A former investment banker with in-depth capital markets expertise, Ozan Pamir is now propelling the success of 180 Life Sciences Corp., a clinical stage biotechnology company based in Palo Alto, California, with three families of novel biologic drugs that address separate areas of inflammation, fibrosis and pain.
Pamir’s finance expertise was instrumental in the merger of three companies to form 180 Life Sciences, and he led the successful listing of the company on Nasdaq. By driving and managing the majority of the funding rounds for 180 Life Sciences, he has been able to create a strong financial foundation that has allowed the company to grow and explore potential treatments for inflammatory diseases.
Pamir spoke with StrategicCFO360 about the particularities of pre-revenue funding, keeping an eye on cash burn and how to compete for talent.
You were instrumental in the merger of three companies to form pre-revenue biotech company 180 Life Sciences. What can you share about this process and how it paved the way to its successful listing on Nasdaq?
I joined what is now 180 Life Sciences as the CFO for one of its subsidiaries in 2018 and started working with one of our founders, Sir Marc Feldmann. In 2019, we went through an extensive strategic planning and due diligence process which eventually led to the merger of the three companies and 180 Life Sciences was born.
After identifying the potential benefits of the merger, the teams worked on integration planning. This involved deciding on the organizational structure, identifying key personnel, and streamlining operations to eliminate redundancies and improve efficiency. Careful planning was essential to ensure a smooth transition and minimize disruptions during the merger.
As the CFO of the combined company, I had to assess the financial health of the combined entity and understand the financial implications of the merger. I have also worked to secure necessary funding for the merged entity through a private financing transaction.
I led communications with both the old and new investors throughout the merger process. Clear and transparent communications with investors is vital through these transactions to garner support.
So what were your fist steps after the merger was set?
After the merger was completed, I shifted my focus to post-merger integration, combining financial infrastructure, realizing the efficiencies that we had planned, coordinating research and development efforts, and optimizing resources to drive growth and achieve our milestones.
It was an incredibly complex task to merge three entities, complete a private financing, move through the first audits for all three entities and the newly created parent company, and execute on the go-public transaction.
Prior to listing on Nasdaq, we needed to meet the exchange’s listing requirements. This involved ensuring that we met the minimum financial thresholds, had appropriate corporate governance structures in place, and adhered to all relevant disclosure and reporting requirements.
By carefully navigating these steps and factors, we were able to create 180 Life Sciences. The merger allowed us to leverage the strengths of each individual company, combine resources and expertise of founders, and accelerate the development of our pipeline. With the robust pipeline created through the merger of the three entities, we were able to command a higher valuation and have a successful listing on Nasdaq.
What challenges have arisen from the boom of emerging biotech companies over the last decade and how do you lead your team to manage them?
The main challenge is that there are more biotech companies than ever in the market, all competing to garner the attention of the same investors. This creates an incredibly tenuous landscape, particularly for small cap companies, since we are—as is typical for small cap biotech companies—pre-revenue and dependent on outside capital. To maneuver in spite of this challenge, as the CFO I actively explore diverse funding sources, from traditional equity financing to grants, strategic partnerships and tax credits.
The current environment requires us to be very mindful of our cash burn and requires significant collaboration between the scientific team and the finance team, as not every member of the team may be aware of the financial restrictions. Collaboration between finance and other departments is also essential for addressing challenges cohesively, while positioning the company for long term success.
As the CFO, I must maintain a forward-looking financial strategy, closely monitor key performance indicators and provide data-driven insights to support informed decision-making. At 180 Life Sciences we have a unique cost structure compared to our peers, where all of our clinical trials to date have been sponsored by the University of Oxford and funded by grants. However, it is worth noting that in the future we may run our trials ourselves.
Another challenge that has arisen from this boom, coupled with other economic factors, has been hiring and talent retention. A boom in biotech companies means a lot more competition for the same talent pool. To manage these challenges effectively, we foster a culture of collaboration and adaptability, work to encourage open communication, empower team members to contribute their expertise and remain flexible in adapting to changing circumstances.
To date, 180 Life Sciences’ clinical trials have been funded by grants. How has this strategy aided in navigating downturns in the sector and in your approach to overall cost structure?
Funding our clinical trials through grants has been a strategic and beneficial approach that has aided us in navigating downturns in the sector and in managing our overall cost structure. Relying on grants to fund our clinical trials has allowed us to diversify our funding sources beyond traditional avenues like equity financings, although that is an avenue we have utilized.
In our case, grants often meant that the clinical trials were run by institutions such as the University of Oxford, and meant that the cost of running a trial usually was limited to the cost of the drug. By securing funding through such grants, we have a more stable financial foundation during challenging market conditions.
If we have funding issues, we do not have to halt the clinical trial as it’s not dependent on our funding status. Grants are typically dedicated to specific research projects, reducing the impact of broader market fluctuations on our clinical trial progress.
Securing grants for our clinical trials also serves as a validation of the scientific merit and potential impact of our research. The approval of grants by reputable institutions, through competitive processes, signifies the quality of our projects and enhances our reputation within the industry.
While grants have been a valuable funding strategy, it is essential to recognize that they might not cover all research and development costs. As the CFO, I continue to oversee our financial planning, budgeting and capital allocation to ensure a balanced approach that combines grants with other funding sources to support our overall growth and success.
How do you balance the needs of the administrative and executive team with those of the scientific team?
We foster open and transparent communication between all teams. Transparency helps build trust and encourages collaboration across departments. Ensuring that the administrative and executive teams understand the importance of scientific research and the challenges faced by the scientific team while communicating the business goals and financial constraints to the scientific team is key.
During our annual budgeting process and the periodic reviews, the scientific team is heavily involved as it’s crucial for finance to have a clear and in-depth understanding of the business, while ensuring the needs of the scientific team are met. Involvement of the scientific team in these strategic planning sessions demonstrates that their contributions are incredibly important.
It is also critical to be able to proactively address conflicts—which will inevitably arise—by encouraging and engaging in open dialogue to find common ground. This is the only way you and your team will be able to see conflicts from a different perspective.
