Episode 49
In this episode of the Ori Spotlight Podcast, Jason C. Foster welcomes John Khoury, Founder of Project Farma, to unpack how the standards for advanced therapies are shifting.
John reflects on why infrastructure planning, automation, and comparability studies can’t be left until late-stage development. They explore how CGT companies can reduce manufacturing risk by running development activities in parallel, why early investment in platform approaches matters, and how outdated assumptions about regulatory flexibility may be slowing progress. For developers aiming to compete at scale, these early decisions are quickly becoming non-negotiable.
Watch on YouTube: https://www.youtube.com/watch?v=Y3hEMBYkaYE
Further Information
Episode transcript
This transcript has been processed with AI software; please be aware that it may contain inaccuracies and may not be entirely precise.
Jason Foster: Hello and welcome to the Ori Spotlight podcast. We’re talking to leaders across the cell and gene therapy industry and telling you more about Ori’s mission to manufacture brighter futures. I’m Jason Foster, the CEO of Ori Biotech, and I’ll be your host for today’s podcast.
This week our guest is John Khoury, founder of Project Farma. And John, you have the distinction of being the second person from Project Farma to join us — you’re the repeat offenders. We had Anshul on maybe a year ago now, but we’re excited to hear what you’ve got to say on the latest and greatest around cell and gene. And I’m sure you’ll be a much better guest than Anshul was, so I’m excited for that too.
John Khoury: It sounds like we’re doing a great job here of working with you, Jason — we love talking to you. And second time’s the best time. This is going to be the one time the sequel’s better than the prequel.
Jason Foster: Let’s get going. If we can introduce the listeners to you and your background — you founded the business, and you’ve got a history of entrepreneurship, investment, and certainly a closeness to advanced therapy manufacturing, which as you know is our core focus on this podcast. Love to hear more about your career journey and how you ended up founding Project Farma.
John Khoury: So my background is mechanical engineering. Transparently, I’d wanted to become a doctor, but all that education was going to take a bit more time than I had, with my humble beginnings, to put in. And ultimately, as advanced therapies were coming to the forefront, we saw an opportunity where they needed more engineering minds and more entrepreneurial minds to solve these complex problems. At that point, in talking to Anshul and Tony Khoury, we were like, there’s got to be a better model here — not just being a staffing company, but actually a high-powered project delivery team to solve these complex challenges.
In that, we started talking about what we wanted to be. We wanted to be like our partners: patient-focused. And our products are people, so we wanted to be people-first. With those two words and phrases, we became Project Farma. It’s been a very proud thing to work with the biggest blockbusters that have ultimately gained approval, and hopefully to keep moving this field forward.
Jason Foster: That’s awesome. John, I think it was probably four or five years ago that we met each other — it seems like forever ago now. I was new to Ori, 2019 I think, and you guys were one of the largest service providers to the advanced therapies industry, and probably still are. Tell whoever’s listening what Project Farma does, in detail.
John Khoury: In the early stages of Project Farma, our strategy group — led by Tony, Danny and myself — was heavily focused on high-impact strategic decision-making. A major part of our work centered around make-versus-buy business cases: determining whether an organization should manufacture internally or partner with an external CDMO. These were pivotal decisions, occurring at critical points in the investment cycle, and many of the proposals we developed ultimately went before boards and funded significant, industry-shaping programs.
At the same time, the regulatory and operational frameworks that existed in traditional biologics were still developing in advanced therapies, requiring us to shift from simply relying on our past experience to thoughtfully adapting it — balancing those proven principles with the flexibility needed for an emerging modality. It was clear that a traditional, biologics-based cookie-cutter approach wasn’t going to work here. Our regulators have also acknowledged this: the modality does not fit neatly within existing regulatory structures. As both the science and the manufacturing continue to evolve, that need for adaptability really became a defining element of Project Farma’s value — strengthening our long-term partnerships and prompting a broader question: how do we design environments that maintain compliance while enabling the level of innovation required to bring life-changing, life-saving therapies to patients?
In the end, we had the privilege of supporting several emerging advanced therapy innovators whose platforms later achieved commercial breakthrough status. It was an inflection point, not only for the sector but for our team, as we helped guide foundational decisions and support the build-out of some of the largest advanced therapy manufacturing footprints in the industry. It remains a really proud chapter for us — driven by our desire to help solve complex problems for the patients in this rapidly evolving field.
