The new CFO fills in the missing link

 

When you think of a Chief Financial Officer, the first thing that comes to mind is not usually a passion for neuroscience. The two fields seem like they couldn’t be more diverse; one deals with market capital and financial decisions while the other is about investigating patients’ brain activity. But what if there was a way to marry the two and use them to effect real change? As it turns out, there is.

 

Gene Mack, MBA isn’t your typical finance guy. In fact, he didn’t even start out wanting to be in the industry. When Mack graduated from Fordham University with a BS in Biochemistry and Molecular Biology, he initially wanted to become a neurosurgeon. His first internship post-grad was at Columbia University in the neuroradiology department, where he got firsthand experience of what it was like to work in a hospital, with patients, and to see all of its glory… as well as its shortcomings. He saw the bureaucratic hoops physicians had to jump through to provide patient care and quickly became disenchanted with his prior dream of helping people through medicine. That is until he discovered the link between biotech and finance. A lightbulb went off. A strategic decision-maker, Mack went back to school to get his MBA, knowing all along that medicine was going to find its way back into his life. 

 

As it turns out, it very much did. His background put him in the perfect position to enter Wall Street’s competitive Life Sciences sector. For the past 10+ years, Mack has been working as an operating CFO for some of the most high networth global Life Sciences companies. He recently led the $475M acquisition of OncoImmune by Merck & Co., and previously raised over $350M in IPO and other equity transactions for several development and commercial-stage biotech companies. Mack officially joined Gain as the CFO on April 8, 2024. As he settles into his new role, we sat down to discuss how closely interlinked science and finance really are and why his background may just be the missing link Gain needs to see operations through its exciting future.

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Can you tell us what attracted you to Gain Therapeutics?

 

There were several things. I’ve always had an interest in neurodegenerative diseases, starting with the work I did right after undergrad when I was contemplating medical school. The industry of biotech has been an organic interest I’ve had going back 25 years.

 

The Background: Where it All Began

I've been an operating CFO for 10 years, and in that time I've had roles at both preclinical stage companies all the way on up through commercial stage companies, both privately held companies and publicly traded companies. These companies included European based companies as well as US based companies. So I have a somewhat diverse background as a CFO.

 

Prior to being an operating CFO or having an operating role, I was a senior publishing analyst covering Life Sciences, biotech, and pharmaceuticals for 15 years at a number of investment banks. That period was 1999 to 2014 and in that time I covered every sort of disease category there was; everything from neurology to cardiovascular diseases to autoimmune diseases to infectious diseases, and cancer, which makes up the majority of biotech. 

 

In the 15 years of covering companies, I met a lot of management teams and a lot of investors and that's probably formed the basis of most of my connection with Wall Street. I have a pretty deep capital markets background having worked for a number of investment banks. I spent the majority of my career at Lazard, HSBC, and Mizuho Banks.

 

It was during that time that I came across Khalid [Islam, Ph.D] [Chairman of the Gain Therapeutics Board of Directors] and another board member named Dov Goldstein, M.D., who was the CFO for a company called Vicuron [Pharmaceuticals] that Pfizer had acquired. I was one of the analysts covering that company. 

 

So going back to your question about what attracted me to Gain: it was the combination of being interested in the disease area that they were working on and already feeling a connection with a couple of important board members.

 

When you already feel comfortable somewhere, you feel confident that you can actually affect change. It's kind of like when you know, you know.

 

Yeah. I think that that's a good way to put it.

 

Going back a bit, we talked about how early on in your career, you had an interest in potentially becoming a neurosurgeon …and you have some clinical experience…

 

Yeah. So why didn't I go to medical school?

 

That was my next question, in addition to what made you make the switch from medicine to finance? 

 

Yes, so let’s get into that. 

From Medicine to Finance and Back Again

Following undergrad, I had an opportunity to do a research fellowship, a kind of unofficial type of fellowship. It didn't have a name; it was more or less shadowing an interventional neuroradiologist. 

