Columns
The column was written based on the lecture given at the "TRS Academia Consortium Symposium" held in February 2024.
Four Years as a New CEO of a Drug Discovery Venture
I founded AlzMed, Inc. in February 2019. At that time, I was still working at Gunma University, but in order to file patents, I needed company funding, which led me to establish my own company. The first year was spent preparing to file the patents, and after one year, I left Gunma University and relocated to the Entrepreneur Lab at the University of Tokyo, where I officially assumed the role of CEO. Currently, including executives, we have a team of 15 people. While this may seem substantial, in reality, most are part-timers or retirees living off pensions, coming together for the excitement of working on something meaningful. Only four of us are full-time: myself, two researchers, and one person in charge of the back office. So far, the capital has been entirely self-funded by management, but we are now preparing for external fundraising. Our mission is to develop early diagnostic drugs for dementia and create the world's first fundamental treatment for Mild Cognitive Impairment (MCI), based on my discovery of the brain molecule drebrin, which is involved in memory mechanisms. Research on drebrin has steadily progressed over the past 40 years.
In April 2020, we moved our headquarters to the University of Tokyo Entrepreneur Lab and began full-scale R&D. However, due to the COVID-19 pandemic, we couldn't start as initially planned. Oddly enough, I believe the pandemic actually helped us. Normally, it is said that startups need to work together and move forward quickly with an experienced CEO at the helm. However, the global slowdown in business activities caused by the pandemic that began in April 2020 worked as an advantage to an inexperienced CEO like me. Although the lab at the University of Tokyo was forced to shut down due to the pandemic, we continued R&D through joint research with universities outside metropolitan areas and outsourcing while also focusing on initial training for our employees.
Having started a startup, I've realized that while startups are small in scale, they are entirely different from small manufacturing businesses. Initially, I received advice from a friend who ran a family-owned factory, thinking our company was similar in size. However, a drug discovery venture must aim for going public from the outset despite the scale of operation, so the advice I received didn't turn out to be very helpful. As for recruiting, it took about two years to find someone trustworthy to handle the back office. As advised by a staff of the Entrepreneur Lab, perseverance in searching for good personnel is key in a startup. Opening a corporate bank account to deposit grants was also a challenge. The bank asked for sales records, which we obviously didn't have. In the end, we managed to convince them with the achievements of our founding members and the existence of our startup's website.
When starting a startup, participating in acceleration programs can be educational, but selecting the right program is crucial. We initially joined an acceleration program designed for companies unrelated to biotech, focusing on businesses with low development risk but high marketing risk. The assumed budget scale was so different from ours that we couldn't create a concrete business plan. However, this experience allowed us to broaden our network, as we met people from different fields.
It's often said that researchers shouldn't become CEOs. Certainly, I, too, would have preferred to delegate the CEO role to someone else if I could find a good candidate. However, since we started with the stance that "we would cure dementia," and "we know memory mechanisms better than anyone else", there was no one else to take on the CEO role, so I had to do it myself. Running the company myself has its advantages, such as the high sense of fulfillment that comes from pushing myself to the limit. I also find myself living more freely, unbound by conventional ideas. For example, I've moved away from the suit-and-tie style and can now enjoy more adventurous fashion, which surprises even me.
In a startup, it's important to think of spending money as buying time. For someone like me, who spent university days trying to achieve the best performance within a limited budget, this was a significant shift in thinking. It's also crucial to find excellent advisors who can support the company's growth at each stage. We must analyze what's most important for us with high resolution and enhance both cost and time performance. This is a vital aspect of the CEO's role in speeding up the company's growth.
Regarding our relationships with patent attorneys and other professionals, it's important to remember that they are not advisors or mentors; their role is to express the client's ideas within existing regulations. It's beneficial to listen to various suggestions and work with multiple firms through programs like acceleration programs.
Among startups, there are those called deep-tech ventures. Deep tech ventures work on solving global issues based on scientific discoveries or innovative technologies. AlzMed is exactly that-a deep-tech company. We started the company aiming to develop treatments for dementia based on the memory mechanisms elucidated through the discovery of drebrin. Recently, we have made progress in our research and development, identifying a drebrin metabolite (Drebolite) in human blood, which we successfully used as a marker to develop a diagnostic tool for mild cognitive impairment (MCI). We believe that by treating patients at the MCI stage, we can eradicate dementia.
Now, regarding fundraising, in Japan, it's often said that we need to refine our business plan. However, when I participated in the Extreme Tech Challenge (XTC) World Competition as a finalist representing Japan, I learned that in the American way of thinking, the milestones of a deep-tech business plan inevitably change as technology develops. Therefore, the deep-tech seeds are more important than a detailed business plan, and the key is to take pride in the seeds and raise funds. However, this approach seems less accepted in Japan.
In drug discovery research, translational biomarkers, meaning biomarkers that can be practically used in drug development, are crucial. The U.S. Food and Drug Administration (FDA) defines translational biomarkers as those that can be used in basic research, diagnostic biomarkers, and are directly linked to changes in the actual target based on the mechanism. Drebrin fits this definition perfectly as a translational biomarker, and the lead compound we are currently developing based on it is expected to succeed as a therapeutic drug.
People often say that human resources are a company's greatest asset, but what is good human resources for a startup? Startups require a basketball-like team structure where everyone has their own specialty but can also cover other positions. AlzMed is exactly such a basketball team; everyone can handle any position. Since the required human resources change as the company develops, nurturing talent to adapt to these changes is crucial. I want to make AlzMed a company where staff motivation is maintained, where people enjoy their work and find it rewarding, and where this leads to cost-effective outcomes. Also, when we talk about human resources as a treasure, this includes a broad network outside the company. Connections with professionals, such as in academia through joint research, are also important.
It's been four years since I became CEO, but I'm still a rookie. I'm sure there will be many new things to learn and new realizations in the future, but I intend to do my best to keep moving forward.
August 2024
Tomoaki Shirao, M.D., PhD.
President and CEO
AlzMed, Inc.