Jason Foster: I think over the last five or six years we’ve realized that a cookie-cutter approach — taking what we did in biologics and applying it to advanced therapies — doesn’t work that well and isn’t the right approach. But we’ve nuanced it based on what we’ve learned over 20 or 30 years of biologics manufacturing.
John Khoury: 100%, and even the regulators have identified that. They’ve said it’s not surprising that these don’t fit in the regulatory framework. So everybody’s saying kind of the same thing: this is different, complicated, and the outcomes are unique. And our manufacturing processes are evolving in that same cycle. So how do we build an environment that allows for more innovation than we’re typically accustomed to? That’s the only way to bring these life-changing, life-saving medicines to market for patients.
Jason Foster: Absolutely. You talked about that buy-and-build decision that companies were making back in 2020, 2021. Given the changes in the macro environment and the funding environment, how have the considerations around that decision changed?
John Khoury: I think we’re doing fewer make-versus-buys and more buy-versus-buy assessments — then working out what’s the best partner for you. It’s crazy to think, Jason, that since we started Project Farma back in 2016, here we are almost 10 years later, and the whole funding environment has changed. I think we need to get more comfortable — not with the current funding environment, but rather with the current macroeconomics we see around us. Interest rates aren’t going to go down to zero again, or to very low numbers. We’re going to live through volatile economic times; we see that every day. We read the paper and this is up, this is down, interest rates, are they going to change or not?
I think we just need to get more comfortable that volatility is a constant. So what’s the line we can put down the middle to set a course that’s going to drive a lot of these next-generation treatments? Because if the funding environment is going to be contingent on the macroeconomic environment, and we know the macroeconomic environment is going to be volatile, then that’s now a constant in our equation. And I think we see behaviours today that mirror that. I was just looking over some of the statistics around the investment environment: we’re seeing lower investment — I think we’ve all seen that, it’s not earth-shattering — but we’re seeing higher average dollars per deal with fewer deals. It’s almost like, just as we’re doing precision medicine, it’s almost like precision investing right now — reducing the risk based on the macro environment, where the funding is a little more restrictive.
Jason Foster: Yeah, I agree. The new normal we’re reaching is a little less spray-and-pray, a little more targeted, a little more laser-focused. Pretty much everything with a business plan was getting funded back in the day — I think $50 billion of investment went into cell and gene in 2020 and 2021 alone, which was a ridiculous amount of money and has really jump-started some of this next evolution we’re seeing. But there’s been a flight to quality — fewer deals, companies raising more money. And the interesting realization I’ve had, and that I hear industry participants talking about, is that the old biotech playbook — the one where we develop a product, get some first-in-man clinical data, and then flip it to one of the big pharma companies because they’re going to worry about manufacturing, they’ve got that sorted, we just need to worry about the science — that playbook is being rewritten as we speak for what I’m calling CGT 2.0.
We tried to follow that model in 2020, ’21, ’22, ’23, and we realized it doesn’t work for advanced therapies. We need to understand not only the biological, clinical and scientific characteristics of our product, but also the commercial ones: how are we going to manufacture this at scale? What is our cost-of-goods profile going to look like? How many patients do we want to treat? What line of therapy are we intended to be used at? Some of those questions that should get answered pre-clinically, in the TPP formation stage when you’re looking at your target product profile, weren’t getting answered. So companies would make a product that had any cost of goods, assuming they could charge whatever they wanted — and then they found they couldn’t make enough of it, or couldn’t get covered in the line of therapy they wanted.
That led to some of the challenges we’ve seen with some of the pioneers in the space. It was sad to see Adaptimmune get sold with one approved product and two in late-stage or early clinical, because that product just wasn’t getting the traction to support the pipeline. Similar story with bluebird bio, although that’s now having a renaissance, hopefully. Some of these companies have really struggled to make their first products profitable. I mean, I just saw in the last week or so that J&J — or J&J and Legend — reported that Carvykti is going to be close to a $2 billion product this year. That’s top-line revenue, which is incredible, and it means somewhere close to probably four or five thousand multiple myeloma patients have gotten treated with that therapy, which is awesome. That’s roughly double year over year, and that therapy has second-line approval. But the underlying economics — the cost of goods — are still too high, throughput still too low, even for those giant players that are at scale. So how has the playbook shifted in your mind? Where does the discussion around commercial viability come in? Because we’re hearing it more and more pre-clinically.
