My guest this week is Ian Keldoulis, co-author of Unblinded: The Startup That Launched a Revolution in Saving Sight. He wrote the book with Dr. David Guyer, chronicling the founding of Eyetech Pharmaceuticals in 2000 by Guyer, Tony Adamis, and Samir Patel. They developed Macugen, the first effective treatment for age-related macular degeneration (AMD), a disease that once blinded millions in their later years.
They overcame skepticism: big pharma doubted patients would accept eye injections, but faced with blindness, people did. An Australian researcher, Andrew Cuthbertson, noted AIDS patients already tolerated them. David's group pioneered global trials for retinal drugs, starting with a failed interferon test that built their expertise.
Funding proved crucial. Samir Patel raised initial millions from his network of Indian diaspora contacts. Venture capital followed in series A, B, and C rounds, betting on multiple molecules since success rates are low—about 1 in 10 after phase one. They navigated high risks: phase three trials are a 50-50 coin toss, even after earlier successes.
The iTech IPO in the post-dot-com era succeeded wildly, funding phase three. FDA fast-tracked Macugen as a novel treatment. Share prices swung on announcements, like a 20% jump after an FDA meeting. They partnered with Pfizer for global reach, then sold to OSI for $935 million.
Success was short-lived; Genentech's Lucentis soon outperformed Macugen, crashing iTech's value to $22 million. Undeterred, David ventured into capital, funding Ophtotech (later Iveric Bio). Their molecule Fovista aced early trials but failed phase three, tanking shares and sparking investor threats—bodyguards were hired.
They pivoted to a second molecule, selling Iveric for nearly $6 billion. Ian emphasized biotech's risks: long timelines, massive capital needs, side effect scrutiny. Big pharma gets bad press, but he gained appreciation for the dedication behind it, driven by patient outcomes over pure profit.
TRANSCRIPT FOLLOWS AFTER THIS BRIEF MESSAGE
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EPISODE TRANSCRIPT
Ian Keldoulis: Even if a drug is super, super effective and cures whatever it's supposed to do, if the side effects are, ah, also significant, well then it's not really going to make it to market either. So there's uh, levels of risk all across the whole process and you really need to be analyzing all of that kind of risk if you're going to making an investment in something.
Phil Muscatello: G' day and welcome back to Shares for Beginners. I'm Phil Muscatello. What has age related macular degeneration got to do with the stock market? And how did people invest saving people's eyesight? Joining me today to talk ophthalmology, big pharma and what it takes to bring revolutionary treatments to market is Ian Keldoulis.
Hello Ian.
Ian Keldoulis: Hello Phil. It's wonderful to chat with you.
Phil Muscatello: Ian Kaldoulis is the co author of Unblinded, the startup that launched a revolution in saving sight. Co written with Dr. David Guyer, the book chronicles the founding of Itech Pharmaceuticals and others in 2000 by Dr. Gaia, Tony Adamis and Samir Patel and their groundbreaking development of Macugen. From securing early stage funding and managing high risk trials to forging big pharma partnerships and capitalizing on market exits. So Ian, um, tell us, what's your story so far that led you up to co authoring this book?
Ian Keldoulis: Well, it's a very interesting book for me because my father was an ophthalmologist. Indeed he was president of the Royal Australian and New Zealand College of Ophthalmology way back when. And he actually retired in 1999 at the age of 70. And this book really gets going pretty much in the year 2000. So for me it was sort of like, well, what happens next? You know, what happened next in ophthalmology? So that's sort of my, my interest in it. And obviously it was fascinating, uh, meeting Dr. Gaia and his crew and learning a lot about what happened next and also how this world actually works, which was also new to me. I've written a lot about different things in finance for many, many, uh, large companies because I live in New York and that's kind of been my ticket to stay here. But I hadn't really covered this area of venture capital and how it crosses over into the biotech world and all that kind of stuff leading all the way through to the stock, through IPOs and other things. So it's been very fascinating for me to see both medical side of things, the science side of things, and the financial side of things in this story, which are all intricately woven together.
Phil Muscatello: I really enjoyed the idea that you discovered that eye doctors were outliers in the medical profession. Eyeballs are for oddballs. Was your dad like that as well? And was this part of what you discovered writing the book?
Ian Keldoulis: Yes. Well, when you grow up with your father, who is an eye doctor, and you meet lots and lots of their colleagues, you tend to think this is what a doctor is. But no, what I discovered when I was writing this book is that actually they are very much outliers in the medical profession. What was key, at least when these doctors were going through their medical schools, and I imagine it's somewhat similar today, there was virtually no teaching around ophthalmology during their main medical course. In fact, one of the doctors told me the only question was in his final exams, having done all of his training in medicine, was how do you spell it? So what happens then, of course, is if you are interested in eyes, then you go off and you study that completely separately when you do your fellowship and your residencies and all of those kinds of things.
