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The Bioverge Podcast: Bridging the Translational Science Divide

Pete Schultz, CEO of Scripps Research, sits down with Neil to discuss his efforts to create a self-sustaining nonprofit drug discovery and development institute and it’s work to advance small molecule regenerative therapies from the lab to the clinic.

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Pete Schultz, CEO of Scripps Research, sits down with Neil to discuss his efforts to create a self-sustaining nonprofit drug discovery and development institute and it’s work to advance small molecule regenerative therapies from the lab to the clinic.

Available on SoundCloud, here.

Available on iTunes, here.

Full Transcript


Danny Levine (Producer)
Now we've got Pete Schultz on today. For listeners not familiar with him who is Pete?


Neil Littman (Host)
I am incredibly excited to welcome Pete to the podcast today. Pete is the president and CEO of Scripps research. Scripps research is based in the Hoya, California, and they are really trying to bridge the translational divide between, basic research, basic biology and chemistry through enabling studies, preclinical studies to move a lot of regenerative medicine based therapies into the clinic. So, I think Pete brings a really broad and unique perspective running that organization. And, and actually before that he was the founding director of the California Institute for biomedical research or caliber. He is a top ranked scientist in nature biotechnology and a top translational researcher as well. Incredibly excited to welcome Pete to the show.


Danny Levine (Producer)
I know you and Pete had some overlap at the California Institute for regenerative medicine. Did you know him?


Neil Littman (Host)
Pete and I did have the luxury of meeting while I was at serum that was many years ago, but some did fund some work at Scripps. You'll hear Pete talk about some of the specific therapeutics that they were developing. If I re if I recall correctly, some funded, some work for a osteoarthritis small molecule program that Scripps's is developing. I'm excited to talk to Pete about the state of that program as well as many others that they have ongoing.


Danny Levine (Producer)
When he took the helm of Scripps, he brought a vision of making it a self-sustaining nonprofit. Where does Scripps fit into the drug discovery and development ecosystem today?


Neil Littman (Host)
Well, Danny, that's a great question for Pete. My perspective is they straddle the line right between the academic research and an industry, right? I mean, they are very much engaged in that translational gap, but I think, culturally, I think they need to merge the disciplines, right? The academic world of really being focused on publishing and then the, the biopharmaceutical world, right, in terms of drug discovery, drug development, and bringing therapies to patients. So I think, you know, from my outside perspective, I think Scripps has a really unique culture and a really unique model to try to bridge this unfortunately, named valley of death.


Danny Levine (Producer)
What are you hoping to hear from him today?


Neil Littman (Host)
I'm looking to get an update on some of the exciting programs that, that Pete and his colleagues at Scripps are working on. They do a lot in the, diseases of aging space. A lot of their programs are really targeting different MOS to reverse the, the, the disease process, not just to slow it. So I think that's really exciting. I know they have a large focus on small molecules. I think that's relatively unique within the field of regenerative medicine, where we hear so much about, cell therapies, gene therapies. I want to dive into what's unique about the small molecule approach within this world.


Danny Levine (Producer)
Well, if you're all set,


Neil Littman (Host)
Let's do it, Danny. Hi, Pete, welcome to the show today. We're thrilled to have you with us.


Pete Schultz (Guest)
To be here.


Neil Littman (Host)
So peak today, we are going to talk about Scripps, research, your efforts to do drug discovery in a nonprofit setting and your efforts around aging and the regenerative medicine space, a effort that's near and dear to my heart from my days, working at the California Institute for regenerative medicine, I want to give our listeners some context. So, so for people not familiar with what you were doing at Scripps, perhaps we can start there. When you took over at Scripps, you sought to create a self-sustaining business model, which I think is very unique. Can you explain for our listeners how you're going about doing that?


Pete Schultz (Guest)
Yeah, just a little background on Scripps. It's a biomedical research Institute. It's it's, its history has been basic research and technology development, and it's has a rich history of that, a graduate program and, and faculty everywhere from chemistry to neurobiology and molecular medicine. When I took on the leadership here about four or five years ago, the question was, could we do something maybe different than bold? That is not only to do basic research, but accelerate the impact of that basic research on the development of new medicines. So, so at a very translational research arm, take a discovery, Megan, new medicine, whether it's a small molecule drug or a biologic or a cell based therapy. As an institution put that all the way into human trials. So we directly impact patients. The idea was really to make this idea of bench to bedside real and seamless, and thereby do two things, a accelerate the time it takes to go from a basic science to medicines that impact patients and be, as we do that medicines that are in the clinic have huge, not only huge public health value, but huge commercial value.


