What if your vision could be saved by the precise application of innovative biotech? Join us as we talk to David Esposito, President &  CEO of ONL Therapeutics, and delve deep into his take on leadership. He shares how his military background has been instrumental in the successful management of clinical trials, particularly when navigating the unpredictable terrain of the COVID-19 pandemic. With their pipeline ONL1204, a FAS inhibitor targeting retinal disease, O&L Therapeutics is making significant strides in the ophthalmology space.

Amy Del Medico: Hi, I’m Amy Del Medico, Vice-President of Ophthalmology at Vial, a technology-enabled CRO. I’m thrilled today be talking with President and CEO of ONL Therapeutics, David Esposito. David, would you like to give an introduction?

David Esposito: Amy, thank you very much for having me. It’s nice to be on the program. I’m David Esposito, the CEO of ONL Therapeutics. ONL is based in Ann Arbor, Michigan right outside the University of Michigan. My background is about 30 years in healthcare. I Started off my career with Merck in commercial roles, sales, marketing, and commercial strategy for about 15 years, and then spent the last 15 years of my career building early mid-stage life science companies. It’s terrific to talk you about ONL and all that we’re seeing in the marketplace.

Amy Del Medico: Thanks a lot, David. You have a military background. How that has influenced your leadership style?

David Esposito: I went to my undergrad, at the United States Military Academy at West Point. I served in active duty in the Army Infantry with the 101st Airborne Division. Over the course of my career, those early leadership lessons from the military certainly weave into very practical aspects of my leadership here.

 The day to day work in a early-stage biotech, albeit some of the the differences of life-and-death scenarios in active duty military, but, the ability to deal with an evolving landscape of change, whether it’s patients in a clinical trial, adverse events, outcomes, you’re looking at the ability to be steady towards the common mission that we all have, but ultimately, resilient to deal with unexpected changes in the landscape of an early stage biotech, or changes on the battlefield.

Being able to interpret new pieces of information and continue to move forward towards a common mission is one of the common traits between both military leadership and early-stage biotech I’ve come to fully appreciate. The other piece of that is making sure the team is aligned around that the common mission. At ONL, we’ve certainly have a stated stated direction of helping patients see the future. We address a number of blinding diseases of the retina we hope could make a real difference in peoples’ lives.

Amy Del Medico: It’s all about your people, isn’t it? I imagine you learned a lot about people when you were working in the military. Am I right in thinking that you’ve been at the helm ONL for five years nearly five now?

David Esposito: Yes, I’m coming in my fifth year, exactly right. When I joined ONL back in 2019, like many early-stage biotechs, we had a number of good pre-clinical endpoints with our elite compound. We were in that challenge of raising Capital and finding the right clinical indications to go forward with. That’s where the work in the team has been over the last four-plus years, is bringing that solid pre-clinical evidence into the clinic.

Amy Del Medico: What strategies would you say have been crucial for your success at ONL and the other companies that you’ve worked with?

David Esposito: With an early-stage biotech, it sounds cool that you can have a small number of people making’ decisions, quickly. The challenge with that coolness or that environment [laughs] to do that is you can zig-zag a lot of different ways back and forth, just because you have a small team and, perhaps, can make decisions quickly.

One of the key factors of our time over the last four or five years with ONL, and some of the other companies I’ve had the privilege of leading is, working with the team to build a very clear operating plan around some of those key areas. One is raising capital. How do you tie that capital to value inflection points, whether they be in research or development?

 Operating plan swim lanes, so to speak, that are very clear on timing, cost, and ultimate value is what has helped ONL move along from both very good pre-clinical data to ultimately, what’s the initial indication we chose? That was retinal detachment with a follow on indication of geographic atrophy, and then open-angle glaucoma.

Piecing together that operating plan that’s time bound, very clear value inflection points, is what the team’s been able execute very well on. It’s something investors or potential investors seem to resonate with. A real clear plan of what capital can get deployed to be able to deliver on over time.

So that’s been a foundational element of ONL over the last handful of years to do that. I’d also say to your question, dealing with uncertainty. When we built that plan and raised the initial capital in 2019, COVID was not an issue at that point, and then, certainly, COVID and the impact of our clinical trial base was something we didn’t anticipate. But the team had to respond and we seemed to have, like many others in the field, to try to keep the data coming and getting out in front of it.

Again, I initial outline of an operating plan, and then executing on it, has been real critical to our success.

Amy Del Medico: Something that’s great is that you’ve got a strong pipeline, haven’t you? It’s one asset, you got multiple indications. ONL1204 is FAS inhibitor. Talk little bit about how you expect that to target retinal disease, how it works. Are there insights from the clinical trials that have been done so far?

