There’s big money to be make in drug development. But is that necessarily a good thing?

Pharmaceutical companies capitalize on years of R&D work with exclusive patents. Approved drugs typically commercialize in developed markets that can support higher pricing through mature insurance reimbursement networks.

Yet serious diseases don’t only occur in the developed world. Billions of people in developing economics need treatments as well. And they’re often not able to afford the hundreds of thousands of dollars it costs for innovative approaches such as CRISPR gene editing or CAR-T gene therapy.

There’s currently an unmet market need for treating serious chronic conditions like Alzheimer’s Disease in a way that isn’t prohibitively expensive. And sometimes, it’s worth veering from the herd and thinking about big problems in an entirely new way.

In today’s 7investing podcast, 7investing lead advisors Simon Erickson and Dana Abramovitz chat with Mei Mei Hu, the co-founder and CEO of Vaxxinity (Nasdaq: VAXX). Vaxxinity is using a disruptive synthetic peptide platform to provide cheaper, safer, more convenient, and more effective medicines for chronic diseases like Alzheimer’s and Parkinson’s Disease. It is also developing a late-stage vaccines for the prevention of COVID.

In the conversation, Mei Mei describes how Vaxxinity’s technology is “turning the human body into its own drug factory” to avoid the excessive costs and immune response issues of traditional monoclonal antibodies. She discusses their unique approach to clinical trials, the progress their making in their programs, and what it’s like to be the CEO of a newly-public company.

Publicly-traded companies mentioned in this interview include United Biomedical and Vaxxinity. 7investing’s advisors or its guests may have positions in the companies mentioned.

Transcript

Simon Erickson 0:00
Hello everyone and welcome to today’s edition of our 7investing Podcast where it’s our mission to empower you to invest in your future.

I’m 7investing founder and CEO Simon Erickson joined by my colleague lead advisor Dana Abramovitz. We’re going to be talking about science today. We’re joined by Mei Mei Hu. She is the CEO and co-founder of Vaxxinity (NASDAQ: VAXX), coming to the life sciences sector that’s a tackling some really big problems. Mei Mei I’m really excited to chat with you this morning. Thanks for being a part of our podcast.

Mei Mei Hu 0:26
Of course, thanks for having me.

Simon Erickson 0:28
Like I said, we’re gonna jump into the nitty gritty of the science, we’re gonna look at the serious conditions like Alzheimer’s, Parkinson’s, and COVID that your company is addressing. But maybe let’s start at the very top. At the 10,000 foot level, your vision is to provide cheaper, safer, more convenient and more effective medicines for chronic diseases for everyone. And the mission attached to that is to democratize health by pioneering the third biologic revolution. For anyone watching, Vaxxinity is publicly traded VAXX is the ticker on that, can you introduce us to your company first and foremost Mei Mei?

Mei Mei Hu 1:00
Yeah, of course. So, thanks for summarizing. I mean, basically, we have one north star, which is to democratize health. And we plan on doing that by basically, bringing the efficiency of vaccines, which we’ve seen how remarkable that can be, particularly in this COVID pandemic, but bringing that efficiency of speed, scale and accessibility to chronic diseases. Which for the first time in history are now killing us more than anything else. So we’re doing this through a technology platform. And when you mentioned the third biologic revolution, the first one was vaccines, which help prevent over 27 diseases now.

And the second biologic revolution were these things called monoclonal antibodies, these proteins that are the kind of magic drug, which are now the top selling drugs in the world, for chronic disease. But the problem is, they’re difficult to take and difficult to make and extremely expensive. So we’re combining those two together with a technology platform and hopefully bringing transformative medicines all around the globe to every corner. So that’s what we’re planning.

Simon Erickson 2:08
And we’ll bounce back and forth. I’m gonna hit it to Dana. And we’ll jump back and forth on asking the questions, but Dana I’ll hand it to you to talk a little bit more about that technology,

Dana Abramovitz 2:15
Ya no, I’d love to learn more. Our bodies have been designed over millions of years to fight foreign objects, right. And vaccines take advantage of that. I’m curious, with chronic diseases, the objects are within our own bodies. So, I’d love to learn a little bit more about your technology and how you’re using vaccines to address chronic diseases and our own body proteins.