Pete Schultz (Guest)
The idea is if we move medicines all the way into the clinic and then partner them with pharmaceutical companies for further law development phase two phase three trials, there would be a significant financial return to the Institute that we could then reinvest in basic and translational research that to, to expand our capabilities and do even more. The idea is, if you make a drug and some drugs now are partnering for hundreds of millions to billions of dollars with clinical data, if you reinvest that in the research enterprise, you can grow the research enterprise, you can make more medicines, you can have a bigger impact. It's a little like in the business world, the flywheel model that it's, it not only is self-sustaining, but it grows. That's what we're trying to do two things, okay. Increase the impact on patients and actually create a quote unquote business model for nonprofit research that allows it to amplify any impact of either federal funding or philanthropy.


Pete Schultz (Guest)
Because if you turn a gift or NIH funding into a drug, you put in the clinic, you increase the value and the impact of that initial funding pretty dramatically. That's the long answer to a short question.


Neil Littman (Host)
No, and I love the model. And, and so I want to dive into a point that you had mentioned around this idea of translational science, right? You're talking about moving from basic research, basic biology through translation, even into the clinic. What role does Scripps play in helping to bridge that translational gap and move therapies from basic research through translation and into the clinic?


Pete Schultz (Guest)
So, so historically the way that's worked with basic research institutes is you make a discovery or you develop a technology and you publish it. Okay, you patent it, you publish it. It's transferred over to a startup company. A startup company goes out and hires raises money, which takes a lot of time hires a CEO, had to be the head of science, recruits science finds a site and then moves that molecule towards the clinic. They partner with pharma and pharma runs the clinical trials and moves it further. And that whole process is very siloed. Okay. The, the academic institutions have a certain culture and certain motivations, the biotech startup the same in the farm of the same. Those cultures and motivations can be very different. There are huge inefficiencies there that slow the whole thing down. You have this valley of death. We've asked is, can you actually bridge the first two, all under one roof?


Pete Schultz (Guest)
Can we make the discovery, can we make the drug in-house and can we file the ind? Can we put that into patients and lead the clinical study and then partner with pharma to take it into later stage clinical trial. We're really trying to bridge the first two pieces of that and make the whole process more efficient in terms of, of costs and in terms of time, and I actually apply the resources. You have more thoughtfully to the opportunities on your plate. That's what we're really trying to do. So we've actually is part of this. We did it in an interesting way. A lot of institutions have tried to do this and because the culture of drug discovery, which is very team oriented and very oriented on the final output, which is a molecule that goes into people rather than an academic institution is really focused.


Pete Schultz (Guest)
It is a cottage industry. Every professor has his own lab, and it's really focused on publishing papers and promoting his career that people who have tried to build drug discovery operations in academic centers, it's been a challenge because of the different cultures and motivations and processes. What we did at Scripps is we took two non-profit institutions. Scripps is a basic research Institute and an Institute called caliber, which I built about 10 years ago, which was a nonprofit Institute focused just on drug discovery and both were successful. We just simply merged two successful entities together. You didn't have to build one within the other. You had both built independently, they were successful and people saw the value of both under one roof. So that's how we did it. It's very different from the approach most people take.


Neil Littman (Host)
Yeah. And, and Pete, that's really interesting. I want to talk a little bit about how you, how Scripps fits in culturally, right? Cause you talked about this, but academic research mindset is very different than the biopharmaceutical industry mindset. You sit kind of in the, in the middle, right. You're I mean, you're translating science, moving it into the clinic. By definition, you straddle the line there. How do you see Scripps fitting in culturally between those two worlds?


