming years.

[00:02:08] I also speak with Professor Eleanor Carlson from the Broad Institute of MIT and Harvard.

[00:02:13] Eleanor talks about Fauna's scientific thesis and potential to unlock a whole new world of drug discovery.

[00:02:20] I hope you enjoyed the episode.

[00:02:23] Hi Ashley, thanks for joining the podcast.

[00:02:25] Yeah, well thanks so much for having me and excited to be here today.

[00:02:28] Just to kick us off before we dive into the ins and outs of the journey,

[00:02:32] can you give us a brief overview of Fauna by its unique drug discovery approach

[00:02:37] and I guess the general elevator pitch for the company?

[00:02:40] Yeah, so really what Fauna does is we look at extreme genomics and species that have adapted sometimes over hundreds of millions of years

[00:02:48] to really use the same genes that you and I have but in very different ways.

[00:02:52] So it's really taking that use of human genomics and drug discovery to the next level

[00:02:57] by recognizing the fact that there are species that have adapted ways to resist and reverse disease

[00:03:02] that are actually really quite helpful for diseases that plague humanity.

[00:03:06] So these are diseases like obesity, which I'm sure we'll get into later on this podcast,

[00:03:10] CNS disease, heart disease, these really big disease areas that oftentimes

[00:03:16] big pharma are struggling to make new therapeutics work.

[00:03:19] So let's take a step back.

[00:03:21] If you're someone who's been in the industry for a while,

[00:03:24] this probably is a new concept to you.

[00:03:27] Essentially looking at animals to get a better understanding of how to treat complex human diseases.

[00:03:33] It doesn't sound quite right, but after delving a bit deeper,

[00:03:37] it's truly fascinating and requires a little thinking out of the box

[00:03:41] and we'll explore more of the scientific thesis in a little more depth later in the episode.

[00:03:46] But I asked Ashley to take us back to the very beginning.

[00:03:50] What led her, a certified veterinarian, on the path of starting up a company

[00:03:55] that is trying to treat human diseases?

[00:03:58] My background is in veterinary medicines.

[00:04:00] My clinical training was really in exotic animals,

[00:04:03] so mostly in mammals, reptiles and birds and really understanding

[00:04:08] what are the specific diseases that these animals have

[00:04:10] and what are some diseases that some of these animals don't ever seem to get.

[00:04:14] And really wanting to understand more of the molecular mechanisms

[00:04:17] that underlie those differences.

[00:04:19] And so I came to stand for a lot of program that supports veterinarians who want to do PhDs

[00:04:24] to really learn more about conserved biological mechanisms.

[00:04:27] Ashley became interested in understanding more about the power of looking at genes

[00:04:32] through the lens of evolution

[00:04:34] and how that knowledge can help scientists crack the code about specific drivers of disease

[00:04:39] that have remained unchanged throughout evolution.

[00:04:43] After her PhD Ashley transferred into a postdoc at Stanford

[00:04:47] really wanting to do more comparisons between animal and human diseases.

[00:04:51] And that's where she met fellow co-founder and fauna's chief operating officer Linda Goodman

[00:04:56] who was focusing her postdoc research on human genomics.

[00:05:00] You know frankly she'd become quite frustrated as many have over the years

[00:05:04] with how easy it is to find genes that are statistically significant

[00:05:09] when you look across humans in terms of their links to human disease

[00:05:12] but oftentimes don't seem to be driving that disease.

[00:05:15] They don't seem to be very functional and they don't make great drug targets.

[00:05:18] And so she realized that there was a lot of power

[00:05:20] in looking at this through an inherited genomics lens

[00:05:23] and looking at genes that are highly conserved across mammals

[00:05:26] and looking to see what they're doing in disease-relevant context.

[00:05:29] She had always wanted to be a veterinarian

[00:05:31] and I always wanted to do more genomics than work that I did

[00:05:34] so we were collaborating on projects academically.

[00:05:36] And then my other co-founder Katie Grapeck had actually been in the lab longer

[00:05:40] than either of us.

[00:05:41] Her background was in human genomics

[00:05:43] and she was fortunate enough to rotate in the lab

[00:05:46] Dr. Sandy Martin at UC Denver

[00:05:48] who was studying genomics of the 13-lined ground squirrel.

[00:05:52] So this is a species that is a highly adapted hypranator.

[00:05:55] They hibernate for six to seven months out of the year

[00:05:58] on a very rigid genomically driven clock

[00:06:01] and they go through some of the most extreme physiology that we see in mammals.

