Jamil Beg, Partner at 5AM Ventures, on Building and Investing in Innovative Biotech Companies

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Jamil Beg, Partner at 5AM Ventures

In this episode, we sat down with Jamil Beg, Partner at 5AM Ventures, a leading venture capital firm focused on building next-generation life science companies. Founded in 2002, 5AM has invested in 100 companies and raised over $2.0 billion since inception. Through its 4:59 Initiative, 5AM discovers, incubates, and funds breakthrough science by partnering with academics and entrepreneurs to establish proof-of-concept data that will enable a Series A financing. 5AM has offices in Boston and San Francisco.

In this conversation, Jamil and I discussed:

• The business and scientific challenges in scaling an early clinical-stage, private biotech start-up to a commercial-stage, publicly traded company
• The current life science investing landscape and how 5AM is working to stay ahead of the curve
• Emerging trends and scientific breakthroughs in biotech, including genetic medicines and other first-in-class modalities
• Key learnings and advice for first-time, early-career entrepreneurs

Start to 4:00: Fascination with Science and Technology

• On understanding the “nuts and bolts” of our surroundings: Jamil’s natural curiosity as a child often led to him disassembling appliances around the house, much to his parents’ dismay. His desire to understand how things worked led him to Penn, where he studied bioengineering and biotechnology. Jamil describes bioengineering at the time as a super exciting field — so much so, that even the bioengineers couldn’t keep up with the rapid pace of innovation!
• On commercializing science to address unmet needs: A class on “Engineering Entrepreneurship” took Jamil out of the laboratory and into the board room. Beyond the science, Jamil found himself asking about the unmet need, competitive landscape, and financing strategy of a hypothetical company that would develop this product. This interest in the “translational” aspect of science (i.e., from science to product) was the driver behind his career journey, discussed later in the episode.

4:00 to 10:30: Early Career Learnings

• On learning how the biotech industry works: To complement his scientific skillset, Jamil was motivated to understand the inner workings of the biotech industry and its stakeholders — from patients to payers to providers. He decided to start his career in management consulting, where he worked specifically with biotech and pharma clients. Jamil then transitioned to venture capital investing at Quaker Partners, where he built upon the skillset he learned in consulting (e.g., due diligence, data analysis, primary / secondary research) and took it a few levels deeper by evaluating and investing in biopharma companies.
• On getting “hands on” with portfolio companies: As part of his venture capital stint, Jamil had the unique opportunity to work directly with two of Quaker’s portfolio companies — a neuroscience and an oncology company — at two very different stages. At one end, Jamil contributed to commercial launch and later-stage financing strategy while at the other, he helped prepare for first-in-human clinical studies and pipeline strategy.

“[ It’s ] always incredibly rewarding to see when a drug actually gets approved, a company goes public, and then subsequently gets acquired down the line.”

• On fostering leadership development: Among other reasons, Jamil cites his desire to develop as a team builder and leader as his top priority in his early career and reason behind why he chose to attend Wharton. Drug development, especially, is a team sport and Jamil soaked up every opportunity to foster his growth as an emerging leader during his MBA years at Wharton.

10:30 to 22:00: Scaling Sage Therapeutics to a $2B+ Company

• On working his first “real” job: Following his MBA, Jamil’s focus was — as suggested by his late mentor, Brenda Gavin (Founder of Quaker Partners) — to find a “real job” and gain operating experience within a biotech company that was actually developing drugs for patients. This insight was Jamil’s primary driver in joining Sage Therapeutics, a small start-up with less than 10 employees, over more traditional, large biopharma.
• On the people of Sage and succeeding in neuroscience: Jamil credited Sage’s robust growth to the strength of the team. Sage’s investors also served as valuable partners that would support the company as it scaled. Regardless of the incredible people involved in the Sage story, however, neuroscience had long been a field riddled with difficulties and high-profile clinical trial failures that Sage would need to overcome. Sage’s strategy was to approach drug development differently while maintaining its focus on addressing the high unmet needs in patients with epilepsy, pain, neurodegeneration, and beyond.

