Naheed Kurji, Co-founder and CEO, Cyclica on how the startup raised CAD$40 million to build an AI-augmented drug discovery platform –

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Naheed Kurji is co-founder, President and CEO of Cyclica, a Toronto-based biotechnology company. Cyclica has developed and commercialized a comprehensive artificial intelligence-based drug discovery platform that captures the complexity of disease to accelerate the discovery of better drugs. Cyclica has been recognized by Deep Knowledge Analytics as one of the top 20 AI companies in the world and one of the top 100 AI companies for 2019.

Naheed is passionate about how people use technology to make better and faster decisions, and wants to promote responsible use of AI to solve health problems. As a founding member of the Alliance for Artificial Intelligence in Healthcare (AAIH), of which he is one of 4 designated leaders. Nahid graduated from the Rotman School of Management at the University of Toronto in 2012.

Nahid answers a few questions with.

If there’s a time to push the boundaries of discomfort, it’s now, when the whole world is upside down. In case of ambiguity, there is a possibility.

Allow yourself to make mistakes, let others give you feedback, get coaching, then make adjustments and work to improve.  Have the courage to be incomplete and realize that self-optimization is a lifelong journey.

We believe that the best time to raise capital is when there is no urgency, so that we can focus on our vision and our history. It is essential to establish deep personal relationships with the investment community and maintain them over time. Know who is who and what their investment thesis is, and find out what excites and motivates them.

What made you decide to start your business?

Biology has always interested and fascinated me, especially neurobiology. I studied biology and biomedical sciences at the University of Ottawa. When I was in school and medical school, I caught the business bug and knew I had to do it. With the support of my mentors and coaches, I focused on understanding human capital for the next 7 years of my career. I earned a degree in psychology with a focus on organizational behavior and financial capital while working at TD Bank and Bank of Montreal. I spent most of my time at Rothman School of Management, earning my MBA in both fields. At Rothman’s, Cyclica was placed. I joined the team in early 2014 as co-founder and CFO and was named President and CEO in April 2016.

We founded Cyclica because we want to fundamentally change the way medicines are opened up to meet the needs of patients. The pharmaceutical industry is increasingly faced with the challenge of depleting inventories, reducing the efficiency of research and development, and ultimately limiting access to medicines for those who need them most. Although traditional drug discovery methods have been useful, we believe that the targeted approach has its limitations.

At Cyclic, we embrace the complexity of disease. We have developed and commercialized a holistic, integrated, AI-based platform that examines all potential proteome targets and designs new molecules with the desired properties. This approach has made us pioneers in computational chemistry in polypharmacology, and we are dedicated to modernizing the future of drug discovery and development.

Tell us more about your current products/services.

Cyclica is the first company to focus on polypharmacology with a structured, AI-driven drug discovery platform focused on Ligand Express and Ligand Design to advance the way scientists discover and develop new drugs for all diseases and ultimately all patients. Based on MatchMaker™, a patented deep-learning proteomic screening technology, and POEM™, an innovative supervised learning technology for predicting molecular properties. Our platform is particularly suitable for designing new chemical entities by simultaneously prioritizing different desired drug properties. Our technology is used by many leading pharmaceutical companies, biotechnology companies and academic institutions around the world to develop a new generation of drugs with greater precision.

How much money have you raised in total so far? When was the last funding cycle?

To date, we have received nearly 40 million Canadian dollars. In June 2020, we closed a C$23 million ($17 million) Series B financing round led by Drive Capital with the participation of GreenSky Capital, members of our management team and renowned Italian pharmaceutical company Chiesi Farmaceutici. Recently, we were one of four innovative medical technology companies to receive a prestigious $2 million Canadian federal grant from the Government of Canada.

What internal decision-making processes determined the start of fundraising and what were the logistics of this? How many investors have you met, how did you meet them and which channels have served you best?

Over the past seven years, we have met and spoken with hundreds of investors. We believe that the best time to raise capital is when there is no urgency, so that we can focus on our vision and our history. It is essential to establish deep personal relationships with the investment community and maintain them over time. Know who is who and what their investment thesis is, and find out what excites and motivates them. Their story is not limited to technology. Clearly express your knowledge of the market, the competition, the business model and most importantly your vision. Involve your management team and introduce them and other team members to potential investors. Trust your colleagues to represent the company with excellence and count on investors who will work well with the culture you have built.

What are the main challenges and obstacles you have faced in fundraising? If you had to start over, what would you do differently?

Investors are generally cautious when investing in traditional biotechnology companies, which require both significant capital and risk depending on the stage and progress of the project. What makes Cyclica unique is that investors do not invest in one biotech company. With us, they invest in a more neo-biotech company or a biotech accelerator that produces and scientifically supports many biotech companies. This unique approach is directly linked to the spirit of the venture capital ecosystem.

What are the milestones for the next cycle? And what are your goals for the future?

