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[00:04] Jennifer Wu: Hi everyone, thanks for listening to the Founder Spirit podcast. I'm your host, Jennifer Wu. In this podcast series, I interview exceptional individuals from all over the world with the Founder Spirit ranging from social entrepreneurs and tech founders to philanthropists, elite athletes, and more. Together, we'll uncover not only how they manage to succeed in face of multiple challenges but also who they are as people and their human story.

Our guest today is Amit Munshi, a serial entrepreneur and a turnaround expert with over 30 years in the biopharmaceutical industry. Until recently, Amit was the President and CEO of Arena Pharmaceuticals, where he successfully transformed the company from $300 million in market cap to finally being acquired by Pfizer for $6.7 billion over a period of six years. 

Amit also led turnarounds of two other companies, Epirus and Percivia, and co-founded Kythera Biopharmaceuticals before it was sold to Allergan for $2.1 billion in 2015. He honed his commercial skills at Johnson & Johnson, Astra Merck and Amgen, where he was responsible for its $16 billion acquisition of Immunex and its European Nephrology Business Unit based in Switzerland. 

Amit is currently the chairman of the board at Enterprise Therapeutics in the UK, and a board member at Galecto in Denmark and Oxeia Biopharmaceuticals in the US, a company that he also co-founded. 

He holds dual Bachelor's degrees in History and Economics from the University of California at Riverside, as well as an MBA from Claremont Graduate University. 

Hi Amit, thank you and welcome to The Founder Spirit podcast! We are very excited to have you with us today, thank you for taking the time.

[02:03] Amit Munshi: Jennifer, thanks for having me.

[02:04] Jennifer: Amit, we're going to start today's podcast with a question for my son - he wants to know what you were like growing up. 

[02:12] Amit: I was a very serious kid, I had both the combined opportunity and what you’d perceive as a child of misfortune of traveling all over the world with my parents. I grew up in Hong Kong, Japan, was born in London, and spent time in India before moving to the US. 

As the oldest son in the family and a lot of moving around, I was a very serious kid, I spent a lot of time reading. Between my brother and me, we didn't have a lot of friends as we were moving around, so it was just the two of us finding ways to entertain each other and waiting for the next transfer order to the next location. We spent a lot of time just the two of us, and as a result, we became very close. 

And Importantly, that whole growing-up experience teaches you to adapt and change, but as a child, you don't really understand that. It's a difficult process, I found myself as a very serious child. 

[03:01] Jennifer: Prior to starting your professional life in biotech, your first job was actually at McDonald's. I always tell my kids that they should work at least once in food services, especially at McDonald's, because if they work there, they'll never want to eat there for the rest of their lives.

But you also had more interesting jobs, which marked the beginning of your sales career. Can you tell us what these jobs were and how some of the skills that you developed back in the day stayed with you throughout your career? 

[03:36] Amit: Yeah, it's interesting. Beyond never wanting to eat a filet of fish in my entire life, it teaches you to work with lots of different people, broads waths of the population you get later in your professional life, in biotech especially, you're surrounded by brilliant individuals with MDs and PhDs who went to top universities. 

I think it's really important to understand how to navigate and how to communicate with a broad range of people. I think that’s one of the most important things I tell our kids is just to have that range, you should feel comfortable in any environment, not just a certain pocket of people, for example. That's one key learning. 

I took these jobs not out of learning but out of necessity, as most of us did early in our lives. But I reflect back and I think that the ability to work with lots of different kinds of people and the ability to sell is an actual skill. As a CEO of a public biotech company, you're selling your story, your team, the ability of your assets to make a difference for patients. That sales skill just never goes away. 

And I had a chance to sell vending machines, radiators, all kinds of really interesting things and over the years, and these were all commission-only jobs. I really think that beyond spending some time in food service, it's really important to think about something in the sales area. I think it's a key defining, character-building endeavor. 

[04:52] Jennifer: Why do you think it's so important to have a job that's commission only? 

[04:56] Amit: Again, I didn't take these as learning experiences, I took them out of necessity. When you're a student, those are the jobs that are open and available to you, I never shied away from it. 

You begin to trust yourself that you can make something happen, something out of nothing, from the unmanifest to the manifest, that is a really interesting skill because it begins to build your own personal confidence and alleviate fear. We have the fear of the unknown, the fear of where you get your next paycheck, how you make your rent. 

I'm hoping most of your listeners have gone through some journeys in their life where they've had those kinds of fears. I think early on, building those sales skills was critical. I look back at all the things I've ever done, including my MBA and including all the seminal learnings at Amgen, J&J and Astra Merck and all that, and I think the single most defining jobs I ever had were commission-only sales jobs. 

[05:49] Jennifer: Interesting, because it's about overcoming the fear of rejection. Because when you're selling vending machines or radiators door-to-door, you're going to get rejected most of the time, it builds your resilience to rejection later on in life, especially when you're fundraising. 

[06:06] Amit: Absolutely, back to dealing with a broad swath of people. I sold light bulbs for a couple of years and dealt with a lot of rental houses in Hollywood. There's just a really interesting broad range of people that you deal with - different personality types and different educational backgrounds. That ability to communicate is really critical when you're thinking about building your life or your career.

[06:27] Jennifer: Is there a funny story from those days that you'd recall? 

[06:31] Amit: I'll never forget the first week I was out selling light bulbs, had an old Volkswagen Jetta loaded up the bulbs in the back, the car had 80,000 miles. 

I was in Southern California at the time, my father was a commercial banker, we were trained to put on a suit and tie in the work environment. I put on my suit and tie, walked into these rental houses, and everybody was in shorts and flip flops with ponytails, and I was absolutely a fish out of water. I came in very formal with my business card, while the customer had his feet up on the desk with no shoes on. It's coming back to understanding the environment you're in and adapting. By the second week, I was in jeans and a t-shirt and sneakers. 

You take from your last experience, you try to apply them, and then you realize maybe you need to adapt, maybe you need to change. 

