REGiMMUNE Corporation: Diving Headfirst Into an Empty Pool

Haru Morita
President and Chief Executive Officer of REGiMMUNE Corporation

After working in R&D for the pharmaceutical division of the Kirin Brewery Company, Morita joined the strategic consulting firm, Booz Allen and Hamilton, and provided consulting services mainly to firms dealing in high-tech. In 2003, Morita joined Y's Therapeutics (a biotech company developing antibody therapeutics) as Director of Business Development and managed corporate development and corporate planning activities before venturing to the States in 2005 to organize a regional office. Leaving Y's Therapeutics at the end of 2005, Morita launched his own firm, REGiMMUNE, in March of 2006 and was named President and Chief Executive Officer. Morita holds a BS in Chemical Engineering and an MS in Molecular and Cellular Biology from the University of Tokyo.

Q: I'm aware that you pursued biology as an undergraduate, but were you always interested in this particular field?

Morita: Not at all actually (laughs). Because my father was a doctor, even as a child, I assumed that I would follow in his footsteps. As I grew older though, I realized that medicine wasn't a good fit and decided on this path instead.

Q: Can you tell us a bit about your job at Kirin?

Morita: My timing was fortunate as I started working with Kirin around the time they had happened upon the seeds of a new pharmaceutical venture. Working as a researcher, I was assigned to collaborate on this new venture with Amgen, a U.S. leading biotech company with whom Kirin had collaborated on other R&D projects in the past.

Q: Why did you leave Kirin?

Morita: The project itself was extremely fascinating, but control over development fell to Amgen despite the initial discovery by Kirin. Ultimately, the project ended in failure and it was the sense of powerlessness of failing to tie an opportunity overflowing with potential to a successful business venture that persuaded me to leave Kirin.
Another reason was that I wasn't especially handy in the lab. Conducting experiments is somewhat like cooking. If a recipe calls for a "pinch of salt” or a "dash of pepper,” accomplished cooks know just how much to use. It's more about instincts, and, deciding that I wanted to make my mark elsewhere, I made a break with this area of the industry.

Q: So what happened next?

Morita: Since I had made the decision to move on to the business side, I decided Kirin was not the best place to develop these skills and I consequently joined a strategic consulting firm where I could stay on the cutting edge of business developments. I was with the firm for two years and worked not only with pharmaceutical firms, but also on projects involving chemical and commodity manufacturers. My office at the time was located in the Toranomon area of Tokyo, near the company I would work with next, Y's Therapeutics. An acquaintance of mine who was CFO of Y's told me that the president of the company had some interesting ideas and that I should meet him. I went later that same day and was offered a position with the company. I liked what the president had to say and decided then and there to work for Y's.

Q: Wow, you didn't waste any time.

Morita: I guess not (laughs). My new responsibilities included corporate development and corporate planning activities, and I spent roughly one year in the States setting up operations there. About the time I left Y's at the end of 2005, a colleague from my days at Kirin contacted me with news that he was considering going commercial with a promising project.

I decided to go along with the project and assisting solely as a consultant in the beginning, I made rounds with my colleague as we sought out investors and venture capital. After meeting with failure after failure, fortune finally smiled upon us and brought us into contact with a venture capital manager who is currently a major investor with REGiMMUNE. Indicating that he would invest in our firm only on the condition that I quit advising from the sidelines and actually run the company, I assumed the role of company president.

At the time, our company had nothing more than the idea of developing pharmaceutical products based on technology made available by RIKEN (the national leading Institute of Physical and Chemical Research in Japan). We hadn't yet acquired any necessary licenses from RIKEN and were faced with a catch twenty-two as RIKEN would only issue a license if we could secure financing and our investors would only provide financing if we could secure a license. Luckily, our venture capital manager trusted me when I said I could secure a license with his financing and took a risk on a company with nothing more than an idea.

Though we had now successfully obtained financing and secured a license, we lacked the talent needed for research development. Timing was on my side, however, as I heard a rumor that my prior coworker, Dr. Teikichi Aoyagi, had just resigned from Y's Therapeutics. With a bit of begging, I persuaded Dr. Aoyagi to join the company, bringing together the final of the three tools needed for our venture: financing, licensing and research talent.

In order for a venture activity to be successful, these major resources are absolutely essential. Pursuing them, however, inevitably puts you up against a catch twenty-two. Unless there is somebody who can defy the odds and bring these resources together, the venture will amount to nothing more than mere window dressing. Bringing these resources together is what being an entrepreneur is about.

Q: Can you talk about your business and why you decided to pursue development in the States?

Morita: We're developing drugs that can be used to treat allergy and autoimmune disorders. While the technology was at RIKEN, its development was conceptualized as a method of treating allergies to cedar pollen. As the technology can be utilized to control immune responses with regards to particular antigens, however, it was possible to apply the technology not only to cases of cedar pollen, but to a variety of allergies, autoimmune disorders and organ transplantation as well. Existing immunosuppressants can only be used to lower overall immunity, which has the unfortunate consequence of eliminating the body's defenses against all harmful elements. The ideal drug is one that maintains the body's defenses intact against intrusion by harmful elements while allowing beneficial ones to pass unhindered through select access points. The drug we're developing will be able to do just that. So what we're talking about is powerful technology with highly desirable applications. Our business model is to develop drugs that can be used to treat allergies and autoimmune disorders based on this technology. We decided to put our immediate focus on controlling graft-versus-host disease (GvHD) associated with bone marrow transplantation, a disorder resulting when transplanted donor's bone marrow attacks the host recipient.

This is generally true for clinical trials for other adaptive disorders as well, but because of difficulties with pharmaceutical administration and subject numbers, conducting clinical trials in the States is quicker than in Japan. In our case, however, we decided not only to conduct clinical trials in the States, but also made a strategic decision to conduct all prior phases of development in the States. In addition to differences in the law, knowing how to file applications and apply for licenses required thinking from an American perspective. Therefore, in order to pursue applications on American soil through filing with the FDA, we had to assemble a global team of talent that was ready to take on these challenges.

Q: What's the first thing that comes to mind when you hear the word "start-up?”

Morita: Diving headfirst into an empty pool, perhaps? Though the pool is empty at the moment you jump, everyone risks their neck and works together to make sure that the pool is full by the time you land. Even in the States, Silicon Valley is known for its culture of rash, aggressive development and start-ups are plentiful. The infrastructure that supports these ventures is more thoroughly developed than it is in Japan and the financial model of "venture capital + stock options + going public” is well suited to the accumulation of the large amounts of financing required in the early stages of pharmaceutical development. Consultants and lawyers, the individuals with the know-how to make a venture succeed, are also readily available.

Q: What's the secret to a successful start-up?

Morita: Well, we haven't succeeded yet, so I'm not in any position to dispense advice, but if I had to choose something, I would say being strong-willed is important. Starting a business is not something you do because somebody is pushing you to do it, but something you do because you want to do it even when the going is tough. I mean, you wouldn't to go war just because someone offers you a tank.

Q: Imagine that REGiMMUNE goes public, putting a few notches on your belt. Would you begin considering any new ventures?

Morita: I've thought about that a lot lately. Even though I know that REGiMMUNE will be a success, I'm hesitant to do the whole thing over again. It's a lot of work and I could use a break. After about six months though, I'll forget about all the hard work and be ready for another round. It's like what they say about forgetting the pain of childbirth…not that I have any experience there (laughs).

(Editor: Michiru Lackey)