The Future of Genetic Medicine with Zandy Forbes, CEO of MeiraGTx

[00:00:01] Susannah de Jager: Welcome to Oxford+. The podcast series for innovators and investors brought to you in partnership with Mishcon de Reya.

Our guest today is Zandy Forbes, CEO, and co-founder of MeiraGTx. MeiraGTx is a NASDAQ listed clinical stage genetic medicine company pioneering innovative gene therapies for both rare and prevalent diseases. It's headquartered in New York with manufacturing in the UK and Ireland.

Zandy started her career as an academic with a double first in Natural Sciences from Cambridge University and a PhD in Molecular Genetics from the University of Oxford. She was hired into the buy side of a healthcare focused hedge fund Galleon, where she learn and operated for over a decade as an analyst and portfolio manager appraising biotech value and market forces. She co-founded MeiraGTx in 2015, and is that unusual CEO that is equally comfortable discussing the assets with scientists as she is the business strategy and share price with investors.

Zandy, thank you so much for joining today. So you've got such an interesting background, having moved from academia to a fund manager role, and then now as a CEO of a listed Biotech company. I'm fascinated to know what has compelled you at each stage to move from one to the other? What is it that draws you into the new domain?

[00:01:21] Zandy Forbes: That's an interesting question and my personality is to make very big life changing decisions almost instantly with very little information. What I really have learned from each of those having moved what the value of the previous thing provided. I would say that when I was an academic, I had done a PhD and I wanted to continue, discovering more about the work that I'd done, and being an academic was what I knew. But I never saw myself as doing that in the future.

I was introduced to the hedge fund manager, a very large fund, by chance and I had never met anyone on Wall Street. I was coming back to England to set up an academic lab, and I managed to find one person on Wall Street that someone, a friend of mine from England, knew his wife and I thought, well, I better phone this person and find out what even is a hedge fund. So I called this guy and he started talking inWall Street jargon about steep learning curves and blah, blah, blah. And then he suddenly went, what fund is this? That's offered you a job? And I was a little bit sheepish, a because they'd offered me a job and I knew absolutely nothing, and b, because when I'd visited it, it was, the trading floor with, people playing foosball and they were really loud and they looked like they were playing games, right. And so I thought, what? What is this fund?

I've never been anywhere near Wall Street. And I said the name of the fund, and he went silent. And he went, oh my God, that's my biggest client. I want that job. So the truth of the matter is I took the job because I saw a world of adventure and excitement and interest, a world that was big outside anything I knew and someone else told me they wanted it.

[00:03:43] Susannah de Jager: That's exceptionally honest. I love that. But it does also speak to how much personal recommendation that's such a high currency, so I don't think it's the worst bellwether to have paid attention to.

[00:03:57] Zandy Forbes: And I think the last thing I said, which is when I went to meet the fund manager, he actually gave methe IPO prospectuses of three companies, Agenix, Medex, and Exelixis, and I was a fruit fly geneticist. All the fruit fly genes had been discovered in a big screen Nobel Prize was given and scientists were given genes and you are very focused on your little area, and I continued to work on that over the decade. However, when I saw the prospectuses of these three companies, particularly this company Exelixis, they had identified every single fly gene. They had every C. elegans gene, they had mice.

So they were looking at everything and I suddenly realized that science is not the spec that we all in our labs are looking at in great detail, but literally it was like mind blown. A company is doing it all.That was really interesting to me cause it was completely unknown. I had no idea that there were companies let alone that did everything that all of us do and more.

[00:05:17] Susannah de Jager: And it's so fascinating because now hearing that description of your whole perspective being changed of how this could be applied, the vectors through which it might come to the real world, just the reality of those companies, as you say, being in existence. It's quite hard to imagine because now that dislocate between academia and people aiming for translational science is so much smaller. That's the aspiration of many a budding scientist.

[00:05:44] Zandy Forbes: That's an interesting comment because in 2000, which was the year that this occurred, it was in the time of the genome being sequenced, these companies were not developing a particular drug to go to the clinic. Each of the companies I've mentioned provided a platform for looking at all genes. All cell surface antibody. All cell surface molecules. All antibodies that humans could make.

