Fireside Chat with Ivana Djuretic of Asher Bio

Welcome back! Next, we have a fireside chat with YC's Jared Friedman and Ivana Dreadich. Yeah, let's give them both a big round of applause! Ivana is the founder and founding CEO of Asher Bio.

Uh, before we get started, go ahead and take a seat. But before we get started, I wanted to introduce a little bit to Jared for those of you who don't know him yet. So, Jared is one of the major forces behind the launching and growing of the YC Bio Community. He's worked closely with the YC Bio startups for many years. In 2019, he wrote a piece on what the next 10 years of startup bio fundraising would look like. Jared, in this piece that he wrote, has very heavily influenced YC's own philosophy on bio and healthcare startups, particularly our emphasis on founder-led bio. So if you haven't read it, I'm going to be tweeting it out so you can take a look at it and read it later.

Um, but also let's welcome Ivana! So, Jared worked closely with Ivana from Asher Bio in building. Asher Bio is building better immunotherapies. They went through the YC batch in Summer 2019 and have since raised a $108 million Series B. So let's welcome Ivana and Jared. [Applause]

Thank you, Kat! That intro was way too kind, as usual. But what I'm really excited about today is for you all to get to hear the story of Asher Bio because it is an incredible story, and very few people have ever heard it because Ivana and her co-founder Andy are very modest people. So, I'm going to see if I can pull this story out of them because it's such a good story.

So, Ivana, to start with, how would you just tell everybody what Asher Bio is?

Well, as you just heard from Kat, this is our YC one-liner: Asher Bio builds better immunotherapies for patients. Specifically, we are focused on immunotherapies that are based on natural proteins called cytokines, which can be very powerful therapies and can turn on your own immune system to fight cancer. However, when they are administered in their natural form to patients systemically, they end up activating all of the different immune cells that make up our immune system—not just the parts that fight cancer. Activating the wrong immune cells can cause severe side effects and can really limit the usefulness of these drugs.

So, what we're doing is activating only the correct immune cells, like those that kill cancer, without the severe side effects. This is really one of the biggest challenges and problems in the immunotherapy field—right, getting precise and selective immunotherapies? So we're using developing protein engineering technologies that enable us to develop cytokines that activate only the cells that matter. We light up only the cells that matter and thereby achieve better, safer, and more effective therapeutics. So, that's what we do.

Yeah, excellent one-liner work there!

Um, okay, so Ivana, I know you're naturally a very modest person, but I want you to turn off the modesty for just a moment and tell everybody sort of what the current state of Asher Bio is and what you guys have accomplished in just the last three years since you started the company.

Yeah, alright. So, as you heard from Kat, we have raised—we're a Series B-stage company. Last year, we raised a $108 million Series B round, which was led by a household name investor, Wellington Management. We are now over 50 employees. A majority are still research and pre-clinical, but we're rapidly expanding our clinical group.

That's because, any day now, we're expecting to treat our first patient with a drug that we conceived when we were back at UC, a little over three years ago. Not only that, we do have a second drug that we developed in the last couple of years that is closely following behind. We have been working on a pipeline of these targeted cytokines and other immunotherapies, and we hope to have more drugs to follow.

Awesome! This is actually the first that I heard that you're about to actually go into the clinic. That's amazing!

Hoping by the end of the year!

Oh wow, incredible!

Um, okay, so let's actually rewind back to the very beginning, like long before you started Asher. Um, you have a really interesting personal background. How would you tell people sort of what your story is, where you grew up, and how you ended up in this industry?

Yeah, uh, well, I grew up in Montenegro, a small country of Montenegro. I came to the U.S. to do a PhD, so I completed my PhD training at Harvard Medical School in Immunology. I did a short post-doc after that before realizing that I really wanted to be closer to treating patients and not working on non-coding RNAs, which I guess today could think of as potential therapeutics.

Uh, so I spent about 10 years in the industry, mostly working in the area of cancer drug innovation. I was on the East Coast at Celgene developing cell therapies, and then I moved to the West Coast where I took on a position at Pfizer in their cancer immunology group. I led a group that was really at the forefront of immunotherapy research. I collaborated with protein engineering very closely, which is where I met my co-founder Andy Young. I also got to see a lot of emerging technologies from companies that were pitching to Pfizer, so I really was able to get a good view of the field and where the needs are in immunotherapies.

