WEBVTT - Building Pharmaceutical Supply-Chain Resilience 0:00:02.520 --> 0:00:07.040 Bloomberg Audio Studios, Podcasts, Radio News. 0:00:07.960 --> 0:00:11.680 You're listening to Bloomberg Business Week with Carol Masser and 0:00:11.760 --> 0:00:15.960 Tim Stenoveek on Bloomberg Radio. Thinking about leverage and trade 0:00:16.040 --> 0:00:18.520 negotiations between the US and China. We often talk about 0:00:18.600 --> 0:00:22.960 China's large domestic market and it's rarests, but not that often, Carol, 0:00:23.280 --> 0:00:24.880 we talk about medicine. 0:00:24.640 --> 0:00:27.040 No, we don't, but we are going to talk about 0:00:27.040 --> 0:00:27.240 it now. 0:00:27.280 --> 0:00:29.200 We're going to a Bloomberg piece from last week, actually 0:00:29.240 --> 0:00:32.519 ahead of this week's meeting between the President and Chinese President. 0:00:32.560 --> 0:00:35.840 Hijin Pang notes that China's power arrests on its grip 0:00:35.880 --> 0:00:39.280 over the global supply of active pharmaceutical ingredients or APIs, 0:00:39.720 --> 0:00:43.840 which are core components of commercial drugs. Beijing's broad sway 0:00:43.880 --> 0:00:46.720 extends upstream to the raw chemicals, the solvents, the reagents 0:00:46.760 --> 0:00:50.479 known as key starting materials needed to make the APIs themselves. 0:00:51.040 --> 0:00:53.400 Doctor Christina Smolke thinks a lot about this. She's the 0:00:53.400 --> 0:00:57.080 co founder and CEO of Anthea. It's a pharmaceutical ingredient producer. 0:00:57.480 --> 0:00:59.240 Their goal is to end at drug shortage. As she 0:00:59.320 --> 0:01:02.760 joins us from Memlo Park, California, doctor Smolkie. Great to 0:01:02.760 --> 0:01:06.480 have you on the program. A pharmaceutical ingredient producer. We 0:01:06.520 --> 0:01:09.240 think about this, I don't. I don't often think about 0:01:09.280 --> 0:01:10.959 you know, when I take a pill, what actually goes 0:01:11.400 --> 0:01:13.520 into the manufacturer of these pills. What I do know 0:01:14.280 --> 0:01:17.560 is that oftentimes it comes from outside of the United States. 0:01:17.560 --> 0:01:21.080 Oftentimes the supply chain spans the globe. Is that a 0:01:21.160 --> 0:01:22.200 national security risk? 0:01:24.280 --> 0:01:27.520 Yeah? Thanks for that question. Is it is increasingly being 0:01:27.600 --> 0:01:30.520 viewed as a national security risk. And the reason is 0:01:30.600 --> 0:01:34.240 that is based upon the United States reliance on foreign 0:01:34.280 --> 0:01:39.319 sources for these materials and also the increasing frequency and 0:01:39.400 --> 0:01:44.240 duration of disruptions we are experiencing in critical life saving medicines. 0:01:45.720 --> 0:01:48.360 So tell us a little bit about what you guys 0:01:48.480 --> 0:01:51.080 are doing specifically. I agree with Tim. I think we 0:01:51.240 --> 0:01:53.840 just like get our prescriptions, we take them, and not 0:01:53.920 --> 0:01:56.200 until there's a problem do we like, wait, what's in 0:01:56.240 --> 0:01:59.520 this stuff? So talk to us about what you are 0:01:59.560 --> 0:02:00.760 doing or trying to do. 0:02:02.400 --> 0:02:07.360 Yes, Anthea has developed a new way to produce these 0:02:07.480 --> 0:02:12.760 critical life saving pharmaceutical ingredients, and it's leveraging a technology 0:02:12.800 --> 0:02:15.200 that allows us to do so in a way that 0:02:15.360 --> 0:02:19.320 is more resilient, more predictable, and addresses a lot of 0:02:19.360 --> 0:02:21.760 the pain points we see in the current in the 0:02:21.760 --> 0:02:25.560 current industry. In particular, what Anthea's technology allows us to 0:02:25.560 --> 0:02:30.440 do is to shift from producing these medicines overseas in 0:02:31.120 --> 0:02:35.240 very long as I said, very basically vulnerable multi step 0:02:35.280 --> 0:02:39.280 processes to a process that looks closer to brewing beer. 0:02:39.880 --> 0:02:43.959 So we're able to take yeast and we basically modify 0:02:44.040 --> 0:02:48.440 those yeast so that they can basically, instead of producing beer, 0:02:48.560 --> 0:02:52.800 can produce these critical life saving pharmaceutical ingredients. And one 0:02:52.800 --> 0:02:55.359 of the key advantages of that is then allows us 0:02:55.400 --> 0:02:59.360 to move those production processes more locally into the United States. 