Zachary Sweeney On Raising $93 Million To Cure Common Diseases

Zachary Sweeney is on a mission to discover important drugs to cure and manage some of the biggest present and future threats to our health. His biotech startup has already attracted almost $100M in capital and some great talent to further this mission. The venture, Interline Therapeutics has attracted the interest of top-tier investors like Foresite Capital and ARCH Venture Partners.

In this episode you will learn:

• Hiring and management
• Diversity
• Biotech and genetics
• His top advice when starting a company of your own

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About Zachary Sweeney:

Zachary Sweeney is the Chief Scientific Officer at Denali. In this role, he supports biology, discovery pharmacology, genomics, small molecule, and biotherapeutic discovery groups.

Before joining Denali, Zach was a director and scientific investigator at the Novartis Institutes for Biomedical Research.

He also worked as a scientist and team leader at Genentech and Roche.

His teams have contributed to the identification of more than a dozen candidate medicines for the treatment of various illnesses.

These include neurodegenerative diseases, inflammatory diseases, and infectious diseases, and six of these molecules have progressed into clinical studies.

Zach has co-authored approximately 60 patent applications and 35 scientific articles.

Zach graduated from Stanford University, received a Ph.D. in chemistry from the University of California, Berkeley, and completed an NIH-postdoctoral fellowship at Harvard University.

Connect with Zachary Sweeney:

• Crunchbase
• LinkedIn
• Twitter

Read the Full Transcription of the Interview:

Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today we’re going to be talking about biotech, a lot about building and scaling, and then also about an amazing generation that came out of the ‘90s at Stanford, and why not? So without further ado, let’s welcome our guest today. Zachary Sweeney, welcome to the DealMakers show.

Zachary Sweeney: Thank you so much, Alejandro. I’m super excited to be here and appreciate the opportunity.

Alejandro: So born in the ‘70s and raised in the Bay Area. I think you’re one of a kind because that’s more like a United Nations, like New York City, where everybody is coming from somewhere else, but it’s incredible that you were born and raised there. What were your upbringings like?

Zachary Sweeney: Yeah, I was born and raised in California. I grew up mostly in Santa Rosa, which is about 40 miles north of San Francisco. I grew up in the ‘80s, as you mentioned, which was an exciting time and place to be for a number of reasons. Culturally, it was an exciting time with lots of evolution that we still see today with respect to understanding and anticipating the value of immigration, understanding different cultural groups, and all of those experiences have been useful to me in my role as an entrepreneur.

Alejandro: And out of all things, Zach, why chemistry?

Zachary Sweeney: I grew up in a family that was very environmentally conscious, so I went to college anticipating that I would be an environmental engineer and helping in some way to preserve our environment here in this state. Ultimately, I was attracted to the rigor of chemistry. It was an interesting subject. We had some outstanding professors at Stanford where I was an undergraduate student, and I saw that chemistry, as a core discipline, would provide me with the flexibility to pursue environmental engineering if I chose to do so to pursue medicine or pursue a career in biotechnology. One of the lessons I learned in respect to reevaluating my decision-making over the years is that when in doubt, choose a path that provides you with optionality in the future. So chemistry, for me, was that career choice where I realized I could take that in a variety of different directions in the future.

Alejandro: What were those years like in the ‘90s when you were at Stanford. Obviously, Stanford is the place where you have the innovative approach, the entrepreneurial spirit, but during that time is where some of the best entrepreneurs in history were there in the hallways. So tell us what it was like and the type of people that you were there rubbing elbows with.

Zachary Sweeney: I think the environment at Stanford had a larger cultural context. If you think about California in the ‘80s and ‘90s, it was a state in transition, and we were struggling with some cultural issues that ultimately, I think, informed the personality types and a lot of the entrepreneurs that you’re alluding to at Stanford. There was the Proposition 187, for example, which was a very prominent and controversial initiative that related to immigration. There were the gay communities that were known at the time, which were struggling still for acceptance, even in an area like this. To make a long story short, Stanford, in 1990, when I started there, was an interesting community where lots of different people were starting to appreciate the diverse contributions of different groups, and we were talking about things like: is America better considered to be a mixing pot, or is it more like a salad bowl, where people are mixing together, but we’re trying to preserve individual autonomy and recognize different groups for their amazing contributions and individual cultures. So how do we unite an organization and a group of people to be organizationally coherent and well-defined while also recognizing everybody’s individuality. I think, again, that those are our concepts that are very relevant to the day-to-day job of an entrepreneur and a CEO.