So it was as if all of academia was condensed into one company. Now today, each little academic project gets turned into potentially a therapeutic which can be approved and un marketed. So, while it looks like there was such a big difference between academia and industry at the time, I'll come back to the company, Exelixis, that did genetics across all animals. Many people, it turned out from my PhD lab and the fly genetic world and the C. elegans were working there.

[00:07:03] Susannah de Jager: Very interesting, and so you did move into this world and then after 10 years, you moved again to run one of these companies. Tell us a bit about MeiraGTx.

[00:07:17] Zandy Forbes: MeiraGTx is a genetic medicines company, and why I say genetic medicines rather than gene therapy is because there are many companies that do gene therapy, and that word has come to mainly mean, you look at people with a broken gene, for example, an inherited disorder, and they're often very severe and rare, and you take a gene and you put it back into those people, babies to adults, hopefully replace that function and replace that gene in a way that allows those people to have a normal life, let's say. So it's gene replacement.

However, when we started Meira while gene replacement is something we do for certain indications, the aim of the company was to build a way that you can make the body, make any biologic therapeutic. And what that means is using DNA as a template in the body. DNA that you've made in the body may be injected locally to the muscle activating that DNA to make RNA and make protein with a pill. So the idea, which had never been done before is, all of the biologics, which are huge number of drugs for psoriasis and many autoimmune diseases, antibodies, all of those drugs, and by the way, all of the gut peptides, GLP-1 GIP, glucagon, amylin, leptin, all of those come from DNA in the body, and what we wanted to do is take those DNA sequences. Put our own controlled version of those genes locally into somewhere like the muscle, and then you take a pill and you make GLP-1 at the right time of day at the right sort of drug. Not long acting, for example. And so the body turns into the manufacturing facility, I suppose the manufacturing site for the drug, any biologic drug, and the pill is the activator, which gives you exactly the right dose at exactly the right time.

So this enables you to use DNA in many, many ways, not just to replace broken genes, but to deliver any protein you want to. And in between those two things, there are ways that you can use DNA in the nervous system, for example, to change the circuitry of the brain by delivering tiny doses that change neurotransmitters in koilocyte, and we've actually done that in Parkinson's, and we have shown in our controlled studies that we have benefits on Parkinson's when the drugs aren't working and using AI, we now seem to have a disease modifying effect. We change the brain of Parkinson's patients and allow them to move and maybe it looks like slow their degeneration. So we had a vision that was a little bit different from just replacing genes, which we do in the eye all the way through to delivering any of the biologic drugs that are out there.

[00:10:54] Susannah de Jager: Kind of mind blowing when you hear it described so simply.

[00:10:57] Zandy Forbes: It is mind blowing and the most mind blowing thing, by the way, this being able to take any gene for any drug you like, put it into the body so it's a little manufacturing facility and switch it on with a pill. We have no idea how to do that. People had tried for years to use switches from bacteria to design switches that controlled gene expression and no one had been able to do it well.

They could vaguely switch things on like double expression or something over five to 10 years. We rather amazingly have developed a system for really precisely dosing the production of a drug in the body that is so exquisitely tight that one small molecule makes one RNA, and we can exactly control the amount of that drug that's made.

Now, we didn't know that we could do that, and that was invented in house. It's very, very unusual for a biotech company to actually invent their technology. This was very speculative. That's why when we started the company, we didn't say, oh, we are going to make, the new delivery mechanism for all therapeutics a biologic.

We actually said, we're starting gene therapy company and we're going to start with gene replacement in the eye, local delivery in the brain, local delivery in the salary glands, cause we didn't want to give huge doses, which can be toxic to people. We just wanted tiny doses in local places that had a big difference to the physiology of the cells that they were touching, and we have four late stage programs now, all of which are small, local delivery doses. The whole time we were working on the new massive mind blowing technology to take over the biologics industry.

[00:13:04] Susannah de Jager: And so tell us a bit about the four drugs that you have. Cause I think it's really interesting for people to hear how you are currently looking to apply this.