Phil Muscatello: So they are definitely only two weeks as part of the whole medical course.
Ian Keldoulis: Yeah. When you think about how important your eyes are, it's kind of amazing that it gets so little attention, at least in those days. It might have changed a little bit recently, but certainly up to that point, it was definitely a field that was largely unacknowledged during your main medical training.
Phil Muscatello: So tell us about the star of the book, David Guyer, and I'll just throw you a quote that I loved where he's quoted as saying, we were a bunch of doctors that knew nothing about business or how to run a company. And, um, I mean, for someone like, who was an academic to suddenly become one of the greatest startup founders of all time, perhaps I don't want to over egg the pudding here, but it's pretty amazing what he's achieved. Tell us about David and what you've discovered.
Ian Keldoulis: Yeah, David's a fascinating person. He's a lovely guy. And I have to say it's amazing the impact that he has had throughout the world. And that's one of the reasons why this book is very important, is it's largely unacknowledged up to this point. David is, I, uh, always call him the fastest man alive. And that's not Just because he likes to run marathons, but because he literally talks so fast and his brain is operating at this incredible speed. So he's a very unique person in that front. And what's sort of interesting for me is that he's not the most patient
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Ian Keldoulis: person in the world. And I think actually dealing on a day to day basis with patients in, you, uh, know, a typical setup in his office was a little bit taxing for him in some ways. But the actual effect that he's had now is it's scaled. So instead of seeing, I think the average doctor sees probably something like a few thousand patients a year. So if you add that up over their whole lifetime, they may see, you know, a few hundred thousand people. David has literally helped millions and millions and millions of people around the world. And at the heart of all of this, even underneath all of this incredible financial journey that he's been on and his colleagues have been on, is this unrelenting desire to improve patients vision and to really help people. And that's the thing that's come through to me most in this book is that the financial story is fascinating and really intriguing. And there's all kinds of things to learn about risk and, and value creation and stuff. But the thing that underlies it all is their desire to actually help people. And that's come through loud and clear with all the people that I've talked to in the book. That's what drives them.
Phil Muscatello: And it's one of the key pivot points, isn't it, in eye, uh, treatment that prior to this there was not very much in the way of pharmaceuticals. It was lasers and operations and surgery and so forth. But he was really driving the push now to use pharmaceuticals for m treating eye conditions.
Ian Keldoulis: That's right. There were pharmaceuticals for things sort of at the front of the eye. So when you got red eyes and stuff like that, you could put drops and they would be eased. But the really um, crucial stuff for this book is the stuff at the back of the eye. And for people who are not that familiar with it, that's where the light impulses hit the flesh at the back of your eye, which is the retina. And they turn through chemical transformation to the electrical impulses that go to your brain. So it's a very, very, very cruc of the visual system. And the things that they were concerned about were affecting the very heart of that. So the diseases that we're mostly focused on is age related macular degeneration. And that literally wipes out your central vision first. So you have this sort of halo of things, but you lose your ability to read, recognize faces, you can't drive. It's hard to do stuff that's right in front of you, like chop vegetables up. All of those kinds of things become increasingly difficult. And, and that's really the challenge for them was to come up with something that would treat that. Uh, and the prevailing orthodoxy of treatment at the time wasn't really very effective at all. And that's what, that's what motivated them.
Phil Muscatello: And it affected millions and millions of people. I mean, people forget now, but there was a large percentage of people who would get to their 50s, 60s and 70s and lose their eyesight and there was no effective treatment.
Ian Keldoulis: Yeah, and actually the thing that, uh, I think we've really done is avoid something even more catastrophic, which is basically our populations now are increasingly getting older. So we're now got lots and lots of people in their 80s and some people in their 90s. And you know, 30 years ago that wasn't the case. So if they hadn't come up with this treatment, we would literally be surrounded by all kinds of visually impaired old people. And uh, in essence, that's one of the reasons why it's hard to sort of acknowledge the success of this development is because we never really saw the truly incredibly bad outcomes that we would be experiencing now with a vastly older population. And that, that part of the population is significantly larger in terms of percentage of the overall population than it was even 20 or 30 years ago.
Phil Muscatello: And I, uh, don't want to use the word hunch, but it was almost like David and his team thought that they were onto something. But going from that hunch into basically building up nearly a billion dollar company, there's a lot of work that goes in, in between.