Our goal is to create the largest portfolio of biotech assets to date. With a world-class platform, an innovative decentralized partnership model, and a world-class team with deep industry roots, we aim to create and own more than 300 programs in diverse and underserved disease areas. We are able to achieve this ambitious goal thanks to our scale of calculation and our partnerships with subject matter experts and key opinion leaders in various biological and pathological fields. By accelerating this model, we create the biotech pipeline of the future.

Our ultimate vision is to get our new devices into the clinic and into the hands of patients, many of whom are underutilized because their disease is too small to justify the financial investment. By reducing the time and cost associated with new drug discovery, we can address these rare and complex diseases that are largely ignored. Ultimately, our goal is to bring better, more effective, and safer molecules to the clinic and to the patients who need them most.

How did you engage users and what strategy did you use to grow your business from the beginning to now?

In the early stages of developing our drug discovery platform, we worked with various academic groups, not-for-profit organizations and biotechnology companies to get feedback from the market.  This was crucial to create an optimal and reliable platform. To this day, we are constantly seeking innovations while demonstrating scientific rigor based on trends and the needs of our partners.  Initially, we proposed our flagship platform for proteomic target deconvolution as part of a software-as-a-service (SaaS) business model, but quickly realized that the SaaS model did not add value to the biotech industry. With our more integrated drug discovery platform that includes multi-targeted, multi-purpose drug design, ADMET property prediction, off-target profiling and systems biology, we have moved from the SaaS model to something much more innovative and value-driven.

We are creating new businesses by breaking away from academia and partnering with early stage biotech companies where we have institutional interests, as well as working more closely with multinational organizations. To date, we have founded a dozen companies and own the intellectual property of 50 drug development programs, which is very close to our goal of 300 companies in the next few years. Our team of highly qualified application scientists work closely with our partners and collaborators to understand their research questions and how our technologies can advance their research programs. It is necessary to listen to the market and adapt to it.

Although our technology is agnostic and can be applied to several painful points in research and development, we are very interested to know if it is suitable for our partner and especially if it is scientifically sound. We then become their computational chemistry engine for drug design to drive their research efforts.

Which software was the best marketing tool for the growth of your start-up and why?

When researching the market, it is important to understand your target audience and take a multi-faceted approach to approaching them in the right way. Using social media to organically build our audience has helped us immensely in showcasing our stories and cementing our reputation as an industry leader. Scientists are learning on social media, and there are many niche communities on these platforms sharing promising stories and current trends in drug discovery. It is a way for scientists, both in industry and academia, to build a relationship of trust with the wider community.

If you’re curious about the latest Cyclica updates, our company is particularly active on LinkedIn and Twitter. In addition to social media, we used various software platforms to deliver our messages, including virtual webinars and YouTube. Given the virtual environment we find ourselves in with COVID,19 the use of cascading messaging software is essential for brand management.

What do most startups get wrong with marketing in general?

When I took over as CEO in April 2016, our brand was not at its best. For a long time we said too much, sometimes about the wrong things, and we didn’t follow up on our words. We were all sizzling and no steak. I see it in many companies and especially in startups.

However, I see it all too often in the field of AI for drug development, where companies make bold statements about curing patients at the push of a button. I understand the temptation to sell a good story (sizzle) and then figure out how to put it together (steak). There is always a conflicting tension between investors and science: Some want clear evidence of traction and a clear growth path, others want consistent scientific evidence. Of course it is possible to achieve both at the same time, but I quickly learned that expectations must be clearly articulated in a well thought out strategic plan and managed accordingly.

Balance is the key: You must demonstrate both a bold vision to generate enthusiasm and a pragmatic action plan and evidence of achieving immediate goals and objectives. As the saying goes: A vision without an execution is just a hallucination. Companies should present themselves as progressive and practical. That’s when people get excited and start building trust.

How do you plan to expand globally?

With our world-class drug discovery platform, world-class team and agile business strategy, we are focused on rapid growth in the coming years. We have grown to 45 employees this year and plan to continue to recruit exceptional talent as we expand our operations and work around the world. To date, we have over 50 drug discovery partnerships for a wide range of diseases and plan to expand that number to over 300 programs. This is in addition to dozens of ongoing partnerships with multinational organizations around the world. Geographically, we have participated in partnerships and collaborations in dozens of countries. Cyclists have a physical presence in Canada, the United States and the United Kingdom. We also have a growing team in Asia and India.

What are the most common mistakes companies make in their global expansion?

A common mistake is the omission of countries. Ask anyone what they mean by Europe and you will get all sorts of answers: Western Europe, the European Union, the Eurozone, etc. Customers identify on a national level, and marketers should keep in mind that each country has its own cultural norms, local laws, forms of currency and payment, and unique business practices.

Without changing their sales and marketing channels, many companies (especially in North America) believe they can enter new markets by following the same rules that have allowed them to succeed in their home market. While brand consistency is important, different markets prefer different approaches to building relationships. In countries where relationships have a higher cultural value, such as Japan, selling products and services through local partners, resellers or distribution partners is more successful than direct selling methods.

