How A Tough 2022 Could Reshape Biotech

Kara Miller:

Welcome to Instigators of Change, a Khosla Ventures podcast, where we take a look at innovative ideas, the people who come up with them and those who invest in them. I'm Kara Miller, and today, biotech will likely change medicine as we know it.

Nabiha Saklayen:

I'm personally so excited. It's such an amazing time to be in this industry because of the incredible amounts of data that is available, that we can mine and use to improve medicines or design new medicines, but also from a patient perspective.

Kara Miller:

But that doesn't mean that in this rocky economic environment isn't feeling the squeeze.

Alex Morgan:

I think really good teams and good entrepreneurs find a way in these situations, and one of the positive elements that likely will emerge is that there's a greater consolidation of talent into fewer companies.

Kara Miller:

Investor Alex Morgan, and founder, Nabiha Saklayen, on biotechs moment of promise and peril. That's just ahead on Instigators of Change. Sometimes it takes an outsider to get a good read on an industry.

Alex Morgan:

I think that's always been the case that new technology and the real revolutions in fields come from outside.

Kara Miller:

Francis Crick, for example, who helped uncover the structure of DNA was working in a physics lab in the early 1940s, but his research was seriously set back when a bomb dropped into the lab and ruined his experiment. By the late 1940s, Crick had moved from physics to biology, a pretty consequential move.

Alex Morgan:

Well, he did a lot. Actually, not just he's known for DNA structure among other things, but also cracking the genetic code. Many of the advances now in biology are driven by computer scientists, right? That's just the nature of the field. Certainly innovation and instrumentation gives rise to new technology, right? You wouldn't have the rise of astronomy in the Early Renaissance, also microscopy, if people hadn't been developing lensing technology and optics.

Kara Miller:

Alex Morgan, who you just heard from there, started off in physics himself, and then also migrated into the world of biology. As did Nabiha Saklayen who focused on lasers when she was getting her doctorate in physics. Then she founded Cellino, a company that aims to make personalized therapies not just for a few wealthy people, but for large swaths of the public.

Both Morgan and Saklayen believe we're living at a moment when machine learning and the coming together of different fields, physics, biology, computing, it's about to change our health. It's about to change how we get our blood pressure medication adjusted, how we get our macular degeneration treated. Saklayen moved to the US after a childhood spent around the world, Saudi Arabia, Germany, Sri Lanka, and she stayed here without initially meaning to.

Nabiha Saklayen:

The system in the US is so unique because it's the most innovative innovation economy there is, and that's what convinced me to move here in the first place. Even though when I moved to go to college, I was not planning on being an entrepreneur, but I wanted to pursue science and do research and do the most cutting edge research as a physicist, and that's what drew me here. I think that spirit is absolutely intact.

Kara Miller:

Morgan, meanwhile, migrated away from the world of physics, got an MD and PhD and became an inventor and co-founder. He's now a partner at Khosla Ventures. But both of them will admit, though the future of medicine might be really exciting, it's also sailing through rough seas right now.

Nabiha Saklayen:

The markets don't look very promising. A lot of companies are going under, clinical results are coming in that are not what perhaps was expected in the most optimistic scenario. Yes, it is a tough time. One thing I want to mention about biotech which is very unique is that our time to revenue is quite long because we have to go through clinical trials, test these medicines and drugs on patients, and then only then can you really release them out into the world. The timing can be very, very tricky.

There definitely is a dampening in energy in the industry. I'm sitting right in Central Square in Cambridge, Massachusetts, a couple of blocks away from Kendall Square, which is a major focal point for the biotech industry, and there's a lot of discussions happening on how to get through the next couple of years. Some folks are predicting we should be thinking well out into 2024 and making sure we have a good plan in place. The real estate market is evolving as we speak.

It's always been traditionally very hard to get real estate in Kendall Square and that seems to be shifting a little bit for the first time and very curious to see how it goes. For me as an entrepreneur, my job and priority is to make sure we make really good decisions for the company, we continue to build our platform and stay very focused. I'll mention this when the pandemic hit, I think it felt similar in the sense that there was a lot of uncertainty about the future of startups, the future of venture capital.

I found myself in this very interesting position of trying to build a company for the first time and not knowing what's going to happen. But I am cautiously optimistic because I do think some of the most important companies in history have been built during times where we've had to be very mindful of resources and making the most of what's available to us. It's a mixed bag. But I'm a very optimistic person. I think that's what gets you into entrepreneurship. I'm going to hold onto that optimism.