That’s a person who, just as the name implies, uses radiology to intervene in the treatment of neurological disorders. In his case, it was cerebral vascular diseases: these really bad, malformed vascular structures in the brain that can create a lot of bleeding risk, the opportunity for stroke, and really catastrophic neurological decline. 

 

Given the types of interventions he was using, he also interfaced with neurosurgeons a lot. They work together with a lot of patients. An interventional radiologist would sometimes be able to map out a problem, but there wasn’t much they could do from inside the brain. So a neurosurgeon would come in and try to approach the problem through the skull, which sometimes is the patient's best option. So it was a very good collaboration. It was really cutting edge medicine at Columbia University. Maybe five people on the planet could do what these guys did with the technology at the time.

 

Keep in mind, this is going back to 1995, so it's a long time ago, but they were using a lot of very innovative investigational techniques and science in order to treat cerebral vascular diseases in a new and different way. Sometimes they were very successful. It was a very rare practice of medicine going on in this particular corner of the world.

 

All that was very exciting and exhilarating. I learned so much about the brain and appreciated so much about its function and its needs and what we could know about its biology. 

 

When Bureaucracy Creates Barriers 

 What I also got was experience with the bureaucratic side of medicine, such as hospital administration. The administration of a hospital at that point was really going through a very rough period.

 

It was a difficult time to be at an academic center where there were patients who needed to be treated, students that needed to be taught, clinical trials that needed to be conducted, and a hospital to be run.

 

I was in really close contact with physicians. These were the directors of the programs; not the residents or the new interns; these were the people who were teaching the medical students in the room while they were operating. These were the people who were running the department… and they’re professors… and they’re dealing with hospital administration. So to make a long story short, I saw how frustrating it was to deliver patient care. 

 

I saw the bureaucracy firsthand. At the time I was young; I was a 23-year-old kid and I thought these physicians were the closest thing to God that you could find. And meanwhile, they’re being told by 25-year-old hospital administrators that they can't do certain types of procedures, or that they can’t use an operating room for so long… they were being told how to practice medicine by people who didn’t practice medicine.By people who were really not qualified to make any assessment of this.

 

I was very highly influenced by the frustration that they felt by the bureaucracy of medicine and for better or worse, that was the lingering issue. The question became, “Why am I going to spend four years of medical school, a year of a general surgery rotation and another five plus years after that in neurosurgery residency if this is what I have to look forward to?”

 

I was interacting with people who were in their mid 40s, mid 50s, at the prime of their practicing years, at their best, and they couldn't see the light at the end of the tunnel with the hospital bureaucracy. That’s what stuck with me and that’s what turned me off.

 

I enjoyed the research. I loved the research. I just didn't think the investment in time and effort and blood, sweat, and tears was going to be worth it for me.

From Crisis to Capital Markets

So after that sort of crisis, I was left with the question of, “What do I do now?” I had a biochemistry degree but if I didn’t go into medicine, I’d be out on the street. There’s not much you can do with that.

 

So I talked to some physicians who were also consultants. I had a relationship with some of the guys who had taken me under their wing.They were older and had experience. There were.a few physicians who were consultants to biotechnology companies and investor relations firms, and over time I overheard them interacting with these folks, too.

 

At some point, I came across an analyst research report by the boutique bank Robertson Stephens. It was a very well thought out interpretation of clinical data from this trial for a blood clotting factor. And the person who authored it went through a thoughtful clinical interpretation as a means of encouraging people to buy the stock. And that got me thinking. I said to myself, “Hang on, what is this job?”

 

From there, I investigated what an analyst research report was and what it boiled down to was this: in that report, I saw someone who could pick up a clinical trial data package, write his opinion about it, and put a price target on a company. And he got paid for that. I looked at that and said, “That. I want to do that.”

 

So I went to business school to learn how to find my way around a balance sheet; I figured out accounting. And then in 2000, I got recruited to my first research role at a bank called Gruntal & Co. as a research associate for an analyst there. Within a year, I was a senior publishing analyst.