David Esposito: This original work on the relevance of FAS inhibition as a target started with our founder, Dr. David Zacks, a retina specialist at the University of Michigan. It was David’s initial research that showed the potential of inhibiting the Fas Receptor to make a difference when David’s original work demonstrated the relevance of the FAS receptor in the acute condition of retinal detachment.

There’s been published data on both wet and dry AMD. Also in open-angle glaucoma. Through a number of pre-clinical models, what was clearly demonstrated is the FAS receptor and inhibiting that FAS receptor is upstream of many of the current targets out there, specifically in GA around complements. FAS is upstream of complements.

We do think the ability to inhibit the FAS receptor, which I should have at the onset, is across those different disease states, when activated, triggers the death of retinal cells and the release of inflammatory cytokines and chemokines. By blocking that FAS receptor, we’re able to protect those retinal cells and quiet the inflammatory response.

That has been shown across those three distinct disease states, pre-clinically. Now, over the last four years, we’ve demonstrated the translatability of each those models into human trials. We’ve just completed enrollment in a phase two study in retinal detachment. Our phase one data proved very consistently on blocking the FAS receptor could make a real impact on retinal detachment top of standard of care surgery.

And now, as maybe you mentioned, with geographic atrophy, our phase one data with ONL1204, our lead compound within every 90 day injection, shows is showing the ability to slow lesion growth in GA of upwards of 40 plus percent. That is a real differentiator in the marketplace, given the current two approved therapies are monthly or every 60-day dosing and showing 20-25% slowing a lesion growth.

What we’ve demonstrated in our early clinical trials, now, inhibiting the FAS receptor can have an outsized impact on lesion growth for GA. We’re just now seeing some early indications in open-angled glaucoma that’s bearing fruit of the translatability from our pre-clinical models in glaucoma into humans, as well. We’ve timed our operating plan to where we’re in a phase two study in retinal detachment, now. We hope to kick off a GA phase two in the next 12 months, and soon after, glaucoma.

Amy Del Medico: It’s also very interesting to hear there’s some innovation going on in the world of glaucoma, as well as, the retina side of things .Thank you for the background. I’m going to talk to you a little bit about partnerships collaboration. We know how challenging it is to develop new therapies, particularly in the space because it’s just so busy. What collaborations and partnerships you found helped ONL to advance advance your pipeline? It’s, obviously, a busy time for you at the moment.

David Esposito: It’s critical. These diseases are complicated. The opportunity to make a difference is very hard. We depend on a number of different core partners and collaborators to help move our operations forward. At ONL, we’re a small team. We have eight full-time employees. We have about eight, almost full-time or near full-time, consultants that work with us on those fronts.

First and foremost, it’s our scientific collaboration, our key opinion leaders, our scientific advisory board members have been very supportive of our journey in helping us to find the clinical programs to show a difference of inhibiting the FAS receptor.

Amy, we are a privately held, investor-based company. We have three of the leading ophthalmology-focused venture capital firms on our cap table that have been very supportive in guiding our programs. In addition, we have some strategic investors as well, in both, Novartis and Janssen, through their financing arm. JJDC, has been very helpful for us.

From that standpoint, those collaborations and input from key opinion leaders and investors have been super helpful. But, also from our clinical research partners in executing the study, help us design the most effective protocols that can accomplish our our clinical clinical objectives, but also making them recruitable, and practical, has been super helpful.

In addition, those collaborations with regulatory authorities are what we look for in partners from our CRO standpoint is, now that these trials are getting bigger and all encompassing, the ability to reach globally. The U.S. a core market for us, obviously. We’re doing trials in Australia, and New Zealand, as well. But, some also will need to move be into Europe and other parts of Asia to be able to complete these trials.

When we think about collaborations on the CRO side that help deliver these trials, it’s critically important for people to not only work well with our team, but also have the same degree of flexibility and resilience. We’re all in it together to get these trials done. It’s complicated work, as you very well know [laughs] with your current job and your experience.

Amy Del Medico: I liked comment about making your protocols recruitable. It’s so difficult, isn’t it? In the retina space particularly, to a protocol that meets the needs of the study, but is also not overly complex that investigators don’t want to be involved it. It’s a hard line to try to think sometimes.

David Esposito: Amy, I agree with you on that point, specifically. We’d all love to have every data point and a massive amount of things to go through. Patients are not going to spend two days in a study site working through that. For some of these studies, having the right CRO partners help to bake those issues out.

There’s no right answer. There’s just probably a more effective answer working to figure out that balance of data points. Plus, being able to recruit, and manage the study site it’s not an easy task, but having the right partners, we found, you can get there, if you try hard enough.

