Pioneering the Pill Bottleneck
This week I am talking to Mati Gill (@matigill), Chief Executive Officer of AION Labs (@AionLabs), a first-of-its-kind alliance of global pharma and technology leaders and investors that have come together to create and adopt gateway AI and computational technologies that will transform the process of drug discovery and development for the betterment of human health.
An AI-Driven Pharma Adventure
Mati discusses his background and journey from public service in Israel to senior roles at Teva Pharmaceuticals, including his visits to Nigeria, and highlighted the importance of innovation and regulatory agencies in advancing healthcare. Mati’s passion is bringing AI and machine learning to drug discovery and this led to the creation of AION Labs, a venture studio focused on revolutionizing pharmaceutical development using computational technologies. We discuss the venture studio model that involves creating and supporting startups in the AI and drug discovery field, providing them with up to four years to develop and validate their technologies.
We dive into the responsible integration of AI in drug development, acknowledging both the potential for breakthroughs and the need for ethical considerations. The good news is that the inefficiencies in the current drug discovery process, which often takes over a decade and billions of dollars, but Aion Labs’ mission to leverage AI to accelerate drug development, making treatments more accessible and affordable.
He highlights the importance of incremental approaches to innovation and especially the need to be realistic with the recent closure of a non-viable startup, demonstrating the importance of making tough decisions to focus resources on ventures with higher potential for success.
Listen in to hear the 3 essential pillars that define their approach and their focus on sharing research data and partnering with pharma companies to provide startups with valuable insights and expertise.
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Raw Transcript
Nick van Terheyden
And today, I’m delighted to be joined by Matty Gill, he is a the CEO of ion labs. Marty, thanks for joining me today.
Mati Gill
Thank you for having me, Nick.
Nick van Terheyden
So as I do with all of my guests at the beginning of the show, I think it’s important to get context, a little bit of history, you know, some of your journey and how you arrived at this point. Tell us a little bit about yourself and the things that contributed to this point in your career, if you would.
Mati Gill
So thank you, Nick. I was born in the United States in the Midwest and Ohio, and our family decided to move to Israel about 30 years ago. And I’ve been based in Israel ever since. I spent about 10 years in public service here in Israel before moving to industry, where I spent a little over 10 years in senior roles at Teva Pharmaceuticals, Israel’s flagship company and flagship biotech company. And that led me on a journey in the various roles to learn about the innovative ecosystems and to help Teva also enter into new markets, including Asian markets, Eurasian markets, as well as in Middle East and Africa, where I had the opportunity to visit Nigeria a few times, which I know has a special place in your heart, Nick, and to meet the amazing entrepreneurs there, and some of the great people and the regulatory agencies that are really trying to bring health and innovation through to Nigerian patients and the population there. And ultimately, what we wanted to do at Teva, and then that led me to Ioan Labs was to help bring artificial intelligence and machine learning into drug discovery and development and to learn how to do that and to help steer those capabilities into the way that we develop new drugs and bring them to markets and bring help to patients. And that brought us to leverage an opportunity that the Israeli government actually came out with, which was to create a new venture studio, which ultimately became my own labs, with excellent partners, and to help great, great new startups that will revolutionize the way that we discover and develop new drugs and bring them to market.
Nick van Terheyden
All right, so before we get into a little bit of that, obviously, you know, folks that listen to this show know that I’ve got a passion around Africa, you know, specifically Nigeria, obviously, you know, interesting country, I think, you know, outside of that continent, perhaps and maybe outside of the US, particularly, I think, less well understood, it’s probably most known for the Nigerian scam, you know, and it continues to this day. Well, I don’t think it’s mostly homed out of Nigeria these days, but highly innovative country. And I think others have heard me say this, what were your experiences? I’m curious about some of the interactions that you had them.