Tell people about the origins of Asher Bio, like how you guys first started thinking about the ideas and the science behind it, and then how you and Andy decided that maybe you would actually turn this thing into a company.

So, and I have to admit that, you know, when I started in the industry, I always had this idea in the back of my mind that I wanted to do something independently, and I think Andy did as well. We just, you know, worked; we had our nice stable jobs, and we were learning a ton.

Uh, and you know, there's always that high-energy activation barrier, right, when you know, leaving your stable position and doing something risky, even if you found it very exciting.

So, I think what enabled us to break out as entrepreneurs was partly driven by, you know, Pfizer's decision to relocate the site that we were working at from South San Francisco to a different location, and so San Diego. Back then, there was no work from home; you had to move to San Diego. And so, we were faced with this decision of whether to leave to move with the company or just look for another job in the area.

Even with this sort of a push, I think it was not an easy decision. But I think what made it feel right were three things. One was we were just really excited to work on developing safer, more selective cytokines, and I just couldn't imagine myself working on anything else. I thought this was the next best thing. I thought that, you know, we were sort of developing this vision of targeting only the cells that matter, and we thought, wow, you could apply this not only in cancer but it could be really in any other disease where the immune system plays a role.

So, you know, we thought this could be big; we were excited by the idea. I think then realizing that to get something like this done, you know, the execution and the decision-making, you know, it's just going to be much faster in a smaller team. If you really wanted to make that happen, it kind of needed to be outside of a big pharma.

Lastly, which probably is the most important, is having that small team, right? So, you know, having the right co-founder and the right early scientists—about five scientists joined us from Pfizer on that early venture. You know, we all sort of shared that same entrepreneurial spirit and had built up great rapport. So, we were convinced that we were the right team with the right expertise to tackle this problem.

Okay, so let's walk through the timeline. It's early 2019, you and Andy are working at Pfizer. At what point did Pfizer order you to move to San Diego?

I think it was the end of '18, early '19, right? And you know, we ended up staying for a few months to wrap up our responsibilities. So we left in March, and we started talking to people. I mean, luckily, we were in this area; you're just surrounded by people with a lot of experience and entrepreneurs.

Back then, we didn't—we just had our experience with our small team. We had some ideas and like this general vision of what we thought could be developed as a company, but that was it. And we didn't have connections with any major biotech VCs or other investors. As we were talking to other entrepreneurs, it became clear that it would be hard to raise a large round that is sufficient to really take these things into the clinic.

So we realized you needed a smaller fund—this is a smaller funding, right—to be able to get some data to convince people that, you know, you have something of value that could have potential. So that's—and then we ended up honing in on, okay, so where could we get these small rounds? And we heard about Y Combinator. I think it was in April, and we spent all of April in a Starbucks, September and overwriting our application alongside provisional patent applications, putting our ideas down.

It's just very important you get it protected before you start talking to investors. In May, we incorporated the company probably just to try to get into YC because we heard it would be better to be incorporated to get into YC, and you interviewed at YC in May, I guess?

Yes, right, and you got accepted!

We did! It was just, yeah, it was pretty amazing that after 15 minutes, somebody just believes in you and gives you—yes, we spent one month writing that application.

Okay, so you left Pfizer in March, you wrote the application in April, you got into YC in May, and you started YC in June. By the end of YC, just three months after starting to work on this thing, what did you accomplish in just that three months? This is pretty amazing, which is why I want to call attention to it.

So we ended up developing one of our molecules from an idea on paper to treating in mice. Yes, I know looking back it does sound impossible, but then reflecting on why we were able to do it, I think it was that combination of the right expertise.

Right, our small team really just had, you know, the right expertise to execute on these experiments. But the second piece was obviously just getting the YC funding after 15 minutes of the interview, right? And then being able to hit the ground running. The next day—literally the next day—we were able to get off the wait list for an oversubscribed lab incubator and get that first lab bench just because we had Y Combinator behind us.

We then used our YC grant to stock up on equipment—small used equipment and reagents—you'd be surprised how many companies, you know, can when they're closing down or moving, you know, end up giving you things for free. We got a lot of stuff for free or cheap, we stocked up our lab, and started doing experiments.

