Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2: You're listening to Bloomberg Business Week with Carol Masser and
Speaker 2: Tim Stenoveek on Bloomberg Radio. Thinking about leverage and trade
Speaker 2: negotiations between the US and China. We often talk about
Speaker 2: China's large domestic market and it's rarests, but not that often, Carol,
Speaker 2: we talk about medicine.
Speaker 1: No, we don't, but we are going to talk about
Speaker 1: it now.
Speaker 2: We're going to a Bloomberg piece from last week, actually
Speaker 2: ahead of this week's meeting between the President and Chinese President.
Speaker 2: Hijin Pang notes that China's power arrests on its grip
Speaker 2: over the global supply of active pharmaceutical ingredients or APIs,
Speaker 2: which are core components of commercial drugs. Beijing's broad sway
Speaker 2: extends upstream to the raw chemicals, the solvents, the reagents
Speaker 2: known as key starting materials needed to make the APIs themselves.
Speaker 2: Doctor Christina Smolke thinks a lot about this. She's the
Speaker 2: co founder and CEO of Anthea. It's a pharmaceutical ingredient producer.
Speaker 2: Their goal is to end at drug shortage. As she
Speaker 2: joins us from Memlo Park, California, doctor Smolkie. Great to
Speaker 2: have you on the program. A pharmaceutical ingredient producer. We
Speaker 2: think about this, I don't. I don't often think about
Speaker 2: you know, when I take a pill, what actually goes
Speaker 2: into the manufacturer of these pills. What I do know
Speaker 2: is that oftentimes it comes from outside of the United States.
Speaker 2: Oftentimes the supply chain spans the globe. Is that a
Speaker 2: national security risk?
Speaker 3: Yeah? Thanks for that question. Is it is increasingly being
Speaker 3: viewed as a national security risk. And the reason is
Speaker 3: that is based upon the United States reliance on foreign
Speaker 3: sources for these materials and also the increasing frequency and
Speaker 3: duration of disruptions we are experiencing in critical life saving medicines.
Speaker 1: So tell us a little bit about what you guys
Speaker 1: are doing specifically. I agree with Tim. I think we
Speaker 1: just like get our prescriptions, we take them, and not
Speaker 1: until there's a problem do we like, wait, what's in
Speaker 1: this stuff? So talk to us about what you are
Speaker 1: doing or trying to do.
Speaker 3: Yes, Anthea has developed a new way to produce these
Speaker 3: critical life saving pharmaceutical ingredients, and it's leveraging a technology
Speaker 3: that allows us to do so in a way that
Speaker 3: is more resilient, more predictable, and addresses a lot of
Speaker 3: the pain points we see in the current in the
Speaker 3: current industry. In particular, what Anthea's technology allows us to
Speaker 3: do is to shift from producing these medicines overseas in
Speaker 3: very long as I said, very basically vulnerable multi step
Speaker 3: processes to a process that looks closer to brewing beer.
Speaker 3: So we're able to take yeast and we basically modify
Speaker 3: those yeast so that they can basically, instead of producing beer,
Speaker 3: can produce these critical life saving pharmaceutical ingredients. And one
Speaker 3: of the key advantages of that is then allows us
Speaker 3: to move those production processes more locally into the United States.
Speaker 2: So at what point the processes does that does that happen?
Speaker 2: I mean, are you are you? Are you taking it
Speaker 2: from the perspective of okay, you're you understand what goes
Speaker 2: into a given medication and you can create the ingredients
Speaker 2: from the yeast then, or or do you sort of
Speaker 2: reverse engineer it? You take the final product and you say, okay,
Speaker 2: this is what we need to produce and here's how
Speaker 2: we can do it. Like, how does that work? Scientifically?
Speaker 3: Great? Yes, great question, so scientifically it will it works?
Speaker 3: As us saying this is the molecule that we want
Speaker 3: to produce. This is the medicine that we want to produce,
Speaker 3: So we know the endpoint, we know the structure, and
Speaker 3: then we basically will modify program the yeast and really
Speaker 3: teach them through making modifications to their genome to be
Speaker 3: able to then synthesize those those pharmaceutical ingredients from sugar.