Mei Mei Hu 2:47
Yeah. So you you hit on something, which is that our immune system has been, is actually one of the most sophisticated machines ever created. And it’s evolved over millions of years. And it naturally has all sorts of defenses against diseases. And one of them is the ability to produce antibodies. So traditionally, we think about it like in the COVID sense, producing antibodies to neutralize viruses, right, and help protect us against severe disease. It turns out that with chronic diseases, they’re also, they’re caused by things that our body produces itself. So what we call self antigens, right?

Heart disease would be caused by high cholesterol, as was one of the early things. Alzheimer’s is caused by toxic proteins that bundle up in your brain. It turns out that when you look at high performing centenarians, the immune system actually does produce antibodies to neutralize against these also. So what we figured out to do is to really selectively activate parts of your immune system to produce antibodies against these specific proteins that are the agents and causes of chronic diseases.

So with Alzheimer’s, our vaccine is designed to produce antibodies that neutralize these amyloid, these toxic amyloid oligomers that build up in your brain as you age. With heart disease, it’s something called PCSK9, which will have a regulatory impact on bad cholesterol. And so we teach the body to produce antibodies against that, which ultimately lowers cholesterol. It’s not a new concept, right? It’s just been extremely difficult to do. And what we’ve done is develop the technology over the last couple of decades that’s figured out how to do it safely and consistently, which is why I think it’d be effective.

Dana Abramovitz 4:30
So can I ask a follow up question about that. So you have the antibody, it binds to whatever protein target you find, and then it just triggers a regular immune response and degrades the foreign material. Is that how it’s working?

Mei Mei Hu 4:47
Yeah, so I think, antibodies, once they neutralize the target, it will be, washed away into your body and all sorts of mechanisms. But I think the trick is actually the production of antibody in the first place. That’s where the hard part is. Because your body has something called immune tolerance, right? We’re really smart. If we were to develop antibodies against ourselves, that’s called autoimmune disease. So we have to be really careful about that. So I think that the really tricky part about it is how do you get your body to develop antibodies against just a specific thing, and not everything else, and not triggering all sorts of other immune responses like T cell inflammation?

You know, that’s been one of the challenges with other vaccine technologies is they haven’t really been able to do what we do safely. So other programs have been halted, mostly because of those impacts. We’ve been tested in six clinical trials now. And actually, the technology was originally commercialized in animal health. So over 3 billion doses sold on the market today. So going back to your question, it’s yes, once it neutralizes it gets broken down and taken away. But the real trick is, how do you produce that thing in the first place?

Simon Erickson 6:02
I believe the approach you’re taking a synthetic peptides, right? I’m looking for your technology and it’s very different than some of the other approaches out there, whether it’s CRISPR or CAR-T. As you’ve mentioned, in previous presentations I’ve seen Mei Mei, those are very expensive. Pretty much uneconomical for most of the developing world out there.

I did want to ask you the commercial question tied to this, which is that it looks like Vaxxinity spawned out of a company called United Biomedical, between United Neuroscience and then COVAXX. Then now you guys have gone public here in November. Can you tell us about the genesis of your company, and kind of how you got this royalty free commercialization rights to the platform that you have.

Mei Mei Hu 6:41
Yeah, so it’s an organic story, which usually means it’s much more complicated. The platform originally came out of Rockefeller University, mentored by a few Nobel laureates, and then incorporated into a company called United Biomedical. It was supported early on by NIH grants, and as I mentioned, commercialized into diagnostic and animal health applications first. So a few years ago, my husband and I, we spun out a company called the United Neuroscience from there, of which United Biomedical was a major shareholder. That’s how we got the first, royalty free license to the technology for neurological diseases. That expanded to other kinds of diseases. And then when the pandemic started, we started something called COVAXX. Basically, to develop a vaccine for COVID-19. The truth was, no one knew whether COVID was going to stay around or not. So that’s why we spun it into separate entity. You know, a year or two later, when we realized that, for better or for worse, unfortunately, COVID is not going away. We saw we had these two companies that were working on the same platform, basically the same team, same manufacturing, and COVID wasn’t going away. So it made sense to merge the two. And that’s how Vaxxinity was born.