John Khoury: Yeah, there are two answers to that question. One is the investment. You mentioned spray-and-pray: we had one key indication, and we acquired a breadbasket of options that a platform — which can be used as a dirty word and an exciting word — can ultimately get to. And I think that investment environment is different from the one we’re in today. The second part of what you were talking about is: how do we solve those challenges around costs, around manufacturability, around consistency? I almost think the investment environment over the last two or three years has given us time to think about that answer more thoroughly and look at it through a different lens, because there’s a whole set of ways to solve those issues — whether that’s automation, shorter cycle times, in vivo, ex vivo, allogeneic versus autologous. The problem is being solved with a lot of different approaches. Time in terms of maturity of thought has been good for us. Time in terms of advancement of science has not been as good, because it slowed down the investment on these life-changing, life-saving medicines.
Jason Foster: Absolutely. You may have seen that we recently received Advanced Manufacturing Technology designation from the FDA for our IRO® platform. One of the rationales, as we understand it from the agency, for even creating the designation was to make it easier for therapy developers to engage with technologies that can help solve some of these issues earlier in development — or switch off more lab-scale tools, flasks and bags and older automation, onto something that’s fit for purpose. Ultimately, I think the FDA is equally frustrated that not as many patients are getting treated. They work really hard to get a product approved, working with sponsors to get these products through clinical trials and onto the market. And all told, last year we treated 10,300 patients as an industry, roughly, globally — and I think that represents less than 5% of the global patient population.
So, how do you coach your early-stage customers who are maybe pre-clinical, thinking about this buy-or-buy decision, thinking about how they get a robust process that can get into the clinic and then be scalable? What are some of the common pitfalls you see people making, and the advice you give to early clients?
John Khoury: First, huge congratulations to you and the whole Ori Biotech team on that designation. It’s so helpful, because when we were working with pre-clinical and even Phase 1 advanced therapies, you have this change in mentality that needs to occur. As I’ve been successful in entrepreneurship, you learn that you need to identify what’s great about each role or individual in your organization and empower them. But there’s a crux — a transition period in the middle where we go from a scientist to “how do I manufacture at cost and scale?” And those are two different people. That’s an engineer talking to an artist — an educated artist at that; I don’t want to downplay it, but it’s an artist. And I think the designation allows the artist now to look at it as a great paintbrush in their toolset. They can say, “Okay, I’m accustomed to flasks and bags, I’m accustomed to working under a BSC, but I’ve got this designation on this equipment that could be a platform” — and it removes that hard conversation between the developer, the scientist and the manufacturer that seems to go sideways.
It’s always been a hard conversation for us, to be honest. Even when we’re doing our make-versus-buy business cases and I’m talking to a doctor, going, “Here’s how much it’s going to cost over the next 10 years to build your manufacturing and your commercial organizations,” they look back and go, “No way, that should cost a quarter of what you just said.” It’s just that their specialty is not on that side of the business. Ultimately, the best partnerships come when they can respect the commercial and manufacturing expertise, while we respect the development process they go through. I think this platform is really providing, hopefully, an easier identification for our developers to say, “Let’s start with this.” The FDA respects it, established it, as something that will make a repeatable process — which is what we want in the first place. It will drive consistent results, which takes a lot of risk out of our process-development activities, and it’s going to transition easily into commercial operations to a viable model. That bridge is super exciting. And again, congratulations.
Jason Foster: I think that’s a great assessment of the status quo and the conversations we’re having every day. Getting research teams, development teams, translational teams to think about scalability, cost of goods and commercial throughput is just not what they do — it’s not something they’ve had to think about very frequently in the past. And often, as you said, parts of an organization are siloed from one another. When the technical operations team or the brand team or the commercial team looks at the product coming out of the process, they’re like, “No — what are we going to do with this?” And it’s too late at that point, when you get to late clinical. What’s your opinion on how late is too late to address some of these things? I’ve asked many stakeholders this question, and it usually narrows in about the same place, but I’m curious what your view is. If you’re thinking about commercial viability and scalability, when is it too late to make any changes to the process?
John Khoury: I believe the only thing constant is change, and we need to get more comfortable with change — but we’ve got to have a framework that doesn’t force us to continually try new things. What I’d like to see is early implementation of automation platforms into the development process. I think that has to be done early and quickly. The actual final decision can evolve, as long as you can run multiple process-development activities to come to the CPPs and CQAs that you need for your drug product, and then use the equipment to optimize your drug onto that platform. There’s not really a “too late” — ultimately, when you need to manufacture at commercial scale, call it your Phase 2 timelines, you have to lock this thing down pretty well. But there’s no “too early” in terms of assessing, implementing and even partnering with an equipment manufacturer that will ultimately drive a long-term cost of goods and successful, reproducible recreation of your drug product.
