ICYMI: What NIH Cuts Mean for Health Sector Entrepreneurs

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1:57With our unified Team Michigan approach, businesses scale faster and compete at the highest level. Michigan, pure opportunity. Seize your opportunity at michiganbusiness.org. Bloomberg Audio Studios, podcasts, radio, news. You're listening to Bloomberg Business Week with Carol Masser and Tim Stenevek on Bloomberg Radio. Well, the drumbeat of news out when it comes to health policy in the U.S. continues. House Republicans are taking a middle of the road approach to funding the federal health department by making deeper cuts than their Senate counterparts, but granting only some of President Trump's wishes.

2:37Also, the Trump administration tapping a deputy of HHS Secretary Robert F. Kennedy Jr. as the acting director of the Centers for Disease Control and Prevention after moving to oust the agency's current head in a clash over vaccine policy. kwan fam is back with us kwan is founder chairman and ceo of the microcap biopharmaceutical company cadrenal therapeutics it trades under the ticker cvkd it's got a market cap of around 25 million dollars shares down about 13 so far this year kwan good to have you back joins us from florida once again i want to just start by getting understanding of the relationship that your company has with washington dc obviously it's a small company so it's not like you necessarily have lobbyists on the ground in Washington, or do you to get an understanding and actually lobby what's happening in Washington?

3:29Are you able to have lobbyists?

3:31Quang X. Pham:Well, Carol and Tim, nice to be with you again. And you are correct. We're a small company. We don't have lobbyists on the ground in Washington, D.C., but we in Florida are very proud that we have a number of Floridians in the Washington area, you know, as part of the administration. But as far as what is being talked around the Beltway, it doesn't really affect us. You know, we're a small public company, late stage drug development company focusing on developing a new blood thinner. I think what it does affect is the reduction in the NIH funding, the National Institute of Health for preclinical stage company.

4:08Quang X. Pham:Companies are very early that are depending upon government grants and mostly at research, the top research universities that feed into the biotech ecosystem. It'll affect those early stage preclinical research. And just to give you a summary, I think, you know, the FDA approves about last year, about 45 new drugs, the year before about 37. And these are drugs that are approved out of about 200 ,000 compounds that entered the preclinical stage of research over a period of 10 or 15 years ago. So we're talking about a very highly capital intensive and long drawn out research development process for drugs.

4:49What do you think of Secretary Kennedy and potentially the impact healthcare and all the companies that certainly play into that space, including a company like yourself?

5:04Quang X. Pham:Well, first of all, I respect the political process. This country elected a president and he appoints individuals in important posts. As far as we are concerned, FDA-level staffing is what affects us and many drug development companies, and that means the amount of time in the regulations that the FDA is required to respond to companies like Cadrenotherapeutics that puts in for different programs, different drug designations. For example, we have two orphan drug designations for our drug, our lead candidate, Ticarphorin. And every time we need to communicate with the FDA, there are a certain amount of days, business days.

5:44Quang X. Pham:So when there's a reduction in staff in the FDA, that delays our timeline, which then delays the development timeline, which then takes more capital. And then we need to communicate that to our investors and our shareholders. And that affects not just us, but the entire industry. Are you seeing more delays in this administration versus last? I mean, give us a little context, if you will. I think going into January, I think just the transition of the heads of the FDA and different departments. And the FDA did communicate to us that there would be a little bit of a delay. But so far, the delays have been minimal.

6:21Carol asked about comparing to the previous administration. I want to think big picture here and try to get an understanding of the early stage challenges that you mentioned. When we think about some of the therapies that have come into effect in recent years, some stuff that has been lifesaving, to what extent do these therapies, do these treatments, do these medications, to what extent do they start or begin with research that is funded by, at some certain point, the U.S. government, whether directly or indirectly through grants to colleges and universities.

6:56Quang X. Pham:Yeah, I'm very familiar with the early stage concepts, having, you know, work before with the university and looking at early stage drugs a number of years ago. So at Cadrino Therapeutics, our lead candidate to Carfin is phase three ready. So we're a late stage company. Let's go back to our conversation just a little bit while ago. So what you're seeing now is if there's a lack of funding at the NIH, at leading universities that work on compounds, such as the University of Florida, Stanford, UCLA, you're not going to see the effects of the lack of funding now for a number of years to come. As I said earlier, the drugs that were approved the last two years, there were less than 80 drugs that entered the clinic, less than 90 drugs that entered the preclinical research portion of the process out of about 180 ,000 compounds.

7:49So we're not going to see the effects of the early stage research now due to the lack of funding for more than a decade, which is longer than anything else that's out there in the business world.

8:00Quang X. Pham:It's a very lengthy, highly regulated capital intensive. But it was we all say in the industry, the patients aren't buying the excuses of delays in bureaucracy, in policies or funding. the patients need these drugs today. And I think the Orphan Drug Act that was passed in 1983 went a long way in incentivizing and protecting companies such as ours to look at therapies that will help less than 200 ,000 Americans. Now, the big one that we're following now is H.R. 946, the Orphan Cures Act, which gives protection potentially to an orphan-designated drug in two or more indications, which is what our drug does to Carfarin.

8:47Hey, Quan, before you go, and just because, you know, if you, you know, in researching and reading in for this story, you know, a lot of the stories that popped up was about some selling that you were doing. You know, when we see insider selling, certainly by a CEO, it catches our attention. And there's certainly, I think you sold about 5 ,000 shares or so in late August. What do we need to know? Why were you selling?

9:10Quang X. Pham:Well, it's all part of a plan. And that's part of the regulators allowed insiders and founders to share it. And it's been planned for a while. And it's a practice that allows public company insiders to sell according to plan, which it's put in place months ago. I've been working on this drug for a number of years, over eight years. And so, like I said, we fully disclose it according to the 144 rule. All right. We're going to leave it on that note. Listen, so appreciate it and your honesty and directness. Kwong, thank you so much for being with us. Kwan Pham, of course, joining us there. Founder, Chairman, and CEO of Profinal Therapeutics joining us from Florida.

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11:08From emerging startups to global enterprises, Michigan offers what executives value most, a resilient, innovative ecosystem, diverse communities that attract top talent, and a quality of life that supports work-life balance. With our unified Team Michigan approach, businesses scale faster and compete at the highest level. Michigan. Pure opportunity. Seize your opportunity at michiganbusiness.org. Healthcare doesn't always work great. If you've ever waited on a refill or couldn't schedule an appointment, you get it. That's the kind of stuff Optum is changing. They're using data and technology to integrate patient care, pharmacy, and everything else.

11:46So healthcare is connected, not complicated. What's that look like? Cheaper prescriptions that are easier to get and care that looks at the whole person how you need it. Optum is helping make healthcare work as one for everyone. Learn more at business.optum.com.