Why Early Biotech Funding Stalls Before Human Trials

From the episode captions, lightly cleaned. Speakers are not labeled, and the text may contain small errors. Time links play the episode from that moment.

0:00 In MedTech, the difference between a good quarter and a great one isn't always the product. It's the friction standing in the way. Broken sales cycles, misaligned teams, deals that stall at the finish line. Every leader feels it, and the best ones know how to remove it. Welcome to Zero Friction, the podcast where we go inside the minds of MedTech's top commercial leaders to uncover the real barriers they face, the decisions they make, and the systems they build to keep the revenue moving. I'm your host, Terry Coutsolioutsos. Let's remove some friction.

Well, welcome to the Zero Friction podcast, and today I have a remarkable guest, Anita Davidson, who is the co-founder and CEO of Creative Biotherapeutics, which is a bootstrap biotech company that's been around for 9 years trying to make um a huge impact on late-stage cancer resistance. And so, I think there's going to be a couple things we're going to focus in on today with regards to friction. One is the friction of actually getting a therapy to the patient, and then the other part is what is the friction with the patient itself. So, Anita does have a remarkable background in healthcare as a licensed physical therapist, and she actually owned a private practice, and so she does come from a therapy delivery perspective. And she's also working with her husband on developing this new cancer treatment. So, Anita, great to have you on the program today, and looking forward to learning more about yourself and what Creative Biotherapeutics is bringing to the market.

Thank you, Terry. I appreciate the opportunity to talk to you. So, it's it's a a a topic near and dear to my heart in terms of friction and how can we reduce some of that friction for the patient. So, kind of a little bit more on my background for those that when when you can start to talk about decades in your career, it's like, oh, does that mean I'm old or just really experienced? But, I've been a practicing physical therapist for over 40 years. I have a doctorate in physical therapy.

But, during that time of working with hospital systems and also as you said going into private practice, I have also been a business developer. So, I see myself as a business builder within the healthcare umbrella. And so, the Creative Biotherapeutics is my fourth company that that I founded and that was in response to my husband's frustration when he was in large pharma as a cancer drug and my frustration as at seeing my patients suffering from toxic and ineffective therapies when they were being treated for their cancer. And so, it was something that really blended our two careers together. So, he had great ideas and skill sets and I am as a fierce patient advocate and seeking ways to be able to make a difference for patients that really with drug resistance in late-stage cancer really have very little hope. And that's the piece that that we're targeting and attempting to reverse.

2:54 So, tell me a little bit about the resistance. Is it general cancer therapeutic resistance? Is it specific types of cancer that you're trying to solve for? Tell me a little bit about the the real problem that, you know, Creative Biotherapeutics is designing itself to solve. So, uh my husband has been So, his name is Dr. Donald Davidson and so, he has been a cancer biochemist for over 30 years and he was he's really focused on starting that with the question of why do cancers become resistant to treatment? Where does that Where does that begin? So, he really started at the end. Why is there continued mortality?

Why is there continued issues? And what he found is that there are some very key survival mechanisms that cancers use to be able to protect themselves from treatment. So, our focus right now is on solid tumors. So, pretty much across the board, what he found on all solid tumors was that the cancer cells push a specific protein to the surface. So, they push this protein out to the surface, which normally is on the inside of every cell. But, under stress or in disease like cancer, it pushes it to the out of the cell. And what that protein does then is it anchors a number of other proteins that help protect that cancer cell. So, some of those other proteins, like there's a few that are called um drug pumps. So, when you have chemotherapy, you get treated with chemotherapy, that cancer cell pumps it right back out. So, some of the cells may die, but several of them will continue to pump that can the uh

Chemotherapy back out. So, then now it's resistant to the chemotherapy. So, then doctors have to go higher and higher with chemotherapy. You get more gut issues. You get more hair loss. And he Don always said that a good oncologist would take the patient to the edge of death and pull them back. Because you have to have try to find that that that balance between killing enough cells as well as being able to help the patient. So, the drug pumps are one area that those proteins and it's anchored by this one big protein. Other proteins that it anchors are also immune evasion proteins. And so, basically the immune cells come in and they bounce right off because they can't see the cancer.