Jason Foster: Yeah, absolutely. We encourage as early as possible when we talk to developers. Pivotal is probably too late, but any time before then, we can help. Even with commercial products, the perceived bar to change something in the manufacturing process is very high. But I’ve also seen some indications from the regulator that ultimately, they care about safety and efficacy. If you can demonstrate a more advanced or parallel automated process that delivers on the CQAs — a safe and effective product — then they’re willing to look at how that gets proven, maybe even in a Phase 4 post-marketing study, rather than treating anything that takes you back into the clinic as a non-starter. So it would have to be some sort of small comparability study. But I think that bar is coming down, because as we said, the FDA sees there’s no reason to be using technologies that are 20 years old in products on the market — you’re not going to get the benefits of the latest thinking and the latest generation of technology. It just doesn’t make sense.
John Khoury: Yeah. In thinking that through — are the regulators really the roadblock right now? Or are they actually giving us freedom to build a case, and they’ll assess and analyze it? I think the higher the drug price is, I’m seeing it more on the commercial end, affecting the decisions made by oncologists — especially where there’s a status quo or a proven line-one treatment for a disease. It’s, “Okay, shall I even assess this thing that’s at 350 to 500,000, or 750, or 2 million, or whatever that top line is? How does that impact the healthcare system when I know I’ve got a line-one treatment right here?”
I was talking to some family recently — I’ve just moved to New Jersey and was interviewing different primary care physicians. Three out of the five primary care physicians I spoke to didn’t know what CAR-T therapy really was off the top of their head. Granted, they’re not oncologists, they’re not dealing with these diseases day to day, but as somebody who works in advanced therapy, if my primary care physician doesn’t know the options — that’s my partner in my life’s journey. So how do I have a dialogue if they aren’t familiar with what I believe is some of the cutting-edge personalized treatment out there, that we have proven science is going to advance? Granted, that’s just mine — I could have called the wrong phone book. But I don’t think that’s off base with what we’re seeing in the actual treatment centers, with the percentage of patients eligible to be treated.
So I don’t think the regulators are actually the challenge right now, as much as the high drug price is almost making the physicians at the end go, “Well, am I willing to transfer this patient? Do I have results that really drive that? This is very high cost, high risk. What’s the payer/payee model?” — and all these other downstream items around commercial viability that the regulators aren’t necessarily concerned about. They’re more concerned with the safety profile, the site of toxicity, and so on. But I think it’s actually affecting the commercial viability of those discussions — it’s an indirect input. It’s like, if that house costs X, I’m not even looking at it; I can’t afford it, or the patient can’t afford it. Why would I put my family in that dialogue? I think that’s where the challenge is being had. I do believe that if we want better results and easier regulatory pathways — which would speed up time, decrease overall investment, and ultimately decrease costs — we’ve got to work with our regulators better. But if we don’t drive down costs, it’s the commercial viability component that’s actually being impacted, not the regulatory.
Jason Foster: Yeah, you hit on a couple of super interesting and critical issues there. I agree — I don’t think the regulator is the barrier to modernizing manufacturing processes. I think it’s the perception of the teams within the companies that have products on the market: “Oh no, it’s too hard, the barrier’s too high, the agency’s not going to let us, the FDA’s going to put us through the wringer,” because historically making any changes has been difficult. But in this field, at this time, the regulator is very open to improving standardization. We have out-of-spec rates that range up to potentially 20% — we’ve never seen that in GMP manufacturing before. So we want to get out-of-specs down, consistency up, COGs down, throughput up, and the agency is interested in helping sponsors do that. So I think it’s the perceived bar, not the actual bar, being quite high, that prevents people from thinking about modernizing their process. That’s point one.
Point two, on the cost side: when people have a spirited debate about these issues, they say, “Well, manufacturing and COGs have nothing to do with price.” And I’ll say, that’s true — however, if manufacturers are able to make more margin, that gives them more flexibility on price, more flexibility to contract in various ways to open up access, and for earlier lines, coverage. So more profit in the system, which is now very thin, is a good thing. And what does impact price is competition. The more products we can get approved in multiple indications — it’s just a natural… I’ve worked in biopharma for 25 years, and this is what happens: the innovator, the first mover, has pricing power, and the next one that comes in begins a market-share battle. That’s just the way it works, so long as we can serve a large proportion of the market.