[00:06:05] Okay, so just to jump in here

[00:06:08] this 13-lined ground squirrel becomes pretty important to Fauna's overall story.

[00:06:13] This specific species of squirrel is so interesting to study

[00:06:17] because of its ability to hibernate using colnamalian genes that you and I have.

[00:06:23] These squirrels take their body temperature down to almost freezing

[00:06:27] where they stay for a couple of weeks at a time and then rapidly rewarm.

[00:06:31] That cycle happens multiple times over a six month period

[00:06:35] and to keep that cycle going their metabolism becomes around 200 times faster

[00:06:41] but that also leads to a blood oxygen supply mismatch.

[00:06:45] That's not easy on any mammalian heart.

[00:06:49] If this happened to a human you'd likely see a heart attack or a stroke

[00:06:54] but amazingly these squirrels are left with minimal tissue damage

[00:06:58] and are able to repair any damage by the end of the hibernation season.

[00:07:02] And so the genes driving that resilience became a point of interest

[00:07:06] for Katie's research at Stanford which she also brought over to Fauna

[00:07:10] as chief scientific officer.

[00:07:13] So the three of us are working on different academic projects during our postdoc

[00:07:17] but recognizing that we each had this different piece of the puzzle

[00:07:21] in terms of how do you start to use data from this highly adapted species

[00:07:25] to better inform how we think about using genomics for human health.

[00:07:29] So in a very organic and almost serendipitous union of academic minds

[00:07:34] the idea for the company was born

[00:07:37] and despite all three founders completing postdocs at Stanford

[00:07:40] Fauna is not a Stanford spin out.

[00:07:43] The team got its first kickstart in 2018

[00:07:46] from venture capitalist Laura Deming from the longevity fund.

[00:07:50] Laura happened to give a talk at Stanford in 2018

[00:07:53] met the aspirational trio and invited them to join the funds accelerator program

[00:07:58] focused on aging that accelerator gave the founders a generous half a million dollars

[00:08:04] some lab space and some early startup grooming.

[00:08:08] And with that also came a lot of support in terms of really learning how to transition

[00:08:13] from being primarily academics to thinking about how to actually run a company

[00:08:18] and so a lot of the early work we did in terms of setting up the very first version

[00:08:22] to the platform and what kinds of data sets we were integrating to do that

[00:08:26] happened during that accelerator. And then honestly just learning how to talk about our science

[00:08:30] again we were all three academics and so learning how to speak about the work

[00:08:34] that we were doing in a way that was accessible to a much more general audience

[00:08:38] something that we started to learn during the accelerator

[00:08:41] and I think we're still learning today and to some extent but definitely that was a lot of help.

[00:08:45] In the early work in the accelerator the team were able to predict some therapeutic

[00:08:49] compounds that might replicate types of disease resistance seen in that special

[00:08:54] squirrel. They were testing in some in vitro lab models of human diseases

[00:08:59] and generated data sets that showed credibility in their ceasars.

[00:09:03] From there it was time to approach VCs for some seed financing

[00:09:07] and they were able to close an initial 4.1 million dollars in early 2019

[00:09:12] led by True Ventures a Silicon Valley based VC firm.

[00:09:16] True Ventures really likes to fund companies that are really at the edge of science

[00:09:21] and do their work in kind of with deep tech in terms of bio

[00:09:24] and so we closed that round really only a few months after starting the company

[00:09:28] it was very very early 2019. So yeah still had cash in bank from the H1 accelerator

[00:09:33] but we were pretty lean team at the time the money from the seed round

[00:09:36] was really to prove out and generate some early in vivo data

[00:09:40] from some early compound that predicted from the platform

[00:09:43] and we did that pretty efficiently and then we raised really a seed extension

[00:09:46] in 2021. That seed extension was for 9 million dollars led by Lifeforce Capital

[00:09:52] with other names including Boom Capital and Pacific 8 Ventures

[00:09:56] among other investors focused on life sciences and genomics companies

[00:10:00] intersecting with cutting edge technology.

[00:10:04] That money allowed forna to branch out into different disease areas

[00:10:07] to broaden its data set while it also expanded its leadership team

[00:10:11] to help the company build a drug program.

[00:10:14] One of the unique aspects of fauna as a platform company is that our lead asset

[00:10:19] and our second program have legitimately come out of the platform

[00:10:23] they were not in license from somebody's academic work

[00:10:26] or had been worked on prior to an in license

[00:10:29] these were compounds that we found with the first version of the platform

[00:10:32] that our developing is and stroke candidates.