Kara Miller:

Alex, let me follow up on something that Nabiha said, which was this idea that it's a tough time and that there are companies that are going under. Is that because of previous mistakes? There was too much money flowing in to biotech two or three years ago and it set the whole thing up for this coming down a peg?

Alex Morgan:

Well, I think not even just two or three years ago, but even as recently as let's say six to eight months ago, there's a lot of money still flowing in. If you're a pre-revenue company with a water feature in your lobby, it may be a sign that you're not allocating the most-

Kara Miller:

A fountain, we're talking about a fountain in your lobby, right?

Alex Morgan:

Yeah. Yeah. You may not be allocating resources in the most efficient way. I think there were, and frankly probably still are, companies out there that were probably overfunded. Now, stepping back, the world needs cures. We need new biotechnology. That's clear. The pandemic highlighted a lot of the still existing needs. It highlighted the incredible amount of technology and tools we can apply to problems, but there's still a hunger for more biotechnology.

I'm optimistic in the long run that there will continue to be interest in investment and opportunities to develop new products and sell them. But there is an element where this is a net positive in a lot of ways. Now, for any individual company, it's concerning. We can talk a little bit also about the challenges. There's certainly a contraction in the funding environment, which causes a little bit of dampening, but there continue ... Or a need to tighten the belts to some extent or to a large extent.

But the other thing is there continues to be supply chain disruptions and challenges with vendors and vendors having staffing and supply issues, and there's a cascading element where it actually just been a little bit more challenging, or sometimes a lot more challenging, in the last few years to actually execute. When there are delays for a small company that is working on one or two core things, it can be really challenging to timelines and the company needs to be moving forward quickly.

I think that's going to continue to be the case for the next couple years. We have a two-element component where funding is getting tighter, but in a lot of cases, the cost and timed execution can also be delayed. I think really good teams and good entrepreneurs find a way in these situations. One of the positive elements that likely will emerge is that there's a greater consolidation of talent into fewer companies, and that gives those fewer companies, I think, a greater edge to succeed.

As Nabiha said, when there are downturns and challenges, that's when the next great wave of big companies develop. It's like when you have a fire in the forest, you need the big trees to be removed, and maybe there're a lot of ... I don't want to use the phrase, but maybe there's some dead wood and that lets the little small trees grow.

Kara Miller:

Right. Well, people think of this internet collapse of 2000, 2001, but obviously Amazon was around then and it made it and Google was around and it made it.

Alex Morgan:

Exactly. People talk about bubbles, but if you look at ... What happened, there were a bunch of companies that were overvalued to exceed. On the other hand, some of those valuable companies were the most valuable companies of all time, also emerged at the same time.

Then there are technology waves and biotech is a great example where there's just been an enormous amount of progress made in the last few years in terms of capabilities. What's the next curve of growth, the value creation for the world that we're on? Well, the power of biotechnology and the technologies that people like Nabiha are working on.

Kara Miller:

Nabiha, let me just quickly ping pong over to you on something that Alex said, which is, do you find ... This doesn't just have to be true at Cellino. I'm sure a lot of people in the biotech startup community, but do you hear that supply chain issues are a thing? We've also heard a lot about the ability to acquire needed talent and how hard that is right now and how tight the labor market is. Do you feel like those two things are squeezing biotech at all?

Nabiha Saklayen:

I would say the supply chain issues are absolutely real. It's a big concern. Good thing I work with Alex because Alex rang the alarm on that one a couple of quarters ago and made sure we were very focused on thinking through, "Okay, how do we have multiple backups? Do we have enough relationships?" A lot of the things we use at our company for stem cell culture and engineering are very rare and precious and are only made in certain parts of the world.

You also had a lot of logistical travel-related customs-related challenges that were piling up because customs was overwhelmed with a lot of things they were dealing with. Yes, I'm not afraid to put it in a supply chain issues in an existential crisis bucket. Then the second part of your question around talent, it's been really interesting to grow the Cellino team because we have, I would say, three distinct categories of talent that we have to draw in.

Machine learning, AI hardware optics, and then cell biology, cell therapies, and they're three very different markets. What was surprising to me is we did really well on hiring machine learning talent and software talent onto the team because of the mission of the company. We were able to draw in talent for a more established companies that are working on problems that are very different to Cellino's, not related to human health. A lot of folks are migrating into biotech to work on human health-related problems, and that's very motivating.

