David Li - Meliora Therapeutics - Part 1

Intro - 00:00:01:

Welcome to The Biotech Startups Podcast by Excedr. Join us as we speak with first-time founders, serial entrepreneurs, and experienced investors about the challenges and triumphs of running a biotech startup from pre-seed to IPO with your host, Jon Chee.

Jon - 00:00:23:

My guest today is David Li, CEO and co-founder of Meliora Therapeutics. Meliora's goal is to develop life-saving cancer therapies using cutting-edge science and machine learning. The company derives a comprehensive picture of how drugs interact with cancer biology by combining biofunctional readouts from numerous modalities using advanced machine learning and other computational techniques. Before Meliora, David served as Chief Business Officer at Everest Detection, an early detection liquid biopsy startup, and was head of commercial operations at Benchling, a life sciences software platform company which has achieved a $6 billion valuation and has attracted over $500 million in funding from firms such as Altimeter Capital, Tiger Global, Lone Pine Capital, Benchmark, Sequoia, Excel, Lux, and numerous others. David began his career in Goldman Sachs Healthcare Investment Banking Group and KKR's Private Equity Group, where he advised and invested in transactions worth over $10 billion in enterprise value. David's multifaceted experiences in the financial and life science sectors gives him a wide range of experiences that founders can learn from. Over the next four episodes, we cover a wide range of topics, including David's early years in China, Kentucky, and Chicago, his journey from finance roles at Goldman Sachs and KKR to his work at Everest Detection and founding Meliora Therapeutics, and his pioneering work in using AI and ML for drug development. We'll also explore his experiences at Benchling, his mentorship roles, and his insights into the biotech industry, from early-stage lung cancer detection to precision medicine and targeted therapies. Today, we'll chat about David's childhood in China and Kentucky, developing a passion for biology and chemistry at a young age, and his experience in the UPenn Life Sciences Management Program. We'll also touch on his time at Goldman Sachs, insights he's gained from Fortune 500 CEOs, his mentorship through Need You in New York City, and his ongoing commitment to innovation and patient impact. Without further ado, let's dive into this episode of The Biotech Startups Podcast. David, good to see you. Thanks for coming on the podcast.

David - 00:02:13:

Thanks so much, John. Excited to be here.

Jon - 00:02:14:

Yeah, we've been really looking forward to this. And we always want to start the conversation in the earliest days so folks can really learn vicariously through your lived experience. And turning back the hands of time, what was your upbringing like? And how did it influence your leadership style and business philosophy?

David - 00:02:33:

Absolutely. To bring it all the way back, I was born in China, came to the States very young, three and a half to be precise, and then landed in Kentucky of all places. My dad was a software engineer and my mom also was in the IT field. They were graduate students coming over from China. And so that's where we landed. And I spent nine years in Louisville, Kentucky, and then high school at Chicago in a suburb called Naperville. And it was a classic kind of middle-class suburb kind of place, all American, went to a large public high school, and then ultimately found my way to the East Coast and to college at Penn. It was a very big change in terms of culture and language and environment, surroundings, everything to go from Hunan, China, which is where I was born, when my grandparents were taking care of me, to Louisville, Kentucky, when I first came to the States. And I think that really shaped me at a pretty formative time where I got comfortable being kind of an all ball out and really being able to be adaptable, really being able to have gained a sense of self, even though it is very different than what the mainstream was speaking or talking and kind of really was able to be finding comfort in self-confidence. I think that's also a journey every leader needs to take. It's kind of really finding their own true north. Why do they want to do it? What are their own motivations and trying to kind of how to lead through adversity? So that was very, very important for me. But also another big part of ultimately where I landed in terms of being in biotech is having a really strong focus in the math and sciences, even since childhood. And I remember even in middle school, really being excited about biology, chemistry, digging deep into learning around the physical world around me and having a strong curiosity, reading a bunch of science books. I used to read a biology textbooks, front cover to back cover, which I think a lot of my friends thought I was really whacked out to be doing that. And that led in high school to several research internships and also experiences that really helped shaped my academic and ultimately professional career goals. In the summer of my sophomore year in high school, I was selected to attend a program called the Research in Biological Sciences at the University of Chicago. It's essentially on site. You stay there a couple of months. You get to work in a lab as a high schooler, understand what research is, get your own project at the end of that experience, and put together methods, data, results, put together the whole nine yards in terms of a paper output. And that was really, really eye-opening. I thought I really understood better what science was all about and kind of crystallized what that interest could be. That was then a springboard into being part of science competitions, time with things called Siemens and I think it's called something else now. But anyway, just being a part of science competitions, even in high school, that allowed me to see the broader scientific world beyond AP biology, AP chemistry, and kind of wrote memorization from a textbook. And that really grounded me, I think, ultimately in what later on in my career I've gone to do. I remember in that period of time. I was also right when Fire and Mello got the Nobel Prize in RNAi. And it was such a breakthrough in molecular biology and the techniques that would be possible. And so all of that I thought was really exciting and kind of really kindled my interest from an early age into my interest in science and thinking about what I want to do later on in my business life.

