The Power of the Right Team

0:03Nimish Shah: Welcome to Running Through Walls, a Venrock podcast featuring conversations between investors and entrepreneurs. Each episode, we offer a behind-the-scenes look at pivotal moments in time.

0:25Marino Garcia: Hi, everyone. I'm Nimish Shah, and welcome to Running Through Walls. Today, we've got Marino Garcia, CEO of Dianthus. Marino's been in biotech for almost 30 years, which means he's seen a lot of great companies, a lot of bad ones, and probably a lot of things that look great and work. So let's start there. What can you tell about a biotech company in 30 minutes today that would have taken you three years to figure out earlier in your career?

0:50Nimish Shah: Great question. And thank you, Namesh, for having me on the podcast today. Look, the benefit of having been in the industry 30 years and being as old as I am is you've seen a lot of things. And I think what I'm much better at identifying today and recognizing is whether a company has the right leadership and people. To be able to really leverage and maximize the strengths of whatever the portfolio holds. More importantly, to be able to overcome some of the challenges and difficulties every biotech company faces. What I've essentially learned is that leadership and people in biotech really does make all the difference.

1:21Nimish Shah: I ask myself things like, is the leadership team more in love with the idea of the technology they're holding and the mechanism of action and the science? Or are they more in love with the idea of how this could impact the lives of patients, how it could improve the way patients live with their disease? Are they about inspiring people in the company to get the best out of them? Or are they about just paying people to get the company to certain milestones in order to, you know, hopefully sell the company at some point? I think that's what I've learned makes the biggest difference between a really successful company and one maybe not so successful.

1:55Marino Garcia: And why did you invest your time and career in Dianthus?

1:59Nimish Shah: A lot of reasons. Three, essentially, I think come to mind. One is I just love the idea behind the LEAD program, which at the time was called D &TH 103 and today is called Clasipobard. It was such an elegant idea for a new complement inhibitor in a class that's been transformative for rare diseases and not a lot of patients. The idea that Fairmount team, along with you and Tells BioVentures and so on, I'd start a company with a therapy like Classyprebar, it really got me excited. I had some experience in Complement before, and I was a little stunned that nobody had ever thought of what you guys had before.

2:35Nimish Shah: Second is the team, honestly. Meeting you and Andrew at Venrock, Lonnie, Mulder, the chairman, Tomasz and Peter at Fairmount. I was just really impressed with the people around it. And as I mentioned, people really do make a big difference. So I really wanted to work with this group of people. And then the idea of just building something new, a new company. You know, the times I've been most excited in my career, where I've been in that flow state of mind, you know, is where I was building something new that didn't exist before, or I was turning something around that was really not working well.

3:11Nimish Shah: And this clearly was firmly in the first camp. And that got me very excited. So that's what attracted me to the opportunity.

3:19Marino Garcia: And did you have any concerns at the time when you were joining or anything that you're trying to figure out?

3:25Nimish Shah: I'm not a scientist, and I'd never led a preclinical program. And this was at least a year from the clinic. This was going to be a real challenge for me. But again, I met some of the folks that I'd be working with, the consultants as well as some of the early employees, and felt like I could probably do it. But that was a little uncomfortable. The other thing was, I mean, this was 2021 going into 2022. Not exactly the easiest fundraising environment. And we had to basically raise a Series A. I was definitely out of my comfort zone on both those fronts during that very difficult time. But, you know, in both those cases, again, it was the people around me.

4:03Nimish Shah: I had the right people in the team and the company. It was a small team and a small group of consultants, but I felt like they were the right people. I had you guys and Fairmount, the Jefferies ECM team. That's what gave me the confidence, or maybe faith is a more appropriate word, that we would be able to succeed in that tough environment. So the advice I would give to people trying to build a career where they want to lead a team or become a CEO eventually, what I would say to them is if you're presented with an opportunity to try something new, get you out of your comfort zone, where you're going to have to learn as you go, especially if you trust the people around you, just do it.

4:38Nimish Shah: This is how you grow. This is how you learn. This is how you get better in our industry. And thankfully, it worked out pretty well.