They're they're repelled by these protective proteins on the cell surface. And then you also have some other proteins that are continually protecting that cancer cell. And so, he was the first to identify that upstream anchor protein that helps support all of these other proteins that help keep the cancer cell viable and make it and keep it keep it alive. And so, what his research has been is that finding a novel non-toxic therapy, a biologic, that he actually designed out of normal proteins, natural proteins. So, it's not a chemical, it's not anything that's going to be toxic. He designed a very specific therapy that can remove that upstream anchor protein, and we have found that all those other protective proteins now fall off. And when they're gone, now the immune cells come in and help kill that tumor. A little bit of chemo can come in and help kill that that cancer cell or that tumor, and the body then can naturally take care of the trash. And so, by understanding that why and that deep

6:19 Mechanism, he's been able to design, and we have several therapies under patent and continue to expand, so that resistance is what really is the big problem, the big friction point for patients. First-line chemotherapy may work very well, and some people live a long time. And second-line therapy may work partially, or other immunotherapies and such, they may work for that next level, but there's always that potential for some of those cancer cells to become resistant, where now there are more drug pumps on the cell, and the and the chemo can't can't come in and take out the trash, essentially. And they can also go dormant, and that's what we see with patients later on. They're like, "I'm cancer-free." And 5 years and 1 day later, their breast cancer returns. Or 10 years later, they come back with a different kind of cancer. And it's like, "Wait a minute, how is this happening?" But those initial cancer cells are already circulating when they're diagnosed. And so, that circulating those cells can just they can just kind

Of hunker down and wait until an opportune time to come back up. And so, that's that's where that friction is with patients at late later stage, because the drugs, you know, they may not work anymore because of resistance or dormancy. And that's where we designed and what we're working on our drug to start at that point and then reverse, so that if somebody comes back at that 10 years, they have an option. And we hopefully will be able to move earlier and earlier. But, for right now, we want to provide an option for patients when there really isn't anything except more chemo that won't work.

So, basically you have these defender cells or defender proteins, right? That are defending the bad cells, the cancer cells. Yes. And you've developed another protein that sort of disconnects that protein from the other defender cells from aggregating and protecting the cancer, which allows the therapy to actually do the work that it needs to be done. Is that sort of a simple way of putting it? Yeah. So, the the biologic or the therapy is is supposed to one protein. It's pieces of naturally occurring proteins that will only target the cancer and not the not the natural cells, not the normal cells. Yeah.

So, this probably has, you know, the ability to change the quality of life of patients going through cancer treatment, right? So, Yes. less extreme measures of of cancer therapy, right? So, Uh-huh. you know, the digestive issues, the quality of life issues, losing hair, all that kind of stuff that that come with appetite, the whole thing, right? Uh-huh. You know, so it allows for healthier recovery, would be my guess as well. Yes. And if it does come back, you've got other solutions that actually allow that to adapt a little faster and more effectively as well.

9:08 Yes. Yes. Yeah. You spot on. And that's And that is what that's what the goal is. Because quality of life, I mean, the one the reasons that we started the company, one is we wanted to have a therapy accessible to patients that needed it so desperately. But, also that that was affordable. Because so many so many cancer therapies are so ex- are so expensive. You know, that whether you've got insurance or not, it can still be very expensive. But, also advantageous and really hitting that quality of life issue. There are a lot of great drugs that are out there, but the quality of life associated with it and the side effects that can become permanent really, you know, we talked to someone a couple of weeks ago who went off an immunotherapy because the side effects were so great. He goes, "It's not worth it." He said, "I was having to deal with these side effects all the time and more than the cancer." So, we're really

Looking at avoiding having side effects, and that's what our drug. We've not seen any side side effects to this at this point, and we've had multiple multiple tests. So, it the quality of life is part of that providing an option for hopefully survival when we get into people, but also a quality of life to achieve that survival. So, that's sort of an adjunct therapy cuz that's not really the cancer therapy itself. It just opens up the cancer therapy to be more effective, is what I'm understanding. It operates on a three-pronged approach with letting, you know, the chemotherapy work, but also the immune therapy. There is a third prong that we don't talk about that's more proprietary. But yes, our therapy does assist with cancer cell killing, but with with focus on that.

So, that's that that three-prong kind of lets it kind of get a get that extra punch in there. Helps helps move it along. Well, cool. Well, you know, that I I appreciate that part. I'm going to pivot just for a second and kind of move to, you know, Anita Davidson, the the business owner and the developer. And this kind of give us a little background on your business experiences and how this new endeavor might either, you know, it might coincide of either similar to what you've done in the past versus might be different. So, how does Creative Biotherapeutics Creative Biotherapeutics differ than the other businesses that you've already started?