Jon - 00:06:16:

That's amazing. Frankly, I'm a bit jealous because my early introduction into the sciences was the road memorization. And was like, oh, I can't do this anymore. I really can't. It is really all there is in front of me. It's just like there's jamming facts into my head and got lucky to get a lab experience in my undergrad. And to hear about your ability to get that exposure in high school is so cool. It's really, really cool. And I guess with your upbringing, obviously your parents were in graduate school. Did they foster this love of the sciences at the home? Or was it something where it came from within and you're just like, I have a great resonance with this.

David - 00:07:01:

No, that's a great question. My mother was a physician back in China, but she changed jobs. And changed professions really when she came to the States. And my dad was a math teacher. And then, so I think the two of them had the math and sciences well covered back at home. And I knew all along I wanted to do something in the math and sciences, but it really was until the high school time period where I remember being in AP bio and biological sciences classes were some of my favorite classes growing up, really wanting to do more, engage with the subject and the topic. And that's the ultimate reason why I started looking for camps that might allow me to do research even at a pretty early age. And yeah, so I think it's just one thing led to the next. And perhaps it wasn't like this seminal moment where I knew, knew, but I just felt, hey, there's something interesting. And I would go out and read up on some paper and then think about, hey, how could I actually do this in practice? And that led me to some of the experiences that I had.

Jon - 00:07:59:

Very cool. And when you were talking about moving to Kentucky, so my parents also had a similar experience. My parents. Came here for grad school as well. Also as the leader of a company, I share that same feeling of taking that oddball, like just being the odd one out. Now I've kind of internalized it, but a lot of the time, founding a company, it is kind of a crazy thing to do. And you got to be comfortable in the pocket. Unlike in football, the pocket being where you want to just like the safe space. It's like, this is where it's just like, you are looked at as a crazy person for a very long time until you're not crazy. And you're now successful or whatever it may be. But I think about it in my upbringing too. I was like, huh, definitely it was an odd one out as well. So that really resonates with me.

David - 00:08:45:

Yeah. I think it's a tricky balance, right? You kind of have to be both an oddball out, but right. It's the combination of the two that's important. Yeah. So I think being able to think independently is perhaps oftentimes the harder one to get right. Because you're growing up. You want to fit in and have friends and be popular, et cetera, as all kids want to be. But I think channeling that into a way that is really laser focused on ultimately what you want to do and the impact and things like that are things that I think about all the time. How do we kind of nurture that? And even for example, the next generation, there's a questions that I do think about quite a bit and kind of exactly harken back to my earlier days when I first came to the States.

Jon - 00:09:28:

Absolutely. And so now you've kind of found this spark for science. You're onwards to your university experience at UPenn. I know you studied biology, but what got you to also focus doubly on finance as well? Was that just like a, this could be fun as well.

