Markku Jalkanen, founder and CEO of Faron Pharmaceuticals, shares his thoughts with BioBoss host John Simboli about leadership in biopharma and how Faron is working to develop new immunotherapies to address unmet medical needs in cancer and improve patient lives.
Markku Jalkanen, founder and CEO of Faron Pharmaceuticals, shares his thoughts with BioBoss host John Simboli about leadership in biopharma and how Faron is working to develop new immunotherapies to address unmet medical needs in cancer and improve patient lives.
Today I'm speaking with Markku Jalkanen,founder and CEO of Faron Pharmaceuticals, headquartered in Turku, Finland. Welcome to BioBoss Markku.
Markku Jalkanen:Thank you very much.
John Simboli:Markku, what led you to your role as founder and CEO of Faron Pharmaceuticals,
Markku Jalkanen:I had a tremendous desire to convert the academic inventions into real products. I had seen that happening all over the world. And then all of a sudden, I was in the middle of running a biotech center surrounded by great people making discoveries. And I had no way of moving them forward. So I really got a little bit desperate at that point. I had seen how that could happen. I lived three years in California, I went to Stanford to do additional research. I realized that there has to be there has to be a way, really, to get these inventions to the benefit of humankind. And I just started to focus more and more on that one, and then all of a sudden, you won't believe this, but it was like mid 90s, a fellow walks into my office and said, Markku, I've been told that there are a lot of projects, but no money. And he's at the time the opposite. So can we do something, and we practically set up the very first Finnish biotech company, which then demanded me to become a CEO of that, and I was rather happy in that and took it public in the summer pf 2000. I'm extremely happy with converting academic inventions into products. That's my my trade, really,
John Simboli:When you made that decision that you wanted to advance the academic work that you were doing, and perhaps bring it to patients, did you go through a long process or was it a short process of winnowing and weaning and figuring which connection you want to make to try to bring that to life?
Unknown:it was not a short period. And the longest discussions I really had were with my wife. I was in a rather secure position, being Professor at University running a state-funded unit. And then all of a sudden, I was asked to run this enterprise. So it took a year, practically, to finish that discussion. But at the end of the road, I'm really happy that we had that one. And we both were kind of happy that I did it. And partially, it also involved her discoveries as well. And obviously that helped. She is, at the moment, q very well known immunologist, globally. And even at Faron we are using the discoveries they have done some 10 years ago, or maybe even more than that. Sometimes you get lucky with your spouse, and you get the right type of thinking. But also her influence from California was really significant to really come to the point where we at the moment.
John Simboli:Was there anything in particular about the science that made you realize that, oh, I can do something by creating this company that I maybe couldn't do anyplace else?
Unknown:I'm a data driven person. Nothing beats good data. It's a slogan I have been using. And it's the same for the academic work, you need to create something new, that actually is remarkable in order to really get the next round of funding for you. It's the same in biotech, if we don't realize what the potential of a product is, and then build a plan how you're actually going to take it forward, there's no chances of success. So you have to all the time, think about what's the next step you do. And sometimes you do make mistakes. And it's important to learn from those mistakes. And that's what makes you really happy from time to time and realize, see why didn't I realize this earlier. But that is the way and you have to be really resilient when you do this. We have our own word in Finnish, that's called "sisu." It means that you never give up, whatever happens. Nature can beat you but you stand up and you go further.
John Simboli:Did you consider the possibility of, because the science look good to you, but you probably had an inkling how challenging it is to start a new company, did you consider trying to take the idea to an existing pharma company to see whether you could build it in house?
Unknown:Absolutely. And we did have a rather serious collaboration with one of the domestic companies but it didn't work out really the way we wanted. You know, having a new mode of action of something, for example, people are not familiar with, they often think that this is too risky. This is something that you cannot go in, because it's not really accepted by the majority of the pharma industry. And I hate that I just hate that that is partially preventing the progress of what we have. And I have a very good example of that. This is this PD-1 blockade, in the oncology area. I don't know how many products we already have on the same target, more than 10 at the moment. So why do those people not spend the time to look at something brand new.