Pete Schultz (Guest)
You know, that's a really interesting question. When I started my career at Berkeley longer ago than I want to say, the two worlds were very separate and, I was involved in some startups and Silicon valley. Okay. And, and it, some level people saw that is, you were a trader to the purist, research, ivory tower mentality. That's how it was then, but now it's changed a lot of younger faculty, even older faculty want to see the impact of their basic research on, the public and public health. So, the bar's almost raised a little for scientists and I only go, people want to do great science, but the great science needs to have an impact on people and they want to participate in that. Would that change, in the old days, and the analogy in physics was, there was basic physics, but then there was bell labs that really bridge basic and applying physics and really translated basic physics and do a huge impact on, the public with, the transistor and lasers and everything else.


Pete Schultz (Guest)
Now, I think in medicine, in the life sciences, there's a huge interest in doing the same. Okay. Not only doing basic science, but seeing the impact of that science on human health and participating in that. Even if you read science magazine and nature, now a lot of the papers that are published have to do with small molecules with exciting biological activity or new cell therapies or biologics. So, so the journals see this too.


Neil Littman (Host)
Yeah. I want to dive into of therapeutics that you're developing but before we do that, just one additional question as a nonprofit, you have a lot of freedom to go where the science may take you. Right. I think you have a, probably a lot more freedom to take on risks that industry and companies may not have the luxury to take on as such. How do you think about that in terms of tackling some of the big health challenges out there that face us today?


Pete Schultz (Guest)
Yeah. That's a really interesting question. So, so there are two sides to that coin we can take on more risk and in fact, academic institutions and scientists make their reputations by taking on risk and doing things that nobody has ever done before. Okay. That's kind of part of the culture. Pharma tends to be a little risk adverse. So, so that's an advantage to doing drug discovery in the nonprofit sector. The problem with drug discovery is failure is expensive and the further you go, the more expensive it is. You, if you have a failure in the clinic, it can be, 20, $30 million in a phase one study. So, so you also, even though, you want to take on more risk and do things that pharma's not doing, you also at some level need to mitigate that risk because as a nonprofit, you simply can't go out and raise more money in the public markets, or, via other avenues that are available to for-profit in an age.


Pete Schultz (Guest)
There's a balancing act there, but in general, it's kind of crazy for us as a nonprofit basic and translational Institute to compete with pharma, because quite frankly, we don't have the resources pharma has, and that's, that's not a useful thing for us to do. If you look at it, all of the activities in life sciences,


Neil Littman (Host)
And, and I know one of the areas and one of the activities that is a particular interest to you and Scripps is diseases of aging. And, and so I want to talk about some specific programs, but before we dive in there, I'd love to, just to understand the context about how you think about diseases of aging, at a high level, are there common elements that they share? Are there particular factors that overlap between various diseases? How do you think about tackling all the diseases of aging that are out there? Or do you have specific ones that you're targeting?


Pete Schultz (Guest)
Yeah. Shall we do we, when we started with a relatively broad portfolio because when we started this idea of doing translational research in a nonprofit in our portfolio is really, we have a large collaboration with the gates foundation and now welcome trust. We do a lot infectious disease and then our focus really, we do a lot of cancer. We have two programs in the clinic, in the cancer area. We do a lot with chronic diseases like fibrotic diseases and so forth. I would say is, we start, we move further. We we've started to create themes around what we do. Like you say, one of our themes is, is diseases of aging and healthy aging. I just turned 65. I always say, as a chemist, I'm a chemist by training. You can actually do something about it if you work on it early enough, so you can actually make a drug.


Pete Schultz (Guest)
So, so one of themes we have is healthy aging. The idea of, can we make drugs historically, we make drugs that slow the disease process. Can we make drugs that reverse the disease process? It, as from your time in CIRM, one approach to do that is by controlling self fake. There's been a lot of talk about stem cells and stem cell therapy. As a regenerative medicine, we take of an unconventional approach towards regenerative medicine. We don't make, first of all, we don't in general do cell therapy. We use, we may small molecule drugs, but we make small molecule drugs that impact the fate of indogenous stem cells in all of us. All of our blood comes from hematopoietic stem cells. Our brain comes from neuronal stem cells, muscle and skeletal from stem cells and so forth. We have those cell types in our body and they turn into muscle or bone or a, a neuron or an astrocyte or what have you.