We also ended up renting a small space in a mouse facility where we could run our own mouse studies versus outsourcing them and having a contract research organization, right, run these studies, which is much more expensive and takes more time. So, yeah, I think being able to hit the ground running, having the right expertise, we completed that full cycle for one of these early molecules: from design, testing it in vitro, showing that it is indeed more selective—a thousand times more selective than a state-of-the-art drug—and then being able to put that early prototype into one mouse study and show that it worked better than a state-of-the-art drug and it didn't cause side effects. That really highlighted the value that was an early prototype; it highlighted the value and the potential of the platform.

Yeah, pretty exceptional! I also seem to recall that you recruited some of your former co-workers to come and work for you for free all summer long. That was your idea; how to entice them?

Uh, so yes, we were lucky enough to have five scientists, in addition to Andy and myself, join us. And again, the $150,000 back then—that was the size of the YC grant. It doesn't, you know, go very far, and we knew that we needed to get some data in three months.

What we did is sort of promise, hey, let's do this, you know, and we'll structure the equity in a way that it could be an incentive. And thank you, by the way, for teaching us how to do that.

We spent that money on experiments.

Yeah, and okay, so we get to the end of YC. You've done this pretty extraordinary accomplishment, which is you've gone from an idea to actually really promising in vivo data in just three months. Now, you need to raise money from investors, and today, of course, you've raised over $100 million from investors. But I'd love to hear the story of how you did that—both the initial fundraising round right after Demo Day and then the subsequent rounds after that.

Yeah, absolutely! So, I'll touch upon Demo Day first because that was such a fantastic experience. We worked a lot with partners on perfecting our pitch—you know, probably practiced it a hundred times. The day before, we went through all the lines. I think version 45 became the final version. It was great; there was a lot of—we got a lot of likes.

You know, we were just very excited, and we started fundraising after that expecting that things would go really well because, certainly, we had a great story, we had great data.

We didn't spend a lot of time working on the pitch deck during our YC batch because most of the time we were working in the lab or spending time with advice, even just talking to people, which was really important and was part of the experience and taught us a lot. But there was not enough time to work on the pitch deck.

It was sort of working on the pitch deck at the same time we were pitching to investors. Of course, Andy and I, being scientists, you know, we put all of our data into pitch decks: graphs, protein structures, etc. The decks were more like presenting to Pfizer's research committee rather than non-bio investors and angel investors. You know, it was going slow.

But then Darren was like, what's going on? Why are you guys not raising millions? You know, he exposed Demo Day until he saw our pitch deck. He was like, okay, so you know, we worked through our pitch deck and we ended up creating two: one for bio investors with a little more detail and one for other investors.

And then things started working after that, so I think pretty soon after that we raised about a million. Our target was $3 million, and that's what was required for us to finalize the first program or the first molecule.

That was quite a surprise, but I think what we did is we just we just ended up refocusing, saying, okay, what can we do with a million? How can that take us to the next inflection point? We kept going, we just kept doing experiments, kept talking to people; you just never know when someone is going to introduce you to the right investor.

We took a lot of no's, but we kept going. So that was really important. Someone unrelated to YC, you know, we talked to a lot of people, anybody that we could introduced us to this big biotech investor, Third Rock Ventures. I think that's where we ended up making a bit of a risky decision. You know, when you're an entrepreneur, an early founder, you're kind of protective of your data; you don't tell investors everything. You kind of, you know, you have this feeling that you don't want to tell them everything, right? Understandably so.

But once we met Third Rock, we just felt like they were the right investor. They were able—getting how excited they were about our technology as well. So, we just decided to tell them everything: give them all our, you know, all these different things that we're thinking about doing, all of our ideas and just really focus on them.

Now, looking back, I think it was the right decision because they ended up being a great partner in helping us build this technology and build our company. We ended up securing a seed round. We ended up getting to that $3 million, $3.5 million, and a Series A round as well.

So that was that, uh, kind of the first part. After the Series A, I think we were able to expand our research team, expand our executive team, and generate even more data that then enabled us to secure the next round.

I think it's a great lesson in there that, like, sometimes even when you have incredible results, fundraising doesn't go according to plan, and you have to be nimble and flexible as a founder and work with what you have. And that's exactly what you guys did, which is what ended up opening up the Third Rock opportunity a few months later.