Alejandro: In your case, you did the Ph.D. in Berkeley, then the Postdoctoral at Harvard. In parallel with the undergrad, as well, in Stanford, that’s an incredible journey. Were you headed toward doing something in academia, or why were you pursuing those studies and collecting your diplomas from some of the best universities in the world?

Zachary Sweeney: The other thing that was happening at the time was actually the first pandemic in my lifetime, which was the HIV pandemic. This had a really strong effect on a lot of the undergraduates at Stanford at the time. HIV was an incurable disease. Effective medicine hadn’t yet been developed. So many of us were inspired to choose a career path that oriented, generally, around medicine and sciences as a consequence. So the HIV epidemic was happening. There were a lot of really interesting advances in genomics that were part of the second wave, as I characterize it, of advances in genetics, and that was maybe the third or fourth wave, and it was something that we were incorporating into our approach here at Interline Therapeutics now. So you had the HIV epidemic that was this major area of societal need and focus. You had emerging technologies, and you had demographic shifts. It was clear that the population was generally going to age. So all of these things encouraged me to, again, transition from a focus in studying the environment to studying hard sciences and, particularly, biomedical innovation. At the strong suggestion of a professor at Stanford, where I did some research, I pursued my Ph.D. in chemistry at Berkeley and studied one sub-discipline of chemistry there, and then moved on to Harvard. I think the major lessons that I absorbed there were really how powerful it can be to be surrounded by such incredible scientists and people. You alluded to the time at Stanford, where all of these people that were ultimately going to become head of divisions, or wonderful high school teachers, or amazing entrepreneurs. And then at Berkeley and at Harvard, obviously, I was exposed to what I considered to be true scientific geniuses, people who won Nobel prizes and established labs of their own, so they were entrepreneurial in an academic way. Again, I was able to appreciate all the wonderful things about them and identify what my strengths and weaknesses were and where I could fit in, and, hopefully, try to make a contribution.

Alejandro: From there, you joined large companies, and you spent about 12 years of your life working for those companies. What I want to do is, I want to name them, and I want you to tell me what the lesson was that you got out of each one of them—just one. Let’s start with the first one, Roche, where you were for six years. What was your lesson there?

Zachary Sweeney: I’ll tell you a scientific lesson, and then a personal lesson, just very concisely. Scientifically, I learned about drug discovery, how to design molecules to bind tightly to their target, and then organizationally, I learned about the value of investing in your employees. Roche is a large company, but it also feels, at times, like a family-run company, which in some ways it is, and it was a wonderful experience.

Alejandro: Then, let’s talk about the next one, Genentech.

Zachary Sweeney: At Genentech, I learned about a different approach to drug discovery that focused more on operational excellence, so how to think about drug discovery as an organizational process, how to leverage technologies, including computational technologies at scale in the context of drug discovery, and how to value scientists broadly in the context of a commercial company.

Alejandro: And lastly, Novartis.

Zachary Sweeney: At Novartis, I learned so much about drug discovery, including oncology drug discovery. I think I learned, at Novartis, about program management, the concept of servant leadership, the role of an organizational leader, and I learned about how an organization can do many diverse things while still maintaining organizational coherence and scientific excellence.

Alejandro: After Novaris, there was one very important pivotal moment for you that led to the creation of what you’re doing now, which we’re going to be talking about it in just a little bit with Interline Therapeutics, but Denali was the segue into it, and Denali was a little bit different from what you were used to doing with some large corporations. So how did you land in Denali? In Denali, you were able to be there as the fourth employee, and then you were able to see the company. We’re talking about a company that is valued at something like $4 billion. That’s not too shabby. Perhaps even more as of today, but how was that journey, and what made you go from such large corporations to perhaps being the fourth employee of a new entity?

Zachary Sweeney: In each of these large companies that we mentioned, I was fortunate to be a bounding scientist in a new disease unit. Sometimes, you can get that entrepreneurial experience, in a way, when you are part of a large company. Large companies are wonderful training grounds, and I think there is room to even train yourself to be an entrepreneur in that context. At Roche, I was a member of the anti-viral drug discovery group. I joined to find new medicines for HIV, and that was a new group there. At Genentech, we were expanding our efforts in neuroscience, and I had the opportunity to work with Marc Tessier-Lavigne, who is now the head of Stanford, and Ryan Watts. These two people founded Denali. After my experience at Novartis, Alec Shooth, Ryan Watts, and Marc Tessier-Lavigne reached out to me to join as the Head of Therapeutic Discovery to help launch the company that they just co-founded. That was, in some ways, what led me in those experiences directly to Denali.

