CFOs play a central role in telling their company’s story, so making an effort to stay in front of investors should be part of your job description, AVROBIO CFO Erik Ostrowski says in a CFO Thought Leader podcast last week.
His company is doing research into gene therapy for Fabry and other rare diseases and until it gets its first product into the market it relies on capital raises to keep it afloat, says Ostrowski, who joined AVROBIO earlier this year after working in other biotech companies.
The reliance on capital raises makes it incumbent on him as one of the company’s key fundraisers to stay in front of investors, both those who have already invested and those who are interested in investing in biotech but haven’t yet differentiated his company from others.
“There are many great biotech companies in this sector, and investors have limited time to spend researching them,” he says. “So, an important part of my job is to make sure we’re getting out there and telling the AVROBIO story. Over time, you will see there are different types of investors who might be more likely to get involved in the stock, so it’s a very dynamic process that you continually need to focus on.”
Ostrowski credits the pieces he put in place to tell the company’s story for the successful capital raise the company closed last month.
“We were able to raise $138 million on the heels of positive interim data from our Fabry therapy program,” he said. “I think it was the proper preparation along with the favorable market conditions that helped make that capital raise a great success for us.”
Ostrowski says he made sure to have the team of bankers and lawyers that were working with him on the capital raise available to answer questions. If you fail to take steps like that, he suggested, you risk not having a successful fundraise even if market conditions are favorable.
“Having pieces in place is something you can control when business development and capital market conditions align so you’re ready to take advantage of the opportunity and conduct a successful fundraise,” he said.
Ostrowski started his career on the consulting side, working for Coopers & Lybrand (now PricewaterhouseCoopers) after graduating from Babson College in Boston. He moved to the investment banking side after earning an MBA at the University of Chicago.
Throughout his career he gravitated to early-stage companies, eventually moving to the operational side of the business as a finance executive at a small company, and then taking on CFO roles in a handful of companies before joining AVROBIO.
The company has about 65 employees and is hoping its gene-therapy approach for Fabry, a deficiency of alpha-galactosidase A that causes a buildup of a certain type of fat in the body, will enable it to offer a more cost-effective treatment than enzyme replacement therapy.
“Enzyme replacement therapy, while it’s been a great advance for patients, has a number of disadvantages,” he said. “If you look at patients with Fabry disease, these patients, while on ERT, still have a below-average life expectancy and they continue to have disease progression, which can include decline in renal function, cardiovascular disease, and debilitating pain, which can include periods of severe pain crisis. Further, ERT treatment requires bi-weekly infusions, which are incredibly burdensome to the patient. And lastly, ERT is incredibly costly to the healthcare system. The lifetime cost of ERT for a Fabry patient has been estimated to be $14 million. And so, the potential to have a one-time curative therapy, we think, offers a great benefit for patients and the healthcare system.”
Ostrowski says his company believes its manufacturing approach will enable it to offer its gene therapy at a reasonable cost because it won’t be handling the manufacturing itself. Instead, it will produce its product using sterile pods that are incorporated into manufacturers’ existing facilities.
“The ability to produce gene therapies in a scalable and cost-effective manner has really been a challenge for gene therapy companies,” he said. “So, our gene therapy platform, which we call Plato, allows us to produce drug products in a closed and automated system, which we refer to as a pod, which is about the size of a dishwasher. We can house these pods in clean rooms at CMO partners, which are contract manufacturing organizations, across the world, which eliminates the need for us to invest in high-cost brick-and-mortar manufacturing facilities.”
Ostrowski said it’s a particularly exciting time to be a finance executive in biotech because the fast-moving sector gives the CFO a chance to make a difference in the company’s fortunes.
“The science is moving so quickly,” he said. “As a CFO, you have the opportunity to be involved in all of this and have an impact on all facets of the business. So, clearly, the CFO needs to have the numbers down but the ability to contribute strategically, whether that’s helping to evaluate market opportunities or improving existing business activities, especially in such a dynamic sector as gene therapy, makes it exciting to come to work every day.”