This actually — Ying, the CEO of Legend, put out an interesting interview with Biotech TV where, in their CARTITUDE-4 trial, they were paying for both the standard-of-care comparator arm and the Carvykti arm, so they had access to claims data for both sub-segments of the patient population being studied. The standard three-drug cocktail for a multiple myeloma patient at that stage cost $1.6 million. The cost for Carvykti was $700,000. So the perception is that the headline, the sticker price, sounds high for these advanced therapies — but when you dig into all the things that go into treatment for the first or second line of therapy, these products are actually quite cost-effective. I posted this to my LinkedIn, if you’re interested — it’s a super interesting segment, because they had access to that claims data. The other thing he said that was super interesting: they were doing 60% of their dosing in the community. So they’re starting to move away from only specialist centers, opening up access in community cancer hospitals. I think all of these are very positive trends that help open up access for patients.
John Khoury: On the Carvykti assessment — it’s that perception of the large down payment, the upfront cost, and then the unknown maintenance costs. This is where I hope we can use AI models, or bring this data to the forefront, because it’s a significant saving over the current standard of care over the time period, which is going to decrease the pressure on our healthcare system. But because of that initial price tag, people automatically block it out. It’s “there’s no way that data is accurate — 750 grand, no way, there’s some flawed assumption in there.” That’s where I hope we can use AI, or use something, to help people realize this is the hard cash that’s coming from our healthcare system toward these patients.
And that’s just the financial burden. Let’s talk about the quality-of-life burden for the patient. If I can get a single treatment — I know I’m going to go through some things, but I can live a more normalized life — I’ll give anything for those extra few years. I had my best friend pass away last year at 44 from hepatocellular carcinoma; I think I mentioned that to you when we were at JPM last year. It hit me. That was a three-and-a-half-month battle that came out of nowhere. We have, hopefully, some pipeline drugs that will change that outcome. And that burden on healthcare — there’s a quality-of-life component where I think we could all look at each other as human beings and go, there’s no price tag I wouldn’t put on that. It’s just, how do we educate the end user, the prescriber, better, and what would help them have more belief in these therapies?
Jason Foster: Yeah. One other statistic I recently read — you might know Joe DePinto at McKesson, he’s been on the podcast. They put out a report last week; they do a prescriber, payer and provider interview series every year to assess where the advanced therapies industry is. One of the statistics that jumped off the page from last week’s report: 66% of community oncologists thought CAR-T therapy was too risky, quote unquote, for their patients. And you highlighted the lack of awareness at the GP level — but these are oncologists, community oncologists, not academic medical center oncologists. I think there’s a massive educational effort that needs to happen about the state of these therapies, the incredible evidence base they have, the 10-year track record we’ve built to say these products are safe, effective, actually also cost-effective, and can be delivered in the community. We need to find a way to break through some of those perceptions, or misperceptions, that currently exist.
John Khoury: And this aligns with all the data we’re seeing around only two out of 10 eligible patients actually getting these treatments. There are eight patients not getting them. When I hear dialogue around “well, those are in certain geographies we can’t reach” — that can’t be all eight. 80% of Americans don’t live in rural geographies without access to a treatment center. So there are other impediments that I think education could really break through. I’m hoping ideas like what we saw with the voluntary CMS Innovation Center outcomes-based agreements at least remove that cost roadblock.
I like to think of it as different barriers we’re going to have to knock down with these oncologists. One is what you just described: is it effective? Two is cost. Three, we could go down a list. If we could move to more outcome-based agreements, especially on the newer drugs, it at least opens a door to ensure that if it’s successful and we’re taking care of patients, that commercial drug will create a successful company and financial benefit to the organization — but also successful outcomes for the patients — versus having cost be a roadblock to prescription.
Jason Foster: Yeah, 100% agree — and really, a line-of-therapy issue too. In the US especially, we suffer from a left-pocket, right-pocket problem: payers look only in one pocket, at the prescription benefit. They don’t look at the medical benefit, so they don’t actually know the whole cost of the standard of care. And so, as you said, $700,000 looks expensive — “Why would I pay that?” — when actually you maybe even pay more out of both pockets.