Pete Schultz (Guest)
What we'd like to do is make molecules that control that fate. So, you know, one of the earliest programs we had at Scripps and doing this was we found small molecules that expand hematopoietic stem cells, cord blood stem cells. These are the stem cells in your bone marrow that make all of your blood cells, your white cells, your red cells, your macrophages, your platelets. If you want to do a bone marrow transplant, you need amount of poetic stem cells. If you could take, stem cells from cord blood, placental, cord, blood, and expand those, you could have a matched donor for everybody. So, so we found small molecules that did that, and those are in late stage clinical trials. Went on to look at Ms. And, the way people treat Ms. It's an auto-immune inflammatory disease. So there's a slow decline. Slow the attack of the immune system on the myelin, sheath, the coats, the axons that, that that's the approach that's been taken, which slows the progression of the disease.


Pete Schultz (Guest)
What if he could make new myelin, then you can actually repair the damage is done. Myelin is made by oligodendrocytes and there aren't enough oligodendrocytes in the brains of Ms. Patients. Those come from a precursor molecule, a cell called an OPC. We found a molecule that turned this precursor cell and LPC into oligodendrocyte and made new myelin. Now that program is being partnered to move it into the clinic. So that got us going. Those were the earlier programs, but now we've created within Scripps. All regenerative medicine portfolio and the diseases we're targeting or osteoarthritis to make cartilage one damage, lung fibrosis, and other lung damage even potentially damaged from COVID by making new lung, okay, making new skin for chronic diabetic ones, repairing the heart, making new cardiomyocytes, heart muscle for heart failure, making new liver for people who have liver cancer and the cancer removed from their liver.


Pete Schultz (Guest)
You want to make new liver and making a new cells that make the intestinal barrier. Those are the programs that we have actively ongoing, and there are they're all small molecule centric, and we have some pretty exciting data pre-clinically and now we're focused on moving some of these into the clinic, but the common theme is to repair damage. Okay. And go backwards, not slow progression.


Neil Littman (Host)
And, and Pete, those are a lot of very exciting programs you have. And, and I love that idea of not just slowing the progression of the disease, but actually developing drugs that can reverse the disease process itself. I want to spend just another minute or two talking about the difference between small molecule drugs, that target types of diseases versus cell therapies. So, this, the cell therapy approach, oftentimes, the MOA could be though, or the mechanism of action could be those cells in graft and try to reconstitute the, the function of damaged tissue. They can also operate by the Paragon effect and recruit indogenous factors. Clearly with small molecules, there's no engraftment right. You're trying to stimulate some indogenous factors or to promote cytokines that will then, as you said, direct the fate of certain cells, are you also looking to, to, to stimulate or activate indogenous stem cells through the use of small molecules?


Neil Littman (Host)
Is that part of the equation?


Pete Schultz (Guest)
Yeah, almost all of our approaches are to activate indogenous stem cells to either expand them. With lung, you have indogenous lung stem cells, AEC two cells, okay. We've found molecules. We actually took a lung stem cells, human lung stem cells, and put them in the little, a Wells and screened for molecules that allow those cells to expand and only those cells. So, so you give a small molecule, you can even do it inhale. So it's targeted to the lungs. What happens is the AAC two cells in the human lung, expand you bank more AC two cells. They turn into the other cells in the lung. So you effectively make new lungs. We found molecules that not only do that in vitro okay. A little, well, but they do it in living mice. If you give the mice models of chronic disease, like lung fibrosis or lung damage, virally induced lung damage, the lungs repair, and you can actually stain for new lung cells.


Pete Schultz (Guest)
Okay. The beauty of that is all the other drugs. People are making the tree, idiopathic pulmonary fibrosis or other chronic lung diseases, CLPD either focus on inflammation or they focus on fibrosis. So this approach is complimentary. Okay, you can S you can treat inflammation or fibrosis, but at the same time you treat and make new lungs. So you repair the damage. That's a strategy we do in almost all the assays. We do. We screened small molecule libraries directly on indogenous stem cell populations.


Neil Littman (Host)
And PDFs. As you think about the safety profile of these types of small molecules, I mean, how does that compare to other modalities within the region bed space?