Alejandro: What were you guys doing there at Denali?

Zachary Sweeney: Denali is focused on finding new medicines for neurodegenerative diseases. Denali was actually the third company that I had been involved with in some way with biotech after my experience with Novartis. Each of these companies was employing a new breakthrough technology to try to find new medicines for areas of medical need. The reason I was attracted to Denali was the idea of the mission that there was new genetic information that told us more about the causes of neurodegenerative diseases than there ever had been before. I recognize that my skill as a chemist is something that identifies drug candidates. I realized that these skills could be applied to help us uncover the still mysterious biology of these diseases and make progress in this area. That was, again, a very exciting experience. The company rapidly scaled, and I was able to bring a lot of those lessons here with me to Interline.

Alejandro: So let’s talk about Interline. How does Interline, all of a sudden, fall through on your radar, that incubation and that bringing the whole idea to life? What was that process like because, obviously, there was a very, very good partnership there that happened with the people that you choose to actually go at it?

Zachary Sweeney: Even going back to my days at Stanford, I think what always attracted me to science was this intersection of technologies and our understandings of common diseases. When I was an undergraduate at Stanford, I was fortunate enough to be walking down the hall, and there was Linus Pauling, one of the greatest scientists of the 20th Century. One of the many contributions of Linus Pauling was helping us understand the mechanisms that cause sickle cell disease. Then we had new genetic information that helped us connect that condition to genetics, to structural information, to protection from malaria. So we were starting to understand diseases on a genetic level and on a molecular level. I mentioned the HIV epidemic, as well. I was amazed by the finding in the mid-‘90s, when the HIV epidemic was still at its peak, that certain individuals were protected from HIV infection based on their genetic variations. So these individuals have a mutation and a cellular receptor known as CCR5. It basically prevents that capsid of the HIV virus from effectively attaching to our cells and ultimately infecting our cells. The equivalent finding today would be for you to learn somehow that you are genetically resistant to Coronavirus. It’s a pretty profound finding. Again, linking genomic information to disease and pronomic information to disease to the real molecular mechanisms that we need to understand to develop effective therapeutics. So, ultimately, as I evolved my career and evolved my expertise, I realized that the coherent aspect of my career was this intersection between genomic information, proteomic information, mechanisms of disease, and I was really committed to trying to use this kind of information as we get more and more of it to find effective medicines for common diseases. That was part of what we were doing at Denali Therapeutics, but it evolved, and I saw the opportunity to focus on the application of new technologies to this endeavor. So when I left Denali, I was in close contact with one of the board members of Denali, Bob Nelson, who is the managing director of Arch Venture Partners, a major venture capital company that funds early-stage biotechnology companies. I was attracted, as well, to Jim Tannenbaum, Dick [Bajages 17:05], Forsyth Labs Incubator Group, in part because they shared this vision of using large data sets and genomic information to found new companies. I had a lot of options after the success of Denali and revolution medicines and some of the other places that I had been. I realized that combining the philosophy of Arch, which is very entrepreneur-centric, a very large concept with these well-funded biotech companies trying to tackle major disease areas or new approaches to discovering medicines with the kind of philosophy and focus of Forsyth Labs. We could do something really special. The idea, from the outset, was to work with these two companies to launch a new entity, and that’s what became Interline Therapeutics.

Alejandro: For the people that are listening, what is Interline Therapeutics all about?

Zachary Sweeney: Interline Therapeutics is a company that is focused on how we best correlate genetic information, a genotype, with what we call a protiotype, which are corresponding changes in the protium of people. To think about this in a physiological context for a broader audience, the cellular environment is very complex and crowded. They’re in an individual cell with ten billion proteins, maybe 10,000 different proteins. Proteins making contact with one another are what transmit a signal from one part of the cell to the other parts of the cell, and key aspects of this are still unknown. So you have a genotype, protiotype. Then ultimately, you have a phenotype, say high cholesterol as being an example or disease susceptibility being an example. We’re getting lots and lots of new genetic information. As some of your other guests may have mentioned, the cost of genomic sequencing is declining. You could get your entire genome sequence for somewhere between $1,000 and $100, so there’s more and more information, but we have a gap in understanding the protiotype, how it relates to genetics, and we have a gap in also understanding how some of our medicines affect the protiotype. This information isn’t entirely absent, but it’s still insufficient to make our drug discovery efforts efficient. Interline Therapeutics is a company that is oriented around using this new technology to make the drug discovery process more efficient.