David - 00:09:44:

Yeah, no, that's a good question. So I actually chose Penn because they accepted me into the dual degree program, which I attended called the Roy Vagelos Life Science and Management Program. It was a very new program at the time. I think I was the second or third year in the program, but Vagelos is the longtime CEO chairman at Merck and had really given the thought that perhaps a lot of scientists should know more about the business of making drugs and being in biotech. And on the flip side, perhaps more folks on the business side in the suits could actually understand the fundamental science that is driving the value in the business better. And that's why ultimately he decided to start this dual degree program. It's a small program still, 25 kids per year. And it really gave me an incredible exposure to life sciences and entrepreneurship. And also thinking about the career trajectory that I ultimately wanted to take. To give a little bit more context on how that all unfolded, then one of the experiences that you're required to have in the program is you're required to have essentially kind of an R&D internship and a business internship. For the R&D internship that I had, I knew I wanted to do something earlier stage, more entrepreneurial. And I think partially it was also a request that I made to our director who helped set up the internship. I wanted to come to the West Coast and get some sun and be in California for a bit and just see what it was like. And so I ended up spending a summer in 2009 with Ari Belli down in UCLA. And he, at the time, he'd already been a successful entrepreneur in biotech. He was thinking through his next ventures. But he ended up starting in that summer, Tide Pharma, and really thinking about the novel technology platform that was cell therapy. So I was just kind of a fly on the wall during that summer, talking to a scientist, putting together papers and data to really think through the initial experiments we wanted to run, what were the initial key proof points we wanted to unlock, go, no-goes, et cetera. And really inspired me to think about, this is something that we're just thinking about, but actually could actually improve the life of a patient. A lot of folks then ask me, why did you stay and things like that? But I was only sophomore as it was back then. I didn't know left and right in terms of what I wanted to do and what was even happening, or even how potentially special of an experience that could eventually be. But I learned a lot from Ari and his team, and that really planted the seed for later on. When I was thinking through my career path, back to that initial experience, how do we get to really making clinical and patient impact and thinking very, very critically about a career path that may lead to that? So that was absolutely huge in terms of setting a real spark for me and ultimately being very focused on life sciences and particularly entrepreneurship and life sciences. On the business side, I think what really happened there was Penn is an extremely pre-professional school. Many East Coast institutions, I think, are like that. But Penn, I would say especially so. I mean, you have the Wharton School there and just a lot of gravitational pull on campus towards certain career paths. And the saying goes that everyone there who thought themselves smart and hardworking thought the best experience that got me out of school was probably in either finance or consulting. And so I thought, I too am a smart and hardworking person. Maybe I should do that. And so then I decided to choose investment banking as my career choice coming out of school, worked hard to be able to land at the right spot and was very fortunate to start at Goldman. And that was in New York. I had an internship at Goldman for my junior summer, which then converted into a full-time and really learned a ton at Goldman. Really, really had a fantastic experience. Can't say enough positive things. I think there's a lot been bantied about in terms of just the negatives of being in the industry. And I think those certainly can be true. But for me, I was a 22-year-old, 23-year-old out of school, being in boardrooms with C-level folks at critical junctures during time points in a company's life cycle when they're about to be sold or they're about to buy someone or they're going public. And it's a really seminal moment for these businesses. And to be in the midst of that, in the room when the CEO decides what they're going to do or to be a big part of those discussions as kind of a fly on the wall, of course, as an analyst, you're so junior, you're lucky if you're in the room. But many times you were. You got to really rub shoulders with some really high-powered folks. And you could see the gravity of the situation as well in the sense of these moments impacted not just the people in the room, obviously, and the shareholders and whatnot. But people's livelihoods were impacted. Patients were impacted. And thinking about whether certain drugs would get to market or not and whether they would get financed or not. And it was really eye-opening to be able to have that. So I can't say enough good things about getting started at Goldman. But that's ultimately the first initial mix of having science, but also getting my first training experiences on the business world as well.