“There was a lot of hesitancy when we went out to raise our first subsequent financing. But when people really started to get the strategy and see how we were different, we were really able to get the flywheel going and gain an incredible amount of momentum for the company.”

• On being the “business guy:” Jamil was Sage’s 9th full-time employee and for the first several years of his tenure, the only non-chemist / biologist. As such, he gained many responsibilities that would have been difficult to even imagine at a larger company. During Jamil’s years contributing to — and in many cases, leading — business development, pipeline planning, fundraising / investor relations, medical affairs, commercialization, and other related functions, Sage grew from a preclinical, private biotech treating one patient in a Compassionate Use setting and 10 employees to a public company with three registration studies across two indications with the lead molecule and 200+ employees with a multi-billion dollar valuation. At the date of recording, Sage was valued at a market capitalization of over $2.5B.
• On the business challenges in early-stage biotech: Jamil cites the delicate balance between creating value and managing risk as the biggest challenge that early-stage biotechs face. While executing upon a clever strategy is the goal of every well-run organization, being flexible is key in biotech, as data readouts inform corporate strategy.

“The team isn’t just moving forward to get a drug approved that regulators are going to approve, but something that’s going to be commercially of interest and truly solve the patient need.”

22:00 to 29:00: Building and Investing in Innovation at 5AM

• On 5AM Ventures: 5AM has been both building and investing in innovative life science companies for nearly 20 years. The 5AM team is proud not just of its strong track record as early-stage investors but more importantly, of the 15+ therapeutics approved for patients across about 100 portfolio companies. 5AM invests across therapeutic areas, modalities, and stages of development and has found tremendous success entering very early in the company lifecycle (e.g., multiple years before the first IND filing for early transformational platforms). The 5AM team remains active throughout each company’s lifecycle, often taking Board seats and even interim C-level roles as companies are getting off the ground. Jamil describes his team’s work as partnering closely with academics and entrepreneurs to build successful companies that are developing medicines for patients.
• On the challenges of being a life science investor: Jamil believes that we are living in a period of unprecedented innovation in biotech and with that comes the challenge of prioritization. With every new research paper and publication comes yet another idea for a new, potentially transformative technology that investors and entrepreneurs can build a company around. The challenge is to stay focused on the science and the ultimate goal of developing medicines for patients.

“Undoubtedly, this is one of the most exciting times in the biotech industry. Every decade is more exciting than the last in terms of the level of innovation, novel modalities, and the deeper understanding of biology and disease pathophysiology that allows us to potentially develop transformational medicines for patients.”

• On staying ahead of the curve: In addition to simply investing in existing life science start-ups, 5AM also discovers, incubates, and funds “NewCos” in-house through its 4:59 Initiative. The 4:59 team operates like a thinktank, continuously diving into the scientific literature and proactively performing whitespace analyses on specific areas of biology or technology. Through its weekly Speaker Series and Journal Clubs, 5AM invites leading researchers and entrepreneurs to share their latest discoveries.
• On emerging trends and scientific breakthroughs: Jamil is excited about the early success and continued progress in the development of first-in-class genetic medicines (i.e., gene / cell therapy, gene editing, ASOs, siRNAs, etc.). While we’ve seen early signs of efficacy and even approvals in rare, monogenic diseases, Jamil describes the potential to apply these approaches to a wider set of diseases as the next frontier in biotech.

“The big step next is to think about — how can these be leveraged to treat a broader set of diseases and where [ does ] the risk-reward profile make sense?

29:00 to End: Advice to the Next-Generation of Business Leaders

• On loving what you do and who you work with: Above all else, Jamil emphasizes that we must follow our passions and love what we do in our everyday work. Of course, our colleagues and peers are included in this as well, and Jamil stresses the importance of working with great people and paying it forward as one progresses through their career.

“Pay it forward. If you’re getting mentored, then spend time mentoring people. Build a lasting community!”