[00:10:36] Fauna's formative years and the amount they were able to raise

[00:10:39] in just a few months of operation is quite impressive.

[00:10:42] Also in 2020 they signed a research collaboration with big farmer

[00:10:46] Novor Nordisk to help discover novel obesity drugs.

[00:10:51] But knowing how hard it can be to crack biotech VCs

[00:10:55] I automatically assumed that it might have been quite challenging

[00:10:58] for fauna to get in some doors.

[00:11:00] The three founders are millennials, they're female, academics

[00:11:04] first time founders and they're pitching something completely foreign

[00:11:09] to biotech investors studying animals in order to treat humans.

[00:11:14] So I asked Ashley what the fundraising process was like for the female

[00:11:18] founding trio and if they came across any challenges getting

[00:11:22] in some doors.

[00:11:23] Yeah, it's interesting.

[00:11:25] As you can imagine, we get this question relatively often.

[00:11:28] It's hard sometimes you mean to answer away from the perspective

[00:11:31] that I've only been a part of this particular founding team

[00:11:35] and founding this particular company.

[00:11:37] So I haven't had the experience of either being in a founding team

[00:11:40] that's being led by male CEO or having pitched as a male CEO.

[00:11:44] So I will say that is helpful to three of us has decades

[00:11:49] of experience in the fields that we come from and are clearly

[00:11:52] generating really compelling assets and obviously high value partnerships

[00:11:57] from the approach that we're taking.

[00:11:59] So even though we are all first type founders, we've accomplished a

[00:12:03] lot in fairly short period of time.

[00:12:05] And so I think at some point now the results start to speak

[00:12:08] for themselves in terms of clearly we're able to build and scale

[00:12:11] a company in a very new space.

[00:12:13] I think one of the differences of being on the west coast is

[00:12:16] that there are a lot of VCs particularly early stage.

[00:12:19] Talk about very early precedencies, age investors who won

[00:12:22] their founders to be close to the science.

[00:12:24] They're looking for academic founders who they can train

[00:12:27] to be company leaders and not necessarily well established people

[00:12:31] who are coming out of biotech or pharma to lead companies like this.

[00:12:34] And so the VCs that we were working with who you know,

[00:12:37] were in Laura's network were largely these types of investors

[00:12:39] who wanted to fund academic founders who were very close

[00:12:42] to the science and identifying teams that were really uniquely

[00:12:45] suited to the problems they were solving.

[00:12:47] And it was hard to argue for a better team problem fit

[00:12:51] than the founding team at Fana for this particular problem.

[00:12:54] And so from that perspective, I think it was fairly straightforward.

[00:12:57] And while for many biotech founders the biggest challenge is

[00:13:00] just getting a meeting with an investor.

[00:13:02] Ashley said that thanks to their truly unique and novel thesis

[00:13:06] they didn't really have that problem.

[00:13:08] Curiosity worked in their favor.

[00:13:10] We do benefit from the fact that we are doing something

[00:13:13] legitimately different.

[00:13:15] I think it's hard if you're doing something that is maybe

[00:13:18] a slightly different flavor of something that a lot

[00:13:20] of other people are doing and then trying to get those

[00:13:22] intro meetings.

[00:13:23] I do think when you pitch a company based on 13 line

[00:13:26] ground score biology to investors, they're willing to hear

[00:13:30] about it, right?

[00:13:32] They may not understand it all of that, but they don't

[00:13:34] take the meetings because they're curious, frankly.

[00:13:37] And we've had investors tell us,

[00:13:39] I've literally never heard this before.

[00:13:41] And that's pretty hard for investors who have sometimes

[00:13:43] been doing it for decades.

[00:13:45] You know, it is refreshing, I think, for people to hear

[00:13:47] something that is truly novel and an area where there

[00:13:51] is so much development and so many people are applying

[00:13:54] AI to data sets in different ways, but oftentimes using

[00:13:59] very similar types of data, and BANA comes in with a

[00:14:02] very different approach.

[00:14:04] And when it came to the initial syndicate of VCs that

[00:14:06] wanted an early piece of the fauna pie, Ashley said

[00:14:09] that profile was also very clear.

[00:14:12] With a company like fauna people either really

[00:14:15] intuitively understand the problem where we got

[00:14:18] really good traction with investors and continue to do

[00:14:20] today is investors who have spent quite a lot of time

[00:14:23] looking at platforms in biotech, particularly looking

[00:14:26] at either genomics platforms or companies that are

[00:14:29] really searching unknown search bases in different ways

[00:14:32] and using different types of AI and ML to do that.