[00:13:11] Zandy Forbes: So I mentioned that when we started the company, we decided to only use very small doses, locally delivered, and that is in contrast to many gene therapies, gene replacement, right in inherited disorders like hemophilia or Duchenne's, where massive, massive doses are given IV for enough of the gene to get to the appropriate tissue, whether it's liver or muscle, and that has worked in some cases in very severe diseases.

However, to us, I wasn't comfortable taking that risk to do something that hard. It's very hard to do, and there are broad, potential toxicities of doing that and people have been successful, but it's not easy. And so in contrast to that, we wanted to use tiny doses and in very specific spots, and it allowed us to actually manufacture all the material we use.

So where we went first is in the eye, because it's locally delivered to the back of the eye and a number of inherited retinal diseases, one we sell to Johnston & Johnson, and that has very strong data in certain endpoints in a phase three, and that's awaiting BLA.

We actually, for charity, interestingly, created a gene therapy, so gene replacement for the most aggressive and earliest form of inherited blindness in children. So it's so early that babies are born completely blind, and this is unlike most inherited retinal disease where you degenerate to blindness over the years.

So you've got children born blind. It's ultra rare. You can't do a clinical trial. So we have a manufacturing license in the UK that allowed us to release material that physicians could then give the injection into the back of the eye to these kids. So four children were treated only in one eye. Every one of those children went from blind to being able to see. Properly being able to see. Another seven children were treated this time because it was so safe in both eyes, and this was in two expert hospitals in London and all 11 children blind when born seeing now. We've got videos, we've got everything.

So this data was so extraordinary that the UK regulators suggested we file for approval under exceptional circumstances, which is what we're doing, and we are a manufacturer that will be commercial and that is allowing us to actually file with manufactured commercial material that we make ourselves.

We are in dialogue with the FDA and they too have given us a pathway to filing this for approval in a similar fashion. So we're going down both pathways this year to be able to file this drug that has absolutely extraordinary efficacy. No one's ever seen anything like this before in gene replacement.

However, we treated people under the age of four. You can't treat them later than four because their whole retina is degenerated. So it shows you that if you can treat these kids early enough, you get massive benefit. Maybe in other diseases of the eye as well. In this particular case, the guys at the Moorefield said this is their career. It's a defining moment for them and it really is amazing when you see the videos of the kids, they're absolutely great and in fact, the videos of the parents are amazing because it's not just the drug, it's the parents that drive this for their children. And this was all done in the UK because we have a specialist license that allowed us to do it, and now we're bringing it to the US.

The other two diseases are Parkinson's that I mentioned. That's in a Phase Three study. We have two sham controlled, so that's placebo double-blind studies, which shows this improves movement in people who no longer respond to dopamine. So there's nothing you can really do. That's very unusual. We're the only genetic medicine, cell therapy, growth factor therapy, studies that have ever shown a benefit against a placebo sham control. We have now used AI that comes out of Queen Square and welcome to look at that double blind data, the scans, and we can see we have significantly changed the circuitry of the brain, and we have changed the input to the substantial nigra, which is the area that degenerates in Parkinson's. So we believe we are not only affecting symptoms, but we may have the chance to slow Parkinson's itself.

Finally, we treat something called Xerostomia, which is the lack of saliva production after you've been treated for head and neck cancer. Everyone loses saliva, however, 30% never get it back. They lose their teeth, they can't speak, they can't swallow, and it's a really nasty condition two years after you've been cured of head and neck cancer. We're able to locally just put water channel genes into this salivary glands and water is produced. We've done a Phase One dose escalating study. We are in the middle of a Phase Two study, which is double blind, which the FDA have given us a designation called R MAT and have aligned with us that this can be an approval supporting Phase Three study. So that's where we are with all of our four programs.

[00:19:49] Susannah de Jager: Very different, which I think articulates the point you made already, which is just how broad the platform that you have is. But you've also created manufacturing facilities.

I just wanted to draw you on that because having been a fund manager and having analyzed companies, that have perhaps a single asset. I know from our conversation that you have designed your company not to be that way and to have less of a binary outcome on any one asset.