Pete Schultz (Guest)
So that's a good question, too. Some of these mechanisms are very cell specific cell type specific. Okay. You have built in selective city and there's controls. So, you know, Oregon's have certain sizes. There are mechanisms in the body that actually control expansion of cells. There, there are other mechanisms that tend to be a little less cell specific. So there's a pathway called yap. Okay. That if you activate hippo, yap signaling, that controls Oregon's size. Okay. That's been demonstrated in many, many animals. The idea is, is if you can make a molecule that, that turns on, yeah, you can make a new heart, or you can make new skin, or you can make, other organs there. The question is, how do you do get selectivities? There for diet, the diabetic one healing and burns is a huge problem. You want to make new skin fast to prevent infection.


Pete Schultz (Guest)
Okay. There, we're making a topical version of that and it's targeted to the skin. Okay. We're also now making a version that's targeted to the heart where you inject it into the pericardium and it works just on the heart. Okay. In that case, you, you, what you do is you use some tissue targeting methods to get selective pity, and other cases is selectivities built in because it's an indogenous pathway, that's kind of selective to that stem cell type.


Neil Littman (Host)
And, and Pete, you mentioned, a variety of different therapeutics targeting different indications, so cancer, Ms. Pulmonary fibrosis osteoarthritis, I, in an ideal world, as you move a drug through the development process, w w when would you plan to seek a partner? Or when do you think is the right time to spin out a company?


Pete Schultz (Guest)
Yeah, that's a good question. So, to date a lot of what we've done has been in collaboration with foundations, especially the gates foundation and some pharma partners. The way we think about it there is we take it basically to I N D. Okay. We can go further and go into a phase one, a one B study, or even a phase two, a study to show, not only that the molecule was safe in human trials, but also that it has, there are some indicators of advocacy, okay. Depending on the disease, those can be very different. For example, we have in cancer, we actually are treating cancer patients. We have a novel cell therapy, it's a variation of car T therapy where we engineer T-cells, but those into patients. We also have a molecule that turns on and off those T cells. There were, we've actually taken those into trials with patients, and we've dosed with those now three patients.


Pete Schultz (Guest)
We have some complete responses already with almost no safety issues. So we're really excited about that. Another program we made with the gates foundation, a small molecule drug, that the idea is you take it with as a sub Q injection or very simple injection once every six months, and you either treat or protected from HIV. It's almost like a once a year vaccine that protects you from HIV. There, we actually partnered that late stage pre-clinically because we had a really terrific pharma partner that wanted to accelerate its development. It depends a little on the program, but we really like to get to the point where the molecules value is a therapeutic and its commercial value has increased significantly.


Neil Littman (Host)
And, and Pete, from the business model perspective, it sounds like you're likely, filing IP, filing provisional pants around the compounds that you identify. Can you talk just about the, the strategy there, when do you feel like it's the right time to file a patent on a new compound? We have a lot of entrepreneurs, I think, as listeners that probably are debating about when to spend the money to file IP. Could you talk about that in the context of your overall business strategy?


Pete Schultz (Guest)
Yeah. That's, that's a complicated and very case dependent question because it depends on the competitive landscape. Okay. And, if you're in a crowded field okay. And, like we have a stink program okay. That, and so a lot of other people trying to make small molecule stay activators, there are so many people working in the field. You tend to be pretty conservative when you file a patent. Some of our work in the kind of regenerative medicine space, there's not too many people doing what we're doing. There we can be, we can move the molecule a lot further through, to basically candidate selection stage before we think about, protecting the molecules to give a longer patent life. So that becomes somewhat case dependent.


Neil Littman (Host)
Yep. Understood. And, and that makes sense. And, you know, Pete, I, I think we could probably spend the next two days talking about Scripps and some of the exciting work you're doing, but I really want to applaud your efforts at Scripps research. And, I think you've really carved out a, not only a novel model, but a novel approach in terms of using small molecules to target many of these diseases. So with that, how can our listeners learn more about what you're doing donate to Scripps and just learn more about the resource that, that you're conducting.


Pete Schultz (Guest)
Yeah. That's a good idea. And that's a good suggestion. The way we have a really terrific website, it's scripps.edu. A lot of the w we have, we cover a lot of our basic research programs because we have a lot of people doing basic research and also our translational research programs. There's some videos that overview, the various programs we have that are also available through those websites. So there's a lot of information out there just it's Scripps study to you.