Mati Gill
So I’ll just give you two anecdotes there. One is that when we started to look into the Nigerian market, which is a great market for a company that wants to expand into Africa, because of the growing population, and and really it’s such a sizable market that you can ignore. So we started to learn the market and we want to meet with the head of the Nigerian FDA, and I was blown away. Here’s a woman that spent decades in the United States learning best practices and pharmaceutical development and pharmaceutical regulations that decided to move back from the United States with a mission to help build up a regulatory agency that would be professional that would be responsible in the way that it review Use approves and makes drugs accessible to Nigerian patients. And we worked with her to help her learn new ways of doing such and gain knowledge in the areas of pharmacovigilance. And the way that new serial tracking regulatory requirements are there, so that we can help teach her and train her but also her all senior staff on new methods and best practices. So that really, they can bring safe and safe and secure medicines and make them affordable and make them accessible for the 80 some million 200 million people that live there in Nigeria. And that was something that I was blown away by. The other element that I mentioned is we did that type of workshop on training for the Nigerian FDA Navteq what’s called through the Israeli embassy, the Israeli embassy asked us to help the Nigerian regulatory agencies. So it’s really a GTG element that they lead, and we help to support from the content. And they asked me, they said, Do you want to come visit a venture platform, here in here in Nigeria, here in Abuja, and the capital there? And I said, Absolutely. And so they took me to the old residence of the US ambassador in Abuja, to meet with this amazing, beautiful group of young entrepreneurs there that we’re building startups with tremendous drive, an entrepreneurial spirit, mostly not in the pharmaceutical space, more in technology spaces that are outside of our scope. But I was just blown away, I could spend hours there, if not days, and would love to my next visit, visit there again, to see their progress. But I was just blown away by the energies and the excitement and the talent that was oozing from each corner there and really making something beautiful out of a very out of a very, in a very resourceful mindset in that sense.
Nick van Terheyden
Yeah. So I appreciate you sharing that I’m just going to layer on just one additional story, I have a good friend, highly skilled, highly qualified brain surgeon who did exactly that went back and is now back with his family in Nigeria. Very similar story, you know, much later in his career, but doing exactly the same thing. And it’s a real testament to the country, the people, you know, I have this sort of deep personal passion, and I truly appreciate you sharing that. And Echo, you know, much of that. So, so back to ion labs, obviously, you know, this conglomeration of folks, you talk about it specifically, as a venture studio, that’s a term relatively new to me, I sort of think about this in innovation hubs is really the term that I sort of come up with, but it sounds like this is a little bit different, obviously, a focus on Pharma. And indeed, you know, we’re in this era of AI, everything. I mean, if you don’t put AI in your, your commentary, nobody’s paying attention, because that’s the focus. And, you know, there’s a little bit of excess, but I think there is true excitement, thanks to some of the progress that we’ve seen. That’s clearly a critical part. Tell us a little bit about what it is that you do, and and how this sort of came about, because I think that’s critical to, you know, the future of this and how we continue to develop this, you know, both in a resourceful, but also ethical manner, because I think people are concerned about that right?
Mati Gill
There. And I think that there, every time you have developments in technology, there’s a reason to be cautious and to be concerned and to be responsible. Mostly, I think that’s what, that’s what’s important. You don’t want to stop innovation and scientific breakthroughs from continuing. But you have to learn what they’re capable of both for good as well as the risks, so that you could do it responsibly. And I think that there’s a lot of great efforts on that front. We are a venture studio, as you mentioned, and it’s a venture studio versus an innovation hub. Because we are very focused in what we do, we are focused on creating and supporting the growth of new startups in our field. And our field is AI, and machine learning and computational technologies for drug discovery and development. So a venture studio because we actually have a company creation model, in which we and we can go into that if you’d like in which we create new startups anywhere between four to six every single year. And we support them for growth, and we give them up to four years to work and develop the technologies validate that they actually work and then go on and grow. And our field was decided upon because we felt that this is a field of AI for drug discovery and development and we actually did launched it a little bit before the whole generic generic of AI bubble started to grow. But we, we chose this space because our feeling is that there’s tremendous potential for artificial intelligence and really the harnessing of big data capabilities in our field of drug discovery and development, because it’s one of the last fields out there and last markets out there that has yet to be fully revolutionized through the capabilities of artificial intelligence. If you think about it, Nick and your physician, we are ultra conservative, and probably rightfully so about how we approve new drugs and what type of drugs we put into our bodies, ultimately, that that whole process takes well over 10 years, it takes well on well over $2 billion, on average, to develop a new drug. And the whole industry pays, it pays for the r&d and all the failures that are well over 90% failure rate, from the time that you actually start to test out a new drug, and what actually makes it to market after receiving FDA approval. So the notion is in such a in such an inefficient process, is that by bringing in technological capabilities, we can bring new hope to patients new drugs, for new types of diseases that do not yet have a cure, or do not yet have a therapy in record times in the faster process, and for much cheaper and provide more access to more drugs for more patients. And that’s really what we’re trying to do here. We’re just at the beginning of the AI entrance into drug discovery and development. There’s more and more going on in that space. Obviously, it’s a growing space. And there is a lot of buzz about it. But the potential is yet to be realized. And we are right at the forefront, which with an excellent group of partners that can help us succeed in our mission.