Speaker 3: So essentially what the process will look like at the scales,
Speaker 3: we throw the yeast into a large vat, we feed
Speaker 3: them sugar, and they're basically working as miniature medicine factories
Speaker 3: to convert that sugar directly to the pharmaceutical ingredient that
Speaker 3: then ultimately will be formulated into the medicine that patients take.
Speaker 1: So how could this help me understand? How is this
Speaker 1: being done already?
Speaker 3: Yes, it is being done already. So Anthea launched We
Speaker 3: launched our first product commercially now about a year ago
Speaker 3: and you know, basically seen tremendous response from the marketing
Speaker 3: from our customers again really responding to the solutions that
Speaker 3: this brings in terms of shoring up their supply chains
Speaker 3: and their ability to have very stable, very consistent supply
Speaker 3: of these medicines. So it's now a technology that's fully
Speaker 3: commercial and you know, one of the I think very
Speaker 3: powerful things about this technology is it a true platform
Speaker 3: we've built out While we've launched our first product commercially,
Speaker 3: we've built out a very large pipeline of pharmaceutical ingredients
Speaker 3: that we are applying the strategy to and now queued
Speaker 3: up to basically launch our second and third products.
Speaker 2: Shortly, how do you characterize the makeup of the medications
Speaker 2: or the ingredients that since they're produced from yeast, how
Speaker 2: are they classified? Like? Are they synthetic? Are they naturally occurring?
Speaker 2: Like are they basically yes, Yeah, I don't understand that question.
Speaker 2: Great question.
Speaker 3: So one of the things to really highlight here is
Speaker 3: that we already leverage fermentation to produce medicines in our
Speaker 3: pharmaceutical supply chain. Insulin is an example of that. You know,
Speaker 3: we used to extract insulin from animals and now it's
Speaker 3: all produced via fermentation process. So within the industry, we
Speaker 3: follow very standard procedures for how the molecules that we
Speaker 3: produce are characterized. We ensure that they basically are exactly
Speaker 3: the same as what has already been used in these
Speaker 3: meta and meet all of the quality requirements. That are
Speaker 3: needed to ensure patients not just have access to these
Speaker 3: life say even to medicines, but that they are safe
Speaker 3: and consistent for them as well.
Speaker 1: Christina, what's the FDA oversight of all of this?
Speaker 3: Yes, it's it's These are basically tracked and approved by
Speaker 3: the FDA. And so again, because the idea of fermenting
Speaker 3: or using biosynthesis to produce medicines is not novel within
Speaker 3: the industry, there are regulatory basically steps in terms of
Speaker 3: how they are approved, and they has already gone through
Speaker 3: those approval processes. Everything is produced within the quality that
Speaker 3: the FDA requires.
Speaker 2: So what so if a pharmaceutic pharmaceutical company, like, what
Speaker 2: what is your relationship with a pharmaceutical company? If pharmaceutical
Speaker 2: company were to come to you and say we want
Speaker 2: you to manufacture this, is that how it works?
Speaker 3: Yeah, at this Dame age, the medicines that we're bringing
Speaker 3: to market are are again there were focused on the
Speaker 3: medicines that played the most critical role in public health,
Speaker 3: but really transforming and rebuilding those supply chains so that
Speaker 3: drug shortages you know, do not infect patients you know,
Speaker 3: going forward, and so we're able to basically sell the ingredient.
Speaker 3: Two pharmaceutical companies globally, you know, and and there are
Speaker 3: pharmaceutical customers basically will take that ingredient and then formulate
Speaker 3: it into the drug product that the patient actually takes.
Speaker 2: You know, I ran into an issue a couple of
Speaker 2: years ago. I've talked about this on air before, but
Speaker 2: it was with a max of syllin.
Speaker 1: Yeah, I remember this.
