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Friday, Mar 29, 2024

Ringing the Bell

The initial public offering on July 27 of Sienna Biopharmaceuticals Inc. represented a milestone in the life of Dr. Frederick Beddingfield III. The chief executive of the Westlake Village biotech startup needed money to fund drug development, and in that day the company raised $65 million. The 52-year-old Beddingfield’s career path to becoming chief executive started with 10 years at Allergan plc. It was there he learned about best practices when it comes to drug development. He left the company to become chief medical officer for Kythera Biopharmaceuticals Inc., which Allergan acquired for $2.1 billion in 2015. Beddingfield spoke with the Business Journal from New York on the first day of trading for Sienna’s stock, where he rang the closing bell at the Nasdaq. He discussed his motivations as a business executive, the benefits of taking the company public and the allure of biotech startups. Question: How were you involved in the IPO process? Answer: I was intimately involved in the process every step of the way. This is our little baby. We started out a year and a half ago with a great team. We had a plan to change the landscape of dermatology drug development. The IPO is a great step in achieving that goal. The final goal is to get new therapies to patients in the dermatology space and to dermatologists in their practices. What are the benefits of taking Sienna public? We have five exciting clinical programs. Once you are in human trials, drug development is an expensive proposition. The best way to fund five clinical programs is to access the public markets. The resources needed are significant. And that is the best place to do that and to do it efficiently and allow you to focus on the real job of the company, which is to move these programs forward. Title: Chief Executive, Sienna Biopharmaceuticals Inc. Age: 52 Education: B.A. in psychology from North Carolina State University, M.D. from the University of North Carolina, Ph.D. in policy analysis from RAND Graduate School of Policy Studies. Most Influential Person: Keith Leonard, David Pyott, Dr. Gary Lask Personal: Married, with two daughters Hobbies: Mountain biking, traveling How will the money be spent? If you think about the use of the proceeds of the IPO it is going to get us through five important data inflection points on these programs. The first program, SNA-120, looks at treating itch associated with psoriasis as well as treating the underlying disease of psoriasis. That is in late phase 2. Our next program, SNA-125, is another novel targeted topical therapy for the treatment of not only psoriasis but atopic dermatitis (a dry skin condition common in children), which is a big opportunity. If you look at some recent product approvals in the space it shows there is a big unmet need. What is that need? The need is for safe targeted topical therapies. Of late there have been all these amazing developments in the treatment of these diseases from a systemic standpoint. But what people forget is they are focused on treating about 10 percent with those patients. The reason they are reserved for the most severe cases is they have side effects, like serious infections that can be life threatening, cancers and heart toxicity. How is Sienna addressing that? Our focus is on developing novel targeted topical therapies that don’t have those systemic side effects because they are not getting absorbed systemically. They are staying on the skin. They are a safer alternative but also a more targeted alternative than today’s topicals, which are really topical steroids and things like that. Why did the company decide to develop skincare drugs? The team is all about dermatology. We have two dermatologists in the company. That is a rarity. I was at Allergan for 10 years and there was a time when I was the only dermatologist in the company. Almost everyone in (Sienna) has worked at companies like Kythera or Allergan or Medicis or Amgen, and specifically worked on dermatology drugs. We are very passionate about the space. We see a big need in that arena for a company like ours, a small company focused on dermatology. Why? What has happened over time is that there has been a lot of mergers and acquisitions. Small companies have gone away and you’re left with larger companies which sometimes can’t focus as much on dermatology as a company like ours that is focused entirely on therapies for dermatology patients. What is the exit strategy for Sienna? Is it to get bought out like Kythera? We are focused entirely on building a great company and succeeding in bringing these products to market. We know that if we are successful doing that there may be other companies out there interested in potentially acquiring us. That is definitely not our strategy or our goal. A wise person once told me that great companies get bought and bad companies get sold. We are just going to try to be a great company. If as part of that somebody buys us then OK. I am sure our investors would be quite pleased. Our strategy is to build the company and commercialize these products ourselves. What have been the challenges? One challenge we faced as soon as we decided to start the company was the entire biotech sector kind of melted down. It made it hard for all companies to get funding. Nonetheless, it turned out to be an opportunity for us because we were able to get investors to buy into what we were doing and to fund us. Many of those, frankly, were investors who had done well with Kythera and believed in the team. How did the investor money help you? Because we had that funding, we have now acquired two platforms. Those assets were available to us at a reasonable valuation because of a time in the biotech space. A company like ours that was able to get funded in the early 2016 timeframe, there were opportunities because valuations had gone down. You could go out there and find some attractive opportunities. So buying drugs already in development is better than starting from scratch? We have bought two exciting platforms. The first one, SNA-120 and 125, is a topical by design platform that allows you to target drugs to the skin with minimal to no systemic exposure or side effects. That was (made by) a company we acquired out of Italy in December of last year, Creabilis plc. We kept on the scientists who are still there living in the northern part of Italy. They have a great research bench there. In addition to the two compounds I mentioned, they have six additional chemical entities that are being studied. We would hope to move some of those assets forward. And what is the second acquisition? Our second platform is a topical particle therapy. This is a very efficient silver photo particle that is applied as a solution to the skin used in conjunction with the existing lasers that dermatology offices already have. You use that to target certain structures, such as in the case of acne, which is one of the indicators we are pursuing, we are targeting the sebaceous gland. The sebaceous gland is the target of the most effective acne drug, Accutane. That is a great drug but it has systemic side effects. If you can target the sebaceous gland in this way without any risk of exposure, that is an idealized dermatology therapy for everybody but the most severe patients. That is exciting for