John Simboli:What was that transition like from being in academia, to creating a new company, in the sense of what it took to be a leader? In other words, how natural was it or unnatural was it for you to assemble a team and then give direction and align forces. That's not something, necessarily, a professor is asked to do each day. It can be, but not necessarily.
Unknown:That's absolutely true. And I grew up in an entrepreneurial family. Both my mother and father had their own activities. And obviously, I learned to really understand the complications you can face. But also research, and being in the academic world, you have to be thinking about your funding every day. It's not an automatic process. If you don't produce something important, they are cut down. And that could be the end of your career. So I spent a good amount of time in that environment to understand that I can tolerate the risk. I don't get worried; I sleep well. I just take care of the things I can do and hope for the best. And here we go. To be over-worried prevents a lot of good nature of people, really.
John Simboli:What did you see when you were just, I'm curious, when you were at Stanford, what did you see there in terms of the way work was getting done that was something that you could bring into your own process when he came back to Finland?
Unknown:Well, first of all, I understood, rather well, that if you have unlimited resources, that's kind of a big, maybe overstatement, you only need to dream something big, and then you go and do it. But then it requires an environment around you that actually is looking after your inventions, are interested in taking them further. And I learned to know a lot of these early VC investors who actually said that there was no investment so bad that you couldn't get half a million of money for it. Well, this is this like 80s-90s. But that is really the key point that you have access to the capital that actually could put your ideas to work. If you think about Boston, in the 80s, was not really a high-tech center. It's now one of the global leading centers. But it was really about academic world inventions, convenient to the early biotechs. And that's what it is nowadays. And I'm happy to have that in Boston nowadays. I really like it a lot,
John Simboli:Knowing that you were creating something new in Finland in terms of helping to create this biotech space, did you consider building it someplace else? Elsewhere in Scandinavia, in the US?
Unknown:That's the thinking I have all the time, you know. Would that be easier? Or expanding faster? But then we do have a home base, so to say, and it's the academic world we see are still utilizing today and taking further the thinking what we have. And now when we have, for example, patient material from those clinical trials, they do important analysis for us. So it's part of us. And I wouldn't really like to leave it for unreasonable reasons. But to build the business further, that requires us to be able to come to the U.S. for the clinical trials, you know, building a commercial arm of the company. Maybe even thinking of becoming listed in New York, and so on. So there are a lot of reasons why we have to consider that all the time.
John Simboli:Can you remember when you were quite young, maybe eight or nine or 10, or something like that, and you were picturing that person you would be when you grew up? For most of us it was a pretty simple idea of firemen, policemen, something like that, athlete. But can you remember what that was, does it have anything to do with where you ended up in professional life?
Unknown:I have three older brothers. One younger one. So five brothers are together. I had difficulties, as a fourth,
Markku Jalkanen:When people don't know the name of the to get the attention from those three older ones. So I explored my own world. And that world was close to nature, close to company, and that's often the case with a biotech company, and biology close to things, and obviously my parents guided me really to that way. So I had a dream, when I was really young, you introduce yourself and you say, Oh, I'm the CEO at . . . that I'm really going to do something that is related to nature. It just turned out to be in the healh of human beings. And then when I got married with the MD, it just got bigger and bigger, the interest. And having done the PhD, I immediately then decided that I want to do something even bigger and applied to get to the group at Stanford. Sometimes you get lucky with these things, sometimes you have to try harder. But that's how it goes. So I'm dreaming my work, even at this stage. So I'm obviously now removing the immune suppressive elements in order to activate human immunity against cancer. That's the dream, I'm living at the moment and then you try to describe that. What what do people think you do, and then how you explain what you do each day? They understand that we are trying to make new medicines, and they appreciate that a lot. They don't understand that we don't have that much of revenue, we are spending money. That's one of the difficulties you have. Even I've tried to explain that, you know, we are investing in order to get knowledge so that we create value higher than we spend the money. But that is already rather difficult to understand. Biotechs do better in the U.S. because they are used to see those and there is a massive amount of biotechs. I can tell you a really funny thing. You know, sometimes when I go abroad to talk to investors, they may ask me, who is your domestic investor? Well, if I don't have any, I might say that it's my grandmother.