Ian Keldoulis: Yeah, well, uh, part of the hunch, and I think this is very important for the type of companies that David has formed inside the biotech world. It's often looking at treatments that weren't designed particularly, you know, originally for ophthalmological purposes. And indeed their original drugs were originally considered to be mostly for oncology, which to really stop the growth of tumors. Right. And that's why they wanted to sort of control the blood supply towards two tumors and then stop them from growing. That was the original research. So what it is, is repurposing something that has been designed for another goal and then going, oh, wait a minute, this could actually work really well in eyes. And they've done that numerous times. And I think that's one of the important things to Think about. When you think about the whole pharmaceutical spectrum and the whole biotech world, it's sort of like there's all of these things created in labs, like tens and thousands of molecules, but then only a certain number of them actually make it into the stage where they're getting tested and tried.
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Ian Keldoulis: And then out of those, there's only an even much smaller number that actually sort of get through the rigorous testing system to get through to approval. So all the way along that you're sort of narrowing down the possibility of, of success and increasing. You know, there's very, very high levels of risk. So that sort of was interesting for me was to learn that whole gamut of risk spectrum that this sort of area of biology and pharmaceutical industry is involved with. And it's quite riveting stuff once you get into it.
Phil Muscatello: And one of the barriers that was put up by the pharmaceutical companies to start with was that nobody would want to be able, um, have an injection in their eye. And they said, you know, what it turned out is, of course, if people are going to choose between having an era blindness, it's a pretty obvious choice.
Ian Keldoulis: Yeah, I mean, that was a big breakthrough for them in that they essentially came up with a standard way of doing that, because even eye doctors themselves were told that this is very risky and you should avoid doing it. So it wasn't solely just patients not wanting to be injected in their eyes, which of course, when you actually talk to people about it, they're like, yeah, uh, I kind of want to have my eye injected. But, you know, instead of going blind, yes, you'll pretty much do anything. And what was very interesting was there was an Australian researcher who was involved, his name is Andrew Cuthberts. And I spoke to him. He was involved in some of this research that was going on in the early 90s, and that was sort of the height of the AIDS epidemic. And he lived in San Francisco, right near really the epicenter of the epidemic. And he knew that, that AIDS patients that were getting a particular type of disease that affects their eye were actually getting these eye injections and were, you know, getting that rather than going blind. So, uh, even early on, there was a perception amongst this sort of inner circle of people that, you know what, it's not so. It's. It's not so bad. But the general perception of getting an injection in the eye was horrifying, particularly for the marketing people at the drug companies. They just couldn't, you know, they just couldn't envisage, if you want to excuse the pun, people Actually, like lining up to get this done, you know, that was. That was the last thing that they thought would happen.
Phil Muscatello: Yeah, about that pun. Using words like envisage and looking at, you know, it's amazing. I guess you found this when you were writing it and even having this discussion now how many aphorisms we have that are based on eyesight and seeing and looking.
Ian Keldoulis: Yes. I mean, uh, we live in a visual world, let's put it that way.
And that's one of the crucial things about the book was it was actually difficult to find people who had had that experience of going blind through amd because they're, you know, the people that were really suffering are now dead. And that's why in the book I end up using who. Someone who was one of David's patients, was the editor of Time magazine. And we looked at his story because he actually wrote a book called Twilight. Henry Grunwald is his name. And the story that he tells in losing his sight is just, um, mind blowing when you read it these days. And I think that's one of the challenges for us, certainly from a research point of view, was actually talking to patients who were still alive that could remember just the challenges that they had and faced. When doctors basically said to them, you know, there's nothing I can do for you.
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It's incredible how many pieces of a puzzle that need to be put together to get a new drug to market and, you know, the focus and motivation that David must have had to maintain to not only develop a new drug, but to go through the process of raising large amounts of capital to fund trials, to weather those trials, and also to negotiate with big Pharma for things like non US Territory deals. Tell us a little bit more about that.