[00:14:35] We're obviously focused on genomics and different types

[00:14:38] of expression data already sequencing, et cetera.

[00:14:40] There are other companies in similar portfolios that

[00:14:44] are mining plant data, that are mining protein data.

[00:14:47] And so it's about really enlarging that search space

[00:14:50] that we could be mining for improvements in human health

[00:14:53] and really getting away from, what ends up being

[00:14:55] a fairly myopic focus on the idea that we can only

[00:14:59] learn about human biology by studying data

[00:15:01] directly from humans.

[00:15:02] And then it's to be a bit of a false premise.

[00:15:04] So we're leaving a lot of really interesting biology

[00:15:07] that can be really impactful on the table by doing that.

[00:15:10] So let's get a better understanding of the

[00:15:12] technology and why it's clearly so valuable.

[00:15:15] I spoke with comparative genomics expert, Eleanor Carlson,

[00:15:18] director of vertebrae genomics at Harvard and MIT's Broad

[00:15:21] Institute.

[00:15:22] And she's also a professor at the University of Massachusetts

[00:15:25] Medical School.

[00:15:26] Eleanor has been connected to Fauna since its inception,

[00:15:29] having met co-founder Linda Goodman, now chief operating

[00:15:32] officer of Fauna at the Broad Institute in the 20 teens.

[00:15:36] She is now currently one of Fauna's scientific advisors.

[00:15:40] I'm extremely excited about what Fauna is doing

[00:15:43] because all of my research is focused on how we can use

[00:15:48] other species to try and understand not just how DNA

[00:15:51] works, but also what happens when things go wrong

[00:15:54] and whether we can use that information to try and find

[00:15:57] better ways of treating diseases.

[00:16:00] And that's exactly what Fauna has been focusing on.

[00:16:03] Eleanor is well known in her field for her large

[00:16:05] comparative genomics project called the Zoonomia project.

[00:16:09] That project sequenced the DNA of over 100 different

[00:16:13] new species and compared them to over 200 different

[00:16:17] mammalian species.

[00:16:18] And that has been pretty insightful in her research.

[00:16:22] And in order to get DNA from those animals,

[00:16:24] I had the opportunity to work with a lot of absolutely

[00:16:27] fantastic people working in ecology and evolution,

[00:16:31] trying to understand other species,

[00:16:33] other species other than humans.

[00:16:35] And that was when I had the first opportunity to really

[00:16:38] start learning about the amazing things that other

[00:16:41] species can do that humans can't.

[00:16:43] I mean, I always knew that hibernation was a thing

[00:16:46] that bears did, but it turns out that it's not just bears.

[00:16:49] There's many, many different species that can hibernate.

[00:16:52] And it's actually sort of an amazing physiological feat.

[00:16:56] You've basically got these animals that every year

[00:17:00] they eat like crazy, they get incredibly obese,

[00:17:03] they sort of climb into a hole or into a den

[00:17:07] and when it gets cold out, and then they hardly move at all

[00:17:11] for months on end.

[00:17:12] And they lose all of that weight very quickly.

[00:17:15] And somehow at the end of it in the spring,

[00:17:17] they come out of their den and they're fine.

[00:17:21] They don't have any of the health problems that

[00:17:23] happen to humans when we go through these cycles

[00:17:25] of weight gain and weight loss or diabetes,

[00:17:29] you know, from having changes in their sugar levels

[00:17:31] and all this kind of stuff.

[00:17:32] You know, and I remember thinking about it one day

[00:17:34] and I was like, so these animals basically don't move

[00:17:36] for months on end and then they're totally fine

[00:17:39] and humans kind of get onto an airplane for six hours

[00:17:42] and we have to worry about blood clots.

[00:17:44] Like how are they doing this and why can't we?

[00:17:47] And so I think from my perspective,

[00:17:49] it was sort of that realization of how exceptional

[00:17:52] other species are.

[00:17:54] Eleanor mentioned that another important piece

[00:17:57] to Fauna's thesis is looking at how evolution

[00:18:00] has allowed species to adapt to adverse conditions.

[00:18:04] We're looking at an evolved trait.

[00:18:07] And the reason that's important is that evolution

[00:18:10] doesn't tolerate things that are ultimately harmful

[00:18:14] to the ability of that animal to survive and reproduce.

[00:18:18] And so in a sense, whatever changes are allowing

[00:18:21] species to perform these physiological feats.