In some ways, extremely different, and in other ways, what I have learned is that business is business and most of it is about people and relationships and systems. So, from my background when I was a early practicing therapy therapist in about 3 years, I started to get a little itchy. And it's like, what can I do? I need to do something else. And so, I went to my boss in the hospital at the time and said, what can I help you with? What can I do?

11:49 And that started a kind of a chain reaction of okay, you can do this program. Okay, well now we need this business you know, venture line expand. Okay, I'll do that all while continuing developing my clinical skills. So, I was as a bit of a workaholic, I would be teaching classes, doing seminars, teaching you know, practicing and treating patients but expanding my business development experience as I went through a couple of different um employers but also different organizations. So, my focus was really on how do we build better systems? How do we build better programs for patients through education, through training through early identification of disease or injury. And so, that was really my focus throughout as I moved up in administration, I still continued clinical.

And then at about 15 years, I said, you know what? I don't want to just do hospital administration. I'm I I don't care to be up in the C-suite. I'd spent enough time sitting at that table and it's like, I want to be able to do something hands-on. So, with the support of my family, I started a private practice in the extra bedroom over the garage. And started it and talk about bootstrap. I had a I had a mat and a sheet and a reputation. So, I in a very short period of time, I started getting more and more referrals where then it was too much. You know, I wanted to be home more with my kids. But then it within about a year or so, it was had expanded. So, I started hiring, moved into a clinic, expanded from there.

But throughout that time period with patients, different opportunities came in different holes still in patient care presented. I had had exposure and experience working with pain programs in within the hospital. So one of my after my private practice started, a local pain program at a hospital was discontinued. So they came to me and said, "Hey, the physician and the psychologist and they're saying you you get this, you know, can we start this?" And so I'm like, "Yes, but we're going to do it under the functional umbrella.

We're going to do it as a different type of model so that we're really focusing on education and function for the patient. We're not focusing on drugs. We're not focusing on the passivity that's been there in the past." So that was formed and then I kept finding patients coming from other therapy places and there was such a hole in the knowledge that I had is by this point I became at an expert level and the things that people were being taught were not as effective as they could have been. So then I started another company where I was doing I traveled the weekends um doing um education and training programs for physical therapists to try to teach them a different model for looking at the patient as a whole and looking at the patient from not as a knee or a shoulder issue, but why is that there?

14:39 Getting to the underlying issue of it. So that's where the similarity between Creative Biotherapeutics and my private practice was I was always trying to look at root cause. And so in in pharma, my husband was always looking for root cause. So very very different paths, but as I continued with my business development, I saw things that were being shelved pharma wise that frustrated me because they could have really played out well. So I started as he says bagging on him over and over to start Creative Biotherapeutics and it took a it took a few years before finally he said, "I agree." And that's where we really wanted to blend both my patient advocacy and building and business experience by this point with his scientific knowledge, but look at root cause and look at how can we change the paradigm for patients that currently have no options. That's that's really how it came to blend. So, business-wise is very similar in terms of setting up systems.

I did a lot of project management throughout that time, even to the point of excuse me, building my own my own Must be around in the backyard somewhere, right? Yeah, he's he's right out here. He's trying to chime in on the on the conversation. But even doing my own project management for my clinics for construction. And so it's like I'm always trying to look how to learn more and you know, how can we build efficiently? Whether it's a drug or whether it's a system or whether it's a you know, a new opportunity business-wise. So, that's kind of So, yeah, we've covered leadership, you covered, you know, entrepreneurship, you've covered patient advocacy, you've covered, you know, building and you know, from a business development perspective because without patients or revenue, there are there is no business and I think those are all the a great thing there. So, let's talk a little bit about the environment today and so, you know, you're looking for some funding,

Right? You want to you want to make this a reality for patients. You and your husband Don have already kind of taken it to a certain point and now you're looking for, you know, another round. What has that journey been like for you? Just on the whole fundraising piece. Let's why don't we go back a little bit and get us up to current and then, you know, we'll talk about some of the the fundraising goals a little bit as well. Yeah. Yeah, that was I think probably the hardest lesson to learn because when I when I took on this role, I said, "I've always made money. All my projects were revenue positive. I've always made money. I can do this. This is not a problem." And you know, the first million or two that we had from private investors and that we contributed ourselves, that was relatively easy. It was developing relationships with people and our investors, early investors, would write us a check. And that was