Ian Keldoulis: Yeah, it's fascinating stuff. Now, David's company, all the three that he's formed that we talk about in the book, really don't develop the molecules themselves. So their basic business model is surveying the landscape to see what potential molecules that are already out there, some of them may have had failings at various trials and things like that for a particular application, but they're looking at, uh, sort of an alternative universe and going, well, what if we use that molecule for something else? So there is a whole world out there where there is investment to develop drugs. A lot of it of course, is conducted through research at universities and places like that. The area in biotech that he's in is sort of really that next stage, which is, okay, so this is possibly a viable substance. How do we actually analyze its potential, and how do we then take
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Ian Keldoulis: that through to development? So there's really a couple of different points that they go through. One is just testing it for safety and all that kind of stuff, and it's. And its effectiveness, and that's where the clinical trials come in. Another aspect is how easy is it to manufacture and how can you scale up and can you get this molecule, you know, out into the marketplace at a very, very significant scale? And that's another very, very risky and interesting area in drug development. And David's companies had to face all of those kinds of challenges. Even if they didn't actually make the molecule themselves once they found one, then they have to go through all of these other steps to bring it to market. And every step along the way is fraught with risk. But that's also the specialty of the people who are investing in that is to actually analyze that risk and decide whether or not they're going to take up the challenge and invest in these companies, certainly at the early stage.
Phil Muscatello: And this is why I'm interested to talk about this, because we're talking about a whole sector here, and the lessons we're talking about in the book apply to the whole pharmaceutical space as well. Most new pharmaceuticals or a new company, when they're testing something, it's going to take eight to 12 years to develop, go through the trials and phase one, phase two, phase three trials. But ITech managed to bring Macugen to market in five years. Uh, I, uh, mean, it really speaks to David's passion and drive, doesn't it?
Ian Keldoulis: Yeah, I mean, it's an incredible pace that they managed to maintain. They did realize that they were sort of in a race at a, uh, certain point, and they definitely did everything they possibly could to speed things up. The key thing for David and his group was they were really the pioneers in that ophthalmological space for setting up the trials. And the very first one that they did was sort of all kind of almost by accident in a way. They set up a trial for a drug called Interferon, which in the sort of, I guess, early to mid-90s, some doctors had been using it off label, which means that they were using a drug that wasn't designed for ophthalmological purposes, but they were using it for that, and they were experiencing some success and seeing patients responding. So David and his group thought, well, you know, if this is happening and they're already starting to tell people this drug works, it really needs to be tested properly. So they actually went about that and they approached Roche, who was the manufacturer of Interferon, and then they set up a global trial for it through with Roche. And that was really. Actually, if you want to look at it from a sort of intellectual property point of view, that's actually the golden intellectual property that David developed was this ability to do a global test for a drug at the back of the eye for a retinal disease drug. No one had done that before. And it was, uh, an immense effort to get hundreds of eye doctors all around the world to get them to test this drug and to have that measured in all kinds of ways. And so setting that up was really the foundation of his later successes. Now, it's sort of ironic, of course, that that drug didn't work and that they built their successes on an original failure, if you want to look at it that way. But the success was, you know, setting up the system for testing a whole new way of testing drugs for an area that really just didn't exist before.
Phil Muscatello: Okay, well, we'll get to the failure side of things, because they got out of it pretty well. I think at the time. It was very, very lucky.
Tell us about the role of capital raising and Sameer Patel's particularly pivotal role in this.
Ian Keldoulis: Yeah, well, Samir's story is very interesting from many, many points of view. I mean, his family were Indian family living in East Africa and basically got chased out by IDI Amin. I don't know. People are familiar with that now. It's quite a while ago, but they had to suddenly leave. They went back to India for a moment and then wound up in the UK and then eventually ended up in the us and the last name Patel is quite significant for a large number of Indians in America. And they've been quite successful. The Patel, I guess you'd call. I'm trying to think of the word right now. It's not exactly an ethnic group, but it's trying to think of the word for. For that. But anyway, they have set up a number of businesses here, so he was actually able to tap into this group and raise the initial round of money. Now, when they first found this molecule that became Macugen company that manufactured it wanted basically, you know, $8 million and they needed it now. So it was really Samir's network of family and friends that managed to Pull together that money very quickly. I think it was in a matter of 10 days or 12 days, something around that time, and front that up. So,
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Ian Keldoulis: but that was the key to that, was key to acquiring that molecule. Then once they've done that. The thing is investors, uh, in those kinds of propositions at the early stage of biotech, they're very, uh, aware of the high level of risk. So they have to be investors that are very willing to take on high level of risk. So after they got their initial funding, then they started to approach venture capitalists who were in that space. And that's when they started to secure the next rounds of funding. And usually these types of drugs go through at least two to three series of venture capital. They call them series A, series B, series C. They usually go through multiple phases. And at each of those phases, what they're really looking at is has the drug been successful at this level of experimentation? Are, ah, these trials working? And when they can see that, and they see some validation that the results are good, that's when they can up their level of investment. And most of them play a game where they're betting on multiple possibilities at the same time. Because the actual chance of success for any one particular molecule to become, uh, an approved drug is very low. Even once you get into the first trial phase out of the drugs that make it into that trial phase, they usually have a less than, you know, around about 1 in 10 chance of actually being approved. So it's a very, very high risk thing. But the rewards on the other hand can be quite, you know, quite high as well. So that area of funding exists. And then as you go through that, what often happens, and this happened to David's companies, is once you get through the second phase of the trial and you get good results, that's when you go towards an IPO and to really get the money for the big trials, because the number of patients involved in a trial is small at the beginning, you know, um, it's usually just a couple of dozen people at the very, very beginning. And then phase one, it's sort of around that scale. Phase two, it's usually a few hundred people. And then once you get to phase three, it's thousands of people. And obviously there's commensurate costs and risks involved as you scale up.