0:02:59.480 --> 0:03:02.079 So at what point the processes does that does that happen? 0:03:02.120 --> 0:03:04.560 I mean, are you are you? Are you taking it 0:03:04.600 --> 0:03:06.839 from the perspective of okay, you're you understand what goes 0:03:06.880 --> 0:03:11.480 into a given medication and you can create the ingredients 0:03:11.520 --> 0:03:14.000 from the yeast then, or or do you sort of 0:03:14.800 --> 0:03:18.240 reverse engineer it? You take the final product and you say, okay, 0:03:18.520 --> 0:03:20.360 this is what we need to produce and here's how 0:03:20.400 --> 0:03:22.440 we can do it. Like, how does that work? Scientifically? 0:03:23.800 --> 0:03:27.560 Great? Yes, great question, so scientifically it will it works? 0:03:28.160 --> 0:03:31.880 As us saying this is the molecule that we want 0:03:31.919 --> 0:03:34.000 to produce. This is the medicine that we want to produce, 0:03:34.040 --> 0:03:37.160 So we know the endpoint, we know the structure, and 0:03:37.200 --> 0:03:43.080 then we basically will modify program the yeast and really 0:03:43.680 --> 0:03:47.680 teach them through making modifications to their genome to be 0:03:47.760 --> 0:03:53.240 able to then synthesize those those pharmaceutical ingredients from sugar. 0:03:54.000 --> 0:03:56.800 So essentially what the process will look like at the scales, 0:03:56.840 --> 0:03:58.880 we throw the yeast into a large vat, we feed 0:03:58.920 --> 0:04:04.280 them sugar, and they're basically working as miniature medicine factories 0:04:04.320 --> 0:04:07.800 to convert that sugar directly to the pharmaceutical ingredient that 0:04:07.880 --> 0:04:12.240 then ultimately will be formulated into the medicine that patients take. 0:04:13.680 --> 0:04:17.000 So how could this help me understand? How is this 0:04:17.080 --> 0:04:19.840 being done already? 0:04:20.040 --> 0:04:23.520 Yes, it is being done already. So Anthea launched We 0:04:23.640 --> 0:04:26.880 launched our first product commercially now about a year ago 0:04:28.120 --> 0:04:32.480 and you know, basically seen tremendous response from the marketing 0:04:32.520 --> 0:04:36.600 from our customers again really responding to the solutions that 0:04:36.640 --> 0:04:40.120 this brings in terms of shoring up their supply chains 0:04:40.120 --> 0:04:44.640 and their ability to have very stable, very consistent supply 0:04:44.760 --> 0:04:49.040 of these medicines. So it's now a technology that's fully 0:04:49.040 --> 0:04:52.520 commercial and you know, one of the I think very 0:04:52.560 --> 0:04:55.880 powerful things about this technology is it a true platform 0:04:56.040 --> 0:04:59.279 we've built out While we've launched our first product commercially, 0:04:59.320 --> 0:05:03.720 we've built out a very large pipeline of pharmaceutical ingredients 0:05:03.760 --> 0:05:07.000 that we are applying the strategy to and now queued 0:05:07.080 --> 0:05:09.200 up to basically launch our second and third products. 0:05:09.200 --> 0:05:13.320 Shortly, how do you characterize the makeup of the medications 0:05:13.400 --> 0:05:18.320 or the ingredients that since they're produced from yeast, how 0:05:18.640 --> 0:05:22.920 are they classified? Like? Are they synthetic? Are they naturally occurring? 0:05:23.160 --> 0:05:26.880 Like are they basically yes, Yeah, I don't understand that question. 0:05:28.040 --> 0:05:28.799 Great question. 