On the hardware and biology side, I think it's been competitive. We've had to be very thoughtful about our interview process to make sure we get enough touch points, to make sure these amazing scientists and engineers are a great fit for the team, but also we've had to compete with other offers. We've had to be on top of our game. I do think right now there's an interesting shift because I'm catching up with my other friends who are CEOs in Kendall Square, and there's just a lot of uncertainty around how the markets are going to evolve.

How much capital even established biotech companies are going to be able to draw in based on their clinical data. How Big Pharma is going to interact with biotech companies right now. They might be sitting back and just watching and seeing what's happening. Within the workforce in the biotech community, there's a lot of nervousness and nervous energy that everybody's feeling.

As management teams across all the companies, I feel like everybody's having to do their part to have tough conversations with their teams about what's happening? Why is this program getting cut? Or what do the layoffs mean? I think a lot of folks in the workforce were not prepared or are trying to adjust to this new way of life and new perspectives, and it's a tough transition.

Alex Morgan:

I'd like to add one thing. Just to remember that it's not just your own supply chain issues and staffing issues, but that also is true with your partner organizations and your vendors, whether they're your service organization, let's say. There are challenges in the execution and a lot of CROs and service providers, and if you're a small company reliant on them to fulfill an obligation or to provide something that is part of your partnership and relationship, there can be also substantial delays in groups, even canceling contracts. That'll affect a company if they're not in control of their own destiny as much as possible.

Kara Miller:

Right. Alex, if you can back up for a little bit, I know that you talk to a lot of companies, you see what a lot of companies are working on. If you had to think about the big trends right now in biotech and you were talking to somebody outside the industry, what would you say that you see that ... What does the 30,000 foot view look like?

Alex Morgan:

Well, there continues to be a shift into uses of data and machine learning in interesting ways. Nabiha alluded to some of the things that she's working on. There continues to be more of a focus on genomic medications of various clients, or genomic therapeutics, genetic therapeutics, things like CRISPR, RNA therapeutics. I think there's a shift into more interest in delivery technologies and manufacturing technologies.

I think if look back, let's say five, 10 years ago, when there was still a lot of effort in some known therapeutic modalities, there was perhaps less a concern in developing new manufacturing technologies. But as we move into more complex genomic medicines and cell therapies, manufacturing issues are paramount. There is increasing interest in things in precision medicine, personalized medicine, and also in digital delivery and more holistic approaches to therapeutics than just thinking about your proprietary chemical.

That's prompted by a few things. One, the challenges and execution of clinical trials under COVID really highlighted the advantages of digital trials and digital approaches, and then there are also an awareness that you'll want to track outcomes digitally, even potentially when you're on the market for purposes of reimbursement, FDA requirements of tracking adverse events and outcomes and so forth.

We'll move to a world where it's not just about drugs, but it's a more holistic delivery technology that would have potentially a companion diagnostic baked into everything, and then some sort of digital relationship that might be established or developed at the trial stage, but also when the therapeutic is on the market.

Kara Miller:

When you talk about digital delivery, explain to me what that is.

Alex Morgan:

Well, you want to understand how patients are using their medication, how they're responding, what are their adverse events, and there are a couple reasons. One of the things is actually you just want to understand how to dose a medication and so forth. Certainly as you imagine running a trial, you would like to have that untethered from the need, for example, of patients to go to a location to answer questions. Let's say that doesn't necessarily make sense in the modern world, whereas historically, that was a big part of executing a trial.

But as much as you can have digital biomarkers, that facilitates and makes it easier to run a trial, but also makes it easier to have compliance so that people actually finish a trial. It's not too burdensome for them to have to go in and talk to someone and get imaged and so forth. The other thing is, as we think about the future of personalized medicine, it is likely going to be required to do some sort of surveillance and interaction with the patient over the long term in order for you get paid for that expensive, personalized therapeutic.

Kara Miller:

Huh? Okay. I want to ask you this, Alex, and I want to ask Nabiha essentially the same question, which is, if you think about a decade from now, 2032, given what you understand about what's in the pipeline and how things are changing and what's in development, how do you think for the average patient medicine might be substantively different than it is today?

Alex Morgan:

Just an as an example of a way to think about therapeutics, you will probably have in a lot of cases, more holistic programs that specialize in particular problems. Take a very common condition like hypertension. From your side, it'll be simpler, but there will be some tracking of your blood pressure at home, you'll measure it at home. You will get medication adjustments automatically. You'll get various kinds of coaching and support around lifestyle elements.