[07:18] Jennifer: Amit, you majored in history and economics. I'm assuming that you weren't necessarily planning to have a career in the healthcare industry. What eventually led you to join this industry? 

[07:30] Amit: Well, interestingly science was my first love, loved it through high school. I went to UC Riverside in the pre-med program and then ran into the buzz saw that is organic chemistry, decided that Thursday afternoon happy hours were more fun than Thursday afternoon labs, decided to make a change much to my parents dismay. But I always loved the sciences, that kind of continued all the way through. 

I tell my kids all the time that, to use a basketball analogy, to dribble with their heads up, meaning you don't know where your life is going to take you, you don't know if you're going to have to jog left or jog right, if the pass is coming to you or you're making the pass. 

What's interesting is it was my first year in business school, I was still selling light bulbs, ended up in a conversation with someone who worked at J&J ophthalmology. We started talking about different intraocular lens designs and focal length and refraction and diffraction, and next thing you know, I got offered a job at J&J. 

Again, you never know when one thing leads to the next and new doors open up. I think it's one of the interesting things that's happened throughout my entire career - interesting things happen at interesting times if you're aware.

[08:44] Jennifer: You had mentioned that the four years that you spent at Johnson and Johnson was foundational. Can you tell us in what way was it foundational for you? 

[08:53] Amit: Yeah, the company was going through some very difficult times, I worked at a group called IOLAB Corporation. Coming out of the selling light bulbs and selling vending machines, all of a sudden, you found yourself in a really professional environment with knowledgeable, brilliant people all trying to improve the human condition. It was such an eye-opener for me to sit back and go, wow, this is very different, this is a group of people who care deeply about what they're doing. 

It was really foundational for two reasons. One, the company was not doing well - there were some changes in reimbursement for intraocular lenses. Intraocular lenses, for all your listeners, are the lenses that are put in the eye post-cataract surgery. In the US, the reimbursement had changed for an intraocular lens from the federal government, the business was in trouble. As a consequence, a lot of people were leaving. 

As a young person, I decided to stick it out. As I stayed there longer, more and more opportunities came available to me. I got a chance to work on business development, product launch, in-licensing of technologies, mergers and acquisitions, all in a very short amount of time. I mean, it was an incredible experience. 

I had a wonderful mentor there by the name of Dan McWord, Dan recently passed away, and another gentleman by the name of Bob Tony. They were instrumental in just giving me opportunities, partly because there were not a lot of people left, partly because I was always willing to raise my hand and jump into the fray. It was an amazing time, and (I) was surrounded by amazing people. It really opened my eyes to what's possible in the life sciences. 

[10:26] Jennifer: In 1994, you joined AstraMerck, which was a joint venture between a Swedish pharma, Astra, and Merck, a US company. It's also a company that's quite entrepreneurial and forward-thinking at the time. 

And the timing of AstraMerck coincided with the beginning of the boom in managed care in the US, which, for the people that don't know, is the type of healthcare like the HMOs.

The company AstraMerck didn't actually engage in any R&D, and it was essentially a distribution organization that had pioneered a new approach to market prescription drugs. I think there was even a Harvard Business School case study written about it. Can you tell us how you guys managed to create the market access for Prilosec, which is this ulcer drug from Astra? 

[11:21] Amit: I was part of really the second wave of people that came in; the first group came out of Merck. Merck had the marketing muscle, Astra had the compound and they came together. Interesting, the group of folks that left Merck, individuals who wanted to do it differently, there were some amazing leaders in that organization who had a big, bold vision for where they wanted to take this. 

To your point, it was right at the beginning of managed care organizations, it was all very new, everything was new, we were doing everything differently. There were no preconceived notions about where to go and how to get something done. There was a lot of latitude - there was a lot of, hey, if you think it's a great idea, put the case together and let's go. 

The drug was growing very rapidly, so there's a lot of willingness to take risk, risk from trying new ideas, risk from building the organization different(ly), risk in terms of thinking about how we approach the broader physician provider network in the United States. It really gave me a chance to be more creative. When you're sitting inside J&J, a larger company, much more prescribed, much more structured, learn the foundations of healthcare there.

But AstraMerck was an incredible journey with some incredible leaders who had this idea that maybe we could do this differently. That carried through, all the way through my career, including at Arena, where we had a mantra of like, well, how do we do this different(ly)? Why do we have to do this the way it's always been done? Challenging convention, thinking creatively, thinking about better ways to help patients access drugs. That foundational piece came from the work at AstraMerck, and I'm incredibly grateful for those few years and for the people I worked with there. 

[13:07] Jennifer: I think I had a very similar experience coming out of university. I worked in a very entrepreneurial environment and I think it influenced me and the career projectory that I had later. 

I want to move forward now to your time at Amgen, before you became the General Manager for Amgen's European nephrology business unit, you actually proposed the acquisition of Immunex and what is today a $5 billion drug to treat autoimmune disease. Can you tell us about how you put that deal together, that's worth $16 billion in acquisition, and just tell us some of the lessons that you learned from that experience? 

[13:52] Amit: I think one of the prevailing themes in my career has been working with amazing people, working for amazing people. And it was true at AstraMerck, and it was definitely true at Amgen. My boss at the time, Keith Leonard, he and I were charged with building out the immunology business. 

We had a drug called Kineret that we were in the process of launching. It was Amgen's first retail drug, all of Amgen's other drugs were sold directly to the physician or hospital environment; it was Amgen's first self-administered drug, all the other drugs were infused. There were a lot of first’s for this drug, Kineret, and it was in the autoimmune space to treat a disease called rheumatoid arthritis. 

We were charged with putting that business unit together. I remember day one, it was just Keith and I and a whiteboard trying to figure out how we would put this whole thing together. As we went down and started building the infrastructure, we realized that infrastructure needed to be leveraged across the second product or third product. Enbrel was/is a great drug, because we had already built so much of that substantial infrastructure and Amgen had the wherewithal financially to do a large transaction, we proposed acquiring Immunex. 