[00:18:25] Evolution has already sort of said,

[00:18:28] this is an okay thing to do.

[00:18:30] This is a tweak you can make to a mammal's physiology

[00:18:34] that will allow it to do this incredible thing

[00:18:36] but isn't going to hurt it in other ways.

[00:18:39] And for me, as far as a starting point

[00:18:42] for developing a new therapeutic,

[00:18:44] that seems like a really exceptionally powerful place to start.

[00:18:48] I was chatting with Eleanor about what makes Fauna's approach

[00:18:51] so novel and unique

[00:18:53] and why something like this is only being done now.

[00:18:56] I mean, animals and these mammalian species

[00:18:59] have been around for forever.

[00:19:02] That is a really interesting question

[00:19:04] because there's like multiple different levels to it.

[00:19:07] I think at the very first level to it

[00:19:09] is just that humans tend to be very literal thinkers.

[00:19:12] And so when we think about studying diseases

[00:19:15] and trying to figure out how to treat diseases

[00:19:18] and how to cure diseases,

[00:19:19] we think that's a disease that humans get

[00:19:21] so we're going to go and study a whole lot of humans

[00:19:23] to try and figure out what causes that disease.

[00:19:26] And sometimes that can work

[00:19:28] but I think we often forget that

[00:19:31] while humans are different in some important ways

[00:19:34] from other animals and other species,

[00:19:37] we're not nearly as different

[00:19:38] as we sometimes like to think we are.

[00:19:40] For the most part, everything that's in a human

[00:19:43] is also in a dog or squirrels.

[00:19:46] We've both got hearts, we've got brains,

[00:19:48] we've got blood vessels, we've got four limbs.

[00:19:51] You know, we're much more alike than we are different.

[00:19:54] And so by studying other species

[00:19:56] it's actually not that far away from studying humans.

[00:19:59] And it gives us access to something

[00:20:01] that is incredibly powerful, which is evolution.

[00:20:04] And so the reason why species are different

[00:20:07] from one another is that over hundreds of millions of years

[00:20:10] DNA changes, it evolves,

[00:20:13] and species adapt to particular environments

[00:20:16] and they acquire certain characteristics

[00:20:18] that allow them to survive in those environments.

[00:20:21] And so by studying other species

[00:20:24] we sort of get the ability to harness the power

[00:20:27] of a clinical trial that's been going on

[00:20:30] for hundreds of millions of years.

[00:20:33] We could never do this ourselves.

[00:20:35] You know, there's absolutely no capacity

[00:20:37] for us to go into a research lab

[00:20:39] and redo what has taken, you know, evolution

[00:20:42] hundreds of millions of years.

[00:20:44] And so now we can actually start harnessing

[00:20:47] the output of that very, very, very long experiment

[00:20:52] by using new technologies that have only become available

[00:20:55] in the last few years.

[00:20:57] That last point that Eleanor made is really quite important

[00:21:00] given that AI, ML, Artificial Intelligence,

[00:21:03] Machine Learning has been a growing phenomenon

[00:21:06] over the last decade or so,

[00:21:08] fauna's launch becomes very timely and relevant.

[00:21:11] If this idea had been drummed up 30 years ago, for example,

[00:21:14] there would be no feasible or cost-effective way

[00:21:17] to explore the thesis

[00:21:19] and these new therapeutic possibilities.

[00:21:22] We've gotten so good at making data at this point in time

[00:21:26] and so bad at figuring out what to do with it

[00:21:28] that it's like finally at last

[00:21:30] we've got all these powerful tools

[00:21:32] to really start taking advantage of the kind of biotechnology

[00:21:36] that let us start creating these datasets.

[00:21:38] And I have to give a lot of respect to the people out there

[00:21:41] in the world of scientists and the ecologists,

[00:21:45] the conservation biologists who have been working in these species

[00:21:48] for decades and are the reason why we know all of this about them.

[00:21:52] It is not easy to go into the field

[00:21:55] and study some of these animals

[00:21:57] and they've been making incredibly careful measurements

[00:21:59] of their physiology and their behavior

[00:22:01] and everything for many years.

[00:22:03] I think what's happened now is that

[00:22:05] on the kind of biotechnology side

[00:22:08] we have this whole new huge suite of tools

[00:22:11] for studying and manipulating DNA

[00:22:14] that allows us to start going from this observational base,

[00:22:19] you know, hey look, these species can do some really interesting stuff

[00:22:22] to actually trying to figure out

[00:22:24] the biological underpinnings of those traits.