4:44Marino Garcia: Do you think your experiences in complement biology shaped your perspective or helped how you viewed this opportunity?

4:53Nimish Shah: Absolutely. Look, I'd seen a lot of the value that Alexion created for both shareholders and patients. Raw Pharma, same. I personally negotiated a deal on behalf of New Zealand Pharma when I was their CBO with Alexion before they were acquired by AstraZeneca. And this clasipivir just felt like a huge leap forward in terms of what it could do for patients and in terms of what they could do to improve people's lives. So that previous experience with complement certainly helped build that confidence. My previous experience with Aspreva, man, we're really going back. That was about 20 years ago, my first real jump into biotech.

5:30Nimish Shah: We were studying mycophenia mofetil for lupus nephritis, but also mycena gravis. And what's amazing there is myosinogravis, it was considered a relatively rare disease, and it didn't get the kind of attention it gets today. And what we've learned over time is that as there are more patients living with that disease, and what improves the recognition and the diagnosis is just having better therapies and better understanding how you could eventually help these patients. That's one reason I'm also very excited about two other areas we're going into CIDP and MMN. I think it's the same situation MG mycenogravis was maybe 10 years ago, where there just are not great therapies.

6:12Nimish Shah: And there are probably patients out there who are struggling with getting recognition, diagnosis, and better treatments. And I think that's where something like Clasifibar can make a really big difference. So I'd say that's mainly how my perspective has been shaped by that experience.

6:28Marino Garcia: You kind of pointed out that 2021 was a tough time in the market. That might be an understatement, but you actually pulled off a reverse merger at the time. Walk us through some of the challenges there.

6:40Nimish Shah: You know, once we did the Series A, we were approached quite a few times about a reverse merger process, but we remained flexible and patient. We knew we had a great asset in Clacipibar and we were presented with a few opportunities. There were a lot of companies struggling who were public at the time, but we wanted to wait until we had just the right amount of data, strong phase one PKPD data that confirmed that we had a long half-life in humans and that the potency could really shut down the classical pathway with a low volume infrequent subcutaneous injection that could be self-administered.

7:10Nimish Shah: I just knew any process was going to take a lot of work and could potentially distract a team that was already working at a very fast pace and advancing our programs forward. So we were presented with the Magenta process just as we had that tipping point with the data and where I felt it was the right time for us to enter and potentially have a high probability of success in a very competitive process. But to Animesh, what really made a difference then, I focused a lot on the data there, but we had the data, the early data to give us the confidence and to give the other part of the confidence, but it's really the people that made the big difference.

7:47Nimish Shah: Sticking to that theme about people being what really makes a successful company. What eventually led us to win the process was the amazing clinical development operations team under our head of R &D and head of clinical operations. They're ultimately what gave Magenta the confidence that we would be successful. Highlighting again that the team is what makes the critical transformative moments in a company's journey come together. That's what made it happen for us. So the combination of the data and the people, that was really great.

8:17Marino Garcia: You know, you spent a lot of your time prior to Dianthus doing deals and executing deals. Was that experience helpful?

8:25Nimish Shah: It was very important. I mean, it was a different beast, but it was because we also had to do a financing alongside it and so on. But my experience was very important because I understand how intense a diligence process can be and how you need to prepare and how important your team can be to the successful outcome of that process and how it's not just about the data. Understanding what the other side is looking for in a deal, how to position yourself, how to work the formal and informal communication channels, how to present and prepare your team, and just understanding when the time is right, you know, too early or too late, and the deal could fall apart.

8:59Nimish Shah: So I felt like that was helpful.

9:02Marino Garcia: You already pointed to how excited you are about the lead program. Was there a time you were ever worried? Or is there a strong argument anyone ever made against that, that you had to overcome or get comfortable with?

9:14Nimish Shah: If any CEO ever says that they're not worried all the time, it's my job to be worried. It's my job to focus on all the potential risks and then make sure we have a risk mitigation plan or a way to overcome anything that could go wrong. Look, some of the challenges we received early on around D &T H-103 or Class H-Pubart, the strongest probably was, hey, how do you know that one shot every two weeks getting above 90 % inhibition for a complement inhibitor, above 90 % inhibition of the classical pathway is enough. How do you know you don't have to be above 95 %? So we designed studies that had our target dose, but also double the dose to really get up there in the level of inhibition, just to assuage and to comfort investors.