I think we beat that drum for a good twelve months before we were able to get the deal done. The simple idea was, let's take the infrastructure we've already built, let's leverage it across multiple drugs so we can provide more of a stepwise basket solution to physicians. If drug one doesn't work, you have access to drug two. That turned out to be a real winner for Amgen long-term and for patients, because were able to leverage all that infrastructure across multiple drugs. A lot has changed in the treatment of rheumatoid arthritis since then, but Enbrel is still a cornerstone product, and I think it still continues to do quite well. 

Again, the lessons that we learn along the way, to not have fear, to raise your hand when someone wants to build an immunology business unit inside what is ostensibly an oncology company. There was only a couple of us that raised their hands to go start this new business unit. I think to have the courage to say, look, our drug is good, but this other drug is even better. Why don't we put the two things together? 

I think even in a corporate environment, that entrepreneurial spirit can still be there. You can still take risk, you can take on the new project, you can propose the big, bold, audacious idea. We made a lot of mistakes along the way, but we did a lot of great things along the way. 

But you can never kind of get rid of that spirit once you have it. as you point out from your experience. Once you have it, then you're always looking for the next idea, the next thing, the next bold idea to go after. 

[16:28] Jennifer: Speaking of your next bold idea, by the time you founded your first business venture, you had already spent 15 years in the industry. What led you to found Kythera? 

[16:41] Amit: It was an interesting time, Amgen had grown quite dramatically. I think when I joined Amgen, it was around 1,500 people globally in the company, maybe 2,000. I went to Europe to run nephrology and we came back, it was probably in the 15-20,000 people range. 

If you really want to be creative, if you really want to do fun, exciting things, it gets harder and harder as the companies grow that large. The group that I was involved with, the new products marketing group, for example, had 5 people When I came back from Europe, it had 120 people. These groups just continue to grow and expand an infrastructure for long-term growth, and I understand that. But I think you always have to ask yourself, am I having fun? Is this a place I want to be? Is this the things I want to do? 

It would have been just as easy to stay there, and the stock continued to do well, so financially it would have been fine. But it wasn't fun anymore. I needed to find something that energized me again, so I decided to jump off the ledge. So I left Amgen with really no other job on the horizon, I found a drug at UCLA Medical Center that I thought was really interesting, contacted my old boss at Amgen. I said, I think I found something interesting, can we take a look at it and see if there's a company here? 

(In) 2005, we founded Kythera, and it was the three of us, we put our own money into the company. We started in one little office in Woodland Hills, California, one minute we were working on licensing the product, and next minute were plugging in the phones under the desk. And I was excited again, it was fun, and we were in this little tiny rowboat together. It was an amazing time. 

And as much as you think you know coming out of big companies, did large M&A, you think you know all this stuff, when you jump onto the really small side and you're starting to deal with a venture backed company, it's a whole ‘nother universe, as you all know. 

All of a sudden, I was learning again. As long as there's stuff to learn and to figure out, and it's fun and there's a real purpose behind what you're doing, I find myself incredibly energized when that starts to dissipate. I always get the sense it's time to go on to something else. 

[18:48] Jennifer: So speaking of learning something new, especially at a startup, how did you raise your first round of external financing with Kythera? 

[18:56] Amit: The A round, Kythera, was actually led by management, so we led the A round, we invited one venture fund to join. It was a relatively small A round, and that was interesting because I remember vividly. 

Talk about funny stories, I remember sitting at a coffee shop and getting the term sheet on curly fax paper sent to the coffee shop, and we had to physically take a scissor and cut them into pages. So, you could argue Kythera was formed at a coffee shop on curly fax paper, for all your listeners that still remember curly fax paper. 

I remember my old boss, Keith Leonard, and I sitting there, going through the term sheet. We had bought a couple of books off of Amazon on how to read a venture capital term sheet and all the different ways the term sheet can stick it to you - lots of nice legal jargon. And we were back and forth on our flip phones to our attorneys, and it was a great learning experience because literally we had a book and we had little post-it’s in the book, and we're like, what does a ratchet mean? What does the liquidation preference mean? It was really fun and it was just a blast. 

I think that coffee shop is still there - anybody wants to start a company, I recommend that coffee shop. 

[20:06] Jennifer: I think it's either a coffee shop or at a bar, that’s how usually companies get started, that's how you raise your Series A. During the 2008 financial crisis, it was very difficult to raise venture money. What did you do differently to secure your financing during this time period? 

[20:25] Amit: We hit two road bumps along the way, 2008, and then, if you recall, 2010 wasn't very great either. In 2008, and I think this is where your life experience begins to matter, having lived and worked all over the world.

During the great financial crisis in 2008, high risk capital definitely dried up; as you know, biotech is all high risk capital. We agreed that I would go look for capital outside the United States and spend a lot of time in the Middle East, Malaysia, Singapore, Japan. And we eventually got a couple of term sheets, all ex-US. 

We were fortunate enough to have Jafco in Japan lead the round in 2008. We're incredibly grateful to Jafco for believing in the company and believing in us. We provided them a great return, which is fantastic. They were there in 2008 when there weren't a lot of other folks around. 

But again, it goes back to that when you have to get something done, sometimes you have to think differently and you have to kind of break the mold. Instead of banging on doors that aren't going to open, try to find doors that might be slightly open. 

[21:28] Jennifer: I think venture capital is drying up again. Are there things that you could think of to help to guide the founders and the entrepreneurs?

[21:37] Amit: Yeah, I think there's a couple of things. One again, it goes back to creativity. In this environment, I'll speak specifically to biotechnology and biopharmaceuticals because it's what I know. 

During the period of easy money, we formed a lot of companies. I think at one point, 70% of biotech CEOs were first-time CEOs. We put a lot of money to work, most of these companies were single-product companies, maybe two products, so they lacked critical scale. 

