Read the Conversation
EF: When you took on the role of CEO, what objective did you set for yourself, and what are your goals for 2024?
JV: I started about two and a half years ago after Bayer acquired Viralgen. Initially, my role involved ensuring that Viralgen remains an independent company while benefiting from Bayer's resources to scale up and deliver gene therapy to various clients. I'm currently the CEO, and Viralgen is a Contract Development and Manufacturing Organization (CDMO) with over 60 clients. We manufacture gene therapies for our parent company AskBio, part of Bayer, and other partners who approach us with their rAAV programs. We were a seven-person startup when I joined, and we have since grown to over 400 employees. My main goal is to industrialize our operations, transition from a startup to an established company, and ensure we meet the increasing demand for gene therapies. We're also expanding our capabilities to support clients through various phases of development, from preclinical materials to Phase II and III trials. We focus on providing the scale and quality needed to advance these therapies effectively.
The second part of our strategy involves investing to stay at the forefront of science as a CDMO. At Viralgen, our goal is to be science-driven in gene therapy. Unlike traditional CDMOs, we focus on innovation and expertise rather than providing capacity for mature products. Gene therapy is about de-risking, not building entire manufacturing sites. To achieve this, we've created a dedicated team of 60 people focused on process development and innovation. This team delves into the intricacies of our manufacturing processes, enhances analytics, and deepens our understanding of the final products. This is a significant step we've taken this year to advance our capabilities.
The third aspect of our strategy is to contribute to both the local and global gene therapy ecosystems. In Spain, where clinical trials are in high demand, we support local trials and partner with hospitals. Ensuring our organization is well-connected and actively involved in societal development is crucial.
As a former Bayer member now with Viralgen, I play a role in maintaining our autonomy; I act as an equity gatekeeper to ensure we don't lose our independence. While I report to a board, part of our mother company, Bayer, I can pull expertise from Bayer; this dynamic ensures we maintain our innovative momentum within the larger organization.
EF: What does San Sebastian provide Viralgen regarding the people, environment, and local economy? Why did you choose that location?
JV: Our location is crucial, and we receive strong support from the local administration. They actively collaborate with us to shape university curricula and training programs, aligning with our workforce needs. Since 2018, we've successfully run a professional apprenticeship program, allowing us to hire graduates who've gained practical experience while studying part-time. This strategic approach has fueled our growth from seven to over 400 employees.
We have close collaborations regarding the expansion of our local technology park. The local administration is exceptionally helpful, providing access to grants for fundamental research and guidance on construction and permits. Unlike other countries, the government's efficiency in Spain stands out. It's a competitive area, and getting things done in Spain seems faster and more effective, a sentiment echoed by colleagues.
EF: What positive characteristics set Spain apart from the rest of Europe regarding businesses like Viralgen?
JV: Our talent base and scientific expertise in Europe, particularly Spain, are significant assets. The region offers highly educated and motivated individuals, making it a prime location for business growth. The cost competitiveness is a driving factor, and as a spin-off from an American company, we chose Spain for its appeal, competitive edge, and investor connections. The city of San Sebastian provides a great living environment, and the local government actively supports biotechnology.
Our low employee turnover sets us apart. In contrast, competitors in the US often experience 10 to 20% turnover. This stability is crucial for CDMOs like us, as it ensures continuity in our team, with people committed to the local community. Our long-term relationships with clients, who have yet to face a complete turnover every five years, showcase the competitive advantage of our model.
EF: How do you assess access and affordability to gene therapies? How can we ensure that the gene therapies you are producing get to the patient and they are accessible to the people who need them?
JV: When Viralgen was founded, it aimed to address the lack of manufacturing compatibility and capacity in gene therapy. Recognizing social responsibility, Corporate Social Responsibility (CSR) is one of our company's pillars. We dedicate part of our capacity to foundations working on treatments for ultra-rare diseases with minimal profitability. We collaborate with foundations globally, offering access to therapies for diseases that might otherwise go untreated.
From a business perspective, manufacturing is inherently costly, so we focus on continuous improvement. Our commitment is to enhance the manufacturing process by exploring next-generation methods to reduce costs. This innovation is crucial for efficiency and driving accessibility, ultimately providing our customers with more value and reducing costs. These are the two areas where our impact is significant.