0:05:29.040 --> 0:05:32.599 So one of the things to really highlight here is 0:05:32.640 --> 0:05:37.080 that we already leverage fermentation to produce medicines in our 0:05:37.080 --> 0:05:40.960 pharmaceutical supply chain. Insulin is an example of that. You know, 0:05:41.000 --> 0:05:44.760 we used to extract insulin from animals and now it's 0:05:44.800 --> 0:05:49.080 all produced via fermentation process. So within the industry, we 0:05:49.200 --> 0:05:53.000 follow very standard procedures for how the molecules that we 0:05:53.120 --> 0:05:57.279 produce are characterized. We ensure that they basically are exactly 0:05:57.279 --> 0:05:59.720 the same as what has already been used in these 0:05:59.760 --> 0:06:05.400 meta and meet all of the quality requirements. That are 0:06:05.400 --> 0:06:08.440 needed to ensure patients not just have access to these 0:06:08.480 --> 0:06:11.159 life say even to medicines, but that they are safe 0:06:11.160 --> 0:06:12.440 and consistent for them as well. 0:06:12.520 --> 0:06:15.040 Christina, what's the FDA oversight of all of this? 0:06:16.240 --> 0:06:21.159 Yes, it's it's These are basically tracked and approved by 0:06:21.200 --> 0:06:26.680 the FDA. And so again, because the idea of fermenting 0:06:26.800 --> 0:06:30.920 or using biosynthesis to produce medicines is not novel within 0:06:30.960 --> 0:06:37.520 the industry, there are regulatory basically steps in terms of 0:06:37.560 --> 0:06:40.080 how they are approved, and they has already gone through 0:06:40.120 --> 0:06:44.520 those approval processes. Everything is produced within the quality that 0:06:44.560 --> 0:06:45.719 the FDA requires. 0:06:46.560 --> 0:06:50.720 So what so if a pharmaceutic pharmaceutical company, like, what 0:06:50.720 --> 0:06:53.080 what is your relationship with a pharmaceutical company? If pharmaceutical 0:06:53.080 --> 0:06:55.479 company were to come to you and say we want 0:06:55.520 --> 0:06:57.760 you to manufacture this, is that how it works? 0:06:59.120 --> 0:07:02.240 Yeah, at this Dame age, the medicines that we're bringing 0:07:02.240 --> 0:07:06.320 to market are are again there were focused on the 0:07:06.360 --> 0:07:08.600 medicines that played the most critical role in public health, 0:07:09.120 --> 0:07:12.560 but really transforming and rebuilding those supply chains so that 0:07:13.160 --> 0:07:16.560 drug shortages you know, do not infect patients you know, 0:07:16.640 --> 0:07:21.160 going forward, and so we're able to basically sell the ingredient. 0:07:21.720 --> 0:07:26.200 Two pharmaceutical companies globally, you know, and and there are 0:07:26.240 --> 0:07:31.840 pharmaceutical customers basically will take that ingredient and then formulate 0:07:31.880 --> 0:07:35.080 it into the drug product that the patient actually takes. 0:07:35.600 --> 0:07:37.040 You know, I ran into an issue a couple of 0:07:37.080 --> 0:07:38.720 years ago. I've talked about this on air before, but 0:07:38.760 --> 0:07:39.960 it was with a max of syllin. 0:07:40.240 --> 0:07:41.080 Yeah, I remember this. 0:07:41.680 --> 0:07:44.760 My Yeah, my son had this terrible ear infection, like 0:07:44.840 --> 0:07:49.840 just screaming, and the doctor couldn't find a pharmacy that 0:07:49.880 --> 0:07:52.120 had a max oficillin coming off the pen it was 0:07:52.120 --> 0:07:54.080 coming off the pandemic. And it was interesting because a 0:07:54.080 --> 0:07:55.960 few months before that, we had had a I think 0:07:55.960 --> 0:07:58.840 it was a big take story that talked about the 0:07:58.880 --> 0:08:01.440 profit margins are so all on some of these generics 0:08:02.080 --> 0:08:06.760 that it's hard to find producers to actually make these drugs. Ultimately, 0:08:06.960 --> 0:08:08.840 we did find a pharmacy that had it, thank god. 0:08:08.880 --> 0:08:10.760 And you know, you take that medication and within hours 0:08:10.960 --> 0:08:13.800 that you're infection is better. But is that the type 0:08:13.840 --> 0:08:16.640 of thing, doctor, that you're trying to solve or is 0:08:16.680 --> 0:08:19.560 it more advanced drugs more complicated to us than that. 0:08:19.720 --> 0:08:23.680 No, it's exactly the type of it's first and foremost 0:08:23.760 --> 0:08:26.200 is exactly the type of thing that you just highlighted, right, 0:08:26.920 --> 0:08:29.600 and you're not alone. I've experienced the same thing, whether 0:08:29.640 --> 0:08:32.520 it's you know, basic antibiotics, cold medicines, you know, things 0:08:32.520 --> 0:08:35.480 that are required for surgery. It's you know, we don't 0:08:35.520 --> 0:08:38.360 expect these to be in shortage because they're not the 0:08:38.440 --> 0:08:41.600 most advanced kind of latest drugs, but they are. And 0:08:41.640 --> 0:08:43.440 that's the type of thing that we are that we're 0:08:43.440 --> 0:08:46.000 bringing to market you know, today right now and solving 0:08:46.000 --> 0:08:49.080 those issues. And one of the things I would just highlight, 0:08:49.200 --> 0:08:53.680 you know, coming back to by leveraging this technology, it 0:08:53.800 --> 0:08:57.000 solves not just being able to synthesize it domestically so 0:08:57.040 --> 0:08:59.959 that we have greater control and transparency over these supply chain. 