I think to survive in this environment, you have to think very differently. Specifically, does your company need to exist as a standalone company? Are you better off putting two or three smaller biotech companies together so you can live to fight another day? Again, the big challenge there becomes egos and I want to be the CEO. The reality is if you take a step back and say it's the enterprise that needs to win and the product needs to get to the patient, if that's your overarching objective, then you can always find a way. If you throw egos in the middle of it, I think that's a huge impediment.

I think there's a critical scale issue, but it takes a lot of courage and it takes awareness to be able to say, hey, I don't have to be CEO, but I really want my product to succeed, so here's the right idea.

[22:46] Jennifer: So 6 years after you founded Kythera, you left to join Percivia, which was a joint venture between two Dutch companies, Royal DSM and Crucell. Was it difficult for you to leave Kythera, the company that you had founded six years earlier? 

[23:03] Amit: Yeah, very much. I'd been on a leadership team, been the number two person in a company, run some business units, etc. But I'd never had a chance to run something of my own and I got the opportunity to be a CEO, my first job, and I called it my CEO with training wheels because it was a private company, we had two large shareholders, and really importantly, the chairman of the company was Jim Mullen, who's a bit of a legend in our industry, was the chairman and CEO of Biogen for many years - wonderful human being and a great mentor. 

I thought, well, if I'm ever going to take the leap, this is the step I'd want to take. It required moving to Boston, and that was wonderful, but having these key elements and saying this is a good starting place was really important. 

Then, of course, J&J acquired the company for their vaccine platform, which was really fascinating to me. We got a call that they were interested in the technology and this is 2011-2012, I remember thinking to myself, there's no money in vaccines, why would anyone want to be in vaccines? Talking about things you can't see around the corner… 

It was a good outcome for the shareholders, for the employees, and of course, eventually a great outcome for humanity, as J&J did make the vaccine in the cell platform that we sold them, so that's touching a little bit of the COVID-19 pandemic. 

[24:19] Jennifer: Kythera was eventually sold to Allegan for 2.1 billion a few years after you had left. Did you ever feel like that you missed out on taking the company all the way? 

[24:29] Amit: Not particularly. Look, it was in great hands, the team that came in after me did a phenomenal job. Kythera was heading toward commercial launch, and my heart really wasn't in that. We had done a large deal with Bayer for ex-US rights, we'd raised plenty of capital, company was in great shape. It was time for the next group of leaders to take it to the next level, which they did. 

I made the same comment to every board I've been on, every CEO job I've had, that at some point, I'm not the right CEO, and I'll be the first one to raise my hand, so you need a different skill set. I think in building and scaling a company, there's a certain type of individual, a certain team that you need as you move to a steady state product launch mode, there's a different mindset, different skill set, different group of people who can take that to the next level. 

I think there's a natural evolution to companies. I'm sure you've seen this even more than I have, where founder CEOs stay too long in their roles. I think it's really important to understand what that transition looks like, and it's really important to have that awareness as someone leading an organization. 

[25:33] Jennifer: After Crucell was acquired by Johnson & Johnson, (you) then led the turnaround at Epirus Biopharmaceuticals, which was a company that was backed by TPG, a big private equity firm. At the time, it looked like a good story with the right approach, but it filed for bankruptcy four years later. What do you think happened with Epirus? 

[25:57] Amit: Yeah, we had an interesting journey there. We took over the company and within three months, we found that the founders had committed essentially fraud, about $20 million worth of fraud. We had a lot of cleanup to do; we stripped the company down to three people, and nine months later, we took the company public. 

We had an interesting business model, which now, in hindsight, I can critique my own business model. The company was focused on biosimilars, which are generic versions of biologic drugs. Biologic drugs are notoriously difficult to make and the pathways to get those generic versions of biologic drugs to the market was far more robust outside the United States than inside. 

Even today, these biosimilars have done better outside the US than in the US. And so our business model was really focused outside the United States. It was a very interesting and I'd say ahead of its time business model, where we were going to transfer manufacturing to local countries. 

So, as an example, we had won a tender in Brazil, and we were going to do a tech transfer to help Brazil make their own biotech drugs in Brazil. We call that in-market, for-market. Interestingly, Moderna recently teamed up with the same company we had teamed up with to transfer vaccine manufacturing in-market, for-market. Here we are, how many years later and that model still seems to perpetuate. 

The challenge that we didn't fully recognize is how to convince US investors to support a model like that. It's very hard for a US investor to diligence a tender in Brazil or a collaboration with the Saudi government to help build biomanufacturing in Saudi Arabia. Back then, there weren't the large pockets of money in the Middle East that were being deployed to biotech. 

If I had to step back and say what could we have done differently? I would have said we should have spent much more time thinking about non-US sources of capital. Frankly, (the company) probably shouldn't have gone public because once went public, we were beholden to the US capital markets - we were talking to the usual players and we didn't fit their pattern recognition. 

Eventually we have an European player who acquired the assets of the company and is still making biosimilar drugs in Europe using the technologies we sold them, our research and development platform in the Netherlands. Even that less than happy outcome has a very happy ending, which is some of those products have come to market or actually coming to market. At the end of the day, that's why we do what we do is to make sure these drugs can get to market. 

I think I would have probably stayed private longer and I would have looked for non-conventional sources of capital. So lots of great lessons learned through that journey and it's matching the right capital to the right story; not every story has the same kind of capital requirements and not every story is going to resonate with (what) I'll call conventional US biotech investors. 

I never want to point the fingers at situations and circumstances, I always want to take away lessons learned. The lesson learned here was I needed to be more bold in thinking through the capital structure and how we built the company. It was one of the biggest lessons I took from Epirus to Arena, which is, you can't incremental your way through a turnaround situation. It takes big, bold thinking. You got to take sometimes a hatchet to the whole idea, and rethink it from the ground up. I don't think we did enough of that at Epirus. 

