Joseph Moskal – Farley Fellow Q&A
Joseph Moskal, research professor of biomedical engineering and director of Northwestern’s Falk Center for Molecular Therapeutics
Moskal is founder and chief scientific officer of Naurex, an Evanston-based drug discovery company that develops therapies for difficult-to-treat depression and other central nervous system diseases. Its therapeutics include two rapid-acting antidepressants currently in clinical development.
You started Naurex in an unconventional way. Tell us about that process.
I was recruited to Northwestern in 1990 and founded the Falk Center. Naurex, the commercial entity, came 16 years later. The idea for the company stemmed from research I conducted in 1983. In fact, Naurex was the fourth company to grow out of that work — but the first to actually succeed.
When I came to Northwestern, I had developed a model that I thought would lead to true translational research and development. Not just basic science with clinical implications, but rather a model that would allow for basic research and the ability to translate those discoveries into drug development and clinical trial evaluation. I thought the best way to do this would be to establish a non-profit research institute linked directly to the University that also had a virtual biotechnology company tethered to it.
In the beginning, it was the basic science that needed to be fully fleshed out, and what better way than to be part of a great institution such as Northwestern with its outstanding faculty, students, and resources? However, as the need to really focus on drug development and clinical trials emerged, a biotechnology company with a business development team — with the savvy to raise money in the private sector to accomplish these things — was necessary. By putting such a model together in advance, we were able to deal directly with intellectual property ownership issues, fundraise from philanthropy and non-profits to professional investors, and avoid conflicts of interest, as well as reduce individual risk.
The key was, I knew my goals — what I wanted to develop — and I set up milestones of what I had to accomplish and what tools I would need. I planned things so I didn't have to take a traditional academic pathway. I initially turned the basement of a community hospital into a kind of idealized, isolated, but interconnected environment where I could control my space and time. This ultimately led to what is today the Falk Center for Molecular Therapeutics in the McCormick School of Engineering, linked directly to Naurex, Inc. with the University as an investor.
Raising enough money to develop therapeutics can be extremely difficult. How did you take on the challenge?
I knew that if I was ever going to get to therapeutics, I would have to cross what we call “the valley of death.” That is, there are a lot of people that get really good science done, really good pre-clinical work done, and really good-looking mechanisms, but they can never raise enough money to get to the clinic because it's so expensive and so squirrely.
View Joseph Moskal's faculty profileDrug discovery is problematic in that realm. You don't have a device like an Apple computer where you can say, “See, this is going to change the world.” All you have is an empty cup, and you say, "I know you can't see it, but in there is something that's going to transform neuropsychiatric disorders and cure treatment resistant depression in 60 percent of the untreatable patients or malignant brain tumors in kids. I know it's there, but I can't show it to you yet.” It's a whole different world, trying to put that together.
But we've made it work. We've sustained the model, and we've trained any number of students — high school students, college students, PhD students. We've raised enough money each year to sustain and grow the program, we've become an integral part of Northwestern, and finally, one of our key technologies is lighting up.
What challenges have you dealt with?
Creating a business team isn’t easy. We went through some CEOs, we went through some intellectual property creation, we went through some drug manufacturing, but we really couldn't get that spark. But in 2008, we found the right fellow at the right time and that blossomed into what has become Naurex, our biotech company. We were able to bring in really top-drawer consultants and a team of people that could take the program far — key people that had great experience in the pharmaceutical industry, who knew how to connect with the VCs, and then we just pounded the streets relentlessly. There were times where I had to write checks out of pocket to keep the thing going. We were relentless for two years — pitching, pitching, pitching, refining, modifying, pitching.
What has been the result?
Naurex now has a board of directors composed of four strategic partners and three VCs. The partners are Baxter, who is our lead investor; Takeda, the world's largest Japanese pharma; Shire, out of the East Coast; and Lumpback, out of Copenhagen. They have access to the IP, but they're strategic. They’re not on the board, and they don't have votes. They have, however, each invested in both the Series A and Series B financings. We call them strategic partners — they will give us whatever support they can to help us along the way, but there is no commitment to support us financially as we go forward or to partner with us either.
The VCs are, fortunately, good VCs. They're very reputable and have very deep pockets. Between the three VCs, we have enough money to keep doing these series without actually having to go out, and with the pharmaceutical industry advisers, we have the best of both worlds. Our board is excellent, too. We ended up with this incredible mix of very experienced people who have done this successfully before.
What tips would you give up-and-coming entrepreneurs?
The business development team is more important than anything. They tell you that over and over again, but it's the business team that carries the day, not the science. The science is brilliant, the science is the foundation, but it's the business team that knows how to craft “business speak.” Absolutely critical.
Be persistent. I've been doing this for 35 years, and the company has only blossomed in the last three. I failed many times. So persistence is an unbelievably important quality. Never give up.
I would also warn them of founder-itis. It goes like this: you had the chutzpah to create a company, and you want to own it. You want what you want, but you need people with this knowledge. Don’t push them away. Because, as we say simply, 100 percent of nothing is nothing, 2 percent of a billion is not all that bad.
Finally, enjoy it. Your startup is just the beginning. I believe that it's innovation that drives the world. Keep innovating, keep looking for innovative ideas and people, and strive to be in the most relevant environment for innovating along the way.