Naurex: An interview with Founder and Chief Science Officer, Joe Moskal
Naurex, Inc. became your basic 26-years-in-the-making overnight success story when the Company popped up on the national radar in 2011 with an $18 million Series A financing. The Evanston-based, CNS-focused drug discovery company scored funding from an impressive collection of investors in the middle of a difficult fundraising environment for biotech companies.
INVO recently sat down with founder Joe Moskal, PhD, to detail the trials, tribulations and his secrets for success.
What is Naurex and how did it get started?
The idea for Naurex really came out of research way back in 1986. I came to Chicago in 1990 and this is the fourth company to grow out of that work.
Our lead drug, GLYX-13, is now in a clinical trial. It hits a novel target called the NMDA receptor, which appears to play a key role in regulating learning and memory processes. We have promising preclinical data on a number of indications – delaying onset of memory loss due to Alzheimer’s, neurodegeneration due to stroke, schizophrenia, autism and depression.
We have focused our efforts primarily on depression, an area of high need where the clinical trials are fairly straightforward and well understood.
Drugs in this area have not been particularly good. Efficacy is somewhat questionable – only 40% respond at all to a given anti-depressant. Many drugs have addictive properties with side effects. Despite these shortcomings, it is a multi-billion dollar industry because the need is so great.
GLYX-13 works very quickly – hours, rather than weeks for current drugs. Most importantly, it has shown virtually no toxic side effects. Our Phase IIA proof-of-concept study is currently underway. The next stage for GLYX-13 is a more sophisticated study Phase II trial, which would continue into and maybe through 2013.
What are the longer term goals for Naurex?
Our goal is to eventually sell the drug and possibly the company to a big pharma company. There is a lot to be said for holding onto the Company and nurturing our next generation programs while extracting value from GLYX-13, but it will cost a lot of money to do that. If it makes sense to sell it all at once, the board will seriously consider that.
What is your current role?
We have two different platforms with two different chemistries that have generated a lot of novel compounds undergoing testing in several areas. My role is to continue to drive the pre-clinical and discovery stage pipeline.
Any advice for inventors working on first time startups?
I absolutely believe the single most important things are perseverance and resilience. The fantasy of “I have an invention and I want to get rich” is a really bad place to start.
You have to get over the solo, do-it-all mentality very quickly. When the going gets tough, you need someone to talk to. And unless you have the rare, innate ability to connect with people and inspire them to give you money, you’re going to need to hire someone that knows how to get investors to believe in your company. That means giving up some control and a stake in the company.
One of my favorite Groucho Marx lines is “I don't want to belong to any club that will accept me as a member,” which is the awkward place you find yourself when trying to recruit a high powered business type because they have their pick of opportunities. You can very quickly get into all sorts of bottom feeder interactions – people who will promise you stuff; people who will say they’ve got experience but don’t; people who will run with it part-way and then give up. Those are big speed bumps. It’s very difficult to find and convince the right people to work with you when you have so few resources to offer.
So how do you get over that and find the right people?
Mentoring is a critical part of it. As soon as possible you have to find people you can trust. I’ve had really good advice and advisors all the way through.
Vetting a CEO is hard. Get as much free advice as you can. You don’t have to join a country club to learn how to play golf. It’s not hidden information about how to go about it – there are plenty of people that will direct you and help you out. It’s just going to take time, and it’s not going to happen overnight. You’re not going to get Steve Jobs, but you can certainly find people that are capable.
We went through three CEOs before the fourth turned out to be the key. Each of them was value added. What we learned at each level was about what we, as a company, needed and didn’t have. We had controlled equity payouts so we would never be in a position where someone owned a lot of the company if it didn’t work out.
Our current CEO, Derek Small, has been able to take advantage of all that had been done before him. He has built an outstanding scientific advisory board from day one that was incredibly well-connected to pharma. They know the game and know the people, so VCs and pharmas suddenly became much more accessible. After 3 years of non-stop pitching and refining our pitch, we closed the deal and ended up turning people away.
What’s it like being an entrepreneur?
When it comes to management, there is very little in the way of a home run shot at this level. It’s very rare to find a situation where someone comes and does it all for you. There are lots of legal, incorporation, and intellectual property issues, and everything that comes along with staff when you have them.
For instance, we failed three times at finding the right legal team. Each time I found good lawyers but their billing structure didn’t work for us. It would start small and then explode. The fourth really got it and they were cost-effective. They made sure key things were covered and had flexible billing – they get biotech startups. But we spent a lot of time and effort to get there.
You have to stay directly on task. I’ve been doing this since 1986 – 26 years to be a flash in the pan. A lot of it was nothing more than staying in the game. Another of my favorite clichés: “80% of success is just showing up” (Woody Allen).
To be honest, I didn’t think we would ever be able to get there. The beauty of it is that it was way more fun, way more intense and way more of a learning experience for me than I thought it would be.