9:58Nimish Shah: We now know based on all the data we've seen from Mycena Gravis phase two data last year and the CIDP data earlier this year, that 300 every two weeks is enough. Being above 90 % is actually certainly enough in those two conditions. And an Mg, it actually may be more than you need. So we're also testing a once a month dose there in our phase three. That was one. The other one, there was this theoretical risk that if you inhibit the classical pathway, you know, the C1S target in the complement system, that somehow in some patients you might activate their autoimmune system and create SLE. It was always a theoretical risk has never been seen with anything with any C1S program.

10:36Nimish Shah: But now that we've collected a lot of safety data, that's pretty much now debunked. So I feel much better about that. Certainly that that's not a real risk. And the FDA agrees. We filed an AK where we very clearly had a conversation with the FDA and they said, yeah, this is not, that's not a real risk of your program. So those were the two arguments. Now I feel like I've been debunked. But yeah, I'm constantly worrying, I feel like that's my job.

11:01Marino Garcia: And when you first were approached with the idea, you said you were familiar with complement. Did you feel like another complement drug was needed? Did you see an unmet need there? Yeah.

11:11Nimish Shah: I mean, look, they've been transformative for rare disease patients. Okay. They're really fantastic therapies. The issue is like they are infusions or very frequent injections. One is like literally a daily injection, almost like insulin. They shut down the entire complement system. So yes, they help you treat your disease, but they also eliminate your ability to defend against dangerous and encapsulated bacterial infections so you could die from meningitis. These therapies all have these box warnings that can be quite scary and intimidating for patients. So there was always room for what if you could get the efficacy, but take away that safety burden or take away that box warning and put it in a format where a patient could self-administer it in an infrequent manner, like a Dupixent with their auto-injector every two weeks.

12:00Nimish Shah: look at the success of the GLP-1s with weekly injections. What if you could put this into the hands of the patients and make this so the therapy can fit their lifestyle as opposed to them having to affect their lifestyle to adjust to the therapy? That's always been sort of the goal for next step and complement. And I feel like we're on the right track with Closipivar.

12:23Marino Garcia: Maybe switching gears, I was looking at your background and you spent time at Big Pharma as well as small biotechs. What does big pharma do well?

12:33Nimish Shah: What big pharma can do is they have scale, obviously, right? So they can conduct very large multinational clinical studies all in parallel. They can launch a drug and make it available to many more patients around the world than a small biotech could. Where I think a biotech has an advantage, and I've seen this actually now in the last few years, is our strategic focus on execution and speed. This, of course, assumes that we have the support of investors like Venrock that can help fund the team and the programs. There's no doubt that Clicipibar has benefited from that. But I think for now, there's nothing that I think a big pharma company could do that we can't do and do better.

13:12Marino Garcia: And what about, let's take the other side, you kind of alluded to it, but small biotechs, what's the advantage there? Because there's a lot of people that are probably thinking like, hey, should I leave pharma, like such a comfortable environment, still challenging, but to go to a small biotech, what would you say to them? And maybe what are some of the advantages of being at a small biotech?

13:31Nimish Shah: Well, look, there's a risk in smaller biotech, right? Is that you're taking a bigger risk, but the payoffs, if you're somebody who wants to be empowered, if you want to see how every day of your life can have an impact on what the company is doing and how you can ultimately change the lives of patients, there's nothing like biotech. That's the thrill. You could be in a big pharma company and you're a cog in a huge wheel, but in biotech, it all depends on you. Everybody has to contribute and you can see the benefits of your hard work every single day. I mean, for us specifically, we are up against some big pharma players.

14:09Nimish Shah: And what I've seen the benefit is that we are 100 % every day waking up, going to bed thinking about what do we need to do to be more successful, move faster, get this to patients even quicker. And so far, I think if there's any, you know, the greatest compliment I get when I meet with investors, honestly, is phenomenal execution. You guys are doing everything you said you would do and more. And that makes me really proud. And that just keeps going back to the team. That was a big focus for me when building this company, hiring the right people. and it's paying off so far, you know, big time.