[00:22:27] Forna is working on its own pipeline

[00:22:30] as it works in parallel to help bigger pharma partners

[00:22:32] with their own drug discovery efforts.

[00:22:35] And while the company is remaining quite tight-lipped

[00:22:37] on exactly what it's working on for its lead assets,

[00:22:40] for example there's no pipeline on its website,

[00:22:43] Ashley gave us some color on what stage it's at

[00:22:46] with its own pipeline assets.

[00:22:48] Now we're at a point where we're really just at the end

[00:22:51] of a lead optimization process for a lead program

[00:22:54] which is in the cardiopulmonary space

[00:22:56] and that is going remarkably well

[00:22:58] and so really transitioning from broad platform

[00:23:01] to that form really discovery into therapeutic asset development

[00:23:05] and bringing on the team that we need to do that as well.

[00:23:08] And then really working on partnerships,

[00:23:10] I think the unique aspect of the forna approach

[00:23:13] is that we are generating data

[00:23:15] that it sometimes is applicable to some very large

[00:23:18] and complex disease areas.

[00:23:20] Like I said obesity clearly is one of them.

[00:23:22] We've had really productive conversations

[00:23:24] with pharma interested in new approaches to heart failure

[00:23:26] and also CNS disease.

[00:23:29] We've had more data and utility to the platform

[00:23:32] than a small lead biotech team can accomplish by themselves.

[00:23:35] We started working with Nivonordis in late 2019, early 2020

[00:23:41] on an early discovery program in obesity

[00:23:44] and then we ended up expanding that program

[00:23:46] and actually ended up working with Lely-Lely

[00:23:49] on a program in obesity which we announced at the end of last year.

[00:23:52] Speaking about that partnership with Lely,

[00:23:54] that deal was announced in December 2023

[00:23:57] and under the terms of that agreement

[00:23:59] forna bio will receive an upfront payment

[00:24:01] including equity investment with potential milestone payments

[00:24:04] of 494 million.

[00:24:06] Forna is also eligible for royalties on any future sales.

[00:24:10] If you ask me, that's not too shabby of a deal

[00:24:13] for a company that had been around for just over five years.

[00:24:16] I asked Ashley how that partnership came about

[00:24:19] whether they were actively approaching potential partners

[00:24:22] or whether they had big pharma already knocking on their door.

[00:24:26] It's a mix of both.

[00:24:27] We certainly had some disease areas that we knew

[00:24:29] were going to be good areas for partners pretty early on.

[00:24:32] Obesity actually was on our radar.

[00:24:33] There were a number of reasons why the 13-in-ground scroll

[00:24:36] is an amazing model for obesity discovery

[00:24:38] and when we started looking at this space in 2019,

[00:24:41] there were not that many big pharma

[00:24:43] that were willing to make bets in the obesity space.

[00:24:46] I feel that has changed very rapidly

[00:24:48] in a very short period of time.

[00:24:50] Nivonordisk at that time was one of the companies

[00:24:52] that was very very committed to obesity discovery

[00:24:54] that we intentionally made some connections to our network

[00:24:57] to folks who were leading obesity discovery.

[00:24:59] Obonordisk had a really productive set of collaborations with them

[00:25:02] but then we've also had pharma reach into us,

[00:25:05] particularly since the announcement of our work with Eli Lilly

[00:25:08] for interest in other disease areas, particularly around CNS.

[00:25:12] We've had some folks reach in and ask specifically

[00:25:14] kind of what can we do in these other disease areas

[00:25:17] and so it's been a little bit of both.

[00:25:19] Ashley explained that a lot of potential pharma partners

[00:25:21] wanted to see exactly how fauna's data dove-tailed

[00:25:24] with known human disease networks and human data.

[00:25:27] So a lot of that financing that they raised went towards

[00:25:30] integrating human genomic data onto its platform

[00:25:33] and now around 40% of that platform called Convergence

[00:25:37] is human data, hence why it's now drawing a lot of pharma interest.

[00:25:43] So the entire UK Biobake is integrated there.

[00:25:45] We have close to 200 functional genomic studies

[00:25:48] and a lot of that is human data that are integrated as well

[00:25:51] and allows us to very rapidly identify which networks we're finding

[00:25:55] in species like the 13-ling crowns for all

[00:25:57] and how they're modified in human diseases

[00:25:59] and that was a big request from some of the big pharma partners

[00:26:03] we were working with to really see that data put together.