There will be more and more drive towards treating your condition holistically with some pharmacotherapy, but also as much as we can do to shift outcomes with lifestyle, how your medication's being used and so forth, to optimize the outcome that we care about. Hypertension is a great example because we understand how to measure the outcome that we're trying to achieve, and that outcome changes in a relatively short timeframe. There's a lot of challenges in doing this kind of delivery of a holistic system around it.

Condition one is you have to have be able to measure something, you have to be able to interact with the patient, you have to be able to have things that you can change. Hypertension medications, there's lots of choices. You can change medication, you can make particular lifestyle recommendations, and that is increasingly true across a lot of different conditions where we'll have ways of measuring how the patient is doing and that measurement is around something that changes relatively quickly so that you can then modify what the patient experience is and what therapeutic modalities you're using.

Kara Miller:

Well, hypertension is also a good example because heart disease is the number one killer in America, and hypertension is often tied in with heart disease. But I assume what you're saying is there's a much bigger role for computers to crunch numbers here because I doubt what you're saying is we have hundreds of thousands more doctors coming online to individually cater to your hypertension because we know we hardly get any time with our doctors.

Alex Morgan:

There are doctors that can be involved in many aspects of care, both in interacting with patients, but also in managing the protocols used. But there are lots of things that computers can do better such as optimizing drug dosing algorithmically. If you collect data from a patient, tweaking the actual numbers is a computational task and you can build a model and computers can do a much better job than a person can, which is ...

It's obvious that human beings aren't very good at this when you look at the numbers of drug dosages. They're round numbers, and basically because those are the kinds of things that humans like to think about, not necessarily optimal for any particular patient. There's great work by people like Calum MacRae at Harvard in figuring out how to better treat patients with blood pressure issues and heart disease, algorithmically.

There are doctors involved with supervising and setting up the systems and making sure that it matches patients' needs and expectations and lifestyle and so forth. But some of the nitty-gritty details of mapping drugs and their usage to human physiology is a problem that machines can model and make modifications and predictions better than human beings.

Kara Miller:

Nabiha, a similar question to you. Again, knowing what you know, and what your colleagues are working on at Cellino, but elsewhere too, when you think about how medicine for the average patient might be different in 10 years, what do you think is coming down the pike that maybe people not in this industry that they would not realize?

Nabiha Saklayen:

I completely agree with Alex about this movement happening towards more holistic treatments and combining the idea around lifestyle, how to manage your disease, and then also working our way towards more curative therapies. I'm personally so excited. It's such an amazing time to be in this industry because of the incredible amounts of data that is available, that we can mine and use to improve medicines or design new medicines, but also from a patient perspective.

When I think about even my experience, I just have a lot more access to genetic level data in terms of even making assessments and decisions about my own health. I know for a fact that will continue as these methods increase in precision and detail and become cheaper and more accessible. That's really, really exciting to me. Of course, I'm completely biased, but I'm very excited about the future of regenerative medicine, because that's the space I work in.

I know for a fact that within the next 10 years, we will have an increasing number of new modalities in cell therapies and gene therapies where patients can be given new cells or genetic defect can be corrected for them that changes the course of disease. Now, will we get to completely curative outcomes with some of these treatments? Possibly. I think we've seen some great results in the earliest cancer cell therapies.

But over the next decade, we definitely will see an amazing movement towards access in a whole new, different class of modalities. Let's say you had Parkinson's disease. You might be able to go to your doctor and get a transplant of brand new neurons into your brain to change the outcome of the disease and possibly even cure the disease.

That's what's happening in my subset of biotech, where there are many amazing companies, both startups biotechs, mid-sized pharma companies that are investing hundreds of millions, billions of dollars into developing the next pillar of medicine that goes away from just trying to treat symptoms, but trying to really change the outcome of the disease for the patient, and long term change their health span and their quality of life, which is very important as the world becomes ... as we get older as a global population, and there's a larger and increasing aging population, increasing health span is going to be very important.

Kara Miller:

Let's talk about what Cellino does and where you see things going. Just talk for a little bit. Again, maybe for somebody who's not super deep into biotech, what does Cellino do and where do you want it to go, and what's the kind of change that you want it to have?