14:48Marino Garcia: And five years ago, you kind of got the call and you were deciding, okay, should I take this CEO job? What's different from your expectations?

14:57Nimish Shah: I thought as CEO, I would spend a lot more time on technical and regulatory hurdles, more so than say on the culture, psychology, team alignment part of the company. I always knew these things were important. I mean, I did come from a marketing and sales background the first half of my career, but it's definitely much more important than I expected as you build and scale a company through significant growth like we've experienced with a lot of new team members constantly joining. And it's so important to help a company manage through a lot of the emotional swings in a biotech life cycle. I mean, you look at Dianthus today and you go, wow, what a great trajectory, but there were some tough times, some challenging times.

15:35So you're constantly balancing the optimism you need

15:38Nimish Shah: to raise capital and to keep growing with a volatile, sometimes not so great macro environment. So the level of energy, emotional resilience and continuous communication that's required, that's something I just wasn't ready for or I didn't expect. And you just can't prepare for until you're right in it.

15:59Marino Garcia: You talk to a lot of emerging biotech leaders and future CEOs. Is there something or any assumptions they make that you think they often get wrong?

16:07Nimish Shah: Look, if I were to advise an emerging biotech leader, there's a couple of things. One, and I've been very fortunate to have a board that agrees, especially with this first one, is raise funds when you can raise. Don't try to time the market. Don't think you know better. Have a clear long-term vision. Stay the course. And when an opportunity to fund that voyage you're on, comes up, take it. Secondly, build a pipeline early. A lot of companies have very successful first products and then later, oh, we should have built a pipeline behind this. That's something that we've been very focused on from early on.

16:45Nimish Shah: So fortunate to have been able to add a couple of exciting pipeline programs behind Clasipibart. That's how you build a long-term, exciting, self-sustaining biotech company. And then make sure you're hiring people that have a shared vision and a strong cultural fit. Don't go just by resume and experience. Don't go just by, you know, what success they may have had in the past. Make sure these people really are going to be part of the team and have a strong fit culturally with what you're trying to build. You're going to need everybody to persevere. You're going to need some resilient people. And having a strong culture is going to be very helpful to get you through the tough times.

17:27Marino Garcia: Are there things you worried about that you ultimately realize, wow, that wasn't as big a deal as I thought it would be? We talked about what was harder than expected, if there's anything easier than expected, or that you didn't realize you'd enjoy as much.

17:42Nimish Shah: Easier than expected. I mean, everything's been pretty intense. And honestly, running, especially at the beginning, running a preclinical company, I really thought that was going to be a struggle. But boy, being able to rely on strong people, keeping my questions at a strategic level and then diving into the details where needed. But just having really strong people around me made it much easier than I expected it would be. So I do have the confidence that if another opportunity in the future came up to, you know, lead a preclinical company, I would focus on making sure I have the right people around me again.

18:16Nimish Shah: But everything I expected, I mean, I've worked closely with CEOs. I've seen what they have to do in terms of the amount of time spent with investors and the amount of time being outward facing to the capital markets, etc. That's been as I expected. So nothing really is that easy. But when you love what you're doing, that's OK. You're enjoying it. I'm thriving.

18:38Marino Garcia: Yeah, that's great. And what about like some of the sacrifices you had to make while being CEO?

18:44Nimish Shah: I mean, this is a lot less personal time, that's for sure. And there's no hiding behind the CEO, right? When you're CBO, you can like, you know, the spotlight is on the CEO. So you can like take a little break. There's no such thing. I don't feel like I ever shut off. I have a great family. You know, my daughters are older. My wife's very supportive. She's also very busy. The amount of travel I do, my time is not really mine as much as it used to be. But again, when you're loving what you're doing, when you're excited about what you could potentially do, at the end of the day, I think about getting clasipibar in this auto-injector to patients, what it could do.

19:19Nimish Shah: I imagine like my daughter's, hopefully this won't happen, of course, but my daughter's being diagnosed with one of these conditions to have this drug available. I mean, that keeps me going every day.