Alejandro: And Interline is your first baby. You were an intrapreneur with the other companies with which you were associated, like leading different things, but this is your real first company that you’re leading. In this regard, what would you say is the foundation to become an entrepreneur?

Zachary Sweeney: I think that the foundation of entrepreneurship is ultimately identifying a need. I love the titles that you have in your podcast, Alejandro. You say, “This person raised this much money to do something.” I think it’s the “to do something” that is important. So being sensitive, and ultimately, that comes back, and I probably wasn’t as articulate as I would have liked to have been, but it comes back to appreciating the people that surround you, the amazing individuals that make up our culture, and trying to think about what their needs are and how can you contribute? That was a foundation of my upbringing. My parents were very socially-conscious individuals, and my siblings and I have careers that reflect, in some ways, their priorities. That’s the most important thing, I thing, is valuing people and their needs. There’s also recognizing opportunities, being willing to work really, really hard, and waiting for the time to be right for you. Then I think there is an element of surrounding yourself with amazing people that don’t value you for your accomplishments but value you as an individual that gives you that ability to take risks. So, a broader social foundation and social network outside of your narrow interest area of entrepreneurship. Those are the three things that I think are super important for almost any entrepreneur.

Alejandro: When you say about valuing people, you guys have grown quite a bit in the last year, so how do you go about approaching hiring and management?

Zachary Sweeney: I think focusing very clearly at the outset of a hiring discussion on where the synergies are between your vision for the company growth and that individual’s vision for their own career progression, and how you are going to enable them to grow their technical skills, their understanding of drug discovery, their skills as a manager. Whatever their individual aspirations are of understanding those very clearly and then trying to make sure that the position that you have available as you grow the company is aligned with those aspirations. Then management is relatively simple. The hiring decision is relatively simple if there’s a very clear alignment from the outset in that area. That’s how I try to approach every hiring conversation, and every decision is to make sure that in that three to five-year timeframe, the drug discovery cycles are relatively slow, but I’m very confident that I’m going to be able to provide an environment that is going to expand that individual’s skill set and be able to help them propel to the next phase of their career.

Alejandro: For Interline, going back to valuing people, how much capital have you guys raised to date because, at the end of the day, raising capital is all about the people who are giving you the capital.

Zachary Sweeney: Yeah, absolutely. Our Series A was about $93 million. Drug discovery is expensive, so we raised a significant sum from the beginning. We’re using that money to build a drug discovery platform that I mentioned earlier, but also to advance therapeutic programs that we hope will be in the clinic in the next couple of years. So we raised that amount of money. I think our ability to raise that amount of money was based, in a large part, on our approach to people. I’ve worked in this area for a long time, and I was able to attract some amazing people to Interline from the outset. Nick Galli, for example. I can name some of these people. I think it would be of interest to your listeners. Nick is the Chief Operating Officer, and he joined when we were in the seed incubation stage. He was the head of business development with me when I was at Denali, for example, so we have this common history. The Head of Medicinal Chemistry, David Tully, was a colleague of mine at Novartis. Our Chief Technical Officer was a colleague of mine at Genentech, where we collaborated together very effectively, and some of our other amazing founding scientists, we had common friends from other companies. Our ability to raise that amount of money was not just based on the vision that I outlined earlier about how we could do drug discovery differently, but it was based, I think, on our founders and our funders realization that we are starting to get a special team of people together to accomplish our mission. That was a really important part of the funding cycle, which was demonstrating that you can attract these scientists to your company. That’s the ultimate validation that people are willing to change their career, leave their jobs, and apply their incredible skills to something that is a 20-slide deck at that point.

Alejandro: It’s incredible, the names and the track record that you were sharing now that are part of your team. I’m sure that there are a lot of people that are listening now and watching. I wonder if I could ever enroll people of that caliber. What is that process of getting someone that is so successful already in their own right and in their professional career to see clearly that it makes sense for them to join you on the path that you’re carving for this company?

Zachary Sweeney: I would invoke, again, those principles that I outlined earlier of trying to outline and to making sure that Interline is going to be a place for them to do even more amazing things than the next phase of their career. I want Interline to be a place where everybody, the incredible junior scientists that I haven’t had the opportunity to mention, the place where they do their best work. That was a phrase that was used by our amazing chairman of the board at Denali, Vicki Sato, “If you can come to work every day as a CEO and focus entirely on trying to make your company the place where your employees can do their best work, I think you’re doing the bulk of your job.” So recruiting those individuals was about trying to help them to understand how Interline was going to be a place where their skill set was going to be applied in such a way that they were going to be able to progress even to the next phase of their career. They’re going to be more at the center of the drug discovery programs. They were going to have a more prominent role in learning how to interact with investors, learning how to manage groups remotely, whatever the case is, it was a very clear win-win situation. And if you’re setting up a company where everybody understands the win-win situation at an individual and company-wide level from the beginning, then it allows you to focus on other things as a CEO, like making that place a great place to work.