Nick van Terheyden
So great background, you know, explanation, one of the things that you know, I’m familiar with, or at least is maybe its dogma, you can correct me if this isn’t the case, but notoriously, you know, an awful lot of companies fail. It’s very hard to start a company even with fantastic technology, I always pick on VHS Betamax. Betamax failed. But you know, purists will say it was a better technology. You talked about four to six created companies every year, I don’t know how long you’ve been in business. And we just started a little over. Okay, so you’re not gonna be able to answer this, I was hoping you might be able to say.
Mati Gill
Good. Well, let me let me ask the question and then answered for you. Because we’ve already been long enough that we’ve already shut down one company. And one of the four elements in venture studios, is to that’s core to their success. And you could see this in any model or case study, like flagship pioneering and others, is to take a tough decision to shut down to a company that just isn’t working. Now, we guarantee to all our entrepreneurs that we give them up to two years, unless an agreement with the entrepreneurs, we feel that it’s just not working, that the scientific capabilities are not being realized, or that the markets not out there. So we actually found great entrepreneurs that came from the tech space to, to set up a new company that was supported by three of our partners, and to solve a challenge that we thought was going to be a robust enough challenge to be the basis of a new startup. And after working on it with a year and receiving a lot of input from our expert partners, we realized it wasn’t a great company that would be attractive for VC funding, and be able to grow independently. And together with the entrepreneurs, we decided that we should just cease to put resources into a time and money into it and separate amicably. And I think that’s key to being successful, because then we can focus on the companies that do have potential to succeed.
Nick van Terheyden
So so for those of you just joining, I’m Dr. Nick the incrementalist today I’m talking to Matthew Gill, he’s the CEO of ion labs, we were just talking about the whole concept of a venture studio versus an innovation hub, we just dived into one of the realities of you know, venture funding, particularly at the very early stages, the relatively high failure rate, and also let’s be clear, a relatively high failure rate of pharma and molecules that are being designed, you know, we see this massive pipeline that sort of narrows up into the sort of final stages of actual solutions that deliver value. And I think, you know, I just want to highlight this and you know, I’m going to be selfish about it and say, Gosh, sounds really like an incremental learning point here that you know, This is not always about success. And failure is important to understand, recognize and deal with responsibly, always hard to do. But I think done, you know, in the appropriate setting appropriate sort of review, it sounds like you’ve already done that. And you know, even in this sort of early experience that sort of jives, or at least a little bit with some of the numbers, and I think essential, but rather than focus on the negative, let’s focus on the positive and see what the sort of positive experiences are, obviously, you’ve brought together a really key set of resources. One of the big challenges for founders, early venture capital is actually creating an infrastructure to deliver against a solution, you know, you can have a fantastic solution. But if you can’t put that into a corporate structure, is that part of what you’re offering? And how do you go about delivering against that,
Mati Gill
we always make sure that we’re working with three pillars. Number one is to make sure that we are always working on a very clear, crisp, well defined problem statement. And we don’t set up a new company or invest in a new company unless that problem statement is absolutely clear. Because Nick, you’re right. There’s a lot of solutions out there that are looking for challenges, we’re happy to take a look at them and work with them to validate whether or not there’s a problem on there. And if anyone has great technologies in the AI space for drug discovery and development, send them our way. However, we will never invest or setup a new company unless there’s a very clear, crisp problem statement. That is our learning from the first company we shut down. But I mentioned that the problem statement was there. It just wasn’t good, crisp