[29:24] Jennifer: Nonetheless, it was your first and probably only bankruptcy that you had to deal with. Do you recall how you felt at the time? 

[29:32 Amit: I was absolutely depressed. I knew the technologies because we did the asset sale, we knew that the assets would get to market and that the European buyer would do a great job with the infrastructure we sold them, the R&D organization. 

But I really felt bad for the people, and that's what gave me the sleepless nights. When you go into biotech, the employees of a biotech company, the leadership of a biotech company, we don't have a portfolio effect, we're not investors, we're not in 40-50 companies. You're really throwing your body in front of the train in a very high risk endeavor, so I always feel my number one obligation is to the team and the people, and letting them down was the hard part. 

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[31:45] Jennifer: Now we're going to shift to the turnaround of Arena. As you mentioned earlier from Epirus, you took a lot of great lessons coming out of that. Back in 2016, I'm told that Arena was a mess and it was everyone's favorite stock to short. So coming from a company that you had just put into bankruptcy, why did you take the job? 

[32:05] Amit: I always have a fundamental tenet in our business, which is you can fix anything, you can't fix bad drugs. Arena had a very long history on the research side, had actually taken quite a few products all the way through phase 1 clinical development. 

In our world, we have phase 1, which is early healthy, volunteer type clinical development; phase 2 is your proof of concept in patients; and phase 3 is your confirmatory trial, which you would eventually register with the FDA. They had taken up about nine products through phase 1 and then put them on a shelf. 

They were focused on an obesity compound at the time, a drug called Belviq. Belviq had gotten approved but it failed commercially. They had a large partnership with Eisai, the Japanese company, and they were unable to commercialize it successfully, so the company had fallen apart. The board had been together for 20-something years, the management team that was left was largely decimated and folks had lost belief. 

The fundamental idea is, we believe the products were good. When you have 8 or 9 products to work with, the simple ideas of the first three we picked, if one of them showed a strong clinical signal, it was a 3x return for investors, and it was our job to just get that across. Something almost magical happened. Of the first three drugs and five indications we tried, we won 4 out of 5 times. The fundamental premise that the products were good was the overarching belief going in and proved itself to be true. 

The lessons learned out of Percivia were absolutely germane to the turnaround Arena. I remember telling the chairperson at the time, Tina Nova, that I wasn't going to do anything incremental. If we were going to turn the company around, we had to turn around the management team. So we reset the entire 100% of the management team was new, we reset the entire board of directors over the first year, with the exception of Tina, and we went down a journey of resetting all expectations for the company. 

I took over in May of 2016, we were about 95% retail shareholders. All the big institutions had fled the stock or had a short on the stock. We began to really build a compelling story, we began to bring some key people across, to rebuild the credibility of the company in the marketplace. 

Then, of course, when the first data read out, we had tremendous amount of interest. When the second data read out, we had even more interest, and then just went from there. 

I always like to come back to what did I learn? How did I implement it? I think you literally have to start with a blank sheet of paper all over again and redesign the company. 

[34:44] Jennifer: You basically turned the company upside down inside out, you gutted it within the first six months, I think. What were your top priorities for the turnaround when you first joined? 

[34:55] Amit: The first thing we needed was a new team. If I'm the smartest guy in the room, the company is doomed. We needed to rebuild the team and in the same vein, rebuild the board of directors. 

Investors weren't going to have a confidence in the company unless we had a new board of directors. The board had been together a long time, several of them were in their mid- to late 70s and lacked contemporary biopharma knowledge. In fact, I'd argue there was nobody on the board, when I took over, had drug development experience, lots of really smart people from different walks of life and different industries. But we were a drug development company, so you need that key core expertise around the board. 

We went forward to change the board around, brought in a whole new management team. A lot of the management team came from folks I'd worked with at Amgen, so our Chief Commercial Officer, Chief Medical Officer, our CFO. We brought a team that been there, done that, scaled an organization, and that was a huge success factor to making it all happen. 

But that was priority number one. Like I said, you can't do this by yourself, right? You got to have an organization and team and an environment and rebuild the culture of the company. All of that had to get redone, but it was really hard. We laid off close to 300 people in the first two weeks and stripped the company down to about 35 people. Those are things I don't want to do again. 

[36:12] Jennifer: I was going to ask you about that firing process, what it was like for you. 

[36:16] Amit: It's horrible, it’s absolutely horrible. It's either that or the company doesn't survive. It's radical surgery, back to my point about you can't incremental your way out of these situations; that's just what needed to be done. 

We needed critical skills to keep the lights on as a public company and we need to rebuild the management team. And we didn't need 250 researchers, there just wasn't room for that. 

[36:40] Jennifer: So that was presumably the lowest point for Arena I think, because it had a terrible reputation and you even had trouble recruiting some new blood. So, given such a tough beginning, how were you able to then rebuild Arena? 

[36:55] Amit: Well, it started with the team and again started by bringing in some really great talent. Our CFO Kevin Lynn, who now runs Longboard Pharmaceuticals, was critical in those early days, really savvy capital markets CFO. 

We brought in Dr. Preston Clawson, who he and I worked together at Amgen. Preston is a nephrologist by training and just a brilliant drug developer. He brought with him a whole team and we began to build it brick by brick. 

We had to execute on the clinical trials, we had to finish the clinical trials and we barely had enough money to get there. That was literally the first 3-4 months was just convincing people that this was worth doing and sharing the story of the compound, where they came from. 

The Arena scientists, historically 25 years, had one of the best chemistry groups in a specific class of drugs that existed anywhere on the planet. They lost their way a little bit, but the underlying chemistry was fantastic. We had strong conviction the drugs were going to work and it was a matter for us to be able to execute. 

[37:56] Jennifer: Eventually you guys raised about $900 million in financing. How was the fundraising process for Arena by that time? 

[38:04] Amit: Painful, through the 6-year journey, we never took our foot off gas. We were averaging somewhere between 750-1,000 investor meetings a year, any opportunity we got to be in front of investors and tell the story, and then tell the story again. 