Jon - 00:14:52:

That's amazing. I mean, it sounds like the dual degree program, you were able to utilize it. It's very rarely when you come out of your early education where you're like, I'm using my degree exactly right now, early gigs. But being in healthcare at Goldman sounds the perfect marriage of the two. And for the scientific folks out there who are listening, who may not be as familiar with the finance side and investment banking, broadly speaking, first, could you just define for everyone what even is investment banking? And then for those who want to have a similar experience, learn the chops and be in those rooms. How do you even land an investment banking job? So I guess two questions there.

David - 00:15:32:

Yeah, maybe just fundamentals of what is investment banking. There's a lot of parts of being an investment banker. Essentially, you're kind of like a real estate agent for pieces of land. And in this case, the land is actually a company. And so what you're doing is you're either providing a service of trying to sell the company in the sense of whether it's a merger or an acquisition, some company trying to buy you, you want to make sure you're getting a fair price. You want to make sure that similar to having a real estate agent, when you're selling a house, you want to make sure that there's a nice kind of flow to the story. You want to make sure the room's all decorated nice. You want to make sure the lawn's all taken care of and a banker will come in and really be able to put that together for you. And also similar to a real estate agent, they see a lot of transactions, right? So they see what is a company like yours supposed to be trading at in terms of the assets that you have, the indication you're in, your stage of assets and multiples in certain cases. If it's kind of a more traditional revenue-driven business. And on the flip side as well, when you can be represented as either a buyer or a seller. So in cases where you're trying to buy a company, whether you're a large pharma company or another financial organization that's trying to buy some revenue stream, like an asset or a royalty or something, you want to make sure you're paying a fair price. You want to make sure that you're really getting the best price possible for the asset you're buying. So in the most basic instance, that's kind of how I think about investment banking, what people do. Maybe a little bit to break it down to the level of what you've learned at the analyst level or even the more junior ranks, because it is very different that the roles exchanges significantly over time. When you just come in, you're really learning how to run evaluation analyses for different types of companies and assets. And for me, that was the biggest draw. How much this company worth because of these assets that it has, how much is each asset worth? How do you then put it all together? And then say, okay, I'm going to put a premium in all this and then buy it. How does that all come together? And so I was really fascinated by understanding kind of the key value drivers for business and for biotech in particular. And I think that is helpful even to this day where I'm now running therapeutics business. We have to think about ultimately, how is Wall Street going to value this? What is the value that's going to be capture and value unlock that we need to return to investors? And that does have significant, I think, strategic guidance, even when the earliest stages we were thinking about target selection and indication selection and things of that sort. To the second part of your question, which is around investment banking as a career path and kind of how to get in. I would say there's really two clear entry points. One entry point is right after undergrad, but some people actually go do another job, corporate finance job, work as a financial analyst and something else and then come into investment banking. That is a career path, I've seen happen. To do that, you probably need to do a lot of networking, but that's kind of the case as in most places in the business world. The second natural place to get in that's kind of a structured intake opportunity is after grad school. So it doesn't necessarily have to be an MBA, but any type of grad school program, there are some on-campus recruiting opportunities for some institutions that allows you to kind of really meet banks and enter that career path. So those are, I think, the kind of two natural places. I have seen ultimately later on in people in their career, especially in biotech, where you may, for example, go into a different part of the investment bank at first. Maybe you're an equity research analyst or sell-side analyst, which is different than being an investment banker. An equity research analyst is you're basically providing an investor, a public markets investor, a service to say, I'm covering the happenings of this stock, of this company, and basically writing up a report and keeping up with the market and the times, which is different. That's truly like a service versus as a investment banker, you're representing a single client rather than providing a service towards the market in general. My point being that there are opportunities as someone being on the sell side analyst, as an equity research analyst, to go into investment banking and also vice versa. There are also times where an investment banker may decide to join a sell side service.