Amy Del Medico: I wanted to ask you about precision medicine. It’s a bit of a hot topic at the moment. I wondered how you it could be applied in the ophthalmology space?

David Esposito: We are seeing it in various forms on a number of different therapeutic areas. My prior company before coming to ONL was in cancer diagnostics. We identified biomarkers to help identify risk prediction indexes for prostate, lung, and breast cancer early on. You see much more of a precision medicine approach in cancer therapeutics these days, with regards to biomarkers to help support select agents.

We’re starting to see that in ophthalmology. One particular group that we’ve been working and have deployed through two of our three clinical programs, one in GA, and one in glaucoma. There’s a company called Novai, out of the United Kingdom, that has the DARC technology. D-A-R-C (Detecting Apoptosis in Retinal Cells). It uses a fluorescent labeled accent tag to be able to identify stressed cells in the retina.

That technology, developed by Francesca Cordeiro and her team at Novai, has been very helpful to validate in GA for us, sick and stressed on the border of lesions. It’s also been published and validated in glaucoma has a higher DARC count, maybe a rapid progression of glaucoma. Technologies, like DARC, are starting to come around to be able to help perhaps identify the right appropriate patients for clinical trials.

We’re also seeing some genetic information come together. That’s still a little bit early on in retinal disease, but that idea of identifying the right patients for the right therapeutic target has begun to evolve in ophthalmology. We’re seeing it in GA, with regards to lesion size, trying to predict growth in a certain sweet spot of lesion size that seems to be rapid progressors or the ability to show a therapeutic impact over the course of 12 or 24 months is another area.

It’s beginning. Quite frankly, for GA, you touched on, there hasn’t been a lot of innovation in glaucoma over the years, therapeutic-wise. We feel it could be a real opportunity for precision medicine, again, to identify the right patients for a therapeutic that could be assessed for therapeutic impact quite earlier than perhaps waiting four to five years to see a traditional visual field change.

Amy Del Medico: That’s interesting. Novai and DARC technology is fascinating. I hope that it gets used more. It’s got a good, positive impact on some of the trials that it has been used on. So, it’s good to hear a a bit more about that.

You alluded to this at the start, throughout your career, I imagine you see lots of shifts and approaches to funding and to research. I what your crystal ball shows? What do you think are the trends for the future?

David Esposito: For most biotechs biotechs out there, I think everybody would say it’s been a tough couple of years, in terms of raising capital and moving programs forward. A little bit was COVID in the earlier part of that year, but it’s been tough capital markets. Whether they’re publicly traded biotechs or in the private markets, venture capital firms, over the last couple of years, have certainly been working on their own portfolios and even though they’ve been raising new funds, it’s been difficult to deploy capital.

Going forward, at the end of the day, in ophthalmology, it’s still a very interesting area where there is the attraction for capital to move some of these programs forward. There are large unmet needs with geographic atrophy or the advanced form of dry AMD, there’s been a lot of interest.

Mostly recently, with two drug approvals in the U.S. for GA and hopefully, moving forward across the globe. There’s a lot of interest now, that pathway is open to see what could be done for these patients that have been without approved therapies since identification of that disease pathway decades ago.

In addition to the opportunities to advance the treatments in glaucoma, from an ophthalmology standpoint, we see there’s still large, unmet need, and a real appetite for capital to be raised to move programs forward. That bodes well for us in the ophthalmology field. Many times the big macro effects of inflation in overall economic demand do hinder some of those capital raising opportunities. At the end of the day, good technologies that can potentially meet large unment needs can get there.

 We’re excited about that part of the business. The other part of this, what you touched on, some the evolving technologies, whether it’s DARC technology, some of the improved imaging technologies that can help support advancing therapeutics, and identifying treatment affects early on than before, is where it gets excited as a team, to see we’ve got capital, we’ve got some new technologies that can help move it forward.

When you wrap it all up, to what you described as some of the precision medicine, a lot of that comes down to how can we aggregate these data points, whether it’s from imaging or biomarkers, the data aggregation of these factors and the machine learning aspects that can improve care. Those are three big areas of excitement for us. There’s going to be capital moving forward. We certainly think that new emergence technologies will be there to support it.

You put all that in a big machine and crank it out, from an AI standpoint, [laughs] that’ll bring us us some benefit down the road as well.

Amy Del Medico: David, thank you so much for your insights. As usual, it’s an absolute pleasure. I appreciate your time today.

David Esposito: Thank you, for having me, Amy. It sure was a pleasure on my end too. I look forward to speaking with you down the road.

Amy Del Medico: Thank you.