 

Wow. That’s very impressive.

 

Yes, it was a quick pivot. What drew me to that world was the idea that I could get paid for interpreting clinical data. Plus, I always found the stock market to be a neat sort of thing. Prices go up and they go down. Companies become more valuable, less valuable.

 

Wall Street always seems to know news first, which is another interesting component. On top of that, I was in this corner of Wall Street where clinical data was important and my opinion on clinical data could be important if I did a good job, so I really enjoyed that.

 

It seems like you had a different set of skills that enabled you to offer value in a way that other people couldn't.

 

Well in Wall Street these days, not so much when I started, but nowadays you more or less have to have an advanced degree in science to cover the Life Sciences sector. You need a Ph.D or an MD. The analysts that cover Life Sciences need to have that scientific background. You’re not going to understand clinical data as a layperson. You need to understand the discipline really well from the inside.

 

But back when I broke into Wall Street, it wasn't as important. 25 years ago, the biotech sector was a lot smaller and a lot younger and there was less to understand. That's not the case anymore, just like most things in any career. Things get more rigorous.

 

Absolutely. The more information you have, the more there is to understand and question. 

 

Now, going back to what you said about having a unique skill set, it was actually beneficial because even though I didn’t have a Ph.D, having real clinical research experience was something that gave me a perspective very few people had. It helped me understand point-to-point patient care a little bit better. It helped me better understand what was practical in an operating room or at a patient's bedside, perhaps even more so than someone who only has academic experience or maybe has a medical degree but never actually practices medicine.

 

Unfortunately, you get a lot of that in biotech: a lot of Ph.Ds, a lot of physicians who don’t actually practice medicine, so the practical aspects of medicine end up being a bit more of a struggle for them.

 

 

Applying Theory

It’s interesting you bring that up. We recently spoke with Dr. Jonas Hannestad [Chief Medical Officer of Gain] and he said something very similar. He spoke about having a background in both academia and the clinical world and how important it is to merge the two. That was what gave him an insider perspective into Industry, and what made all the difference when it came to theoretical concepts vs. application.

Yes, that's exactly right. And you can see it play out in our strategy sessions, in our internal discussions. You can see the disciplined, scientific side of the argument that we have, but you can also see the practical stuff that comes from Dr. Hannestad and the clinical side and that’s what makes for a healthy debate. It makes us better.

 

Just adhering to one perspective won’t help you understand that some of the things we want to do with science simply aren't practical. On the other hand, if we don't have that discipline constantly keeping us in check, then we won't be rigorous enough in our approach. So you really do need that battle, but someone who can understand both sides of it gets to a workable solution faster.

 

I think we have a lot of that at Gain. Also, if you wait for the science to deliver you 100% certainty…

 

You'll be waiting a long time.

 

That's a long time to wait for new medicine.

 

Now to pivot, I'd like to talk a little bit about some of the successes you’ve had within the biotech industry as a whole already. In 2020, you led a $475 million acquisition by Merck & Co. for Oncolmmune. Outside of that, you raised over $350 million in IPO and other equity transactions for several developmental and commercial stage biotech companies.

Given all of that, do you feel primed to see Gain walk through whatever comes next?

Do you feel pressured? Where does that leave you?

 

It’s a bit of both. The markets are challenging, but I believe in what we're doing. I believe our lead program is going to have a dramatic impact on Parkinson's disease. I believe that the rest of the market doesn’t appreciate that yet, but it’s our job to prove it to them.

I think with the enhancements to the management team that we've made, particularly with Dr. Hannestad, our clinical trial strategy has improved, and I think the studies that we're planning now are going to tell us more than what we were planning prior to his arrival.

 

Financially, you mean?

 

No, but I'm glad you brought up that point. Having our shared appreciation and perspective on the practical and rigorous balance of drug development means we’re able to put our heads together to do more creative things with the financial resources that we have.

 

So by bringing that balance of practicality and rigor, we can deliver more value with the financial decisions that we need to make in the next trial.

