10 Sep “The largest biotech IPO in Switzerland within the last ten years”
Giacomo di Nepi has a successful history: A high level executive in big corporations, he transitioned towards biotech, currently as CEO of Polyphor, which, in May 2018, he led to the IPO. We spoke to Giacomo about serving patients, the timing for an IPO and the people needed in a biotech.
BaselArea.swiss: What do you check first these days – your emails or the stock market?
Giacomo di Nepi: Emails and meetings are still more important on a daily basis. Of course I check the stock market but the volatility is such that I stopped to try to interpret the market in the short term. But of course I look at it in its development and my commitment is clear to have the stock appreciating and increasing the value delivered to the shareholders who put their trust and investment in our ideas, technology and team.
You served in big corporations such as McKinsey and Novartis. What made you join a startup like Polyphor?
Sure, I come from multinationals, but I worked elsewhere, too. My last job was with InterMune, a Californian biotech. I started the operations in Europe from zero, from my home. If the weather was nice, we moved our meetings from the dining room into the garden. This grew into an operation of 200 people, bringing the drug to the patients affected by idiopathic pulmonary fibrosis. With a startup, you have the possibility of looking at all the dimensions of a company from a much broader perspective. Therefore, Polyphor was attractive for me, but there were other reasons, too.
… the dramatically fantastic science which certainly is one of the fundamentals. Polyphor is a company that has discovered the first new class of antibiotics against Gram-negative bacteria in the last 50 years. This is radical innovation. Antimicrobial resistance is becoming a huge problem. You have patients that get an infection, then are treated with 20 different drugs and they die nevertheless. This is unacceptable. Pneumonia from Pseudomonas aeruginosa today has a mortality rate of 30 to 40 percent. Also, when a woman has metastatic breast cancer and is in her third line of chemotherapy, she has very few therapeutic options and her prognosis is devastating. We want to save lives and give more time to patients. This is what for me makes our business the most beautiful business in the world. It is heartbreaking to see these patients.
So you meet with patients?
Sure. Lately, I brought a patient to Polyphor: A fantastic woman with colonization of Pseudomonas took part in the earlier trials. She has great courage and a willingness to fight for life that is really moving and inspiring for all of us. She talked about her experience because I believe that everybody should have a touch of feeling of what we are trying to achieve, such as people not directly involved in development, for example working in units such as in accounting who normally only see the invoices for the trial.
Polyphor underwent a transformation from research to R&D focused biopharma company in the last couple of years. How did the organization digest the change?
When you move from one stage to the next stage, you raise the bar because in development, projects are multi-year, complex projects with big expenditure. It really changes the mindset. Personally, I like change. I am not interested in doing administration. And this particular change was necessary. This being said, we still have a big research operation focused on antibiotics and immuno-oncology, that we want to keep to find and build excellent compounds.
Basel seems to have become a hotspot for antibiotics recently.
Antibiotics have been disregarded by many large companies. But it is like in the Pascal law: if there is an empty space, something will fill it. Smaller, entrepreneurial companies are now taking the lead worldwide – and Basel is one of the key spots. Clearly, we have a very strong science base in Basel. If you want to do R&D, Basel is the best place to do it, in my opinion. And, I would not be surprised if large companies will be back….
Polyphor listed on SIX Swiss Exchange in May 2018 and raised 165 million Swiss francs. Why was an IPO the right option for Polyphor?
If you are lucky, you find a biotech with one product that is one step away from the market. We have two products that are one step away from the market: Our antibiotic Murepavadin has entered phase III while we negotiated a program with the FDA to bring our immune-oncology drug Balixafortide to the market with only one pivotal study. That puts us in a unique position. However, these studies required a lof of capital. Thanks to going public, we have the resources to develop our products and, when successful, bring them to the patients who need them. The IPO was a necessary tool given the stage of the company.
Which conditions had to be met for the IPO?
An IPO is an interesting exercise. It’s a bit like undergoing a complete physical examination. The investors don’t know the company, yet we want them to support our ideas, our vision and our team. That means they need to trust us. To gain that trust you have to be completely transparent and explain in every detail what the company is about, what the opportunities and risks are. In the end, the results were fantastic because we’ve been the largest biotech IPO in Switzerland within the last ten years. And, we’ve been one of the top 3 in Europe in the last three years.
How influential was the timing?
Timing is important, but it is not determining. The first quarter of 2018 was very good for IPOs but the second quarter was not stellar. A dozen IPOs were pulled during that period. It may happen that you have a valid IPO but don’t do it because the timing is wrong. However, you never have a non-valid IPO that you do because the timing is right.
Which reactions did you get towards Polyphor’s IPO?
Internally, we are super happy that we can work towards bringing our drugs to the patients. At the same time, we are very conscious of the responsibility and very committed. Externally, our IPO is a demonstration of the capability Switzerland and particularly the Basel area have in pharmaceuticals. The IPO was a moment of visibility, of public recognition. In a way, an IPO shows how investment-intensive this business is. I hope it’s a good sign for the whole industry that we are capable of starting new companies, making them flourish and bringing new therapies to the patients.
Why did you choose the Swiss Exchange?
We already had quite a large shareholder base in Switzerland, so it was natural to go to the Swiss stock market. We were a known entity. Switzerland is a fantastic market, I am happy with the choice. In fact, I wonder why it is not chosen more often. There are available funds, there are investors that are familiar with pharmaceuticals and that are willing to take the risk.
What are the plans for Polyphor for the next couple of years?
Our vision is clear: We want to become a leader in antibiotics and help fighting and reducing the threat that comes from multi drug resistant pathogens. At the same time we want to advance a new class of immune oncology drugs. We are developing third line therapies for metastatic breast cancer. The women affected by this have very few therapeutic options. However, we believe that the potential of the drug can go beyond this patient population, for example in earlier lines of breast cancer and to other combinations and indications. This would bring us to a much more competitive field.
How do you get there?
We have to make sure that we have the organization and the culture that allow us to perform our studies effectively. We want to make sure that the pieces of the organizational machinery are in the right order and that we have all the competences that we need.
What do you do to achieve this?
I recognize talent as one – if not the – key component of success for a company. Consequently, I dedicate a lot of effort and a lot of commitment to do this task. I interview candidates two or three times, I don’t mind. I also have them interviewed by their future colleagues. When I was at Novartis, I had fantastic experiences with the young high potential. Why? Because they have the brains and the capability. It doesn’t matter if they have little experience because the rest of the organization is stuffed with it. It is different in biotech where you absolutely depend on hiring people with relevant experience since no one else has it in the company.
And how about the cultural changes when transitioning from big pharma into a biotech?
Experience, however, is only part of the story. I met a lot of people who have experience – but are not able of making a photocopy and need three people reporting to them in order to be able to achieve anything. They are not good either. That is why I look for a sort of “schizophrenic profile”: In biotech you need people who have experience, capability and vision while at the same time they need to roll up their sleeves, be practical about their choices and do things on their own.
Giacomo di Nepi started his career in his homeland Italy with FIAT and McKinsey from where he transitioned to Novartis, where he held senior roles on different continents. After leaving Novartis he took on the role of CEO of Takeda Europe. He was then EVP and Managing Director, Europe of InterMune prior joining Polyphor in 2016. He is also in the Board of Geneuro and Kuros and a shareholders’ advisor for NTC. In 2016, Giacomo di Nepi became CEO of Polyphor, a clinical stage biopharmaceutical company based in Allschwil. The biotech is focused on the discovery and development of antibiotics and other specialty pharma products for severe or life-threatening diseases.