Phil Muscatello: So tell us about the, uh, ipo. This must have been a very exciting day. Going to ring the bell at the New York Stock Exchange. But more importantly, to have such a robust open.
Ian Keldoulis: Yes, the IPOs are, uh, very critical, largely as I've mentioned before, you know, there's an enormous need for capital once you go into the phase three of the trial. And you need to have thousands of patients, multiple, multiple sites, often, uh, in the hundreds of sites around the planet where doctors are going to be informed and told how to run the tests and all that kind of stuff. And then you have to have the capital to do that plus the capital to keep the supply of that drug going throughout the test. And you know, now you've scaled up. So yes, the need is great. And that's why the IPOs come in usually after the second trial is completed and there's good positive results from the second trial. That's what gives you the momentum to then go and conduct an ipo. And that's exactly what David was able to do with macugen. And we're doing this sort of not that long after the dot com crash. Right. So they initially had funding problems, sort of just, you know, it was just not a good environment in the early 2000s, particularly with their company.
Phil Muscatello: People were understandably squeamish.
Ian Keldoulis: Yeah. Especially seeing as their company had the word tech in it. Itech. It might not have been a good idea if, to use that term, um, tech. If they'd started their company two or three years later, they probably wouldn't have. But in 2000 it was great, you know, yeah, we're going to be itech, you know, so the, the challenge for them at that point was the markets had been quite slow and people were very, very skeptical. But on the other hand, I think there was also a buildup as well. Like people hadn't been actively involved in the stock market during the downturn following the dot com crash. And there was probably more of an appetite just around the time that they decided to go for, for their ipo. And so they were, they sort of had that first mover advantage, especially seeing as by this stage the need for the drug, you know, dealing with an illness that had millions of sufferers around the planet that had no effective treatment at this point. So the understanding that this was going to be a market changing drug was something that they could capitalize on and they did very, very effectively. So their IPO was a huge, huge success and really did fund everything, set them up for their phase three trial. And then of course once you do that, that's when you get your approval and you become a drug that actually hits the market.
Phil Muscatello: And yet it's still a coin toss. Even at the phase three level only
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Phil Muscatello: it's a 50, 50 chance that any molecule is going to make it through that last trial.
Ian Keldoulis: Yes, uh, it's a big level of risk. I mean 50, 50 is a big chance. But you know, the way people interpret that of course is well it's been successful so far. You know, let's hope this continues. So but the reality is yes, you have pretty much a 50% chance of failure. Fortunately for Macugen that wasn't the case. It was a successful drug and got through its trials and went to market and was the first treatment for uh, age related macular to generation to reach the market. And you know that was pretty successful for them as we went on in the book and I think you, you may have just read this part actually about their next drug. Not such a good story on the third trial.
Phil Muscatello: So we'll get to that.
Yes, I know but it's this stage just uh, talking about Macugen still. And this is something that's experienced by any biotech investor. The volatility. The share price can go up and down by incredible amounts and often it's to do with some sort of FDA announcement. And I remember the scene when they were in the lift and David was talking to someone who said our share price has just gone up 20% and it was on the back of an, an FDA meeting of some sort. But yeah, that's just something to think about, isn't it for any kind of biotech investing?
Ian Keldoulis: Yeah, the machinations of the FDA are very, very crucial and they were fortunate in a number of ways in that the FDA also looks at drugs that are treating diseases that what they call novel. So uh, if there isn't an existing treatment then you can fast track your FDA processes. And that was possible with Macugen because it was treating a uh, new condition. They were able to speed up some of the bureaucratic side of the FDA approval process. But yes, it's very, very, very carefully passed information. Whenever they say something it's sort of a bit like you know, when the Fed gets together and has a meeting and talk. People always trying to like read between the lines about you know, is it going to be a rate increase or not? You know, it's that it's that level of importance that the FDA has.