Neil Littman (Host)
Excellent. Well, Pete, I want to thank you so much for joining us on the show today and for a really, I think, wide ranging and fascinating discussion.


Pete Schultz (Guest)
The Lancaster. Thanks for the invitation. I really enjoyed it. Thanks a lot.


Danny Levine (Producer)
Well, now, what did you think.


Neil Littman (Host)
That was a great wide ranging discussion with Pete? Obviously he has a ton of experience in the space in general. I really enjoyed his perspective about how Scripps research fits into the broader ecosystem. Now, how they think about moving, largely academic science into, translation and through the translational process and into the clinic. You've heard him talk about funding early stage clinical trials. When was the right time to think about filing IP? That's always on a case by case basis. Once the right time to think about partnering with industry, and again, that's a case by case basis as well. But, you know, I think Scripps has a really unique model that, you know, I think it was really enlightening to hear Pete talk about his perspective and how they fit into the ecosystem.


Danny Levine (Producer)
On paper, these types of models sound great. Where do you see the challenge for a nonprofit like Scripps straddling these worlds of the non-profit and for profit drug development?


Neil Littman (Host)
Well, you want to talk about this idea of creating a self-sustaining business model, right? So that's clearly a challenge, right? So I that's an ongoing effort at Scripps. Are they going to be able to develop enough drugs in a large enough pipeline where they're able to partner that with industry to get licensing fees, get royalties, to create this self-sustaining business model. So obviously that's an ongoing effort. You heard Pete talk a lot about their pipeline, which I was really impressed with how broad it was. I didn't realize all the variety of indications that they cover ranging from, variety of oncology indications to a remodel, a nation in diseases like multiple sclerosis, Utah. He heard him talk about acute lung injury and their pulmonary fibrosis programs. So, I think they have a really unique vantage point, but I think, a challenge is can you actually create a sustainable model from this that is not a hundred percent reliant on donations.


Neil Littman (Host)
And, obviously they're working towards that goal, but I think that is a key challenge.


Danny Levine (Producer)
On the regenerative medicine side, they're working to stimulate endogenous stem cells to address a range of conditions. What do you think about this approach?


Neil Littman (Host)
I think that's a great approach. I think it's a complimentary to a lot of other approaches as well. Right. You heard Pete and I talk about the idea of, cell therapies that can actually in graft reconstitute, some of the function of damaged tissue damage organs, small molecules, aren't doing that, right. They're, they're acting by an entirely different MOA. You heard Pete talk about some of the benefits in terms of safety, maybe by taking this type of approach. I, I would also argue that, the two approaches are not mutually exclusive, right? They could also be complimentary. I think there, if the small molecule based approaches proved to be safe and efficacious, there there's a tremendous variety, an enormous market out there with a whole bunch of different indications that these could work towards. And, and, small molecules are historically much cheaper to develop much easier to distribute from a logistical standpoint as well.


Neil Littman (Host)
I, I think what they're doing is really quite interesting within the space.


Danny Levine (Producer)
I've given that last point, the economic element here, do you think that makes these particularly compelling?


Neil Littman (Host)
I do. Yeah. I mean, I think if they prove to be safe and efficacious, I, I think the, that makes the small molecule approach particularly attractive to industry. I think it's particularly attractive to patients as well. If you think about just how easily small molecules are administered compared to these other types of novel therapies. So, I think a lot of these programs are still relatively early in their lifecycle, right? I don't believe any are late stage clinical trials yet, but they're moving through the pipeline, right. They're moving through the drug discovery process. I will be excited to see how the programs move forward and would welcome Pete, back on the show here to have another check-in in the, in the, not too distant future.


Danny Levine (Producer)
All right, well until next time.


Neil Littman (Host)
Thanks, Danny.


Danny Levine (Producer)
Thanks for listening. The bio verge podcast is a product of bio Virginia Bessman platform, buttons, visionary entrepreneurs with the aim of transforming health bio birds provides access and enables everyone to invest in highly vetted healthcare startups on the cutting edge of innovation from family offices, registered investment advisors, and non-accredited individuals to learn more, go to bio verge.com. This podcast is produced for bioburden by the use it for this podcast is provided the Curtis Jonah Levine collective.