Yeah! Tell us a bit about what's happened since YC. You guys have had to learn how to build a whole company, how to go from sort of being scientists to being managers and leaders of the company. So tell us about that.

Absolutely! Yeah, so I think Andy and I really wanted to stay close to science because we were really pioneering developing this new approach. I can tell you, you know, for some of you that are in this area, it's called CIS targeting of cytokines, and not a whole lot of people are out there that knew how to do this.

So we stay close to science, and we were focused on bringing in other scientists that we could really mentor and sort of, you know, transfer all of this knowledge and ideas. That was a major focus for us—really growing the research group. And I'm pretty excited that today we have a stellar group of rising stars in drug development. I'm very proud that that would be one big thing that I highlighted.

We continue to work fast; we are in a competitive space, in particular with the first program that we chose. It's an IL-2, and so we continue to work fast towards filing an IND, getting to manufacturing, etc.

Yeah, so those would be the two things that we were really focused on.

Yeah, so one theme from today has been how to move fast as a bio and healthcare company despite the external forces that make it hard to do that. We heard that from today at Othellis earlier and then from your story going through the batch. How have you been able to keep that up now that you have this 55-person team and a lot of forces trying to slow you down?

So maybe I'll go back to one point that I didn't hit earlier, which is sort of how to move fast. It's taking small, calculated risks. When we went through YC, you know, we were sort of working backwards from Demo Day: what did we have to accomplish by Demo Day? If we wanted a mouse efficacy and anti-tumor efficacy data at this time, we would have to inject mice with tumors at this time, and then the proteins would have to be ready at this time. So we sort of worked backwards and ensured that we stuck to these timelines.

We did risky things, like we implanted mice with tumors, even though our molecules weren't ready, because if we didn't implant them that day, you know, we wouldn't be able to have that data by Demo Day, right? Tumors grow for another ten days, and in those ten days, we were able to create or develop molecules that we could then inject into mice.

So, you know, we took some small risks, but in the end, it paid off. We kept doing that. For example, the next step was going to primate studies, and so we ended up again booking primate studies because they take a while to book ahead of time before we knew that we actually had something to put in primates.

That's how we worked initially, and I think it's important to continue, you know, taking these small—some maybe bigger—calculated risks as you go forward in order to stay fast. I think what also was important is when we recruited people, it was always people that were as passionate about this approach as we are, and so that's a common thread, right? They really—once they got it, they really thought, wow, you could do a lot of things.

I could get a lot of programs using the similar approach of targeting the cells that matter.

Yeah, that's—I remember being really impressed that you guys had made that decision during YC to implant tumors in mice because you were so confident that you would be able to actually make the drug in the next week with a very narrow window of time to hit that.

That was when I think I knew that—and they weren't perfect drugs, so it was important not to be perfect. Something else I wanted to mention is, you know, we had several different ideas, and there was like our favorite idea, which we were working on, which ended up being quite challenging. It looked like that was just not going to be possible for eight months.

So then we pivoted and started working on another molecule, which was our top—not our top choice, but it ended up giving us really nice data, and that is the molecule that we're now putting into patients.

So now, when we have more funding, you know, we could go back to these more challenging drug molecules and work on those.

Alright, so this has been an incredible story.

Um, last question for you is, there might be some people in the audience who are in sort of a similar position that you and Andy were in when you were at Pfizer, who were thinking about whether they want to go and embark on a journey like this. What advice would you have for people like that or for your former selves?

Yeah, so I think I would say take a leap of faith and pursue your passion, you know, either in science or building a company or whatever you're interested in. Really don't be afraid to work on big problems and big ideas because that's really important.

And then, once you're committed to that path, you have to—you have to stay on it. It's going to be a long path, and there's going to be a lot of ups and downs, and you just have to continue. You know you're going to get negative data; one experiment doesn't kill a company—it might kill that idea, but it doesn't kill the company.

So, you just have to continue, and it could continue sort of taking these risks to accelerate value creation. Right, think about the next inflection points always.

And then, be overly confident with investors. There's really no reason to be shy. If you are true to your science, as Andy and I were in the beginning, you know, you're trying to build a company, so there's really no reason to be not overly confident.

Yeah, yeah, that's awesome, Ivana! Thank you so much! [Music]