ITECH developed an exit strategy when they went public 20 years ago
Phil Muscatello: So I remember reading earlier on in the book, is that moving into a CEO role that there are so many skills that need to be picked up and developed and one of them is developing an exit strategy. Tell us about the ITECH exit strategy.
Ian Keldoulis: Uh, yeah, their exit strategy, uh, I don't think was fully formed, went into this because as we mentioned, they weren't very experienced businessmen, but they certainly have developed exit strategies along the way for them. One of the challenges as a small company of course, is scaling up. And once you start to have a product that is going to be available globally, you really do need the help of, of a big pharma company to get it out there. And that's why they ended up partnering with, with Pfizer. So partnering with Pfizer really helped them bring it to market globally and it also gave them a lot of validity in some ways of being a company that was taken very, very seriously. Once they started partnering with Pfizer, I mean, they were being taken seriously before that and they, they had a number of offers, but they ended up going with Pfizer. But that wasn't the sale of the company. Eventually Pfizer did a deal with them to basically do the non US side of the business, you know, manufacturing and distributing globally outside of the U.S. then they ended up being acquired by another company, OSI, for at the time was a very considerable amount of money, which was 935 million was the actual cost of the Academy acquisition. And so that was their exit at that point. And I think they were extraordinarily happy with that exit strategy.
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Phil Muscatello: And then almost immediately after Macugen was superseded by another pharmaceutical which did a much better job and Itech and their ip, uh, and everything was worth next to nothing.
Ian Keldoulis: Yes, yes, they went from the great high of $935 million valuation to 25 million in pretty much almost overnight, largely because of the advent of Lucentis, which was by all accounts just a much better drug. Ironically, if you, when you read the book, their very first encounter is with the company, you know, Genentech, who brought out Lucentis. And it was really, I think, you know, Genentech sort of looking over their shoulder and seeing, oh, wow, these guys have gotten, you know, this huge thing up and running that incentivized Genentech to actually go
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Ian Keldoulis: out and develop Lucentis. It was really, it's a slightly different molecule from the one that David and his team were originally looking at, but they did first talk to Genentech about that. So it was basically Genentech playing catch up after they saw that they had missed an opportunity when they saw what was happening with Macugen. So that's really what happened. And Lucentis is still a very large part of the market for AMD, uh, drugs. And this is, you know, now 20 years later.
David discovered that he really enjoyed business after his experience with Macugen
Phil Muscatello: So the next chapter was Optho Tech. And by this stage, David had moved into the venture capital space as well. Tell us about how that played out from there on in.
Ian Keldoulis: Yeah, David discovered that he really enjoyed business, not surprisingly, after his experience with Macugen, I guess, and the company.
Phil Muscatello: Some would be tempted. Some would be tempted just to keep the money and buy a yacht and, uh, sail off into the sunset.
Ian Keldoulis: Yeah, not David. I don't really see David having the patience to, um, do that. And he also, of course, is very motivated by improving people's sight. So, you know, he's always kind of looking for the next thing to do that will improve, uh, patient outcomes. So the story with orthotech was basically, well, we know that then there's still other possibilities at the back of the eye, and there's still ways to keep improving upon what they've already achieved. So that was sort of the founding. And that's the same with you, uh, know, a lot of other pharmaceuticals. Like when you get some kind of treatment, it does, you know, A, B and C, and then you'll find another drug that does D, E and F. And you know, eventually, you know, you might need multiple drugs to cover everything from A to Z, as we say in Australia, or A to Z, as we say over here.
Phil Muscatello: Right.
Ian Keldoulis: Uh, so that's sort of where they went next was like, how can we keep working in this area and make, continue to make improvements? And this is when David was sitting in the venture capital seat and decided to help fund a company that his friend Samir would actually run. And that was offthotech. Again, they did keep tech in the name. I think they felt that they were enough past the dot com era to have tech, especially seeing as they had so much success with iTech. But, you know, they did their usual mode, which is to go out and try and find a molecule that they thought was, had potential. And then they did a lot of shopping around. I mean, they did looked at hundreds and hundreds of potential molecules before sort of zeroing in on two that they thought were very, very likely to be successful and solve some unmet needs inside the retinal disease area. So that's sort of, that was sort of the genesis of Thotech.
Phil Muscatello: And one of the first experiences with a, uh, molecule called Fovista, which made it very well through the first two.