and robust enough. And so we have a whole set of criteria that it needs to meet for that. Secondly, is that there has to be excellent scientists founders. And so we run a competitive process, and a very clear process where we are open to talent coming from anywhere. And if you’re listening to me in Nigeria, we haven’t yet had an Urian scientists founders, but we’d love to have some here. And we’ve had from actually five out of the seven continents from the world we haven’t yet had from Australia. But we’ve had candidates come from all over the world, and setting up companies here in Israel with great scientists founders to tackle some of the biggest challenges in our space. And third is that we then mentor them for success and help them grow. So we’ve created an infrastructure where our companies have access to computational wet labs, the expertise of the great pharma companies, Pfizer, AstraZeneca, Merck and Teva that will help them to provide them with the data experience expertise needed, meet with them on a regular basis, so that they can develop their solutions and technologies and bring them to market, great investors like the Israel biotech fund and MBT ventures, as well as our entire network, so that they have access to funding and are making sure that they’re actually building a good company and not just good research project. And we have a computational and cloud partner and Amazon Web Services, that we were blown away by their capabilities, specifically in the biotech space because they’ve really developed a great scientific team so that they can provide their cloud for pharma companies in the life sciences space in the healthcare space, with a deep understanding of what those companies need. Absolutely. Pharma r&d executives from the past and X healthcare and even physicians, our investment committee member from Amazon as a physician, so they actually have an understanding of what the needs are in our space. And they can help to understand how to leverage the cloud. And this whole model is based on a model that was invented by Christianity donor from biometrics, that really has been doing this for over 10 years in the research space. In a company called biometrics. They’re based out of Germany. And we adapted that model for from a research institute into what will work for venture creation. And that’s what we’re doing here and I on labs and helping to define great challenges, provide all the expertise and support needed so that our scientists founders can succeed.
Nick van Terheyden
So still relatively early, but I’m curious about what your funnel looks like. I mean, how many applications do you get? What’s the sort of success rate? I mean, is this is this difficult? Are you finding lots of great ideas and people coming up and you know, just not enough resources, potentially, what’s your balancing act?
Mati Gill
So we are doing something that hasn’t been done yet. And just like anything that ambitious with great partners, it’s also very difficult. So we we’ve finished our first year learned a lot from it, building on those learnings. And we’ve it up until now invested or created in five startups or six will be selected in September. And some of them are very promising. We’re very, very happy with The with our success to date, we hit the ground running. So to be able to do that within a year and a half, I think is, is something that we’re very proud of. But we are going to continue to improve. And that’s something that we’re very committed to. And we’re blessed to have such a tremendous team, but also great partners that are very, very committed to our success. And we have an upcoming bootcamp in September that will be in how do we develop, we use AI for small molecule drug discovery. There, we have five incredible candidates and teams that will compete to create our sixth startup here in an eye on labs. And we’re now running our ideation process to decide on the biggest challenge that we’re going to tackle and 2024 and beyond.
Nick van Terheyden
So, the other thing that sort of strikes me, I mean, I think International is always positive. But one of the things that you see, especially in healthcare, it’s not not exclusive to it, but is the fear, let’s call it not necessarily founded, but the fear around sharing of data, especially PHSI. Not so much the sort of corporate patenting and so forth. But that obviously plays into it. How do you approach that, because it sounds like you’ve got a real sort of international stage. You know, what’s, what are the challenges and you know, the successes so far.