Simon Erickson 7:56
And then as my follow up for that, too, I saw that Peter Diamandis was very interested in the COVID vaccine as well. Can you talk a little bit, he’s a rock star, just like you are, but globally, and people that are in the life sciences immediately know who he is, among space exploration and other things, too. But can you talk a little bit about kind of his involvement or the role that he has in Vaxxinity now.

Mei Mei Hu 8:15
Yeah, so he’s, like you said, a rock star, like totally exponential thinker, visionary. He goes for moonshots. And it’s probably one of the reasons why commercial spaceflight exists today. He saw, kind of, the vision that we had, he recognized the potential, the legitimacy of the science. And, he has been a huge supporter, right? He realized that this is an exponential transformative technology. So he helped found Vaxxinity, and is currently on our board today. So he is all-in on our moonshot to vaccinate the world against heart attack and stroke basically. It’s incredible support,

Simon Erickson 8:54
Dana I’ll hand it back over you if you want to talk about the pipeline.

Dana Abramovitz 9:02
Sorry, it took a second to unmute.

So, yeah, no, just like super cool. Peter is amazing. And just the vision, and just you said, the legitimacy of the science and just the belief that this can happen and just making things happen. And so you’re tackling a lot of different diseases, you have a very impressive pipeline, how did you choose to target such difficult diseases. I mean, like, talk about Alzheimer’s and Parkinson’s. They’re diseases that many companies have been trying to work against and just haven’t been successful. You know, how did you choose those and then, like, what, specifically proteins are you targeting? How are you doing that? How are you testing to see how that’s going? And, then, how is it working? How’s it going? We’d love to hear about that.

Mei Mei Hu 10:01
Yeah. So one of the benefits of having a platform is that you can go after a lot of things. And one of the drawbacks is that you can’t do everything and you realize that. So you focus on what you’re good at, and then try to leverage off of others. And so even though what we are doing seems crazy disruptive, we’re actually taking a pretty de-risked approach to it.

Alzheimer’s was our first shot on goal. And in fact, it came at a time where we really wanted to prove and see what the platform could do in humans. There was another vaccine at the time that was developed by Elan in collaboration with J&J (NYSE: JNJ). And even though it showed good signs of efficacy, it had to be halted because of safety issues. Right. And the time, we were a bunch of vaccinologists, just not neurologist. But we saw that and we said, you know what, we know how to solve that problem. We know how to break immune tolerance safely. And we want to show that we can do it. And that was actually the origination of how we got into Alzheimer’s.

It turns out, it’s better to be lucky than smart. And we pushed that program forward and we got really beautiful results. So for Alzheimer’s itself we’ve now been through a Phase 1 and Phase 2A. We’ve tested it on Alzheimer’s patients, early Alzheimer’s patients, and even though it’s not statistically significant, because it’s not, hundreds and hundreds of patients. What we’re seeing is that we can slow, what appears to be, slow the cognitive decline by about 50% across all these different endpoints. And with that encouraging data we also went into Parkinson’s which has a very similar pathological phenomenon where there are these toxic proteins. They’re misfolded proteins that aggregate in the brain and begin causing damage, right. So that program is also in the clinic.

Now, once those programs started working we started looking at really well validated targets. So, where a monoclonal already exists on the market. Where we understand the biology that it knows that it works, and where we have a benchmark to know exactly what we have to hit to show efficacy in patients. So two examples are this one thing called CGRP, for migraine, for chronic migraine, right. There’s monoclonals on the market, there’s an oral on the market, but what we’re trying to develop is a vaccine that can be the baseline, right, for long durability. So instead of taking a pill every day, or a shot every month, that you have to inject yourself, think about if you just went in to your doctor’s office, two or four times a year really, and then you had this long durable relief, right? That’s migraine.