Jon - 00:19:46:

Very cool. Something that you said that really stuck out to me was how you carry the lessons learned, like the valuation aspect of a given asset and what that might mean on the other side. Bringing that into the various earliest, most nascent days of a company is so critical. I'm painting a very broad stroke here, but sometimes at least in 2020, 2021, that was not really a consideration. Just like to the moon, send it. Like we're going to send it versus this analysis that you're kind of talking about now is far more like, no, no, no, no. Like this isn't something we can just pray for at the end. We need to be very cognizant and we need to plan around this and that's better for all the stakeholders. And I'm going to imagine being at Goldman. Like you said, you see the transactions, so you kind of know the process and you see how things are actually unfold rather than just it being theoretical on a prayer.

David - 00:20:39:

Yeah, exactly. I think there's a lot of nuances to how do you pick an indication that will ultimately have clinical impact. And I think that should be the North Star. North Star is, let's make a patient's life better, extend their life, really change their life meaningfully in a positive way. With that being said, I think the only way to have patient impact at scale is to unlock value for investors so that we can get the capital to repeatedly have patient impact. And that means that we need to be very cognizant at the very least and very strategic as your operating principle around thinking through, is this the right program for a small biotech to be running? Do we have a chance at really having an outsized impact in a certain indication or a certain treatment paradigm? I think that really, like you said, in terms of building the models itself, I have put the models together where I spit out a number that says, with this many patients, this many sales, with this type of reimbursement, these types of costs on the other end, what is the cashflow we generate? I'm a big believer in innovation, a big believer in platforms, big believer in having that innovation bring a brighter future for us. And so we can't just be counting our cashflow and being like, okay, that's it. But at the same time, we need to deliver real value. And I think that's a good barometer for determining if we deliver real values, if someone is willing to pay for it. That's probably true.

Jon - 00:22:05:

You hit the nail on the head how it is critically important to be able to kind of have these two disciplines play together and walk that line. Capital formation is critically important. But also, you're right, the innovation on the other side of the spectrum, critically important. And you need to not forget and neglect either side. And probably the pendulum swings every so often. It's a healthy kind of tug of war amongst your teams, I'm going to imagine. But also, the capital formation aspect of it is like, as a leader, you need to be empathetic and really think about, okay, at the end of this, what's the public market's going to think? And what's big pharma potentially going to think? And they themselves are running that model. It's like an empathetic exercise. You're like, I'm going to imagine they're going to run a model like this. So let's try to put ourselves in the best position as possible, but not necessarily have that be the 100% governing factor to what we do here. And I'm jealous too. Like, when I came out of the lab, Excel was like, I was like, oh my God, how do I do this? And then when everyone was like telling me, oh yeah, you're not even supposed to use your mouse. I was like, what? They're like, oh yeah, that's a drag on how quickly you can get things done. And I was like, oh my god, I'm so far behind. So impressive that you were able to do both the science and also just be an absolute, just like modeling wizard.

David - 00:23:22:

I think over time, you kind of have to have both, right? As you're saying here, you really have to understand the science, how it translates. I would say some basic financial model understanding is perfectly fine as long as you understand the value drivers. And there have been so many really impactful entrepreneurs that didn't know the finance side, right? That were really pioneers on the science and ultimately captured in some sort of clinical value. But I think that is the bottom line. Is there a clinical value here? Is there a difference in someone's life that was made and that really can change their health trajectory? So yeah, I think Goldman in that sense really trained me to have the right orientation for ultimately where we landed. The other things I learned from Goldman are it really helps, I think, to be more confident walking into any business situation knowing that, hey, I've seen Fortune 500 or Fortune 100 CEOs and how they talk and how they walk, even small things, how they shake hands, how they treat the room and how they treat their teams. And I took a lot from that. Because growing up, I hadn't had any interactions like that before. So learning how to be professional, learning how to comport yourself and move around in the business world, so to speak. If you've never done it before, it seems like a totally foreign world. But once you've seen it once or twice, you're like, oh, okay. That's just how kind of meetings are run, how board meetings are run, how intro pitches are made, it's very basic stuff. But I think stuff that it does make an impression, it is important in the business world. And at least I think so. It does make difference as well in terms of the ability to successfully raise money as an entrepreneur, successfully recruit people. These small things, I think, are very indicative of the overall quality and feel an organization. So I definitely took a lot from that from Goldman as well.