[00:20:17] Zandy Forbes: I'd love to hear that strategy from you a bit and how you think about that. Yes. I think if we go back to my nature, just for a minute, and it applies to both being a fund manager and running a company. And in fact, one of the reasons I took the fund manager job is because I am fundamentally adventurous.

However, to be honest, I am also incredibly fearful. So it's a weird balance, right? In personality, those are two quite dominant features of me. In order to be super adventurous as well as being super fearful, you have to have developed risk mitigation tools that you trust. I understood that in biology, in this world of biotech, it's very difficult to legally have what you are told you need to have, which is certainty and an edge. That's a very, very difficult thing to have. You think, well, if I'm a biologist, if I'm a doctor, I'll be able to tell better than other people if this is going to work. No. So there was a recognition from being a fund manager that there is a huge amount that we don't know in biology, that we can't predict in biology, that we can't predict in regulatory agencies cause we don't see the information.

So there were many ways of layering risk management, like what positions you had, how we hedged them, but seeing a portfolio as almost a moving sculpture of risk and reward over time. Somehow that fed into a company which couldn't, coming from me, be a one product, binary risk company. We had to build a real company and provide investors while doing that certain binary events that they could invest in.

So I would say that the company was built more out of design for a company with the hope of a technology that we developed than always making one product that will be a big product as the single asset. It's very difficult to do that and many companies are successful, but many aren't, and I wanted this to be a resilient company that we could go through the years and if we had failures, we'd have other things that were successes as we built our technology, we could support that with deals that we do with other companies.

In the deals we do, one also has to recognize what we can do and what a partner can do and what we can afford to do and what partners can afford to do, and knowing how much it costs to get to the point that you are really, really valuable and you are selling completely innovative drugs has also driven those decisions. Because you have to be able to provide, visibility on value each year, right? So new trials that work and maybe doing it in different indications, always interacting with regulators about everything you are doing. So that really describes I think some of the risk mitigation in the company needed to be multi-layered and making manufacturing was one of the things that has turned out to be expensive but necessary for all of our products and indeed our partners.

[00:24:41] Susannah de Jager: Yeah, and it makes perfect sense. In different market conditions you'll have assets that are potentially in vogue that regulators are pushing through. Obviously then you can supplement. SoI suppose what's surprising is that more people don't build like this and that there are still so many single assets, but they don't have your background, Zandy.

[00:24:59] Zandy Forbes: Most, I don't know if most, but many companies, that are currently public, may have come from academia that are often set up by either long short funds that are now doing VC or very experienced VCs. There can, there are lots of different VC models, some of them are, take a product, develop them, sell to pharma. Others are, take an academic idea, put it into the clinic and get that drug approved. And those are, those have been successful, however many haven't. Right? And when they aren't successful, they trade below cash and then they may have to pivot. So it's a different way of treating biotech, less about making companies and more about monetizing products at different points.

[00:25:52] Susannah de Jager: There are obviously platform companies set up by VCs and there are also companies that were single products that do deals and actually develop into revenue generating biotech companies, and they are really valuable. They can be too valuable for pharma to buy. I recently saw a talk by the CEO of Instamed, and if you hear how that company developed from a one or two product company through partnerships, through successes, through pivots. That's a company that, at every moment, the management and the team have looked at where they are and made decisions that have ended up with them being a very successful revenue generating company that can develop into one of the really big biotech companies. So it's not all or nothing. But our perspective was maybe a bit broad and looking to the future and we didn't really have VC investors.

Yeah, and you've brought me exactly to where I was hoping we would land next, which is you've spoken about the investment needed to grow a company like this and you chose to list on the NASDAQ, and I would just love to hear what drove that decision from your perspective. Particularly given that you had been a fund manager, so you are even more knowledgeable than most CEOs would ever have been at that point.

[00:27:29] Zandy Forbes: So we did go public quite quickly, at a time when there are many, many IPOs and we had very little VC investment. I think that's more because that wasn't my experience, right?There's a different way of having dialogue with VCs, maybe from public investors, which is what I'd been for a decade, and I just wasn't familiar with the private VC world.