Ian Keldoulis: Phases of trials, indeed, for Vista is sort of a lesson in probability and chance. You know, it sort of, uh, did so well at the beginning in its first two trials that everybody was just sure it was going to succeed. You know, that was. They. They felt extraordinarily confident about it. However, as we learn, it's not always what it seems on the surface anyway.
Phil Muscatello: I mean, it must be pretty amazing to get to that stage where you're so excited and it seems to work at early stages in the trial. And they're sitting there at that meeting and they're waiting for that PowerPoint to come up to show what the effectiveness is at the phase three level. And it failed. Imagine what the investors must be feeling.
Ian Keldoulis: Yeah, the investors were not happy, that much I can tell you. And. And there were certain investors who were more than unhappy. And yes, it spiraled off into a very, very, very nasty situation once Fur Vista failed, because the expectations, having gone through an IPO and done all that sort of stuff and actually had a very, very successful ipo, they were not.
Phil Muscatello: Ready to the extent of, um, hiring bodyguards.
Ian Keldoulis: Yes, there were some unfortunate phone calls that led them to suspect that they're under physical danger. One of those things were the dangers real. And they may have been. I mean, this is America we're talking about, and there's lots of crazy people out there with guns. So, you know, you do need to take these things seriously. And then the other thing is, like, are you just being overly paranoid about this? But, uh, you know, they had to take precautions. They were that. That scared that something may step off with the level of disappointment that the share price after it crashed had caused in the marketplace.
Ian, tell us about iveric and which was the next venture for David
Phil Muscatello: So, Ian, tell us about iveric and which was the next venture for David.
Ian Keldoulis: Yeah, so iveric, essentially, Ophthotech had such a bad reputation after the failure of Foveista, uh, in its third phase trial, that it was decided to rebrand Ophthotec. So, uh, iveric is still the same company as ofvotech, but
00:35:00
Ian Keldoulis: they changed the name and they also changed focus. So, uh, they brought in a new CEO. Samir, uh, stepped aside and this guy Glenn Splendorio came in who had been working with him before. But anyway, he came in and took over as CEO, uh, and wanted to rebrand it and also to focus more on the genetic side of drug development. And they went down that path for a while. David wasn't entirely convinced that this was the right mode. And they also, as I mentioned before, they had found two molecules in their initial study and he decided we should be taking the second or they should be taking the second molecule more seriously. And there was a lot of internal debate around that. And eventually they did start taking that, that molecule seriously and it turned out to be a champion as well. And even though they had had this failure for Vista, um, phase two, I'm sorry, phase three trial, the next molecule was far more successful. And actually, you know, when they wound up that company, they sold it for I think, uh, close to $6 billion. So they more than made up but it was really the second horse in that that they were betting on that was actually the winner and that's this, that was the, the key to their success was to make sure they had more than a one trick pony and they had something up their sleeve.
Phil Muscatello: Yes, that's part ah, of playing the odds, I guess in the biotech space, isn't it?
Ian Keldoulis: Yes.
Understanding the processes that go into drug development has given me a broader perspective
Phil Muscatello: So the world of big pharma gets a lot of bad press. How do you feel about, you know, looking through this, the biotech industry, the big pharma industry and how they work together? What are your thoughts and feelings overall about it?
Ian Keldoulis: Yeah, it's interesting because uh, I've certainly never been a huge fan of the big pharma world from what I've read in the newspapers. And also I have a lot of friends that are very skeptical about the industry. This has given me a whole new level of appreciation in terms of the risk that's involved, the expenses that are involved, and particularly with David's group of people, the dedication that they have and their commitment to actually making people's lives better, even though the money is, you know, that's on, that you read about is just extraordinary in some ways. Then I wouldn't say, you know, no one's interested in money, that's not true. But their overall motivation is clearly to help people. That's really the thing that's been motivating them all the way along and the satisfaction that they get knowing that they have done that is tremendous. And that's kind of what keeps David going. It's not so much, oh, I need to start another company and make X billion dollars. It's really, you know, how can I help people? And I think that's, that's something that has been very reassuring to know that actually trying to improve people's lives is really the foundation. And it's not just purely, you know, the pursuit of dollars. I mean the American system is very difficult. Uh, you know, the health care system over here, I don't Think there's anybody in the country that would say, gee, we have a great health care system. You know, it sits, you know, in that backdrop. But understanding the processes that go into drug development has given me, you know, a slightly more broader perspective on the risks involved and the rewards that, that are attained as well. So I hope that helps.
Phil Muscatello: Oh, let's hope so. Uh, I think this is a great lesson for people who might be hearing stories of biotech companies that are promoting some great advance in a drug, that their development. It's a very long process. There's a lot of hurdles. There's a lot of approvals that need to be gone through and a lot of capital that's involved. So it's worthwhile being skeptical if you hear any stories like that.