Nabiha Saklayen:

Yes. I'm happy to tell you all about Cellino. That's my favorite thing to do. We play in the regenerative medicine space specifically, and it's a really exciting time to see the transformation that's happening in medicine, where there are new modalities being developed. Let me give you an example. Let's say diabetes. Normally, when you have diabetes, your beta cells that produce insulin normally are malfunctioning, or they've been destroyed depending on what type of diabetes you have.

Normally, it's quite a difficult process to manage the disease. I think some patients do better than others with insulin injections and glucose monitoring, et cetera, and there's a completely new modality that's being developed where the idea is, okay, how about we create new pancreatic islet cells for the patient, brand new ones, and transplant them into the body? That's really exciting because the idea behind this new cell therapy approach is that the patient would not have to take insulin injections anymore, and the cells are going to be better at regulating insulin within the body.

It's very, very exciting, attractive, and there are actually several companies working in the beta islet transplant space, which is very exciting. Sirna Therapeutics, about half a year ago or so, announced some great results in their first patient that was given a transplant of insulin-producing cells and didn't have to take insulin injections anymore. It's quite revolutionary, almost feels very science fiction at times, but it's happening and it's really exciting because it's happening across many different disease areas, such as Parkinson's, heart disease, retinal disease, vision loss.

The idea is to make new cells and transplant them in the body to replace the cells that have been damaged and destroyed by the disease. What we do at Cellino is we make the process of generating these cells much easier. The way these cells are made today usually involves a very highly skilled scientist sitting in a lab, making cells by hand over a period of several months. They're very gifted. They're really good at their jobs. There's very few people in the world who can do or achieve the level of precision and accuracy that you need.

But it's not scalable, it's very expensive on the order of millions of dollars per patient to run this very artisanal manual process. What we do at Cellino is we automate every part of that process from all the liquid handling steps that would be normally done by hand, the inspection of the cells, which would be done by eye under a microscope by the scientists. We've automated those aspects using machine learning algorithms to characterize the best cells.

As Alex mentioned earlier, algorithms are really good at making a lot of these decisions now, thanks to how far we've come on that front. We've built a fully automated approach to engineering those cells and generating them in a highly scalable way. One of the key aspects of the technology that came out of my PhD work is the idea of how do we remove cells that are unwanted, that are not high quality? We actually use a laser system to do that. I'm a laser physicist by training. It's unusual for me to end up in biotech, but I think that's one of the most exciting things about what's happening in this industry right now.

What I see as a huge trend is folks from many different industries coming in, bringing new ideas to create paradigm shifts and reimagine how we can solve some of these biggest problems. Using a laser-based system is very powerful because it's precise. It's super precise. It's subcellular resolution, if you want it to be, and if a scientist is having to pipette things by hand and scrape cells away by hand, it's really difficult to match that level of precision. That's what we're doing at Cellino.

Kara Miller:

Clearly, if you have cells in your eye that aren't working properly, or cells in your pancreas that aren't working, it sounds great to be able to replace them with new cells. Give me a sense of the timeframe. I know it's hard to say, but the timeframe as you see it and what the barriers could be. Is this a question of you're sitting back and you're waiting for the results from studies and you just don't know? Or what might be these hurdles to getting from where you are now to where you'd like to be?

Nabiha Saklayen:

Absolutely. Where we'd like to be is let's say you are diagnosed with a disease, age-related macular degeneration. It's one of the biggest diseases in the US when it comes to vision loss, and time is ticking because essentially what happens in this disease is the retinal pigment epithelial layer, which is the dark layer that makes your retinal look black, those cells have been destroyed or are in the process of being destroyed.

If you don't replace them soon enough, your photoreceptors will be damaged too, and that just keeps going, so you start to lose subsequent layers of the retina. Intervening quickly is important. I totally appreciate your question. What would happen in a cell therapy approach, there is ... If we're going for a personalized cell therapy to replace those retinal cells, you would do a blood draw from the patient, and they would be taken to a Cellino site where these cells would be transformed into personalized stem cells.

Stem cells are really powerful because they have the code in them to become essentially any cell type in the body as long as you know, how to manipulate that code with the right biological tools. Then once you have the stem cell, you drive it towards your retinal cell state, and then you end up with a finished product. Right now retinal patches are being developed in a sheet format because then you can inject them subretinally. I think surgeons are brilliant.