How did you deal with the KOVID-19 flash?

If there’s a time to push the boundaries of discomfort, it’s now, when the whole world is upside down. In case of ambiguity, there is a possibility. At Cyclica, it is important to have a deep empathy for the personal challenges our team faces and a true understanding of their personal situation (e.g., children at home, family members not working, general concerns about today’s world, etc.). Standard company slogans like valuing the team, promoting a positive culture, etc. are put to the test in this environment to test performance and stress. In times of uncertainty, words are tested by actions and this is how a leader is judged. This is how it’s supposed to be.

Due to the changes brought about by the COWID pandemic, we have adapted our organization in several ways. We’re trying new meeting formats, we’re involving new team members in meetings, and most importantly, we’ve adapted our boarding procedures to the current paradigm. In addition to organizing, we improved our presentations and tried new ways to tell our story. This doesn’t mean it’s time to throw the baby out with the bathwater (as the saying goes), but to look to yourself for opportunities to make subtle but potentially powerful changes.

What are the most common mistakes founders make when starting a business?

The biggest mistake was not putting our people first and not protecting our culture. Twenty-five of our 40 employees have PhDs and deep technical knowledge in specific areas where they’ve done one or more extraordinarily profound things over time, and now it’s about putting that in context and looking at a broader, more holistic paradigm. This has made the management of human capital a major challenge, and in the early stages of our development as a company, we did not take advantage of or manage the opportunity for cultural cohesion and harmony. As a result, many parts of our business are scattered and fragmented. Our technology has not advanced as quickly as it should and our business model has become fragmented. We were saying the wrong things to the market because our message was inconsistent. We were not taken seriously and people did not want to invest in us. It was a difficult time, but we worked hard to understand and improve the fundamentals to get to where we are today.

Based on these mistakes, we have a guiding principle at Cyclica: hire, reward and retain the best, brightest and most dedicated employees. Put them in place to succeed. We have since grown into a company with more than 40 employees, where this principle still forms the basis of our culture.

What is the best advice you have ever received? And what advice would you give to someone looking for a startup like yours?

The biggest lesson I’ve learned, and one I want to share with every entrepreneur, is that there’s little point in focusing on product development, business development, and fundraising while focusing on your team. This debt is catching up with us, and when it does, it will be a painful lesson. Trust me. Trust me. Sometimes it takes extra energy to think about soft skills, such as conveying meaning and visibility through face-to-face meetings, one-on-one coaching, mentoring, and career conversations, but getting it right the first time creates a culture that is then passed on to new team members and saves you the grief and financial loss of replacing truly skilled people.

What are the three most popular books or movies (TV series) that have changed your life and why?

I alternate between fiction and non-fiction. The last non-fiction book I read was one of my favorites: Lawrence Hill’s book of Negroes. This is Aminata Diallo, who was kidnapped as a child from her village in West Africa and sold into slavery in South Carolina. It is the story of his survival of slavery and his struggle for freedom, his service to the British during the Revolutionary War and his return to Africa. This book, which I completed 4 months ago, came to me in light of the Black Lives Matter movement and the racial and social injustices we still face. Phil Knight’s shoe dog is also an all-time favorite. Nike’s early history and work in the Japanese market helped me understand the cultural differences in the business world and led us to work with a number of Japanese pharmaceutical companies. I keep coming back to Malcolm Gladwell’s Blink because it reminds me to trust my instincts and have the courage to be imperfect.

How do you stay motivated every day

I wake up every day inspired by conversations with my team. I work with some of the smartest people I’ve had the pleasure of meeting in my life, and as someone who constantly strives to learn, every day is a lesson in something new. I also believe that we are working on something that will have a demonstrable and lasting effect on humanity. I also like to go fast and do several things at once. The structure of Cyclic is similar to a game on a multidimensional chessboard. I love complexity and difficulty – it’s addictive. I’m really grateful to be in this position. When I need a push, I jump on the field or go to practice.

What are three important life lessons you would like to pass on to future generations?

This is especially important because my wife and I are expecting our first child in January 2021. I want our daughter to know the following: i) Modesty is important. Not knowing something, being proud of it and learning from others is an incredible skill. ii) Not striving for perfection is impossible. Try to be the best you can be, keep working and celebrate the ups and downs of this journey. Allow yourself to make mistakes, let others give you feedback, get coaching, then make adjustments and work to improve.

Have the courage to be incomplete and realize that self-improvement is a lifelong journey. iii) Be respectful of people and truly care for them, invest your time and knowledge in them even if they have nothing to offer. Without my mentors and coaches, all of whom are still in my life, I would be nowhere. They gave me everything and asked for nothing in return. This is the biggest investment I’ve ever received, and my goal now is to pass it on.

Why would you want to be remembered?

Someone with great integrity, honesty and empathy. These are the roots that my parents worked hard to establish in my brother and I, and I hope to pass them on to others and develop them in my business. I think success, however you want to define it, is built on that foundation.

Want to know more about seedling fundraising? More articles here.

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