Another one is for high cholesterol called PCSK9. There are a lot of drugs on the market right now, right? There are two monoclonals and inclisiran on it as well. The problem is that they’re expensive. And so they’re late line treatments. You have to fail other treatments to get there. So even though the biology is really well validated and consistent, these drugs because of their expense, and the difficulty of taking them become lateline treatment.

And so what we want to do is say, hey, let’s show, let’s go into this target where we can show efficacy, and we know that it translates well. But let’s try to go after first line, because of basically our cost, convenience and accessibility profile. So that’s kind of how we got into these, Dana. And we’re excited because we’re expanding the portfolio, but in a thoughtful way, because we realize we don’t have the stomach to digest everything.

Dana Abramovitz 13:42
Yeah, it’s so smart. You know, I didn’t think of that, just going after the targets that are already known through the monoclonals. This is brilliant. You know, I love smart companies, and I love companies that are doing good. And so this goes back to your mission of equity and making really expensive drugs available for everybody using processes that are cheaper. So it was just brilliant. Really, really nice.

Mei Mei Hu 14:16
Well, thank you. We’re excited about it.

Dana Abramovitz 14:21
Let’s see. And so I have another question. Oh, yeah. So, with clinical trials, you mentioned that you have some things in, Phase 1 and Phase 2. You know, a lot of times when we’re talking to, we’re talking about drug companies to investors we talk about like how the drug development process is, time consuming, it’s risky, it’s expensive. Yeah, I’m just wondering how your clinical trials are going and the approach that you’re taking of targeting, now that I know targeting, those proteins that already have monoclonal antibodies. Is that making your process easier or more challenging? Are you able to use that data? Is that helpful? Just curious if you’re having any challenges or benefits from the courses you’re taking?

Mei Mei Hu 15:21
Yeah, so the answer is both, right? I hate to be a lawyer about it, but it depends. So the cool thing is that our mechanism of action. We’re inside of a vaccine, right? Where instead of making these antibodies in giant vats and billion dollar facilities outside and then passively infusing, we’re getting your body to be the antibody factory. But the way that we test in clinical trials is very similar to other therapeutics, because that’s what we are. So the great part about going after targets that have already been validated, is that there’s a defined regulatory path already. And so we know what people did before us in order to get their label or approval. And so having that kind of pathway already defined really de-risks and accelerates our clinical development pathway. So that’s what we’re doing for migraine and hyponatremia, as well as for Alzheimer’s, because, there’s a set path.

Now, it’s interesting, because with the vaccine we can go beyond where a monoclonal can. And mainly that’s in prevention. So it’s not just sick care, but it’s actually real health care, right? Because only with a vaccine can you practically and meaningfully go into prevention and try to intervene with the disease before symptoms appear. Now, the challenge is that these trials are more complicated and they take more time and money. So for Alzheimer’s, even though we can go into treatment like others have, we’re looking for partnerships because prevention trials do take longer. And you really want someone, now the irony is that the probability of actually being successful is likely higher in prevention because you’re intervening earlier, before the disease has a chance to really set in. But it is more complicated. And so even though the field is moving in that direction, that’s actually where, because of the extra complications, we’re looking for partners, particularly in those assets.

Simon Erickson 17:25
Mei Mei can you talk a little bit about COVID? This is such a relevant topic right now, for those of us who are non scientists, can you tell us how you think about this virus and how you approach controlling it?

Mei Mei Hu 17:36
Sure, so COVID is fascinating, because it’s still everywhere, and it affects everyone, and yet, we’re all fatigued by it. Right? So, investors are fatigued by it. People are fatigued. We would like it to go away. The problem is, it’s not going away. It’s staying with us. Right. And so as a result, there’s still big opportunity and unmet need. And, I was just recently at the White House, I was honored to be there talking about next generation vaccines. And what we’re looking at is, can we get a vaccine that, 1) can really kind of address multiple variants, current and future variants? Can we increase durability? Right, so instead of having a booster, every three months or six months, can we increase the amount of time that it’s protective? And then when we’re looking at LMIC countries, low and middle income countries, there’s still a big question for distributability. Right? Cold chain, can you do it in normal cold chain and not require extra cold freezers?