There are several surgeons around the world who are trained to do this and there you have it. You have your end-to-end therapy and you can stall the progression of the disease and maybe even regain vision for the patient. Where we are right now is there have been several patients around the world that have been given a certain version of this type of therapy that those cells were made manually, and it took months, maybe half a year up to a year to make those cells.

There's a really a critical need to make sure we accelerate those timelines. How do we manufacture these cells in a time efficient way on the order of a few months. Few weeks would be amazing. I think there are some things we can do, thanks to synthetic biology, to accelerate biological timelines, but it doesn't always work out. But I do think we'll see a lot of movement there. But essentially it all comes down to manufacturability.

Because biology is complicated, and as a physicist, I really respect how complex it is. It's really difficult to figure out what types of equations you want to use to explain the complex phenomenon that are happening at a cellular level. Figuring out how to bring about consistency and reproducibility into a process that's very chaotic and unpredictable sometimes and doing it in a controlled manner is very, very important.

I'm optimistic because Cellino's approach is already showing that we can deliver consistent reproducible results when it comes to generating some of these cell types. Then the next step is to be able to do that in the most efficient manner and then doing it at low cost. I do think from a democratization aspect, we do need to think about long term, where's this going?

A lot of these cell and gene therapies could be curative, but if they cost a million dollars or $2 million per patient, it's very difficult to scale within the US, let alone the world. I do think the more efforts we put towards building next generation technologies to scale up these new modalities in medicine, the better off we are.

Kara Miller:

Nabiha touched on this a little bit, and I wonder what your thoughts are, Alex. The idea of bringing down the cost. Years ago, there was a great cover of the MIT check review and I'll get it wrong, but there was just a picture of a baby, sitting there, a little baby, and the headline was something like if it costs a million dollars, might have been $2 million to cure this baby, could you pay it? Should you?

You talked about these rare diseases. There has been for a while, if you were very wealthy, this ability, if you did have a child with a rare disease, let's say, to maybe get that addressed. Is there an effort to bring some of that personalization down the cost curve?

Alex Morgan:

100%. All of this is about reducing cost, and at the same time, by using technology that has automation in it, again trying to optimize for multiple things, but you typically can end up with a higher quality outcome because your system is more consistent, you understand failure modes and you can do it in a reproducible way, right? Historically there are many technologies, like cell phones, let's say, that were once limited to the very wealthy.

But once you improve the technology, it becomes scalable. The actual cell phones today of course are much better than the early cell phones that people had in the '90s. They're better quality, but they're also much more widely distributed in much lower cost. That is our goal with all of these approaches, right? Is to get biotechnology into the hands of everyone.

Kara Miller:

Nabiha, let me just ask you, and maybe you've already touched on it with me, but what the first use cases you think might be for your own technology. Then I also wonder who your customer is. Does this go to patients? Does this go to doctor? To whom will you make that first connection and say, "Here's what we have?"

Nabiha Saklayen:

Yes, absolutely. For us, the first areas of focus for the company are in the neurodegenerative and ophthalmology spaces. I mentioned the two examples of age-related macular degeneration, which we're doing a collaboration with the NIH on that because they're leading the first personalized AMD cell therapy trial in the US right now. It's an amazing opportunity to work with them. Then we're exploring neurodegenerative applications very actively.

The reason for that is those just happen to be the two areas of this specific regenerative medicine domain that have been the most advanced. These were the first cell types to be generated from induced pluripotent stem cells. These are the stem cells I was referring to earlier and then also tested in patients. Given that Cellino's vision is to really scale up production with high precision, we are following the trends right now of where the first cell therapy's being developed because it's taken decades of clinical effort to get to where we are.

Those clinical trials are now starting, launching, or they're in the earliest phases where they're dosing five, 10, 15 patients, and we want to support those trials to get to hundreds of patients in phase two and beyond, and then once there's an approved product, thousands, tens of thousands of patients per year. That's where the immediate focus is. But absolutely, we have some very interesting cell types that we always think about in the back of our minds that would be ... that our ideal fits for the platform.

Alex and I both have some of our favorites that we're keeping in our back pocket, but we're really following the trend of the industry. To go back, who are the customers is the question you asked. Right now we're very focused on building partnerships with companies that we think bring value to the table in their cell therapy expertise. They can be biotech, mid-size, large, or even pharma companies, because they've done a lot of work in developing transplantation methods or clinical trial strategies if they're enrolling patients.