[00:26:06] Obesity will likely be a big focus for the company

[00:26:08] given the current hype around drugs like Novenordisk's

[00:26:11] Semiglutide, commonly known as Ozenpic or Wegovi,

[00:26:15] as well as Lily's Tezepetide, also known as Mungaru and Zepbown.

[00:26:20] The FDA says there's still a shortage of the drugs.

[00:26:23] These are already raking in huge multi-billion dollar sales

[00:26:27] for diabetes and obesity, as well as a lot of off-label use

[00:26:31] for straight out, plain weight loss.

[00:26:33] And given the demand, there's a lot more room

[00:26:36] for other pharma players to get involved with better drugs

[00:26:39] and we're seeing that now.

[00:26:40] Ashley says that Forna's 13-lined ground squirrel

[00:26:44] becomes a very valuable species to study

[00:26:47] when it comes to the broader obesity conversation.

[00:26:50] You know, 13-lined ground squirrel is a species

[00:26:52] that doubles in body weight every year

[00:26:54] and it goes through really rapid periods

[00:26:56] of metabolic rate increase over the hibernation time span.

[00:26:59] So during those rapid re-rousal periods

[00:27:02] they increase their metabolism 235 fold in an hour.

[00:27:06] So there's very few models of human data

[00:27:09] that you can look at that have that extreme metabolic flexibility

[00:27:12] so for pharma that are interested in things like

[00:27:15] how do you reset human metabolism to a new set rate?

[00:27:18] How do you modify energy expenditure in a very critical way?

[00:27:21] There's very few other models that are as useful.

[00:27:24] One of the concerns around drugs like Wagovie for obesity

[00:27:27] is that while these drugs are showing huge success

[00:27:30] on the weight loss front,

[00:27:31] there are some concerns around unwanted loss of muscle mass.

[00:27:35] But the 13-lined ground squirrel exhibits something completely different.

[00:27:39] These are species that, even though they are motionless

[00:27:42] under the ground for seven months and a year,

[00:27:45] they don't lose lean muscle mass.

[00:27:47] They actually start to rebuild lean muscle

[00:27:49] toward the end of the hibernation period

[00:27:51] and of course maintenance and rebuilding of lean muscle

[00:27:54] is a huge topic right now.

[00:27:55] The prevalence and use of the GLP-1 agonist

[00:27:58] sets one of the side effects that everybody is concerned about.

[00:28:00] And fauna's genetic data on this species

[00:28:02] will likely be something of high interest

[00:28:04] to companies developing next generation obesity drugs.

[00:28:08] We've tried for years to figure out how to offer people tools

[00:28:13] to better manage diseases like obesity and diabetes

[00:28:17] and heart disease.

[00:28:18] And I think that having a whole new tool set for doing that

[00:28:24] is something that's just obviously needed.

[00:28:26] Like we need a different perspective on this problem.

[00:28:29] And the fact that we know that there are other species out there

[00:28:32] that don't have these diseases,

[00:28:35] is that actually have evolved protections against

[00:28:38] the health side effects that harm people

[00:28:40] actually means that this is for me,

[00:28:44] at this point in time an opportunity

[00:28:46] that hasn't been explored yet and really needs to be.

[00:28:49] And so I'm really excited to see what happens

[00:28:51] especially with something like obesity

[00:28:53] which really is one that makes a lot of sense

[00:28:55] in terms of what we know about hibernation.

[00:28:59] But even with some great initial strides

[00:29:02] impressive financing and partnerships

[00:29:04] Forna will no doubt encounter unique challenges

[00:29:07] as it navigates uncharted borders.

[00:29:10] And I asked Eleanor to hypothesize on what the company

[00:29:13] has to carefully think about moving forward.

[00:29:16] I can tell you what I've been thinking about most

[00:29:18] as far as the challenges in this field more generally

[00:29:21] and the work that we're doing still

[00:29:23] on trying to understand things like hibernation

[00:29:26] and that's actually sort of,

[00:29:28] it's sort of the flip side of it being an evolved trait

[00:29:31] which is that it's also probably going to be

[00:29:34] a complex trait meaning that changes in many,

[00:29:37] many, many different genes are actually involved

[00:29:40] in conferring these traits on a species.

[00:29:43] It's not like they just went and changed one gene

[00:29:45] and they said, oh yeah we're just going to change this one protein

[00:29:47] and then voila the species can do absolutely amazing things.

[00:29:50] It's like something changed and then something changed

[00:29:52] and then something changed in response

[00:29:54] and it's basically you're going to have lots and lots

[00:29:56] of different tweaks to physiology that are feeding into

[00:29:59] the ability to deal with the side effects of obesity

[00:30:01] or not become obese in the first place.

