And I'll show you in a minute that it was pretty much ideal opportunity for the
shareholders at the time. >> Yeah.
>> How do you find that new technology to bring in.
>> great question. I spent about nine months turning over
rocks and in, in everywhere I could find to look for technology, and in fact, what
we ended up finding. so most of the time what happens [SOUND]
is when you're out looking for technology there's.
[INAUDIBLE]. Lots of different sources you can go to
because there is lot of, lot of small bio techs that are out there shopping their
wears. you can go to universities so you make a
stop you at USSD and and, and everybody has got office its looking to have
licensed technology. So, there's different places you go to.
in this particular case, we found a small mid-size firm that was interested in
getting out of R and D. they just decided that's not a place to
where they wanted to invest money anymore.
And they wanted to get out, and they had some interesting pre-clinical compounds.
So, they had never been in any yet the pre-clinical work hadn't been quite
finished, in order to put them in a man. But they looked quite promising.
And we were able to acquire those pre-clinical compounds.
They, there were some for HIV. And NNRTIs and MEK inhibitors,
predominantly focused towards cancer. so these were two great areas to start a
company around. Because their very well defined end
points they're looking at. Particularly HIV at the time seem like an
ideal place to be and although at the same there was lot of other HIV products
by then in 2006. So, you really had to have something that
was more interesting. Know what was on the market.
and we also were able to lease their laboratories, get all their equipment.
So, as a way of jump starting the organization it was really quite amazing
opportunity. And because there was a few things that
they wanted tied up in their R and D program.
We, we got an agreement with them to continue doing some research.
So, we also got some funding and from them to keep some of the scientists, paid
for so we didn't have to burn our own dollars.
so that was an ideal situation and then because these compounds really didn't
have any value to that organization. we were able to get them with very low
milestones and royalties most of which were back loaded.
So, from the point of view of what it caused to requirities that was say was a
great deal for shareholders. and I think that was clearly demonstrated
by, by the reaction of the market to restarting the company.
when we restarted the company, at the arrow and put out the press release of
the, you know [LAUGH]. Well, guess what, you're not getting your
money back [LAUGH]. But we're, we brought in a bunch of
interesting technology. you know, the concern is always, should
it, the stock is going to drop even further.
As it turned out, it actually went up very quickly.
So, the investors that were in this company at the time, to make a small, a
small increase in their investment when they got their money back.
So, the company was selling for 85% of cash and so if they got all the cash back
they'd make 15% in let's say six months. here they made almost double their money
in that same period of time. So, I got very few complaints from
investors which is nice. We restarted the company and we were able
to with the 50 people that I hired out of that Mid-sized company.
Have really a fully integrated organization that had all the components
that are necessary to do discovery and development.
Obviously not a lot of resources, not like a Pfizer, but certainly we had
individuals in the company that had expertise in all of these areas.
And enough to actually make some progress.
And so we focused, as I mentioned, on HIV and cancer.
And, so, you know, why HIV? Well, at the time, and now it's probably
10 billion. I'm not sure what the worldwide sales
are. but you know, when we were looking this
in early 2007, this was an $8 billion market.
So, there is a commercial opportunity clearly there, it had the highest success
rate of any phase three programs. So, if you had a drug that worked in
phase two when you put it in the phase three.
All but one of the HIV drugs that it moved in the phase three it made it to
approval. a very high success rate, so again, if
you're going to invest money, that looks like a nice profile.
We took a look at the main, three main classes.
Lots of protease inhibitors, as I mentioned, that we develop one here at
Aragon. Lots of nucleosides, very few NNRTIs, one
of which was not even on the market anymore.
and so we decided to go after the lead in RTI, which was doing over a billion sales