Like any sales process, it's competitive. You're competing for limited dollars across 500,000 public biotech companies. You've got to have that ability to deal with rejection, the ability to keep telling the story. We were back to being a commission-only sales organization. 

It all comes back full circle. We built a compelling story and we got a few early investors to bite. Once we had our first clinical data readout that was an absolute success, then we had some momentum on our sides. 

And back to my very early comment about sales and how important that is, these are the fundamentals. Are you willing to pull a compelling story together? Are you willing to tell that story over and over? Are you willing to take rejection?

I'm sure if you asked Moderna management team what it was like pre-COVID, they were at all the same conferences I was at, and they were telling the same stories over and over, and they told it with conviction, they believed and they did an amazing job. 

If you build a great story and you truly believe, you have conviction, you have the courage to think about something, to tell a bigger idea, a bigger story, then it's just hard work. 

[39:25] Jennifer: You talked about building the management team, building up the new board of the company. As you mentioned at the beginning of the episode, you played basketball. In what way was it similar to build a team in basketball in the case of Arena? 

[39:42] Amit: Oh, boy. If you take five individuals who know how to play the game and you put them on a court together within about five or six minutes, they'll figure each other out. They’ll figure out where they need to be on the court, who's doing what, how to play together as a team. Interesting, if you throw just one new person on the court who's never played the game, guarantee that person will be out of place, they'll be in the wrong place at the wrong time, they won't know what to do in certain situations. 

It's that pattern recognition that you build with 20-30 years in the industry. Building a team that's got that team mindset, but a group of pros that knows exactly where to be when they need to be there is really key.  

We were able to pull a team of professionals together. Importantly, about halfway through the Arena journey, we turned that whole team over. Because the team that got you from $300 million market cap to $1 billion market cap was probably not the team that gets you from $1 billion to $10 billion - different skill set, different growth. In the early days, you needed strong leaders who are running smaller organizations, but they also were great individual contributors. As you grew the company, you needed people who could scale. 

As I mentioned very early on conversation today, I said there was a point at which I told the board that I'm not going to be the right CEO. So I think you've got to constantly be asking yourself, do you have the right team at the right time in a company's journey? So I think that was another really hard piece, you have loyalty to the people who got you here, but they can't get you to the next stage. That's a very difficult conversation to have. 

[41:20] Jennifer: I can imagine. One of the things that you did at the beginning of Arena was getting rid of this weight loss drug that had already been commercialized. Why did you pull this revenue-generating drug? It seemed like quite a departure for someone that had a sales and marketing background. 

[41:39] Amit: Yeah, we had a collaboration with Eisai, Eisai was doing the commercialization, we collected a royalty on it. The drug was doing $40-50 million a year in revenue, which is not really substantial. By the time (we) pay for cost of goods and we got our check, we were getting $6-7 million a year. 

We couldn't be a drug development company and be focused on this one little asset out here. Not when you only have 30 people in the company and 3 or 4 quarters of cash. You needed to get that laser focus in terms of what you wanted to be as a business long-term. And the market had spoken, the drug wasn't going to magically go 10x in revenue. And Eisai, to their credit, they agreed to take the product in its entirety and take the liabilities and take all of that. They felt the commitment to the drug that they were also very involved with in the development. We were able to reach an agreement, and it allowed us to focus and reset the story. 

Internal focus and external story needed to match. If externally people still saw we had the old Belviq asset, it didn't allow us to tell a compelling story around the new Arena. Internally, that would have just been both financial drag as well as focus drag. Going back to my kind of lessons learned, we couldn't incremental our way out of that. 

[42:58] Jennifer: You also ended up signing an $800 million licensing deal from a partnership with United Therapeutics so that you could build up the balance sheet. Can you tell us about that licensing deal with United Therapeutics and how you guys put that together? 

[43:14] Amit: Yeah, amazing company, amazing story. They're focused on PAH, or pulmonary arterial hypertension, a very specific disease. They've got several drugs in that category, and our first drug was for PAH. We got positive phase 2 data on that drug, and we began building our own infrastructure to go run the next study, the phase 3 study. 

While were doing that, our second drug read out. Our second drug was a drug called Etrasimod for ulcerative colitis and Crohn's disease and a whole host of autoimmune diseases. When the second drug read out, we were still only about 70 people in the company. By that point, we had raised $600-700 million in equity capital. While we had the financial means to run both programs, we couldn't scale up the company fast enough. 

I think the difference between the two drugs is that the first drug, that drug was a single indication drug, it was really designed for that one disease. Etrasimod, our second drug had broad utility, probably 8 or 10 different diseases. So we had to place a bet which one were going to go focus on. 

With United Therapeutics being so heavily focused in the PAH space, naturally they expressed interest and we got together and put the deal together. The drug had fantastic data, we could have built an entire company on it, and that was our intent until the second drug read out. 

The real issue became one of critical scale, we were 70-75 people. We would have had to hire 200 people in three months in order to scale up the company to execute both things, and we just simply couldn't do it. Rather than do two things poorly, we chose to do one thing well, which was to really develop Etrasimod. 

We firmly believed United Therapeutics could do a better job developing and eventually commercializing this drug than we could. Putting in their hands was not only in the best interest of our balance sheet, but really in the best interest of patients. 

[45:13] Jennifer: I'm told that you made all the right decisions in turning around Arena. Besides that one decision, what was the smartest decision that you made?

[45:23] Amit: I have a laundry list of mistakes I made, we can go through those. For every one great decision, there's always a handful of things you look back and say, god, I wish I had done that differently. 

I think one of the things that we did, I'm going to come back to management team, I had a very supportive board, they tested me, they pushed me. It was always a contentious, not in a bad way, but there was always vigorous debate at the board level. When I needed to make the hard decisions, they were always there to support me. 