The last thing that I see, which is something that I saw kind of in animal health, is that safety really matters, right? If you had a choice between taking something that made you sick versus not, all other things being equal, I would like to think that, you’d like to take the thing that didn’t make you sick. It would be the one at least that I would give my kids and loved ones. So those are the challenges and opportunities that I see. And those are actually the things that we’re working on. So we have a COVID vaccine called UB-612. It’s in the clinic right now. In fact, it’s in a global Phase 3, approval study, registration study. And we’re testing to see if it can boost other platforms. So if you’ve had mRNA vaccine before, if you’ve had inactivated vaccine before, can we boost you to get protective levels of titers. And that’s what we’re going to read out in the second half of this year and aim to get an approval off of.

Simon Erickson 19:42
That’s fantastic. I wanted to change gears a little bit. Talk about, you just came public, the IPO was I believe last November. Congratulations, by the way. For those that are interested, it is a publicly traded company. Vaxxinity is VAXX is the ticker for that. Mei Mei you raised $85 million last year. I wanted to ask, our audience is investors or individual investors that are really interested in innovative things like you all are doing. What do you want to use the money for? What do you want to expand the company to do next? In the next year, two years, three years?

Mei Mei Hu 20:14
We’re just focusing on executing and getting good data readouts. Right? So we’re gonna be looking at the COVID vaccine that I was just talking about, so hopefully becoming a revenue generating company. But the other ones is we have four major shots on goal that we’re using that money for. And we want to make sure that they all have the chance to play out. So we’ve got a readout in our Parkinson’s vaccine later this year. We have the readout in our migraine vaccine that’s going into the clinic right now, early next year. And we just announced non-human primate data for our cholesterol vaccine. And we’re going into the clinic with that. And so we’re hoping to see some results from that next year. So the money that we raised is really going to progressing our pipeline. And I always tell everyone I meet, IPO is just a step in the road towards achieving our north star. It’s a financing event. And the technology and mission give us the conviction to do the right thing. And I’m confident the rest will follow.

Dana Abramovitz 21:14
I love that, just your north star of doing the right thing. And, now with the funding raised to be able to make that happen.

You know, just a couple of days ago we had a new health care bill that was just signed into law. And so it helps in being able to negotiate drug prices and the cost of drugs is something that we’ve been talking about for years, decades. And your mission is to make pretty expensive drugs, drugs that are typically really expensive.

So, I’m curious, with this new law, and hopefully you can still hear me. Okay, with this new law, being a CEO of a publicly traded company, there’s extra pressure from investors, from the Street, you know, to do things. How is that influencing you? As you’re focused on meeting your mission and aiming at your north star? How do you not get distracted by all the other things that are happening now that you’re a publicly traded company?

Mei Mei Hu 22:41
So I think that’s the job of a leader, which is to make sure we stay focused on what our north star is. And that’s the purpose of the north star, right? No matter what is going on outside, you got one direction that you’re going in.

In terms of the bill, listen, I applaud the desired outcome of the bill, right to lower drug pricing. And it’s completely aligned with our mission. So it actually doesn’t affect us, it’s actually good for us, in the sense that as more reform happens, people are going to have to lower prices, which is where we were all along.

Now. This is my own personal opinion. But the bill is big and it gives negotiation rights. But I’ve always been a proponent that in order to make big things happen, you want to set the parameters about the outcome, not the guide posts, right? So going to the moon, right? The Manhattan Project, getting a vaccine for polio, heck, getting a vaccine for COVID, right? We didn’t say, hey, let’s negotiate, you have to take this process, you have to take this process, we said, this is what we want, right? We want lower priced drugs. Why don’t we say that and challenge folks to deliver cheaper drugs, like vaccines for chronic diseases. Like invest in technologies that will get you there. That’s what I think, ultimately is going to have to happen. But that’s not to denigrate this bill which is actually a big step in terms of giving, balancing the playing field in terms of negotiating power. But ultimately, I think true innovation comes from actually driving innovation, not the process around innovation.

Dana Abramovitz 24:29
Yeah, I totally agree with you. I’ve been trying not to get on my soapbox, but that could be a totally.