Using Financial Resources Wisely

To be specific, it's designing that trial: what it's going to say, what we're going to test, what we're going to measure, and what we're going to evaluate. It’s about asking, “Are there ways to include more things, take out other things that maybe aren't necessary, and separately, are there ways to enrich the patient population?”

 

Those are the kinds of things that enhance a clinical trial without necessarily driving its costs way up. These are things that I/we have to keep in mind as the company’s CFO.

 

Absolutely. Going back to the “theoretical versus practical” or “ideal versus real”... there is only so much money and at the end of the day, you have to stretch the dollar to a certain amount. Like you said, it’s about using the resources you have and making sure they really go somewhere.

 

Yeah. So right now we're finishing something really exciting. We're finalizing our next study and it's going to be our job to go out to the street and explain what we're doing and see if we can get people excited and convinced that what we're doing is going to deliver meaningful results in the near and longer term.

 

One of the first things I did before joining the company was a deep dive on our technology versus the ones that are closest to what we're doing. And I can honestly say that I’m confident we’re in the lead.

 

What’s so great about our management team here at Gain is that each of us can do our own primary research on it. We don’t necessarily need the science to be explained to us. Of course, there are aspects of it that Dr. Hannestad will know better as a physician, but I think the level of understanding I bring to the table and my own clinical and scientific background is an asset.

 

The capital market element, yes there’s strategy and there's some creativity to it… and I'm probably underselling it a lot. But next to the scientific piece, the capital markets piece is a good bit easier.

 

I think you’re definitely underselling it.

 

Sure, but being able to sit there and look at the journals and look at the data yourself and being able to come to your own conclusion without having to rely on someone else's interpretation of it…we have that at Gain and that’s pretty unique. Our management team can do that for ourselves because we've been around this particular type of science for a while.

 

For me to be able to get in there, do the primary research for myself, and come to my own conclusion based on my interpretation of data, that does give us a leg up. I don’t necessarily share all of that in an investor meeting, but it does give us an edge.

 

Walking in the Shoes of the Investor

To go back to what attracted me to Gain and what made for a good fit in this partnership, part of it was my ability to get in and do my own digging and then reflect that back to management. To be able to say, “Hey, here's how an investor wants to think about your data. So let's start delivering our description of our data to fit their level of understanding.”

 

It’s about walking in the shoes of the investor because at the end of the day, yes, developing drugs and being able to say that you've invested in companies that have developed the next Parkinson's disease drug is a noble pursuit. But at the end of the day, they have to make money on the stock.

 

So we have to find a way to make drug development profitable for the investor and once again, it comes down to the concept of what sounds good ideally versus what's practical.

 

That means we have to design milestones with closer break points. We can design trials that will read out in four years, but you have to have break points to deliver value to investors so they understand that the capital is being used wisely and what you're doing is headed in the direction of success, at the very least. You have to be thoughtful about what investors need in terms of milestone development and how they need to be delivered.

 

So sure, we can design that three-year study, but we can also do a pilot study alongside that that might deliver some kind of data in 6 months that's meaningful. Now that’s not going to be as fleshed out as the more extensive study, and it’s important to remember that because you don't want to design something that can give you a false negative or false positive. It needs to be something that is consistent with what you're looking at in the longer term. So that can be challenging, but it has to be done because investors have people they have to answer to as well. It gives them something to hold onto in the interim.

 

Speaking of milestones, what are you looking forward to at Gain?

 

I'm looking forward to dosing that first patient in a phase two trial. That’s not the next milestone, but you asked me what I’m looking forward to and it’s that, because that is the day that we are really going to be on the tips of everybody's tongues.

 

Do you have a timeline for that?

 

We’re aiming for sometime in 2026.

 

That’s not that far off.

 

Yeah. That's going to be a really cool day. I'm sure there will be several very responsible, happy bottles of champagne popped that day.

 

Cheers to that.

 

For more on Gain’s happenings, be sure to visit the company’s perspectives page.

 

*This interview has been edited and condensed from its original version.

 

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