John Simboli:When you're trying to give the shortest possible description of what Faron does, then we'll, obviously, expand that here in a moment. But the shortest version of. well, Markku, what is Faron Pharmaceuticals? How do you answer that?
Markku Jalkanen:We are converting academic inventions into medicines. That's my true answer. And then I explain that we do have great funding for the medical reserves in Finland. And there is nobody who is taking benefit out of it, and I want it to be one and, I'm still continuing to do it. That's, that's my straight answer.
John Simboli:And then when they probe a little bit and say, Okay, well, what are you trying to do to help patients if your research takes you that far? Is it possible to answer that at this early stage?
Markku Jalkanen:It is because everybody knows, this is called cancer. Even though we have improved treatments, it's still really horrible to anyone who actually faces it. And we just understand, so much better, the biology of those and behavior of the cells, that there are days when this may be become a chronic disease and totally controllable. The same happened to HIV. It happened to some some other diseases, it may happen one day, also with Alzheimer's. So, yes, people understand and appreciate that a lot, because health is the value people understand and they want to have it as long as they can. So yes, that's one of the motivations I have. It's easy to explain that you are trying to generate new medicines for conditions where there are not really good treatments at the moment.
John Simboli:Do you find yourself trying to describe what that gap is between what the existing medicines are and what you're trying to achieve? Or do you talk about it more in terms of mechanism of action?
Markku Jalkanen:Depending on the background of the person. If I meet my grandmother, I will try to say that, you know, your sister died of a cancer that could have been prevented if we had this kind of a medication at that time. But then if you go to the expert, I start to talk about the commercial opportunity, because obviously, they are interested in that. And then I will say that if you look at the current immuno-oncology products, they sell maybe $60 billion a year. So the leading product, alone, more than $20 billion. So I think there is a reason why you should actually try to get this business done to the point that you can actually get it to the market. And for the size of Finland, we have five and a half million people, you know, having company, not like Pfizer, but something similar would have significant impact on our economy.
John Simboli:What is it about the way you're approaching the science that gives you hope that you can fill a gap?
Markku Jalkanen:You know, being at Stanford, I made really significant work over there. I have received royalty payments from Stanford University for more than 30 years already, because of those inventions I did over that time. Even today. It's just amazing. So let's put it this way I can see through the problem with these experimental settings and take it further. I'm not an expert in clinical development, I leave that to the other people to do. But having that kind of a ability to see through the problem, you can solve it faster than setting a committee, that spends a year thinking, what's the next step. You have to be rather immediate when you have acute problems.
John Simboli:How would you like to describe the mechanism of action of the lead product and of your platform?
Markku Jalkanen:I'm using a physiological example of it. When a woman gets pregnant, she needs to deal with the foreign material inside her. Because the embryo can be totally foreign, normally, it's half of foreign because the father has produced half of the genes that are used to grow the embryo. Why is that not rejected? Why is that not foreign Because there are cells that build an immune barrier around this embryo. So that the mother's immune host system cannot recognize the embryo as a foreign material. And they bring in bone marrow, or myeloid cells to take over the placenta. And they build this immune barrier. And when the pregnancy is over, they disappear. Now, cancer has taken over a similar kind of a mechanism, because it wants to hide from patient's immune system. So they use these same cells to build this immune barrier around them. They first grow globally. And then once they have taken over certain parts, they start to expand, they generate metastases, and then take over the whole patient. And we can now unleash this immune barrier and make the host immune system recognize those cancer cells and start to fight against them. That's what we are trying to do. There is are massive publications in the literature supporting this thinking that we need to control these immune suppressive elements. So we are not alone there. But our target is unique, we call it Clever-1 for historical reasons, so a clever way to treat cancer. But that is what it is. And obviously, we have tried to build IP around it as much as we can. Because that's commercially really important. People don't like it, but it's the only really sustainable way of build the business.
John Simboli:When people hear you describe what it is your approach is, and they get it wrong, what did they get wrong? Is there a pattern there? And then how do you get them back on track?