Jon - 00:25:03:

Absolutely. And before moving on from Goldman, were there any specific mentors or colleagues that kind of took you under their wing while at Goldman?

David - 00:25:10:

There's so many, but I'll call out, I guess, a few. I worked with an associate that, she was an associate and I was an analyst at the time. Just really showed me the ropes of all types of different types of analyses. It was a really hard driving boss, really learned what it feels like to have pages on pages of red ink, she fixing every detail, but it's because they care. And it's because they care about their own work. They care about your work. They want to make sure you're growing. Her name was Naomi Leslie. So if she ever listens to this, I really attribute a lot of my learning to working closely with her. But there were a lot of people like that at Goldman. I think that they really cared about training and up-leveling their people well. And to the point I made prior on how to think about organization, construction, and culture, I think having a really high bar is something that you have to see to feel it, to really know what it feels like on a day-to-day basis. And that is, I think, probably the biggest learning from Goldman is the kind of the standard they hold themselves to, their organization. Now in my career, and personally as well, I kind of have this saying, which is, how you do one thing is very indicative of, generally speaking, of how you do everything, even the smallest things. And when I went into Goldman, I think there are a lot of things I was like, oh, that's like no big deal. Why not just take the shorter path? And it always comes back. Some small shortcut that you took, either on data or presentation or analysis or whatever, it always would be caught. And I realized over time, it's like, okay, just build the best foundation. Just take the time, go steady, and go slow as you need, but with urgency. And I think that early in my career, having been able to be exposed to that really gave me a lot of ideas later on, helping shape and form my own organizations, what is important, even from the most strategic things all the way down to very, very small details.

Jon - 00:27:00:

Absolutely. I get fired up about this because I preach the exact same thing in Excedr. The level of attention and care is just so critically important because those become habits and it becomes the DNA of your organization. This is how we behave and we hold ourselves to this very high standard. It's critically important. And on the mentor wavelength, I know you were a mentor coach while in New York and New York Needs You. Can you talk a little bit about that? Was that simultaneous with Goldman?

David - 00:27:25:

Yes, that was simultaneous. So New York NJU was a organization, still is an organization that pairs first-generation college kids with young professionals who can help coach and guide through early steps of their career path. And so I had the opportunity to work with, basically, these were folks who were at City College or Community College in New York City, and very often came from just disadvantaged backgrounds. And it was really, you know, very, very compelling work in the sense that it was actually pretty intensive for the first couple of years. You can have a meeting pretty much every Saturday, I think, for quite a number of months. But they really want you to really start to make a difference. Kind of, I think, if you just have a call here or there, it's kind of like, ah, okay. But once you do it like a weekly cycle, it becomes powerful in the way that you can really drive change. So I took a lot out of that. That was really great. And learned a ton about especially seeing the grittiness and resiliency of folks who really want something. I think it adds more kind of color and feel to the fire for myself personally, as well, to take advantage of opportunity for whatever life can give, because we should not take it for granted. It's important, I think, to have that reminder sometimes.

Outro - 00:28:33:

That's all for this episode of The Biotech Startups podcast. We hope you enjoyed our conversation with David Li. If you enjoyed this episode, please subscribe, leave us a review and share it with your friends. Thanks for listening. And we look forward to having you join us again for part two of our conversation with David. The Biotech Startups Podcast is produced by Excedr. Don't want to miss an episode? Search for The Biotech Startups Podcast wherever you get your podcasts and click subscribe. Excedr provides research labs with equipment leases on founder-friendly terms to support paths to exceptional outcomes. To learn more, visit our website, www.excedr.com. On behalf of the team here at Excedr, thanks for listening. The Biotech Startups podcast provides general insights into the life science sector through the experiences of its guests. The use of information on this podcast or materials linked from the podcast is at the user's own risk. The views expressed by the participants are their own and are not the views of Excedr or sponsors. No reference to any product, service or company in the podcast is an endorsement by Excedr or its guests.