That doesn't mean we didn't, we avoided them. We didn't. It just wasn't something that I was particularly comfortable with in comparison to the comfort of the public markets, and I think that sentence in and of itself is weird for people to hear. But having been an analyst portfolio management manager and probably, I don't know how many, one-on-ones I've been to thousands, right? With other funds, so many meetings over a decade, that from my perspective, the public market investors are unbelievably courteous. There is a known way of speaking that you each know what you are saying to one another, which is something I understood having been one. I have a lot of respect for many of the public market investors. Some of whom have been doing it for 20 years, and they are knowledgeable about the whole of the pharma industry. Like all of the drugs. All of the pharma companies. All of the biotechs that have failed. These guys know so much and I now know how much they know because when I stopped doing it 10 years ago and went into industry, I'm like, oh my God. But I've watched so many FDA panels, I've seen so many failures. I've learned so much, and those same guys have continued for another decade.

So there is a personal comfort and respect, from me with public investors that comes from me having been one and I think it's justified. They have to make decisions every minute based on only the knowledge they have right there and then, cause every minute you either are holding, selling, or buying a stock, you don't get to do another bit of diligence and come back two weeks later.

And so, not only is there a lot of knowledge, there's a lot of history, and there's the ability to make decisions without all the information.

[00:30:33] Susannah de Jager: For you it was a given that you would list on the NASDAQ and not in the UK. I'd love you to illuminate on that because obviously it's a really live discussion. It seems to me it's very hard for the UK to compete in this area with the depth and the longevity of the market. But I'd love to hear it from you.

[00:30:50] Zandy Forbes: So the UK has great universities and they're really good at inventing things and there is a push to monetize those inventions. Our eye products we license from UCL. Great science. Many people moved from UCL to our company. We work closely with Moorfield, really the best eye hospital in the world, I'd say.

There's definitely opportunity in the UK. It is hard to work with any university, whether it's US, UK or globally, to do deals and slow. So I don't think that distinguishes the uk right? But I would say the amounts of money over certain periods of time that actually required that get from an academic drug or idea to a Phase Three product and the infrastructure that is required, just it's too large for the UK biotech capital markets, right?

So our manufacturing, which is enabled all of our products and we have one of the best, most, probably the best end to end, gene therapy manufacturing in the world. Starting with making the process. We make the plasmids, we make the vector. We even have a facility that's commercially approved to do all the testing, so we can do everything. It's very unusual. We did it because we had to. It cost us hundreds of millions. A lot of that money we got through partnership. That would've been very difficult to do if we had only relied on UK capital markets because it's very large amounts. If you think of all the biotech companies out there that are spending, that are raising hundreds of millions for Series A, Series B. Number one, it's very large amounts, right? Number two is, going public in the UK just doesn't have the ecosystem. It doesn't have the large numbers of biotech expertise that is required and the trading volume that is required. People need liquidity in order to trade on good news or bad. And it's not great at the NASDAQ at the moment, the last three and a half years have not been great, and I can only imagine with the reduced amount of capital and the reduced liquidity, what it would feel like in the UK markets.

It's not a rapid problem to solve. The UK could, in the next 20 years, become a center of biotech, like Boston, like San Diego, if investors start investing, if people start learning, if fund managers become established, if the US starts investing. Cause they're the real experts over the last 30 years in this industry.

It's not that it can't happen, but it can't happen in a year. It requires a lot of knowledge, knowhow and persistence, and that can be done. Ireland did it in a whole different way in manufacturing by educating, by changing policy and are one of the best countries for manufacturing or have been over the last 20 years.

Micheál Martin started, had this idea 25 years ago, and the Irish, we have a facility in Ireland that manufactures, they are incredibly good. They do degrees in running facilities. They do. PhDs, MAs, all in DNP manufacturing. So it's a really good job that they get and they do a really good job.

So you can do it. You just can't do it tomorrow. You need to think ahead.

[00:35:30] Susannah de Jager: Need proper policy. Now on the more cautionary side, you and I have also talked about the dislocation between pricing and valuation and how robust you need to be. Obviously we've touched upon your approach strategically to a portfolio of assets to protect against some of that.