19:32Marino Garcia: It is surprising, like each CEO has their own way to work through problems. Like, Do you have a sounding board? Because sometimes it's lonely being CEO. There's not many people you could tell what's going on because they'd have to sign a CDA or something. How do you kind of handle that? Or what advice would you give to someone who's being a CEO for the first time?

19:53Nimish Shah: This I really, really, really feel strongly about. I think every CEO should have an outside coach. Somebody that they have full trust in. Someone who understands the CEO role. someone who you know has been an executive has dealt with boards has dealt with investors especially if you're a public company ceo someone who's dealt with the public markets public investors that you can 100 trust and talk to every week and i've had somebody like that very fortunate for many years that helped me informally but once i had the series a and i could actually afford to pay for a coach i brought him on and he's been with me from the very beginning.

20:34Nimish Shah: And I'll tell you, I talk to him every week. I have any questions, anything starting to eat at me, you know, that I'm not really clear on. I call him and he's my sounding board. And he calls it as it is. He is about as different from me as possible. If this coach you get can be really different from you, that's even better. Because you want to get the other point of view. You want to get pushback. It needs to be someone who can very clearly say, Marino, you're wrong. and boy does he do that a lot marino you're thinking about this the wrong way boy that's been helpful i've even made this coach available to some of my executives when they want to have a conversation where they don't feel comfortable talking to someone else in the company and they have told me you know many times how much they appreciate that so every co if you have the ability to get a coach make sure it's someone you trust someone who's not exactly like you and where you can have a very open, honest conversation with and it will give you real feedback.

21:33Nimish Shah: It's been invaluable for me.

21:35Marino Garcia: No, that's great advice. Well, enough with all the serious stuff. Maybe we'll close with some rapid fire questions. What's your favorite place in the world?

21:44Nimish Shah: Anywhere on the Spanish coast in the Mediterranean, especially the Balric Islands. I actually grew up in Ibiza. So Ibiza, Formentera, Mallorca, or Menorca. Anywhere on those islands especially, I'm in heaven. Guilty pleasure? My wife would say bread. Oh, my God, I love a good fresh baguette. A fresh baguette with just the right crispy exterior, warm interior, soft interior. And if you put a little slice of manchego cheese on there with some jamón ibérico and a glass of Rivera del Duero, man, I'm in heaven.

22:19Marino Garcia: Dogs or cats? Dogs.

22:23Nimish Shah: I love both. I've had both, but dogs. What's the best interview question you ask? You know, one I really like is, tell me when you've been in a state of flow or zen in your job or in your career. You know, where time flies and you even forget to, like, have a meal. I think that tells you a lot about certain people. I love that question. And who would you most want to have dinner with? You know, when I was growing up, what I really wanted to be was a film director. So, I think any of the great visual storytellers. I grew up loving Kubrick, Gorsese, Coppola, today no one. But the guy I really love right now is Denis Villeneuve.

23:01Nimish Shah: He's actually from Quebec. I also grew up in Montreal. After moving from Spain, we moved to Montreal and he's come out of Quebec. And these Dune movies, I mean, what masterpieces. Actually him. I think I'd love to have dinner with him. And I want to kind of end

23:15Marino Garcia: where we started. What are you still trying to figure out?

23:22Nimish Shah: The biotech financial markets, the capital markets well if you figure that out let me know yeah yeah exactly i mean the swings it goes through and how it goes up and down for mysterious reasons at least to me thankfully i have a good group of advisors and a fantastic cfo who try to explain it to me but uh i'm not sure i'll ever fully understand it and uh so i just try to stay focused on those things that i can control and try not to spend too much time trying to figure that out but boy especially this last month has been an example of that. Like it's just tough to understand sometimes, for me anyway.

23:56Marino Garcia: For you and me both. But Marina, this was great. Thanks for doing this with us. We really appreciate

24:01Nimish Shah: it. I really appreciate the opportunity, Mish. Great seeing you again. Thank you. Thanks everyone for listening to Running Through Walls. Thank you for tuning in to Running Through Walls, a Venrock podcast. Special thanks to Willie Wisely, who designed our theme music.

24:20Thank you.