EF: How do you assess the sustainability of Viralgen’s growth? Will you continue this level of growth in the future?
JV: We've structured our setup into three segments: clinical supply, a separate raw material supply company, which we also own, and the commercial manufacturing site initiated in 2022. On the commercial side, we aim to have three modules with cGMP suites, the first of which is already operational. To ensure sustained growth, we've created a platform that can scale up with increased demand, especially as therapies move from clinical to commercial phases. Our rapid ramp-up aligns with the market's post-COVID recovery, including overcoming biotech sector challenges. Although there was a slowdown in the past two years due to external factors, we anticipate a significant pickup in 2024, which aligns with our accelerated growth expectations in 2027-2028 as we enter the commercial manufacturing phase. With a solid foundation, an established team, and the necessary capabilities, we're well-prepared to respond to any future increase in demand.
EF: If you had to choose three pillars of sustainability, what would they be?
JV: Sustainability, for us, involves responsibly sourcing inputs and ensuring a sustainable manufacturing process. It goes beyond the typical sustainability topics; it means understanding cost profiles thoroughly. This enables us to support our clients effectively through various phases, ensuring their product has a sustainable cost profile in the market. In gene therapy, high launch prices are neither accessible nor sustainable for local healthcare systems. Sustainability essentially boils down to responsible resource use and a deep understanding of cost profiles for sustainable market access.
EF: Is Viralgen the biggest AAV manufacturer in the world?
JV: To my knowledge, yes. We've also released a 2000-liter commercial-grade batch, one of the first of its kind. All the others that are currently available are produced on a smaller scale.
EF: Regarding AAV manufacturing, are there any concrete initiatives you are implementing to increase profitability, shorten the commercialization period, and boost accessibility?
JV: Part of our strategy involves using a technology platform to manufacture gene therapies. We work with a locked-in platform, unlike competitors who start from scratch with each new therapy. This accelerates our time to market, allowing us to supply for trials within six months of the first request. Our innovation strategy includes embracing digitization and IT from the start. The platform generates extensive data across all operations, which provides a wealth of data experience. This digital approach helps us build a strong data package for regulators, giving a clearer picture than others. We gather common data across therapies, which speeds up regulatory processes. While product-specific data is still needed, our digitization strategy accelerates how we assist our clients.
EF: Could you tell us about the true potential of gene therapies and how far this will go? In 10-30 years, how will we use gene therapies in society?
JV: I believe gene therapy, particularly using AAV, will be a major player in the next 15-20 years. AAV has the potential to address a vast range of rare diseases, with thousands of such diseases globally affecting millions of people. Currently, five AAV products are on the market, including a well-known one from Novartis, which provides real data and improvements and demonstrates the actual potential of AAV. With the growing support we and our colleagues are experiencing, AAV's validation and future prominence seem inevitable. AAV will have a lasting presence in the therapeutic landscape. While other modalities will have their space, AAV is here to stay as part of future therapies and their modalities.
EF: What are some of the key lessons you have learned through this year managing Viralgen, and what advice can you provide to future executives entering this particular healthcare area?
JV: In my diverse experience, I've learned that two key factors set Viralgen apart: the people and how you treat them. Success as an executive hinges on understanding and managing people, regardless of the scientific or environmental aspects. Our generation and the future generation values purpose, and as executives, connecting with our team on a meaningful level is crucial. At Viralgen, working with foundations and meeting patients and their families creates an unparalleled connection. Being a purpose-driven leader fosters commitment and something truly special. It's not just a cliché; understanding and connecting with people is the key to driving commitment, contributing to the industry, and achieving accelerated success.
EF: Do you have any final message you want to share with our readers?
JV: The CEO of Regeneron mentioned that despite the hype around AI, gene therapy will be the standout innovation from 2024. I agree and share the hope that this year will indeed be transformative. Innovation in this area can change lives, especially for those lacking viable options. Being part of generating gene therapies that offer hope and alter the course of diseases is something we should strongly support and foster.