[00:30:03] And so I think one of the biggest challenges

[00:30:05] is going to be figuring out how you take that complexity

[00:30:08] of kind of real world evolution and identify key drivers

[00:30:13] that would be the basis of actually developing a therapeutic

[00:30:16] that had the efficacy that our medical system expects

[00:30:19] from a therapeutic.

[00:30:21] And when it comes to getting therapeutics into the clinic

[00:30:23] a big focus is the risk benefit profile

[00:30:26] and I myself wondered whether Fauna's unique approach

[00:30:29] might heal drug targets that are potentially safer to hit.

[00:30:33] You know, I hope so.

[00:30:35] It's a field that is just really starting to grow now

[00:30:39] that genomics is scaled up to a level

[00:30:41] that we can actually start comparing hundreds of species

[00:30:44] and so it's not likely have a track record

[00:30:46] of a whole bunch of other drug development efforts

[00:30:49] that have gone down the root of trying to follow

[00:30:51] something that was discovered through evolutionary signals

[00:30:54] in order to figure out how well it worked.

[00:30:56] But I do think that starting from the standpoint of knowing

[00:31:01] that a physiological change is something

[00:31:03] that was made in another species

[00:31:05] and wasn't harmful and was effective, you know,

[00:31:09] when we develop a drug now

[00:31:11] we tend to go try it in a couple of other species

[00:31:13] you know laboratory models just to check that it's safe

[00:31:15] and in a sense some of those safety trials

[00:31:18] have already been done before you start the process

[00:31:21] when you start from an evolutionary standpoint.

[00:31:24] Fauna is still very early in its journey.

[00:31:27] It's really at the start and as I usually like to ask CEOs

[00:31:30] where they see the company from a business perspective

[00:31:33] five to ten years down the road,

[00:31:35] whether it be M&A, IPO or something else,

[00:31:37] I think it's a little bit too early

[00:31:39] for Fauna to answer that question

[00:31:41] but it's really an exciting time for the company

[00:31:43] as it starts to narrow down its pipeline,

[00:31:46] work with bigger pharma partners

[00:31:48] whilst also broadening its research

[00:31:50] to study different species.

[00:31:52] I think the potential for the Fauna approach

[00:31:54] is extremely broad

[00:31:56] and aside from what we can learn from 13-Line Ground Scroll

[00:31:59] which has been a lot of the focus for our early discovery efforts,

[00:32:02] there are many other species that have really compelling disease resistance traits

[00:32:05] so we can study through this approach.

[00:32:07] One example is a species called the spining mouse

[00:32:09] which is not a hibernator

[00:32:11] but they have their remarkable ability to repair

[00:32:14] damage to many organs in the body

[00:32:16] without any scarring or fibrosis

[00:32:18] including things like the brain and the spinal cord and kidney

[00:32:21] tissues that are normally considered to not essentially be regenerative

[00:32:25] so our internal innovations team has identified

[00:32:28] over 30 species that have really compelling disease resistance traits

[00:32:32] that we could study through a very similar approach

[00:32:34] that covers a very large variety of disease areas

[00:32:38] so we're just trying to be very mindful

[00:32:40] in terms of how we progress assets from the platform

[00:32:43] and make sure that we have partners for those assets

[00:32:45] and can fill meaningful drug programs from the data

[00:32:48] but their larger potential is there

[00:32:50] and there's very few other companies that are currently working in that space

[00:32:53] so there's a lot of low ocean in terms of looking at this novel types of genomics data

[00:32:57] and linking it to human disease

[00:32:59] so I think we'll be doing some of this through partnerships

[00:33:01] and some of this we'll do internally.

[00:33:03] So that's it for another episode of Raising Biotech

[00:33:09] definitely an interesting and unorthodox approach to drug discovery

[00:33:13] that will no doubt be fascinating to follow

[00:33:15] including Fauna's partnership with NASA

[00:33:18] to one day send hibernating squirrels to space

[00:33:22] Thanks to my guests Ashley Zender and Eleanor Carlson

[00:33:25] for coming onto the podcast

[00:33:27] and sharing their incredible insight

[00:33:29] and thanks to you for tuning in

[00:33:32] If you liked the episode please remember to subscribe

[00:33:34] and leave us a review on Apple or Spotify

[00:33:37] I'm Serani Fernando and I'll see you next time

[00:33:40] on Raising Biotech