Getting the right board dynamics and getting diverse opinions around the board, different vantage points, different thought processes, different experiences, to be able to really pressure test these difficult moments when you have to make changes and navigate complex things or license out a drug is probably one of the best things I did was making those changes at the board level. 

Look, divesting a drug for $800 million upfront, while it sounds great in hindsight, it was a very difficult decision at the time because most biotech companies would love to have one drug with that kind of data that we had. We ended up with a couple of them, it was very difficult to send your first child off the boarding school. 

Having a board that can wrestle with that decision with you is really important. As I think about whatever I choose to do in the future and the boards I'm on, I'm always trying to ask, do we have the right dynamics? Are we wrestling through the right decisions? Are we having the detailed conversations? Because I think that makes companies better. 

[46:50] Jennifer: Speaking of the biotech industry, I'm told that the industry is similar to speculative oil drilling for PhDs. Is that something that you would agree with, Amit? 

[47:01] Amit: Our risk model looks like oil and natural gas, for sure. In fact, ironically, when I was at Amgen, we had a decision analytics group, really smart modeling individuals. The entire group came from Exxon, and they literally brought all that thinking directly into biotech because it's the same idea. 

You spend a decade working on a project, and eventually it'll be profitable or not profitable, just so many binary risk milestones along the way - it looks a lot like it. I learned a lot from the group at Amgen that came from Exxon, because when they started modeling out oil and natural gas, I go, it's exactly the same thing, It's hard. 

I believe biotech is the fourth or fifth most regulated industry in the world. I think we're above the US waterways as an example. So developing a drug is not for the faint of heart. From the moment a product goes into the first animal to all the way when the product is priced in the market, even the trade name of the product and advertising, everything is regulated. Every step of the way for that decade or 15 years is regulated. 

[48:04] Jennifer: I want to talk about how you got Pfizer to be interested in Arena. How long did this take? How did the deal come about? Tell us about the journey. 

[48:16] Amit: Yeah, I used to say this at Arena all the time, which is you don't build a company to sell. You build a company, period. When you try to build a company to sell, you take shortcuts, you worry about dilution, you try to raise a little less money because it's more dilutive to your shareholders. 

We had full commercial infrastructure ready to go in the US and Europe, we had a whole commercial team, we had started working on brand names - we were doing everything we needed to do to get ready to sell the drugs ourselves. Because we had the mindset that we were going it alone, there were no shortcuts, we had really taken pains to spend the money and the time and the attention that it would take if we were actually building a company. 

Our objective was to build a company, so it was actually a bit of a surprise when Pfizer called and said they were interested in acquiring the company before our phase three data, that was the big surprise. What we wrestled with as a board is now the right time. Again, this is the advantage of having a seasoned board of directors. 

Very quickly, and before all the macroeconomic risks that we've seen, before hiked up inflation and interest rates and SVB and Credit Suisse, before all of this stuff, I recall one of our board members said, I'm starting to see a lot of macro risks ahead. He said, if we head into a recession in the next couple of years, we've had 10-12 years of a fantastic market, it's going to cycle, and we're going to see some risks ahead. 

Now, we couldn't see what those risks were, but the advantages of having pattern recognition around the board of directors. So we decided to transact with Pfizer. I think we made the right decision, and I think it was driven by an experienced board of directors. 

The journey was interesting; they had more people in the data room than we had people in the company. I think we counted close to 800 people touched the data room, and we had about 600 people in the company. Of course, of the 600 people in the company, only 20 or 30 were over the wall in terms of the transaction. So it was a lot to manage, again, kudos to my team. 

I think we first heard from them in October, and we announced the deal in December. It was six weeks of a tremendous amount of work, but it happened very fast. 

[50:27] Jennifer: Now that you had a year to reflect since the Pfizer acquisition, what do you think of the success and the failures along the way? Or how do you think of success and failure along the way? 

[50:39] Amit: Like I said, we made a lot of good decisions, we didn't get everything right. I would say, whatever I work on next, I won't make those same mistakes again. I'll make different mistakes, but I won't make the same mistakes. 

You learn from every journey. I've shared a lot of the things that I thought were really important around the team, the transition of the team, building global infrastructure, paying tremendous attention to the investor base, and being front and center with the investors all the time, those are all things we got right. 

There were a couple of hiccups we had on some of the smaller clinical trials, I think I would have done them differently. We have three drugs in the neuroscience space, and we spun them off into a new company, and our first CEO went off to run that, so there's still a little part of Arena still out there, it’s called Longboard Pharmaceuticals, and they're developing our neuroscience drugs. 

I think if I could have done something differently, I would have accelerated our cardiovascular products. I think there's still tremendous promise, so much emphasis on cancer, but heart disease still kills more people around the world. We had a couple of fantastic products there, they're now in the hands of Pfizer, and I really hope they develop those products. 

The one thing we got really right early on and through the journey was managing our human capital. It’s  probably the thing I'm the most proud about, not just from a diversity perspective - our company was 62% female, our board was 44% female. I didn't even know those numbers, especially the staff, until we sold the company. My HR guy goes, did you know that we were 62% female? I had no idea. 

We did just a great job of building a young, not just age wise, but young in mindset and spirit. I think we built a great culture inside the company. I think if you talk to 100 random employees who were at Arena and ask them what they miss, I bet you they'd say just miss the feeling of the company. And I miss it too, I really do. We just had great people, and I think we did probably a better job on human capital than almost anything else. I think that was a huge part of our success, huge part. 

Look, if I ever choose to jump in an operating role again, I'll take those lessons with me and try to rebuild something that has that same feel. I know feel is not a quantitative analytic, you can't make a slide on feel, but I think how a company feels is really important. I think it translates into execution, I really do. 

[52:54] Jennifer: The feel in that sense translates into the culture of a company, which I think is really important because at the end of the day, who runs the company, who builds the product? It's the people. 

I think the success of a company is very much tied to the culture of the company, which is built by its people. People and culture are two very important elements and it's also the reason why people stay at certain companies. 