John Khoury: A lot of my leadership training is around the head — the data and analytics — the heart, and the gut, the experience. Your head is that money component. But my heart looks at the human being and goes, “What is their quality of life going to look like?” And then my gut, my experience, says, “If we get better patient outcomes, there will be profit,” and ultimately we’ll have a better society. I think we’re going to see more positive outcomes as the funding environment changes, but we’ve got to work on that commercial dialogue so people really understand the benefits here — not just from dollars and cents, but from the human aspect. That may unblock things too.
I do want to go back to something you said regarding perception on regulation. I love that you said it’s a perception of the regulatory outcomes. The number of rooms I’ve sat in where people have said, “I don’t believe the regulators will agree with this” — and I like to ask the question back: “What don’t you think they’re going to agree with?” and really open that dialogue up. Instead of “well, in my experience at Company A this didn’t work” — this isn’t Company A; let’s break that down. What did Company A have in terms of sub-components that would make a regulator say no? When you have a biologics process with consistent inputs and consistent manufacturing processes, wanting some flexibility around Part 11 compliance makes no sense — there’s no impediment in the development or manufacturing process that makes you need that. On the other hand, when we’re talking about CAR-T, whether it’s autologous or allogeneic, whether it’s in vivo or ex vivo or hybrid, there’s so much change happening that it’s more of, “Let’s have a dialogue around what the risks are.” Because we’ve got patients in need, and we’ve got assets that aren’t being developed. Ultimately, if we can target those dialogues not against our perception but around a learning mentality — let’s learn together to advance something. Entrepreneurship, or this idea of doing something totally unique, doesn’t come without risk. And if you want to take the risk down to zero, you’re in the wrong business.
Jason Foster: Yeah, I think that’s a great insight. We actually had a Type D meeting with a sponsor last year, and we had a side bet on whether the advice would be to start the clinical trial over — they were in Phase 1/2 — or whether we could proceed with a parallel process. It was the latter. The agency said, if you can show it’s a comparable process — delivering the same CQAs, the same release criteria that your existing IND has set forward — then you run the two in parallel. You show that the parallel process can deliver those, and that it’s safe and effective to treat patients, and then you can merge the two data sets. So you don’t have to go backwards; you can look forward. That was a great indicator of what you’ve just said: the agency isn’t stuck in the past. Why should we be? Why should our regulatory or quality point of view be stuck 10 years ago in biologics, or 20 years ago in small molecules? We need a forward-looking view that has innovation, and that takes into account some of the unique aspects of advanced therapies.
John Khoury: And I think they recognize there’s no way to reach our true north — let’s say the gold standard is biologics manufacturing — from a beaker, if we don’t allow for comparability or other development activities to happen in parallel. Granted, there’s risk. But how do we assess those risks? Because a change is better than no change. And that applies not only to what’s short term in terms of profit and loss, but to what’s best long term, because there’s going to be another developer on a platform, with automation and more consistent results, and ultimately you’re going to lose market share across the table to a more repeatable process with fewer out-of-spec activities. Either we allow these organizations to evolve, or a new organization is going to come in.
And this is where — if you don’t mind, I’m going to ask you a question, because I feel like the larger an organization gets, and the moment they have commercial drug product, it becomes challenging to innovate. So are you seeing the same thing? It makes me wonder: are the breakthroughs going to come in the next private-equity-invested organizations, or are they going to come from all this investment we’re seeing by large pharma into advanced therapies and cell therapies? Which is super exciting, and makes me believe in our commercial viability. But innovation has got to happen somewhere across that table.
Jason Foster: No, I think actually the answer is interesting, because it’s at two ends of the spectrum. You’ve got five big pharma players that have — or four that have — commercial products, and one that’s invested heavily in late-stage assets. Those that have experienced the pain firsthand of trying to commercialize a non-scalable process — whether that was the very first process out the gate or some that were more recent — none of them have scaled easily. There have been billions of dollars invested in getting those processes to any sort of scale, but the cost of goods continues to be too high, the throughput too low, the reliability too low, where they know they can’t replicate it — they can’t afford to replicate that experience. So they’re looking to innovation to help solve the problem. You saw J&J just announced a deal with Cellular Origins, looking to see if some of the robotics can help. Some of those big players are partners of Ori’s. So at that end of the spectrum, people who’ve experienced it firsthand don’t want to go through that pain again and are looking to innovation.