But I'd love to hear from your experience, just if somebody were listening and thinking, oh, great. Sounds like the streets are paved with gold on the NASDAQ. Clearly, you need to really know what you are in for there as well, and it's not all plain sailing.

[00:36:05] Zandy Forbes: Not at all plain sailing, and there are, particularly in biotech, there are incredibly bullish moments that may be too positive. Then negative moments, which may be too negative. And when I say moments, these moments could be years, not 10 minutes. Although 10 minutes can also be a moment. So they're incredibly negative moments and there is in biotech, particularly small biotech, after COVID when there was a huge amount of money put in, lots of companies started, were IPOing at high valuations, way higher than ours and there were many companies that were being formed. There was a lot of money put into the market. Maybe some of the companies were too early, maybe their technology wasn't something that could survive. Maybe they never grew into their valuations.

There are many things, but after COVID, as interest rates went up, the desire for money burning, not revenue generating by biotechnology declined, and we saw a real decline in valuation over that year, the subsequent year, and for small biotechs, cause this doesn't include the big ones that make revenues or have drugs approved, et cetera. But for small pre-revenue biotechs, it's been a very difficult three years because I would say last year, the beginning of year we 2024, we thought everything was going to be okay. Everyone was coming into biotech at the beginning of the year, and then, I think it was around February 12th or something,

inflation number came out in the second week of February, and it was up. And so the idea that the Fed was going to cut rates three times in the year disappeared and all of these small companies went down again, and so that was the second bad year. And interest rates never came down, right?

Multiple bad years result in many funds, which are biotech focused, have lost money, and so they're in a position where it's very hard for them to make new investments. They need to support their own companies because these are money burning companies and many of them have really good ideas and good products and maybe even close to market. This year, again, beginning of the year, and this is from many starts, beginning of the year, every markets are going up. And then, the leadership in the FDA and other areas were announced and it was perceived as negative, right? Just perceived, and so another hard year began.

Now, I'll just mention why I said perceived, from the perspective of reality, our interactions with the FDA have been better than I've ever experienced in the last 10 years. Driven by science. Driven by rationale. Driven by real reviewers reading every document and coming prepared to meetings, and we've been given designations. We've had excellent conversations with the agencies. So there's a perception of the FDA and there's the reality of the FDA and my experience of the FDA and reality may lie somewhere in between. But that was a hit to biotech, and in particular to companies that had certain types of drugs.

I think without a massive recovery, there is the opportunity at the moment for the big funds to look through this wasteland and pick the diamonds in the rough because there isn't really a good correlation between stock price and value. Like we have four late stage programs and manufacturing as well as this future looking technology and many preclinical programs, right, and other companies inside us, and our valuation is not changed since IPO basically. It's a little bit higher.

But we are an opportunity, a diamond or an emerald. In the rough. And I know there are other ones and I do believe that fund managers are starting to look at that, albeit really looking at things that have something innovative.

[00:40:49] Susannah de Jager: Do you ever think that your strategy of a portfolio of assets means that the individual value of each of those is harder to perceive and that obviously eventually when they play through, the value will be there, but that they can slightly cloud one another.

[00:41:04] Zandy Forbes: That's absolutely right. Couldn't be righter. I believe our valuation, is to some people Parkinson's, to other people's Xerostomia, to other people the eye, to other people the future pipeline and manufacturing. Any one of those alone more than supports our current valuation. It's very hard for an investor to value all of it. It becomes too much and I think what you said is completely true.

[00:41:38] Susannah de Jager: Zandy, thank you. This has been an incredibly wide ranging conversation. But really, really interesting and I appreciate you coming to speak to us.

[00:41:48] Zandy Forbes: Well, I really appreciate you asking me and it's been so interesting talking to you. So thank you so much.

[00:41:54] Susannah de Jager: Thanks for listening to this episode of Oxford+, presented by me, Susannah de Jager. If you want to stay up to date with all things Oxford+, please visit our website, oxfordplus.co.uk and sign up for our newsletter so you never miss an update. Oxford+ was made in partnership with Mishcon de Reya and is produced and edited by Story Ninety-Four.