[53:22] Amit: That's the thing I'm the most proud about. I'm proud we built a great company, I'm incredibly proud of the people. The last day was really difficult, was really difficult because we wanted to go long, we wanted to go build a business, we were going to run this for the next ten years and launch these drugs - that part was really tough for folks, including me.

[53:42] Jennifer: So now, as the rock star CEO in the biotech industry, what are you going to do next? 

[53:47] Amit: I'm on a couple of boards trying to help out companies in this really really tough environment. Got a couple of companies that are public, most recently, as of last week, Zura Bio, Z-U-R-A. We took that company public via a blank check entity or a SPAC, which was not ideal, but in this environment, we have to navigate and do things a little bit differently. That company, I think it's going to be a lot of fun to work on, I've got a great young CEO in that role. I've got some former Arena folks around the table as well, I think that's going to be really fun to work on. 

I've got the other boards that you mentioned, so just working with these CEOs, working with these boards, trying to help out, there may be a point in which I’ll take a new operating role. But I'm still having fun, my days are still busy, I get to interact with amazing people and work on amazing projects. 

I always tell people who are not in biotech that, the reason I love what we do is because long after we're on this planet, these drugs will still be here. In fact, the drugs will likely be generic and even more millions of people will have access to these drugs. I think that's just a wonderful way to leave a legacy. What better legacy than helping the human condition? I'm really proud of what we do as an industry. We don't always get everything right, but by and large, the impact on human health is dramatic and substantial, and I want to be a part of that for as long as I am on this planet. 

[55:11] Jennifer: So you might go to bat again, taking another operating role? 

[55:15] Amit: It’s possible, I actually think I'm an okay board member, I'd really like to run something again when the right opportunity comes up. 

[55:22] Jennifer: By the way, where does your love for cowboy boots come from, Amit? 

[55:26] Amit: Well, first and foremost, it comes from my bad knees and ankles because they're actually the most comfortable thing you can wear. So basketball gave me bad knees and ankles, but it didn't start there - I really like country music, since I was in high school. 

There's a depth and soul to a lot of country music, and I really enjoy it. The boots help my knees, so I think it's a double benefit. You didn't ask me the important question, how many pairs do I have? 

[55:48] Jennifer: How many pairs of cowboy boots do you have? 

[55:52] Amit: I think I have about twelve pairs. 

[55:53] Jennifer: That's not too bad. You're also the master of inspirational quotes. I'm told that your board presentations at Arena were full of them, and you had this quote on your desk from the Reagan Library. Can you tell us what it is and why you have it on your desk? 

[56:08] Amit: Yeah, I think I was at Percivia when I took my youngest daughter to the Reagan Library and had them at the gift shop - “It can be done.” That's all the quote is, “it can be done.” And biotech is really difficult, you're always dealing with some kind of challenge in the drug development process, and it was just a reminder that anything's possible and you can make it happen. 

I think the three things I used to tell the Arena team is we're bound by our creativity in how we run our trials, how we build our organization; we're bound by our courage to make the big, bold decisions like licensing ralinepag D-9 to United Therapeutics, and our conviction to make it happen. I think those three things define the kind of organizations I like to be involved with. You have the audacity to really press hard and really believe that it can be done. 

So, unfortunately for my team, they all got one of these little plaques on their desk whether they liked it or not. It's just a reminder in tough times because we're so subject to market cycles and we're so subject to this binary risk model in biotech, whether drugs are going to work or not going to work. It's a constant reminder that we can navigate it, we can navigate the tough times. 

[57:19] Jennifer: We're coming now towards the end. Where can people find you online? 

[57:23] Amit: I'm on LinkedIn,  that's my only social media presence, and welcome any comments, quotes, any more inspirational quotes I'll take them. Any recommendations for cowboy boots - I'm always listening. 

And I think it's a wonderful industry, and the more people I can help educate on how what the journey looks like, I would love that. 

[57:43] Jennifer: And maybe your next business venture, if you had to choose, would it be a turnaround or would it be a complete startup from scratch? 

[57:52] Amit: I'd love to do something earlier, build it from the ground up. 

Turnarounds are difficult, there’s a lot of pain along the way. Like I said, one of the few things I never want to do is have to lay off people again. It's a very emotionally painful process, it’s a much more difficult journey. 

If I got the opportunity to run something from the ground up and build it and bring the right people together, I think it'd be a lot more fun. 

[58:15] Jennifer: I think some people have PTSD from it, from laying off people. 

[58:19] Amit: It's horrible. I mean, these are Moms and Dads and they have mortgages. That's all that weighs on your mind, it’s really difficult. It's always preceded by sleepless nights and followed by a bottle of wine. 

[58:32] Jennifer: My last question, what does the Founder Spirit mean to you, Amit? 

[58:36] Amit: I think it's beyond just building a company, there's so many different ways to have the founder spirit. I'd like to think I had this Founder Spirit when I was inside of AstraMerck or inside of Amgen.

That idea that you can take any situation and make it a blank sheet of paper and put your own stamp on what you want to build, to have the courage and the belief that you can make something happen in the not-for-profit sector, in biotech, in tech, whatever it is. I think it comes down to purpose. I'd be hard pressed to find a founder that didn't believe they had a real sense of purpose. 

I think even inside the larger company I was with, the people bifurcated, there was a group of people who really felt a sense of purpose and a group of people who really had a sense of paycheck - I think they're two completely different individuals. If I was to give you one word, I'd say it was purpose. 

[59:25] Jennifer: We're now coming to the end of our interview, and as you know we end every episode with a quote. For this episode, we have a quote from Nelson Mandela, the former president of South Africa. 

“It always seems impossible until it's done.” 

So Amit, I want to thank you for joining us today and taking us on your magical journey through life.

[59:47] Amit: Jennifer, thank you so much, that was a lot of fun. 

[60:09] END OF AUDIO