Those are the synergistic relationships that we're exploring. But ultimately, the Cellino platform is designed to deliver personalized human cells and tissues at any site in the world. We're pursuing a decentralized modeling because everything is cloud controlled and modular. Let's say we want to drop a manufacturing unit at a hospital, and there's going to be several patients that would receive a cell therapy transplant there.

We want to be ready to build that type of platform at a global scale, and we're building the right partnerships along the way over the next couple of years to achieve that big ambitious goal because it'll be difficult to do it on our own.

Kara Miller:

Alex, let me ask you another big picture question. You talked before about a big trend being the role of computing and helping personalized recommendations, medicines, dosing for people. I know you've thought a good deal recently about women's health and how a focus on women could be altering the industry. Just give me a sense of what you see happening and what you hear.

Alex Morgan:

Well, I think it's important to remember, of course, that the majority of healthcare is actually women's health, even today, where women consume a little bit more healthcare, whether in spending or whatever metric you look at. They often are the decision makers of family health for a family unit. That's an element. In healthcare delivery, certainly many healthcare providers do skew towards be ... Whether it's nursing professions and so forth, that does skew towards more women. But actually now, even in the pipeline of physicians, it's about 51% of medical students are female.

Kara Miller:

Interesting, which is a big shift, right? From probably 30 years ago or...

Alex Morgan:

Exactly, over the last several decades. Now, of course, in many of the key leadership positions in the academic industrial complex, it's still men. But I think the future of healthcare is certainly basically parody at a high level. There are still, of course, gender differences in some of the areas of healthcare in that there are let's say fields like obstetrics now where most of the trainees are women, and then in as well as pediatrics and then certain areas of surgery, which are orthopedics, which are still dominated by men.

But there are changes going on, and certainly men and women can be in any role in healthcare they want to at this point. Now, there is issues of equality in access. I think that things are going much better than they used to be. I grew up very, very poor in the United States, and I know that having been involved in various things, including helping to run a clinic at one time, a free clinic, that access is dramatically improved.

Things like the Affordable Care Act have really transformed access, and as we adjust payment models, more and more in the right direction for paying for outcomes, as opposed to healthcare as an act, we are getting the kinds of things that we want out of a healthcare system. Sorry, I don't want to get depart too much from women's health, but I think one of the key things that is interesting to me is you mentioned babies and treating babies with rare conditions and how that can be expensive.

Well, the flip side of looking at that is if you can save or improve the health and wellness and productivity of an infant, you get all of the lifespan of productivity in relationships and everything that an individual does across the whole course of their life. That's one of the reasons I'm really interested in things and we're active in things in fetal and maternal health because it ... Right at the very beginning of life, you are setting down the foundation for future health and future life and productivity and ability and so forth.

Right now, a lot of issues like pre-term birth are disproportionately a burden on mothers of color. It's an area that we're working on from a technology angle. We have a company called Mirvie, which is working on technology in pre-term birth, and we're in the background working on a few other efforts in that space. I think there's a lot of there, and it will affect the future of generations if we can improve outcomes at birth. There are million premature babies that die every year, and that's a million babies that I'd rather didn't die.

Kara Miller:

Maybe a final question too, it's only tangentially related, and I know you're not the venture capitalist, but I know you care a lot about getting women and girls into STEM. I don't know if you've done this, but I've done this recently. When you look at the numbers that PitchBook, that Bloomberg have put out for 2021 about women getting venture capital funding, 2% of VC funding went to companies founded by women last year.

Now obviously, you're an exception to that, but you have a whole network and you would think we would be moving in the opposite direction. Can you give me a sense of what you think is going on?

Nabiha Saklayen:

Yes. Great point. Yeah. 2% is not very-

Kara Miller:

Not good.

Nabiha Saklayen:

Not great at all. No, it's abysmal. Well, I think there are many reasons, and I think I first started thinking about this topic about representation in STEM, and having been a physicist my entire scientific career was always usually the only woman in the room. 5%, 10% of undergrad classes usually women and in grad school, similar numbers. I think ultimately, there's a lot of different aspects that have to be dealt with, and one aspect that is difficult to deal with is the idea around unconscious bias.

We grow up thinking what does a CEO look like? Most people, there have been studies on this, will not draw or imagine a woman. Or what does a scientist look like? You might have these ideas based on pop culture references of an old White man with tufts of gray hair. But I think imagery is very, very important. One thing that's been really interesting at Cellino is we're a growing team. I have several employees with young children and they know that I'm the CEO of this company, so now they have this bias that all CEOs are women. They are starting to ... It's changing-

Kara Miller:

It's nice for a change.