17:28 Great. And then participating in grant applications and such. And so I'm like, we can do this. Unbeknownst to me, there's a whole different level of understanding that needs to come with institutional investors versus a private angel investor. And that has been one of the things that has probably been the greatest frustration but the greatest learning for me since taking this role. So my cockiness has really, you know, gotten knocked down a couple of times on being able to generate revenue because I know what we'll be able to do um for the patient benefit and in the market. But at the same time we started looking at an institutional investment that's at the same time institutional investment went very dormant because of things happening in '23, '24, and coming off of COVID, all the money that had been flushed into the market, there suddenly was retracting back. And venture capital wasn't looking for early. And suddenly the pharma companies weren't looking for anything early. So everybody follows suit. So that it's like, you know, come

Back when you're in phase two. Come back after you're in people and you've proven it. And that's really difficult when you need a certain amount of money just to get into your first phase one. You know, it's not you know, 4 million isn't a lot to be able to get regulatory approval. 10 million's not a lot to get through phase one on the scheme of things. But the market retracted and unfortunately, in the last couple of years, the bulk of revenue or bulk of funding has gone to kind of opportunities. So that's been a challenge, but we're you know, you learn from experiences. One of my phrases that I've used for years is that experience comes from failure. I'm very experienced. So I I I'm I'm not afraid, you know, I'm I'm not a I'm not afraid of failing. I don't like it, but whatever time something hasn't gone in a straight arrow like I expected, then I I reflect back to okay, what did I learn from

This? What was the universe telling me that I didn't get? And if I can learn from a bad experience, then I can use that to move forward. And that's that's what I've been doing in finding the right pathways and the ability to tell the story in the right way to the right investor. And so we feel like we're much closer than what we've been. We've we've had some recent opportunities and there's some movement and some excitement with institutional investors, but it's still until the check hits the bank, it's still not done. And we've in the last year we have been promised 35 million, we've been promised 10 million, we've been promised a million, and none of those kind of actually came through into fruition. So the the learning curve has been tough, but I you know, one day when I write write a book on for new new on Trump entrepreneurs in biotech, that will be one of the things. It's like you learn from everybody else around you that you can and Right.

20:27 Keep learning. One of the things that I've always said in my career, you know, when I was working with teams and we were experimenting and venturing into new unknown territory, right? I've always told them I said, you know what? Like failing is okay, but fail fast, fail cheap, and don't fail the same way over and over again. And so Exactly. that can be learn fast, learn cheap, and don't learn the same things all over and over again. I think you and I kind of fall in line with that is that we understand running businesses, running teams, taking on the challenges, you have to take some risk. If you don't take risk, you don't you really don't advance. And perfection is never going to be, you know, achieved, right?

True. there's always some element of failure or not achieving exactly what you want, but it's about getting back up, learning from it, and then gaining new traction. So, you're right, like the market, and I've I've interviewed so many other people that are doing early-stage type of work and looking for money, and you know, this is where the venture is kind of a lot of venture money is getting thrown into AI. It's a very, you know, there's a couple things in that environment. In healthcare, hospital systems in healthcare is one of the fastest adopting adopting market segments for AI today. All right. So, healthcare systems are throwing AI in every direction, and they're trying to figure out what's working and what's not working. You know, you can get software systems up and running in 6 months that generate cash flow, right? And so, you know, I think maybe trying to find a way to look at the purposeful mission sort of linked investor, you know, is a really interesting play, and, you know,

Have you thought about, like, you know, family office? Have you thought about different angles on angel and things like that where, you know, those groups tend to be looking at purpose and mission and outcome and what you're doing to support society, um and they're not quite as financially driven as maybe some of the other investing markets would be. Yeah, absolutely. And that's been our preferred target from the beginning. The difficulty is getting through the gatekeeper to get to the actual family office. And getting through and and finding them because you can't just really go online and and find anybody.

Everything has to be through a warm introduction. So, to to that end, what I would recommend to anybody listening to this is there are no coincidences. Take advantage of every introduction that you have presented because you don't know who on the other side of that may actually be the gatekeeper for a family office. Which we're talking with someone right now out of Singapore that is the gatekeeper for several family office office and so that is trying to get to someone that really speaks to it and has had that impact or wants to do something that's unique and life-changing.

23:13 Fighting that family office but also one that hasn't been burned by a therapy that has failed in the past and and that's where you you kind of pay the price on the people that came before you. So yes, we we have pulled every string, we have followed every introduction that we could get to either to get to a better animal model that is less expensive or to meet someone that we never thought we would meet. And buyer beware, we've been in the middle of what were a couple of fraud opportun- opportunities, too. So if the money looks, you know, if it seems too good, it is.