us. We are in pivotal trials for that product. That data will come out in the second half of next year. What made you decide to become a medical doctor? I didn’t originally plan to go into medicine. Somewhere along the line I got interested in it and found my way into dermatology. I am fortunate to have found that it’s an exciting field where you can make a huge difference to people. How is that? Dermatology conditions effect patient’s quality of life. Even the most medical dermatology condition has an impact on the person’s self-esteem, their appearance, their confidence, how they interact with other people. I don’t make a hard separation between medical dermatology and aesthetic and cosmetic type treatments. I think all dermatology conditions have that aspect. I still see patients. I am on the faculty at UCLA. I think it is an important part of how I approach the job here at Sienna. I think it’s what differentiates us here from other companies. How is being a doctor a benefit to the business? Business and medicine are sometime quite distinct. I didn’t go immediately into business. I first went into clinical medicine and then got involved in research. I ended up getting a Ph.D. because I was fascinated by research. I spent some time at the Rand Corp. doing that work. Eventually I got into research and development at Allergan. I was there for 10 years and worked with people like David Pyott who was CEO of the company. Over time I realized that I had the ability to work in an environment that had both the business component and the research component. Kythera was my first experience in the startup realm. It was an eye-opening experience to me and made me excited about what can be done with a group of excited, energetic and highly skilled professionals. What did you learn at Kythera? I had focused more on the research and development aspect of things as opposed to the business aspect of things in the concept of a startup. As companies grow to a large size, there is the inevitable bureaucratic component. In the startup realm, we are all in this together and with a strong team and cohesive team we can outperform the big companies. That was what was eye opening for me. What I didn’t realize was how amazing that environment is for moving forward in an efficient, rapid fashion with highly motivated employees. What motivates you? At the end of the day, the primary job for me is to bring new therapies to patients. If we are bringing products that are innovative and needed, that are treating the patients and helpful to the dermatologists and their practice as they try to treat those patients, then I will feel we are successful. To do that there are a lot of things that have to happen. You’ve got to fund the company, which means you have to bring on investors. Those investors need return on their investments. There are a lot of steps that go into getting those drugs and therapies to the patients. It is a win-win when it all works out. What is your typical day like? Get up early. Get the kids off to school. Exercise. Go into work. Work hard all day. We have a tight group because we are in a small office together. You never know exactly what’s going to happen in the course of the day. Inevitably, part of the day is thinking about are we planning for success, are we going in the right direction. There are a lot of details in terms of the five clinical programs we are running and making sure they are on track. I am always talking to my CFO Rick Peterson about keeping us on track on the financial side. Luckily he’s been doing this for a long time. He was at Medicis for 18 years. What is the last book you read? It was probably the IPO book, truthfully. The last book I read for pleasure and really enjoyed was “A River Runs Through It.” It is all about fly fishing and the meaning life. Anything you would have done differently in your business career? I made a lot of right angle turns along the way. I didn’t have a plan along the way. I am happy that I was willing to take some of those right angle turns. Leaving academics at UCLA to go to Allergan was one. Going to Kythera and a startup environment was another. After Kythera was acquired and starting Sienna certainly took some risks. If anything, I wish I had gotten into the startup environment sooner because it is so exciting and there’s a lot you can do there. What was your career turning point? There have been a few. I would say one of the biggest for me was leaving Allergan to join Kythera. I had known the CEO there, Keith Leonard, and he had been talking to me for a while about joining, It was not an easy decision. That was certainly a turning point in my career as I changed from being a research and development person to joining a small company and being intimately involved in all aspects of the company. That’s what led me to want to do this, the CEO position and to start Sienna. Who are some people who have been influential in your career? I would say Keith Leonard certainly has been. He hounded me for a while to come to Kythera. Eventually I went and he was right. It was the right move for me. If he hadn’t been so encouraging I’m not sure I would be here today as the CEO of Sienna. Certainly, he has been hugely influential and helpful to me. I would say David Pyott, at Allergan. I had a close working relationship with him. I think most would say that he is a best-in-class CEO and built a great dermatology company there. He’s a nice addition to our team here at Sienna, too, as a special advisor to myself and the board and as an investor in the company. Prior to that, my dermatology surgery fellowship director Gary Lask has certainly been an influential mentor and making sure that what you do is beneficial to the patient at the end of the day. What are your hobbies and interests outside the workplace? A lot. Too many, probably. I love outdoor sports, whether it’s mountain biking or road biking. I love to travel with my family whenever I get the chance. Less and less these days, it seems. Eating and sharing good food and wine. Where do you like going mountain biking? I live in Pacific Palisades so the Santa Monica range is right above me. I can get on my bike at the house and ride up into the hills; getting up into all the paths that come off of Mulholland Drive. It is phenomenal to be in a city like Los Angeles and being close to all these mountain biking spots. Even close to our office in Westlake Village we have Cheseboro Canyon, which is amazing mountain biking there. Where do you enjoy going when you travel? Italy is certainly my favorite place to go. I am fortunate we acquired a company in Italy. It’s another excuse to go there. We’ll be traveling there in the near future, my family and I, on vacation to Sicily. I am looking forward to that because it’s one part of Italy I’ve never been to.

Mark Madler
Mark Madler
Mark R. Madler covers aviation & aerospace, manufacturing, technology, automotive & transportation, media & entertainment and the Antelope Valley. He joined the company in February 2006. Madler previously worked as a reporter for the Burbank Leader. Before that, he was a reporter for the City News Bureau of Chicago and several daily newspapers in the suburban Chicago area. He has a bachelor’s of science degree in journalism from the University of Illinois, Urbana-Champaign.

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