Mati Gill
So in most cases, we are sharing, and we’re enabling the sharing of data that is researched that and not necessarily patient data, but we’re fully compliant with all the best practices and to ensure privacy and to ensure compliance with all all the requirements with regards to sharing data. And we’re fortunate that we have four pharma companies that all want to enable the sharing of their data, for the, for the purpose of helping startups advance science and advanced breakthrough discoveries. They want to share that data with the startups. But they don’t want to share their data with each other be and they’re not allowed to, because this is their competitors. And we are very strict on our antitrust guidelines. So therefore, it’s great that we have a company like Amazon Web Services here that’s able to provide that type of platform. And to help us think through how we can create a federated data sharing platform. So that each one of the pharma companies can share their data with the startup but not with each other in that manner, and to be able to do it and as efficient as possible. But the access to that is really key. And it’s really the it’s really a differentiator for startups, for them to be able to work with the farmer partners from day one and CO develop with them and have access to their expertise, but also to the data is a key differentiator for what will help them be successful versus trying to do it on their own developing their technology and then down the road, seeking out a design partner that in our space, it’s a little different than in other spaces, and it’s really something that they can benefit from. Right.
Nick van Terheyden
So the other thing that you mentioned in the introduction, and you know, some of the background details is the speeding up of the process, and in particular trying to deliver more access more accessibility. I mean, one of the things that I think people would be critical of whether it’s valid or not, is the cost of pharma, I think that’s, you know, vastly exceeded any kind of trajectory that people would have seen. We know healthcare costs are just astounding, but you know, specifically with very customized molecules, customized therapies. And it sounds like a lot of your sort of innovation is directed in that area. But you know, you’ve worked in spaces that don’t have resources. You’re excited about that? How are you addressing that? And how do you see that playing out in, you know, the coming months and years.
Mati Gill
So it’s, it’s very evident that artificial intelligence and the capability to be able to really harness technologies can speed up processes make them much more efficient. We feel that’s part of our mission, not just to bring new therapies to patients, but to also make the process of doing so much more efficient so that it doesn’t, we’re not continuing to pay for over 90% failure rate. And that’s the main drivers that ultimately, we are all paying for the fact that scientific breakthroughs are incredibly hard to do. And you have a 90% plus failure rate, and we’re paying for all those failures because ultimately, this is a for profit business. And so you need to be able to return your investment and that includes all those failures in that sense. So if you’re able to really gain more insights and to really Be harnessing data, you can lower that attrition rate to much less than 90%. And you can improve your chances of success and clinical outcomes by a much higher rate that’s worth a lot for a startup that wants to work in this space. But it’s incredibly a value to healthcare systems out there. And while pharmaceutical costs are a small portion, usually of healthcare costs that are high, they still, they still are much higher than they could be if we’re able to bring down those attrition rates and really spend less than the r&d and then you can actually lower the cost and make them more accessible.
Nick van Terheyden
Okay, so exciting times, I think, lots of opportunity. Obviously, you’re excited about it. I think, you know, this inflection point that we talked about the beginning with artificial intelligence is really bringing a huge new opportunity and scope that you’re trying to capitalize on. You have the infrastructure, you’re obviously keen to get people in, I’m sure folks are listening. How do they get involved? Who should be involved? Who should they do? You know, what, what should they do to apply?
Mati Gill
Sure anyone can reach me on LinkedIn, and you can reach out to us we’re very accessible. Just reach out to me, I’ll respond very quickly. We want the best and the best minds out there that are potential scientists, founders, that are either coming from a technology or AI background or coming from a biological and scientific and life sciences background. That’s who we’re looking for.
Nick van Terheyden
So for those of you looking, it’s a I O N labs, AR Ion labs.com. That’s their webpage, you’ll find all the resources there. Reach out, you heard it here, Matty Gill is the person that everybody wants to reach out on LinkedIn. I think he’s very brave to say that because if he doesn’t get all of those challenging LinkedIn connections of people that are somewhat more nefarious is that he’s a better man tonight, unfortunately, as we do each and every week, we’ve run out of time. So it just remains for me to thank you for joining me on the show. Matthew. Thanks for joining me.
Mati Gill
Thank you, Nick. It was a pleasure.