At the other end of the spectrum are the very earliest programs. If you think about academic centers — we’re partnered with the likes of MD Anderson through the CTMC team, with City of Hope, with Seattle Children’s and other leading centers — they’ve seen it from the other end. They’ve developed therapeutic interventions and platforms that can treat disease, that have some clinical data or have demonstrated the potential for safety and efficacy, but they haven’t been able to partner those assets. The tech transfer teams at those academic centers have had difficulty over the last four or five years partnering assets that don’t demonstrate commercial viability early. You might have great science, but big pharma and venture capitalists are not backing, buying, or licensing assets that can’t reach scale. If I can’t make money on it — let’s all be very open, pharma development is a very expensive endeavor: a billion, two billion dollars, 10 years, to get one product that you hope takes care of the other 90% of failures in your pipeline. You have to be able to deliver a return on investment. And so those early developers, those research institutes, are thinking about commercial viability even at the early research phase.
That was a super interesting finding for us, because we expected it to be incredibly hard to have those conversations with PIs who are looking for a grant and a Nature publication. But the business people in some of those organizations are struggling. What’s interesting is that middle bit — the biotechs that are already in flight, already funded to some extent, on a trajectory they can’t change. They might realize their process isn’t scalable, or that their cost of goods is going to be too high, but their venture capitalists and their boards are still executing the biotech playbook 1.0 from 10 or 15 years ago: just get first-in-man, get data, run, run, run, fast, fast, fast, go, go, go — not knowing that essentially they’re designing to a dead end, and there’s nothing they can do about it. They’re in this place where they can’t decide, “Okay, we’re going to pivot to a new manufacturing technology now,” because they’ve got their investors breathing down their neck. They’re in this impossible position, knowing that potentially the product they’re developing isn’t going to be commercially viable but not being able to do anything about it. That’s probably the worst place to be — that middle ground.
John Khoury: Yeah, just to tack on there — what I’ve seen out of some development centers is they have almost a commercial, but more of a manufacturing-focused, person that’s not being added to those teams. And that is critical. I’m not talking about the pricing activity early on — we’ve done pitch decks before, we’ve proposed on businesses, and that commercial number is simpler to at least start with, to say “here’s what the commercial price of the drug is.” On the other hand, that middle piece — how will this become commercially viable — isn’t just “is the science working,” but rather “does it have a mode for repeatable commercial manufacturing results?” So I think adding that expertise early is key. And something interesting you said: people who have felt that pain firsthand. If I’m at a large pharma organization that has acquired a cell therapy asset, I almost want to create a tiger team on the side. I want to insulate them from my big pharma mentality — not that it’s a bad mentality; it’s a successful mentality that’s protected hundreds of millions of patients out there — but in a time of innovation, it will stymie innovation. So you almost need a tiger team of experienced individuals to look at the assets and go, “How would I do this if I had a blank slate? Because the regulators aren’t stopping me — actually, they want to see me succeed in solving this issue.” But if I’m going to have an innovation theater occur, I need to insulate the theater portion so that innovation can happen. And on the development side, I need people with first-hand experience to discuss solving this issue early, so we can get these drugs to patients. The value of those people with first-hand experience, to me, is very high.
Leaders need to identify that, because at the early stage, they won’t be funded if they don’t have that person in-house, or at least externally partnered, to drive solving that problem. And on the opposite end, our larger pharma partners need to find someone in-house to innovate and stay on the front foot — otherwise somebody’s coming to eat your lunch at a future date.
Jason Foster: Yeah, 100% agree. I think it’s also incumbent upon people like you, who advise companies, and people like us, who have innovations in the market that can help, to demonstrate the potential value of these things. We started out by demonstrating the biological benefit — we can get to X cell yield, or improve transduction efficiency, or lower COGs, whatever those are. But the ability to drive standardization, to drive out-of-spec rates down from maybe 20% today to less than 5%, would have an incredible impact on COGs. What about the development timeline? Based on the data we’ve seen and the work we’ve done with partners, we did a tech transfer with a partner from Houston to Philadelphia — two different sites — in six weeks. You know how hard a tech transfer is; it usually takes nine to 12 months. We took a lot of the training burden off, because machines are doing some of the work, not all people. It wasn’t a full tech transfer — this was a proof of concept, before everybody starts shouting at me in the comments of this podcast — but just the idea that we could transfer a protocol across the country, from one site to the next… We ran three parallel batches in both places using split ingredients, split reagents, and we demonstrated that all six batches could meet the predetermined CQAs, measured by the same analytical lab.
So if we could cut tech transfer even by three months — say from nine to six, or 12 to six — how many times do you tech transfer in the development of an advanced therapy? Twice? Three times? Saving 18 months on a development process just through faster tech transfer is massive. Time is money in drug development. So being able to prove some of these points — “hey, we did this tech transfer with this client and it took that long versus your expectations” — might help some of those fixed frameworks of thinking open up to new ideas and new innovation.