0:09:00.559 --> 0:09:03.400 It does so at a fraction of the cost, because 0:09:03.400 --> 0:09:06.880 it's really leveraging a novel technology to make sure that 0:09:06.920 --> 0:09:10.720 we can synthesize them in more efficient and cost effective ways. 0:09:10.760 --> 0:09:13.280 So it addresses some of that some of that issue 0:09:13.320 --> 0:09:15.840 that you just described. I mean, now the same technology 0:09:15.880 --> 0:09:18.920 can also be applied to new medicines, you know, and 0:09:19.240 --> 0:09:22.560 advanced medicines as well, and that's really a longer term 0:09:23.000 --> 0:09:25.600 trajectory that in THEYA is looking at. But right now, 0:09:25.640 --> 0:09:27.400 what we're bringing to market are the ones that are 0:09:27.440 --> 0:09:28.760 most critical for public health. 0:09:29.240 --> 0:09:35.040 So when you're doing biologics or biosynthesis, Christina, I mean 0:09:35.080 --> 0:09:38.760 my understanding. You know, you're using a living organism and 0:09:38.920 --> 0:09:42.240 engineered systems or living organisms raised a lot of questions 0:09:42.280 --> 0:09:48.520 when it comes to biosafety or you know, unintended by products, 0:09:48.559 --> 0:09:52.440 how to regulate them. So I'm just curious. That makes 0:09:52.440 --> 0:09:56.920 it difficult, right and also providing consistency, so that is 0:09:56.960 --> 0:10:02.079 one of the things that is is a risk. 0:10:02.520 --> 0:10:05.800 It's a great question. And let me highlight a couple 0:10:05.880 --> 0:10:08.800 things about the technology itself. At the end of the day, 0:10:08.840 --> 0:10:11.080 the product that we sell and the product that goes 0:10:11.120 --> 0:10:14.600 to patients, it is a chemical we are not it's 0:10:14.760 --> 0:10:17.200 you know, the living organism isn't actually not going into 0:10:17.200 --> 0:10:20.960 the patients. I guess we use a yeast sale to 0:10:21.000 --> 0:10:26.240 make the product, but ultimately we purify that chemical down 0:10:26.320 --> 0:10:29.640 to greater than ninety nine you know, percent purity and 0:10:29.720 --> 0:10:32.640 meet all of the existing requirements. So it's very well characterized. 0:10:32.679 --> 0:10:35.719 So that carryover of sort of an uncontrolled you know, 0:10:35.840 --> 0:10:40.520 living organism into a patient that doesn't happen with this technology. 0:10:41.400 --> 0:10:43.680 The other thing I will just highlight, and what we 0:10:43.720 --> 0:10:45.839 have been able to show with this platform is that 0:10:46.280 --> 0:10:51.120 we can program the synthesis so precisely that we actually 0:10:51.160 --> 0:10:55.360 are able to provide products that have fewer byproducts than 0:10:55.400 --> 0:10:57.920 what we see through other manufacturing approaches. 0:10:58.120 --> 0:11:01.120 Hey, just lastly, twenty and I know you guys did 0:11:01.120 --> 0:11:05.800 a Series C about fifty six million dollars. When is 0:11:05.840 --> 0:11:08.720 it commercially viable? And forgive me, it's just twenty seconds here. 0:11:10.400 --> 0:11:10.480 No. 0:11:10.640 --> 0:11:15.120 Absolutely, As I mentioned, Anthea is commercial at this stage 0:11:15.760 --> 0:11:18.240 and we'rek And now what we're doing is we're leveraging 0:11:18.280 --> 0:11:21.079 that funding, leveraging the support from the investors to really 0:11:21.120 --> 0:11:25.160 grow and ramp basically how we bring our products to market, 0:11:25.240 --> 0:11:29.120 what markets we can enter and ensure that this is 0:11:29.120 --> 0:11:29.920 truly disruptive. 0:11:30.000 --> 0:11:33.160 Come back and keep us informed. Christina Smolkey, co founder 0:11:33.240 --> 0:11:35.960 CEO of Anthea joining us