Simon Erickson 24:40
It’s fascinating Mei Mei, I mean, all the things you’ve described about innovation. The approach you’re taking to these endogenous diseases, the immune response, it’s hard to get the train the body to attack itself in the ways that you needed to without having off target effects. Like you said, I applaud the effort you’re taking not only just do this, but also do it in a way that’s easy to distribute to other countries, it’s affordable for them. There’s a whole bunch of things with the platform you’re doing that are awesome. I think it’s really cool.

I’ve also seen your presentations at Singularity University, I think that you are a bigger picture thinker. And I think as my last question for you, I’d like to kind of ask, when you look into your crystal ball, and everything that you know about healthcare and everything that you’ve done along this journey. I mean, in terms of distribution in terms of all the different challenges that face the world today. Where do you see healthcare going? In maybe five or 10 years from now?

Mei Mei Hu 25:37
Um, listen, I think five and 10 years is always a funny thing. Someone once said, you end up doing a lot less than you think you can do in a year, but doing a lot more than you think you could in 10 years, right. Ultimately, where I want to see healthcare going is moving towards, healthcare, right preventive medicines. And I think that we can bring the third biologic revolution in. We don’t have to do it ourselves. I think other people can help, but we’re pioneering the idea.

But I think that, just like today, we go in and get checked for cholesterol. And if we’re, high, we get put on statins. I’d like to think that in 10 years we go in and we get checked for all sorts of things. We get checked for amyloid and tau in our brain, alpha-syn, these other biomarkers for migraine. And we say, hey, if you’re high, let’s put you on a vaccine now and prevent that disease from happening. And we just keep monitoring you on a yearly basis. And so I think preventive healthcare is really the way to a healthy society. And I think we have all the tools today, to get there, we just have to put them together. So diagnostics and blood based biomarkers are coming around, and this ecosystem didn’t exist 20 years ago, right? We have new technologies of being able to see in the brain. We have this technology that we’re developing of vaccines for chronic diseases, this is coming out and being proven in the clinic right now. So all the pieces are there, we just have to put them together and keep charging ahead. So that’s where I see life in 10 years, and hopefully by then we will be well on our way to vaccinating the world against things like heart attack and stroke.

Simon Erickson 27:28
Dana, I’ll give you the last question. If there’s anything you want to add, I know you’re a big fan of personalized medicines and value based health care. Seems like a mission that you’re certainly on board with as well.

Dana Abramovitz 27:38
I think it’s wonderful. I don’t think I have any other questions I would just love to be able to continue the coversation. Definitely follow up and monitor your progress and see what you’re doing. And healthcare’s hard to disrupt, for real. It’s really hard. And it’s just great to see somebody who has the vision and is actually working to make it happen. You know, I’ve seen a lot of companies, do something, and they were just too far ahead. And they didn’t make it happen. And it’s great to see that you have that vision and you’re making progress. And I’m looking forward to watching and seeing you reach your goals.

Mei Mei Hu 28:31
Well, thank you, Dana. You know, it’s a big vision. But I think we’re taking lots of little bites on how to get there. It’s like somebody would say, how do you eat an elephant? One bite at a time. So we got lots of data catalysts coming up. And each step is one step closer to getting where we are. And as I mentioned, this is disruptive what we’re trying to do, but we’re doing it in a very de-risked way. With a validated technology with well validated targets and we’ll get there. We have the conviction to not stop.

Simon Erickson 29:07
Well, once again, Mei Mei Hu is the co-founder and CEO of Vaxxinity, VAXX for those who are interested, the publicly traded company. Taking a disruptive approach to treating and preventing actually some very serious conditions. Mei Mei it’s a real pleasure. Thanks for joining us in the 7investing Podcast this morning.

Mei Mei Hu 29:23
Thank you, Simon. Thank you, Dana. It was great.

Simon Erickson 29:25
On behalf of my colleague Dana Abramovitz, I’m Simon Erickson. Thank you for tuning in to this edition of our 7investing Podcast. We are here to empower you to invest in your future. We are 7investing