Speaker 2: My Yeah, my son had this terrible ear infection, like
Speaker 2: just screaming, and the doctor couldn't find a pharmacy that
Speaker 2: had a max oficillin coming off the pen it was
Speaker 2: coming off the pandemic. And it was interesting because a
Speaker 2: few months before that, we had had a I think
Speaker 2: it was a big take story that talked about the
Speaker 2: profit margins are so all on some of these generics
Speaker 2: that it's hard to find producers to actually make these drugs. Ultimately,
Speaker 2: we did find a pharmacy that had it, thank god.
Speaker 2: And you know, you take that medication and within hours
Speaker 2: that you're infection is better. But is that the type
Speaker 2: of thing, doctor, that you're trying to solve or is
Speaker 2: it more advanced drugs more complicated to us than that.
Speaker 3: No, it's exactly the type of it's first and foremost
Speaker 3: is exactly the type of thing that you just highlighted, right,
Speaker 3: and you're not alone. I've experienced the same thing, whether
Speaker 3: it's you know, basic antibiotics, cold medicines, you know, things
Speaker 3: that are required for surgery. It's you know, we don't
Speaker 3: expect these to be in shortage because they're not the
Speaker 3: most advanced kind of latest drugs, but they are. And
Speaker 3: that's the type of thing that we are that we're
Speaker 3: bringing to market you know, today right now and solving
Speaker 3: those issues. And one of the things I would just highlight,
Speaker 3: you know, coming back to by leveraging this technology, it
Speaker 3: solves not just being able to synthesize it domestically so
Speaker 3: that we have greater control and transparency over these supply chain.
Speaker 3: It does so at a fraction of the cost, because
Speaker 3: it's really leveraging a novel technology to make sure that
Speaker 3: we can synthesize them in more efficient and cost effective ways.
Speaker 3: So it addresses some of that some of that issue
Speaker 3: that you just described. I mean, now the same technology
Speaker 3: can also be applied to new medicines, you know, and
Speaker 3: advanced medicines as well, and that's really a longer term
Speaker 3: trajectory that in THEYA is looking at. But right now,
Speaker 3: what we're bringing to market are the ones that are
Speaker 3: most critical for public health.
Speaker 1: So when you're doing biologics or biosynthesis, Christina, I mean
Speaker 1: my understanding. You know, you're using a living organism and
Speaker 1: engineered systems or living organisms raised a lot of questions
Speaker 1: when it comes to biosafety or you know, unintended by products,
Speaker 1: how to regulate them. So I'm just curious. That makes
Speaker 1: it difficult, right and also providing consistency, so that is
Speaker 1: one of the things that is is a risk.
Speaker 3: It's a great question. And let me highlight a couple
Speaker 3: things about the technology itself. At the end of the day,
Speaker 3: the product that we sell and the product that goes
Speaker 3: to patients, it is a chemical we are not it's
Speaker 3: you know, the living organism isn't actually not going into
Speaker 3: the patients. I guess we use a yeast sale to
Speaker 3: make the product, but ultimately we purify that chemical down
Speaker 3: to greater than ninety nine you know, percent purity and
Speaker 3: meet all of the existing requirements. So it's very well characterized.
Speaker 3: So that carryover of sort of an uncontrolled you know,
Speaker 3: living organism into a patient that doesn't happen with this technology.
Speaker 3: The other thing I will just highlight, and what we
Speaker 3: have been able to show with this platform is that
Speaker 3: we can program the synthesis so precisely that we actually
Speaker 3: are able to provide products that have fewer byproducts than
Speaker 3: what we see through other manufacturing approaches.
Speaker 1: Hey, just lastly, twenty and I know you guys did
Speaker 1: a Series C about fifty six million dollars. When is
Speaker 1: it commercially viable? And forgive me, it's just twenty seconds here.
Speaker 2: No.
Speaker 3: Absolutely, As I mentioned, Anthea is commercial at this stage
Speaker 3: and we'rek And now what we're doing is we're leveraging
Speaker 3: that funding, leveraging the support from the investors to really
Speaker 3: grow and ramp basically how we bring our products to market,
Speaker 3: what markets we can enter and ensure that this is
Speaker 3: truly disruptive.
Speaker 1: Come back and keep us informed. Christina Smolkey, co founder
Speaker 1: CEO of Anthea joining us