John Khoury: Yeah, and as we move technology upstream, we can do those things faster, because we’re reducing the number of variables in the tech transfer process. It’s a great point. One thing I’ve been challenged in thinking about is that, as I look at the cost models, we really need to find ways to improve the supply chain to actually reduce the cost of equipment and the disposable technology, too. Because what we’re seeing as we analyze the landscape is we’re not necessarily decreasing the cost of goods — we’re paying the same, but we’re getting consistency. So let’s not act like there’s no benefit to automation. But ultimately, the goal is to do both: to increase consistency, therefore have better scalability, but furthermore ultimately reduce COGs. I think that’s where we’re also burdened right now — how do we solve that equation? Because it’s not getting there as quick as I’d personally like to see, and I think it’ll be interesting to see how we solve that.
Jason Foster: Yeah, some of the proof points I hope will be available next year from some of our partners. With the investment you need to make in an IRO instrument and the consumables for one run — even including those costs, you can save 30 to 50% on your COGs out of the gate. So not only do you get better standardization, lower out-of-spec rates, higher throughput, but you get cost. You need all three: it needs to be better, faster and cheaper, or else you’re not getting all the benefits you need. That’s really what we’re striving for as we move forward with our partners, getting it into the clinic next year.
We’re coming towards the end of our time together, and thanks again for visiting with us today. I wondered if you would just project forward: if we’re having the same conversation five years from now, what are your hopes for what we’ve accomplished — what’s changed in how we deliver cell therapies to patients in that five-year period?
John Khoury: I hope in five years we can look back and say we solved the items blocking us from getting this to patients — and when I say solved, I mean progressed. We can get to a lower cost to the patient and take off some of the burdens, so we can get the personalized medicine that our body is responding to, and in that way increase education. So, one, I’d like to see costs come down. Two, better safety profiles — we’re still learning. And if we can reduce those barriers, whether we move to more point-of-care, more in vivo models — I think there’s going to be a place for autologous therapy in the future, period. Whether allogeneic comes in and disrupts the line of treatment or not, there’s going to be personalized therapy, in my belief, five, 10, 15, 20 years from now. So it’s our responsibility to continue to drive these changes: moving some of the automation upstream, allowing the freedom for our developers and scientists to move the technology forward, and ultimately driving down COGs and continuing to work with regulators. I think we have the right environment for it, but we’re going to need some wins.
I always say — we do a lot of capital builds — I can never just say, “If we would have changed this person, or this subcontractor, or this piece, look at how this model says we would have finished that product.” You don’t get that opportunity. You don’t get a second chance at the first bite of an apple. So we need that entrepreneurial, solution-driven mentality early on, so we’re not restricting our partners as they develop, but rather partnering with them to make sure we can actually get this to the patients in need. I hope that’s what we’re talking about five years from now: that we got more and more of these to the patients in need, by overcoming the oncologist education gap, the cost model, the education and ultimately the automation.
Jason Foster: Yeah, I think that’s a great ambition. You’ve just very effectively described what I’m calling CGT 2.0, which I think is starting now. We’ve learned those lessons from the first eight or 10 products that have been approved, and the pioneers in the space, and we’re looking at how we make CGT successful. I agree that with a focus on commercial viability early, bringing automation earlier in the process, focusing on COGs and line of therapy and patient access alongside safety and efficacy, we’ll be able to deliver a new generation of cost-effective therapies that can make it to patients at scale. Because ultimately, what’s the point of having cures for cancer if patients can’t get access to them? That’s what we’re all trying to do here. So that’s a great ambition.
John Khoury: And if the past is the best indicator of the future — we’ve done this before. It’s just that now we’re applying it to new therapies that are life-changing and life-saving. That would be a profound accomplishment for the industry if we can move it all forward, because we’re changing lives here. I couldn’t be more thankful to be a part of this industry.
Jason Foster: Awesome — a great note to end on, John. Thanks again for your time today, and for all the work you and your colleagues do at Project Farma. I look forward to seeing you again soon, I hope.
John Khoury: You’re the best, Jason. Congratulations. I’ll see you again — have an awesome day.
Jason Foster: Thank you for listening to the Ori Spotlight podcast. To keep up with the latest in cell and gene therapy, and to follow us on our mission to manufacture brighter futures for patients.