Alejandro: So being able to allow people to see a compelling and exciting future for themselves if I’m listening right.

Zachary Sweeney: Yeah, exactly. I probably wasn’t as clear, but let me give you a more tangible example. We’re applying protium technologies more centrally to the drug discovery process than many other companies would. So you can talk to people that have this incredible skill set described to them how you’re going to reformulate the drug discovery process and make them more of a central part of your company than they are at another company. They realize that’s an exciting proposition for them, and then the next thing you know, you’ve attracted an incredible leader with an incredible technical skill set to your company, and your job needs to make sure that they truly are at the center of the drug discovery process like you promised them they would be.

Alejandro: As we’re talking about the future, here, Zach, imagine that you go to sleep tonight, and you wake up in a world where the vision of Interline is fully realized. You wake up five years later, ten years later, whenever that is, but you wake up, and everything is there. You can see it. It’s fully realized. What does that world look like?

Zachary Sweeney: Interline was founded to enable us to use genetic information to develop a wonderful understanding of disease. What we know from the first couple of eras of genetically-driven drug discovery is that programs with a strong genetic foundation are more successful. Unfortunately, in the drug discovery industry, we are plagued by a very high attrition rate. Noubar Afeyan has this beautiful quote that says, “You should imagine what the drug discovery industry would be like if it was more like making Fitbits,” and that’s something that resonates with me very clearly because a friend of mine from my undergraduate days is actually in charge of the Google division that makes Fitbits. So why do I come to work every day with this tremendous sense of uncertainty regarding the products that I’m going to produce when Rick can go to work every day and have high confidence that he’s going to be able to make a Fitbit. So if I wake up in five or ten years and the vision of Interline has been realized, we won’t have a 4% success rate for drug discovery projects. We’ll have a 40% success rate, and we will be able to use new genetic information to deeply understand molecular mechanisms of disease. We’ll be able to use new technologies to make sure that our drugs really correct those dysregulated molecular mechanisms, and we’ll have a reproducible path for drug discovery that simply doesn’t exist today. So I’m really excited, as you can tell, about the potential for that vision to be fulfilled. It’s certainly not a vision that’s only unique to Interline, but I think that we might play a key part here in making that vision manifest.

Alejandro: You guys have been at it for a few years. It’s not a crazy long time that you’ve been at it with Interline, but I’m sure that in those few years, as you were mentioning, you surrounded yourself by the right people. I’m sure that there have been a ton of lessons, too, along the way. If I put you into a time machine, and I bring you back in time, and you have the opportunity of having a chat with that younger Zach of a few years ago that is thinking about launching something, and you were able to have a sit-down with that younger Zach and give that younger Zach one piece of advice before launching Interline, what would that be and why given what you know now?

Zachary Sweeney: I think that the piece of advice that I would give to the younger Zach would be to make sure to balance the sense of dissatisfaction and the sense that you can enable important change with a deep appreciation for all the opportunities that you’ve been provided. There’s a balance. At Arch, in particular, they say, in order to be a really successful CEO, you have to be a little bit dissatisfied,” and I think that’s true. You have to see the opportunity for change. But I also think that in order to be a successful leader, you have to, again, recognize amazing people, recognize the amazing opportunities that you’ve been provided, and be patient. Help people grow, accept that things aren’t perfect from the beginning, that you’re on Version 1.0, and that you’re in a process of continuous improvement, and that you’re fortunate to have the opportunity, the funding, and the time to facilitate that growth. So it’s really balancing this vision for change with a deep appreciation for living in an amazing time for entrepreneurship and technology implementation.

Alejandro: Amazing. Zach, for the folks that are listening, what is the best way for them to reach out and say hi?

Zachary Sweeney: I’m on Twitter. I’m on LinkedIn. My email is [email protected]. I’m always happy to connect with people, as you can tell, hopefully, from this interview. I’m super lucky to have an amazing network, and I’m always happy to expand it.

Alejandro: Amazing. Well, Zach, thank you so much for being on the DealMakers show today.

Zachary Sweeney: Thank you, Alejandro, so much for the conversation. I really appreciate it.

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