Um but yeah, we've been approached from out of Abu Dhabi that ended up to be a fraud and so we kept digging and digging and digging until we could prove that it was a fraud and not pursue and through other people's support and then also one out of Zurich that seemed like it could have really been valid but then by digging and digging and the support of our current investors, we determined nope, we didn't know it it could have been a money laundering situation. Okay. And so just buyer beware also. We can you can get really excited about the money and the dollar amounts but you have to really look at from the integrity of your business. Be careful where the money comes from and make sure it's who you want to get in business with and how do you want to have your company identified when down the road you're successful and the media comes at you or other competitors come at you.

You want to make sure that you can stand on solid ground with the funding that you have and so that's been a learning and be staying compliant with the SEC is one of the big learning curves that I've had is to understand their rules and regulations and follow those to a T to stay compliant. So, it's it's So, what's your pitch to a family office? Like, what's your sort of your 90-second pitch? You know, what's your elevator pitch to, you know, somebody that you're connecting with on family office about, you know, what you're doing, how you're doing it, and why you're doing it.

Like, you know, what does that sound like? Yeah. It varies on the day, but you know, just on on one level, so you know, imagine that you were a family member returns to your doctor and you're told, "I'm sorry, your cancer's returned and there is nothing else for you. And get your affairs in order." But fortunately, with CBT-300, which is our novel biologic, that won't be the case in the future. We've designed a novel non-toxic biologic that actually identifies and remediates the root cause of drug resistance and immune cell evasion that we have seen increases survival without the side effects and with the high quality of life that you would want for you or your family member. And this biologic is right at the edge of getting regulatory approval to beginning to be to begin our phase one clinical trial and we're targeting metastatic breast cancer with um women who have or do not have brain mets. Because that is a population that in the United States over 40,000 women die year over year

26:18 From metastatic breast cancer despite all of the new interventions. So, for 30 years it hasn't changed. And we're committed to changing it and we're hoping that you might be interested in learning more. So, there's my Wow. 40,000 lives a year. In one hasn't And that number haven't really moved with all the I mean, you would think that with incredible awareness that breast cancer has, I mean, it probably is arguably one of the most widely known, you know, branded chronic diseases out there. And we're still where we were 20 or 30 years ago. It's kind of crazy. But that's where the new techniques are much better and people will live longer than they used to. But that drug resistance and immune evasion ultimately, you know, comes comes around for those it circles back, right? Is what you're telling me that disease comes back.

Yeah. And so with what you're creating that that will be a reality treatment for somebody versus get your affairs in order conversation. Exactly. Exactly. And my unfortunately, my college roommate died from triple negative breast cancer at the age of 49 and just yeah. And so we carry her carry her with us. Um I've also had several patients die. One was a 15-year-old with brain cancer that we just lost about a year and a half ago and I carry him with me because our therapy will impact, we believe very strongly and based on our data with um canines with brain cancer.

It's going to make a huge difference in those late stage drug resistant cancers and we I know that we could have helped Parker and it's it's a painful painful thing to know you have something and that money is what is holding you up. So that's Well, and what a great mission by the way and you know, having Parker and having your college roommate to put on the shelf every day to give you that inspiration to drive forward is is wonderful. And so with that, you know, if your family office, if you're angel investor out there today, where can they connect with you Anita in order to, you know, set up a connection and a meeting to learn more?

Um they are Now, I have to be careful but going back to the SEC, sorry, but I can't I can't broadly solicit according to our our but but if someone would like to hear more or if they have a story they want to share with us, you can reach me at a.davidson@creativebio.tech or you can check out our website at www.creativebio.tech. So. Awesome. Well, we'll make sure we get that highlighted in the the podcast production as well. And with that, you know, we'll close out. I do want to say thank you. You've been a a big inspiration for me. I've learned so much today. Thank you. So, we have leader, entrepreneur, business developer, you know, looking to change the way healthcare is delivered. Anita Davidson, thank you so much. We appreciate you.

29:15 Thank you so much, Terry, for the opportunity. It's it's been it's been fun. Thank you. Have a great one. You, too. Bye. That's a wrap on Zero Friction, the show built around one simple idea. Remove the barriers and the revenue will follow. If today's conversation was valuable, please subscribe and share it with somebody who needs to hear it. That's how we will grow this community. I'm Terry Coutsolioutsos, just a revenue architect powered by AI. Come find me at my website, myrevarchitects.com, and let's talk about what friction is costing you and your organization. Until next time, keep removing the barriers and keep the revenue flowing.