Markku Jalkanen:The practices people have throughout these meetings, it builds, I would say, behavior that is really difficult to change. The word is conservative. And this conservatism, that is among the clinical world, is extremely strong. And when that shows up, it's really difficult to get new ideas into practice. And people have a certain kind of habit to be critical of new thingss. They easily adapt some modification of the existing technologies, but if you come up with maybe something out of the blue, it really takes a long time. And if I think about the current immuno-oncology treatments, I happened to meet Jim Allison, who then got the Nobel Prize a few years back in the late 80s and 90s, when I was visiting Stanford because he was at Berkeley at that time. And he spoke about these checkpoint inhibitors. Now we accept them, like, you know, the daily goodies. But he had to have a long fight, really, in order to get those ideas through. So I really wonder, I mean, mankind is curious, but they also are very conservative. They want to maintain the status quo around them, because they feel safe about that.
John Simboli:One way people avoid dealing with new ideas is they sometimes slot a new idea into an idea that they're already familiar with. And they might say, oh, okay, thank you for the presentation. Markku. I understand now, Faron is like .. . X. Is there a pattern there that you say, no, that's actually not what we are. We are this.
Markku Jalkanen:They may say that we are not really interested because they don't really believe that there is any role in this disease formation. But, yet they need to. If you get to sort the data, and you really have rescued patients who were destined to die, you get the attention and their their understanding timewise may get longer, and basically, and then all of a sudden, you may see that even like, you know, something happens in their eyes. And all of a sudden, they start to ask the right questions. So is interesting to see gradually making this kind of progress, influencing other people's thinking. Having a unique target. Clever-1,, people are not familiar with that one, they don't know what the function of the molecule. They don't understand what's the relationship to the immune system. So they start to overlook the whole scenario, and they lose their interest, right away. So then it's almost impossible to get anybody convinced at that occasion. But our work, my work is to go back several times, meet them again, say that, you know, we have solved the question you may have had in the past, you may have heard that somebody else did some fantastic work with a similar kind of environment. And obviously, we do have some examples from the macrophage area where people really have been successful with similar data. And now they are progressing rather well. Obviously, we need to follow those examples and tell them, look at those. Big pharma got interested, we make it there as well. But this work is not immediate success, I need to tell that to anybody who's thinking of starting it. You need to really have this "sisu" in order to get it done and completed,
John Simboli:What makes a good partner for Faron Pharmaceuticals,?
Markku Jalkanen:Obviously, they have to appreciate our previous work, and then really think about how that mode of action can be applied either into combination therapies or as a standalone therapy to take further, and they have to commit themselves. Sometimes it helps if they are losing some of their major product, and they need some replacements. And they think that you know, this combination actually would do it. And when they have that motivation, and if they are big pharma, they have resources to do almost everything. You want to have a partner that has endless resources, in order to speed up the development. And I have to say that we were very lucky to get Leukemia and Lymphoma Society, LLS, to join us. And they have made, two times, investments in us. And we have really been supported heavily by them, especially with this acute myeloid leukemia project. It's their main interest and that's a significant unmet medical need at the moment. And then when you get a match with your kind of a understanding, it's so fun to work together and move on with the project.
John Simboli:It's a long process. Do you allow yourself, at this point to think, oh, you know, if this, if I'm successful, if the company is successful, it will have this effect on patients? Or do you hold that thought for later, after the data continues to tell you where to go?
Markku Jalkanen:I do. That's my greatest motivation, really. Absolutely. Absolutely. To understand biology and then generate tools to really help those where the normal biology is not functioning? Absolutely. We are helping current treatment, refractory or resistant people, really, to extend their lives. Let's think about it, how can we make a better world? That's what it is. And obviously, people who work with sick people, hopefully they have had the motivation from the very beginning, that they actually want to help them in many, many ways. And, obviously, you help elderly people to maintain their normal life. You have realistic people to bring in the medicines. And the question there is why, from time to time, do we have difficulties, to not understand the value of that work. There are a lot of individuals who have great thoughts. And I would like to be one example of those who have come from nothing to make something really significant.
John Simboli:Markku, thank you for speaking with me today.
Markku Jalkanen:Thank you very much. It's a pleasure