Nabiha Saklayen:

... their worldview. Right? It's so interesting that that's the first takeaway that they had. Oh yeah, mom's boss is a woman or dad's boss is a woman, so all CEOs must be women. That's really interesting and I'm sure that shapes their worldview going into the rest of their lives. I do think starting young is very important in terms of how we create a broader set of images and stories of people who can be scientists or entrepreneurs or pursue business, whatever it is.

One nonprofit education program I worked on is called I'm A Scientist. It's run by The Plenary, which is based out of San Francisco, and the idea was to send beautiful posters of scientists who don't look like a traditional scientist at all to thousands of classrooms, and right now it's running in over 3,000 classrooms in all 50 states, and the response has been phenomenal because kids are starting to see themselves in these scientists. The right age to start this type of movement is a middle school actually, because that's around the time when kids really build their own sense of self and who they can be and who they can grow up to be and they start to eliminate options.

I feel very fortunate because I have an incredible mom who's a teacher and she just always encouraged me to pursue every single dream I had, whether it was wanting to be an astronaut or a physicist. Then when I said, "I'm going to be an entrepreneur," and she said, "Sounds great. I'm here to support," and that's not something a lot of us grow up with. I think on the venture capital side, I will say I know the numbers are really bad, but every year and every six months of my career, I feel more and more camaraderie and solidarity and I see lots of other underrepresented founders around me.

I think in the biotech community, it actually covers many different angles. It's women, it's people of color, it's age as well because the biotech industry is predominantly run by experienced professionals. I do feel that movement happening. I do think we, as the next generation of biotech leaders, have our work cut out for us. We need to do a good job, build successful companies, deliver great medicines for patients to continue that movement. I think if we do well and we continue to do well, I think that brings about generational change.

I'm excited about that. I look at these numbers and they're quite awful, but I wake up every day and I say, "We're going to fight this fight and we're going to keep doing this." Because I look at my own journey, and if I hadn't pushed through all those biases that I was facing in my career, we wouldn't be here today and this technology would not exist in the world. I think patients would be missing out on having access to these therapies down the line because Cellino's approach is so novel, and being the inventor of this, it just made sense for me to go for it.

Alex Morgan:

I would say that I think half the CEOs I work with are women.

Kara Miller:

Wow. You have an unrepresented sample.

Nabiha Saklayen:

Yep, that is true. He does. Alex, does have one of ... Actually not one of the ... I would say the most diverse portfolio of CEOs that I've seen out of all investors. Yeah.

Kara Miller:

I wonder if some of that is that biotech is a little different from, let's say, if you were working in, I don't know, software startups or something.

Alex Morgan:

But yeah, potentially I think. One of the things is Khosla Ventures does invest around impact. They have to be good businesses, but we also look for things that have positive impact in the world, and we have a lot of women who want to do impactful things, whether they're in areas like energy, clean tech, healthcare, or also software and consumer companies that are really around positive impact. I think we end up with a ... For a bunch of reasons.

Maybe it's also because I was raised by a single mom and some of my early mentors were some great women scientists and engineers, people like Lynette Hirschman, the AI researcher, NLP researcher. But I think by focusing on important outcomes, breakthrough technology, trying to do positive, good in the world, you can attract people of all backgrounds, all genders, all sexes, et cetera, trying to do something impossible. I think also maybe because Vinod Khosla was a very unusual person when he was coming up in Silicon Valley as an immigrant and in a space that wasn't very accepting at the time. We do end up having a lot of diverse backgrounds.

Kara Miller:

Alex Morgan is a partner on the investment team at Khosla Ventures, and Nabiha Saklayen is a co-founder and CEO of Cellino. Thanks to both you for a fascinating conversation.

Alex Morgan:

Thank you.

Nabiha Saklayen:

Thank you so much. That was really fun.

Kara Miller:

Thanks, as always, to you from listening. If you want to hear another fascinating voice whose work spans many aspects of biology, check out our recent conversation with Angela Belcher, the head of the Biological Engineering Department at MIT. She's worked on batteries, environmental cleanup, and has now thrown herself into the early detection of cancer. Subscribe to Instigators of Change to get new episodes of the show every week. I'm Kara Miller. The show is produced by Matt Purdy. I'll talk to you next week.