Ian Keldoulis: Indeed. And what they're also investigating while they're going through these trial phases is also looking for possible side effects and other indications that the drug is not safe. And, you know, even if a drug is super, super effective and cures whatever it's supposed to do, if the side effects are, uh, also significant, well, then it's not really going to make it to market either. So there's levels, uh, of risk all across the whole process. And you really need to be analyzing all of that kind of risk if you're going to be making an investment in something. Something.
David's obsession with food comes out when he's flying on private jets
Phil Muscatello: And we can't finish off this interview without talking about David's obsession with food. When he's been running around the United States on private airplanes. Food has played a huge role, hasn't it?
Ian Keldoulis: Indeed. I have to say, first of all, that David doesn't fly private jets generally. That was only really, that was just.
Phil Muscatello: At that stage when you're just getting the investment in. There's no other way of doing three meetings in a day, for example. Yeah, I mean, presume days. Yes.
Ian Keldoulis: Yeah, he's, he's, he's a commercial plane, uh, user generally. But yes, when they needed to be in like four different cities in the same day and have, you know, three or
00:40:00
Ian Keldoulis: four investor meetings in each of those cities, that's when they were using their private jets. But yes, David is a, uh, complete obsessed foodie and he's the type of guy who, you know, he likes eating in fine dining establishments. That's all well and good, but he really likes hunting down that novel, special little food stand that's in the middle of nowhere that's got particularly the spiciest food that he can find. He's a real spice demon on that level. So his fascination for food plays out In a number of quite interesting ways. One is that when he does find gold, he really digs in. And if he finds a restaurant that he loves in a city, he will literally go to that restaurant every meal that he can. So if it's open for breakfast, lunch and dinner, he will go there three times a day. If it's only open for lunch and dinner, it'll be twice, you know, so he did, uh, he. When he finds what he likes, he just sticks with it. But his level of investigation and trying to find the latest, best thrill, particularly if it's spicy. Yeah, that's quite something.
Ian Kaldoulis shares his 40 favorite restaurants around the world
And in the book, we do put down, uh, a list at the end of his 40 favorite restaurants around the world, which does include one in Australia.
Phil Muscatello: Oh, which one was that?
Ian Keldoulis: He liked Rockpool. He liked Rockpool in Melbourne. It was that. That was, uh, that was his favorite there. But he didn't, doesn't listen.
Phil Muscatello: Not Sydney. Not Sydney. Rockpool.
Ian Keldoulis: I don't know. I don't know why he didn't make it to the Sydney one, but the Melbourne one was one that stayed in his mind. But yeah, he's a, he's a total foodie, uh, completely, completely obsessed. And I think when they were flying around in the jets, what was really exciting for them was one, the ability to go to all these different places in the same day, and two, that the airline people, not airline people, but the jet people were willing to go and source stuff. So if they knew that a good restaurant existed in some city, they would call it up and get the food delivered to the plane. And that just really made it for them. It's like, you know, not only do you get to fly around in this sort of incredible environment, but you get all the best food in the world while you're doing it. So, yes, that was definitely a highlight for them.
Phil Muscatello: Okay. And so, uh, remind us of the name of the book and, ah, you don't need to tell us where we can get it from. I'll put it all those in the links, in the notes, in the description.
Ian Keldoulis: Right. Well, it's unblinded and it's the startup that launched a revolution in saving sight.
Phil Muscatello: Ian Keldoulis. Or should I say Bill Maher's long lost Australian brother. Thank you very much for joining me today. I'm sure you've had that one before.
Ian Keldoulis: Oh, I got chased around an airport by, uh, a TSA agent that thought I was Bill Maher. And yes, he was completely obsessed. It does happen quite frequently.
Phil Muscatello: So, yeah, what happens with that? I mean, uh, don't they hear the accent and realize, oh, Bill Maher doesn't have an Aussie accent?
Ian Keldoulis: No, I don't know. You know, he asked me if I had a TV show and said, well, I'm working on one, you know. But anyway, yeah, it does happen. My partner, she always wants me to put my hair down like this so people don't think I look like Bill Maher. But I don't think it has any effect. Yeah, it happens all the time.
Phil Muscatello: Ian Kaldoulis, thank you so much for joining me for this interview, and it's.
Ian Keldoulis: Wonderful to chat with you again, Phil. We haven't chatted for quite a while, but it's a pleasure catching UM up.
00:43:24
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