Starting a life science company is not easy. Continuing to keep the venture going while at the same time achieving scientific milestones is hard work. But San Diego is a good place to do just that. Known for its culture of collaboration, San Diego is unique in that it has an innovation ecosystem filled with an abundance of startup resources and relevant life science expertise to foster the creation and growth of a biotech company.
Here we share the journey of a San Diego home-grown success story…
DTx Pharma is a San Diego-based preclinical biotech startup with a novel technology for delivering RNA therapies targeting disorders affecting neuromuscular and central nervous system function.
The company was recently acquired by drug giant Novartis for $500M, including additional potential payments of up to $500M upon completion of certain milestones. The acquisition provides Novartis with DTx Pharma’s drug delivery platform called FALCON, an acronym for Fatty Acid Ligand Conjugated OligoNucleotide, which aligns with Novartis’ efforts to expand its neuroscience pipeline.
How did DTx get its start? Let’s go back to the beginning.
2017 – DTx was founded by Arthur “Artie” Suckow as an idea. Suckow had known he wanted to start a company since grad school, where he came up with the idea and found out investors were actually interested in funding it. From then on, he ensured that he was exposed to as many aspects of drug development as possible and eventually built a team whose collective experience would set them apart.
Later that year, DTx was accepted into JLABS @ San Diego.
DTx applied to Springboard, Connect’s startup advising program, but was initially not accepted. Instead, as part of Connect’s entrepreneurial offerings, they were provided with one industry domain advisor – James Callaway – who spent 2-3 hours working with them to address several key issues.
DTx applied to Springboard again… and was accepted.
DTx completed Springboard, and was selected as a Cool Company later that year.
Artie credits the many discussions, early guidance, and encouragement received from his Springboard advisors as providing vital direction on navigating the DTx path forward:
James Callaway was a very significant advocate, working on multiple pitch iterations with him, and as time went on, even came when Artie gave presentations.
Onne Ganel really supported business development at DTx; he provided a key introduction to Eli Lilly, which later invested. He also arranged a meeting with the CMT Research Foundation (CMTRF), which inspired Artie to pursue Charcot-Marie-Tooth (CMT) type 1A, the indication Novartis was excited about. CMTRF also provided funding to DTx for an initial validation project.
Takashi (Taka) Kiyoizumi worked closely with Artie on developing his presentation skills.
James was first introduced to DTx following its completion of the Springboard program. Shortly after, he became Artie’s mentor and has continued to fulfill that role for the past five years, meeting with Artie on a regular basis. James also became the Chair of the DTx Pharma Business Advisory Board and has served in that role for the past four years. James also helped Artie appreciate the role of bankers in the space as well as helping him be a better mentor to his own employees. Artie says of James,
Tim has known Artie since he was a Ph.D. candidate at UC San Diego and has invested in every DTx financing round, as well as an early false-start company while Artie was still in grad school. Tim, a serial entrepreneur himself, co-founded Pharmatek Laboratories and TEGA Therapeutics, Inc. He also served as a Member of DTx Pharma’s Board of Directors. Tim has had a long history with Connect, including taking Racegate.com through Springboard in 1999. Racegate.com would eventually become Active Network. It was Tim who encouraged Artie to apply to Springboard. In Artie’s own words.
Jeff was introduced to Artie by one of DTx’s co-founders around summer 2017. Jeff came on as an early angel investor around Q3 2017 and later became a board member and scientific advisor for DTx. Friedman Bioventure led the Series A (oversubscribed) round which ended with $10.6M.
Joe was introduced to DTx at one of the company’s pitches as part of the Springboard program. He subsequently invested as an early individual angel investor in May 2018, several years before conceiving, raising, and launching SeedFolio, his VC firm.
Funding round led by San Diego-based NuFund Venture Group.
DTx received several grants, including three SBIR grants totaling $850K and two STTR awards totaling $700K.
Oversubscribed funding round led by San Diego-based Friedman Bioventure, which ended with $10.6M. San Diego-based Viva Biotech also participated. Eli Lilly participated robustly because of Onne Ganel’s introduction.
Funding round of $100M and which included San Diego-based Viva Biotech, among others.
The FDA granted DTx orphan drug designation for their therapeutic candidate in the treatment of Charcot-Marie-Tooth disease Type1A.
DTx was acquired by Novartis for $500M.
In a conversation with Jeff Friedman, he described Artie as very creative, superb at navigating decisions, always learning, and possessing an incredible work ethic.
“From the very beginning, he knew who he wanted to hire, he reached out to those folks early, told them about what he was building, and let them know that when he had the resources, he would hire them. When the time came, they left their comfortable jobs and joined DTx. That core team has all stayed with him!”
He continued, “What’s remarkable and unique is that early on, DTx realized that in order to build value, significant capital was going to be required. Through multiple financing rounds, the focus was on getting the required capital to create value, and never trying to over-value the company.”
Early on, DTx invested heavily in lab space, facility, and other requirements to allow for a quick throughput where they could make molecules, test them, and prove them. They kept all this in-house, truly believing that the fastest way to go through cycles of tech development, was to do it internally. When the CV-19 pandemic hit, and JLABS was starting to shut down in April 2020, San Diego-based Element Biosciences stepped in and offered them to lease 15K square feet of space, at startup-friendly terms. This allowed a core team of five to continue to safely develop the technology and evaluate applications across a host of therapeutic areas.
And James Mackay recalled, “When I met Artie for our first mentoring session some 5+ years ago the first question that he asked me was ‘when will I know when I need to replace myself as the CEO’. I was blown away with his self-awareness and understanding that the company needed to continue to evolve over time and that eventually that might mean that he needed to hand over the leadership at some point. It set us up for a great mentoring relationship and we revisited that question several times over the past 5 years. Of course, the answer was that Artie did not need to replace himself as CEO and he went on to lead the company through the acquisition by Novartis for $1BN. His self-awareness and openness to seeking views from others was instrumental in his ability to evolve the leadership of DTx Pharma from an idea to a successful acquisition.”
Reflecting back on the last six years with DTx, Artie shares the following message to other entrepreneurs, who may be looking to go down their own biotech startup path, “Connect’s Springboard program, along with the connections that resulted, accelerated my own personal growth as an entrepreneur and a CEO by exposing me to experts in areas that were complete blind spots for me (i.e., pitching, fundraising, strategy, human resources, legal, IP). As a scientist in academia and in large pharmaceutical companies, I learned three critical things that were important both to maximizing what I could get out of my Connect experience and to setting DTx Pharma onto a positive trajectory early on:
1). It takes an army of people with all different experiences to develop a drug.
2). It’s critical to leverage others’ experience to learn and guide decision making rather than to try to learn everything on your own (or from a book)
3). LISTEN and adapt (as needed) to critical feedback. Every presentation of a given project is an opportunity to learn how to overcome the naysayers!”
Continuing, “The advisors and subject matter experts at Connect put mine and the growth of DTx far above their own interests and, knowingly or unknowingly contributed to our ability to raise a seed round, to Eli Lilly participating in our series A, to the selection of our lead program (a key pillar of the Novartis deal) and to my confidence to keep on going in the face of A LOT of people saying no. I was successful because my San Diego mentors (and all of our investors) put development of people like me over returns and because my mentors and I believed in following the science/data no matter where it takes you.”
When asked what he wants to do next, Artie adds, “Honest truth is that I really just want to pay forward the experience and confidence that Connect and the greater San Diego biotech community selflessly gave to me, to another scientist entrepreneur with an idea but, no experience starting, running or executing on a business plan. On top of that, I really want to continue to contribute in any way I can to making a drug that makes a REAL difference for patients and I (as a member of a team) will continue to aggressively tackle devastating diseases like CMT with significant and real unmet need.”
The power of an ecosystem; the unselfishness of a community; the collaborative spirit. This is San Diego; this is how we roll.
Connect is a mission-driven 501c3 non-profit organization
