How to Channel Your Motivation for a Successful Career Part 2

Punit Dhillon

Punit Dhillon is the CEO, President, and Chair of Skye Bioscience Inc. The company specializes in the pharmaceutical development of cannabinoid derivatives to help treat various diseases including glaucoma. Punit’s experience as an executive in the biotechnology, pharmaceutical, and health industries has allowed him to build a remarkable understanding of key leadership, management, and development skills. He is the author of Catapult: How to Think Like a Corporate Athlete to Strengthen Your Resilience, an exploration of the important elements of entrepreneurship. 

Punit received his B.A. from Simon Fraser University and attended the Executive Program at Singularity University.

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Here’s a glimpse of what you’ll learn: 

  • Punit Dhillon discusses the business model of the biotech industry
  • What opportunities are available for young entrepreneurs in life sciences?
  • Punit details his unique experience with a reverse merger 
  • YELL Canada’s mission — helping students get into leadership, entrepreneurship, and business
  • Punit shares methods and coaches that inspired the growth of his career
  • The key to good cyber hygiene in business

In this episode…

Beginning your entrepreneurial journey is about purpose just as much as it is about successfully growing your business. Is a career in the biotech industry the right choice for you?

Apart from the appeal to medical professionals, the biotech industry has unique opportunities for aspiring entrepreneurs. Though it may be a difficult field to get into, developing your leadership and operational skills in this industry can give you a unique perspective on business. The biotech industry is projected to experience exponential growth and is inspiring innovation in a thriving market.

Resuming The Cyber Business Podcast’s two-part episode, Matthew Connor continues his discussion with Punit Dhillon, CEO, President, and Chair of Skye Bioscience Inc., about the business model of the biotech industry, the opportunities life sciences have for young entrepreneurs, how YELL Canada introduces leadership concepts to students, and the elements of cyber hygiene in business. Punit shares the importance of mentors for successful career growth and what he learned from a reverse merger experience.

Resources mentioned in this episode:

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Matthew Well okay, Well, shifting gears, let's talk Sky Bioscience. Can you give us an overview?
Punit Yeah. So it's a it's a very exciting technology. So we're working on this whole class of compounds that are in linked to this endocannabinoid system. So it's modulating endocannabinoids system. So our lead acid is a receptor that we're targeting called cannabinoid receptor one, or it's known as CB1, and we're basically binding to this receptor to have a disease modification.
Punit And we've chosen glaucoma as the initial lead indication for this this particular molecule. And now that is that is a program that's in phase one clinical trials and we're going to be beginning phase two clinical trials in the middle of this year. So it's a it's a really compelling technology. It's a first in class in this particular area in ocular diseases.
Punit We think it's a transformative new class of therapeutics. We have a deeper pipeline that goes beyond and targeting CB1 and we are just continuing to build on on that portfolio. So the lead asset is in the clinic. We also have other assets that are preclinical at this stage and we're working on generating human clinical data in 20 2023, 2023, and it's come a long ways in the last two years.
Punit The team is very lean. It's about 13 people. A lot of my management or my my peer group in the company, we've worked together and in another company and another company as well. And the board is experienced in ophthalmology, biochemistry, antibodies and oncology. So a great, great, all well-rounded team of people that have developed drugs and we're continuing to make advancements as fast as possible.
Punit It's all about efficiency and in drug development because we're non-revenue at the moment. So we have to continue to be acting with austerity and moving a lot of our development as efficiently as possible. And we hope that our stakeholders get a return on invested capital based on the clinical inflection points for the company.
Matthew Yeah, okay. I mean, I think that's that's a really interesting point because I think a lot of people really take for granted just how much money and effort goes into into that, you know, that pharma puts into developing any new new drug, any new, you know, you name it, it's a it's a ton of money. And to be, you know, so now for the biotech startup that's you know pre-revenue.
Matthew So how do you how do you even manage that? How does that you know, it took me through the the, you know, the trials and tribulations there because that's that's that's a lot to bite off on.
Punit Yeah. So like a clinical setback, I guess. I'm a big proponent of overall life science development. Yes. It's a unique business model because you're going negative until you have potential revenue. Revenue comes in two forms. It's the commercialization of the product. And most often in biotech, it's revenue from outlicensing or an exit of the product. And because had a bio dollars through a big pharma giving you an upfront and milestone payments and royalties and that kind of stuff.
Punit So it's a it is a unique business model. It is it is very risky because there's a lot of drugs that fail. I think last count, those typical drug takes 900 million or maybe more now through to get through development and in ocular therapies. I don't think it's that much. It's it's it's different because we're concentrating on the biology in the eye.
Punit But still it's it is a very expensive endeavor. I'm a proponent of life science development because there is still a lot to be unpacked in terms of unmet medical need. I think there is a ton of opportunity. I came into the industry as a fairly young entrepreneur. I started my my first company at age 29. I was an executive prior to that for a pharmaceutical company heading up corporate finance and operations.
Punit But I'm not a scientist. So it's it's a very unique kind of experience. I came from it from the corporate finance world, concentrated a lot of my my career development was in M&A and looking at unique assets, In-licensing assets, Outlicensing assets, bringing in companies, technologies, a lot of the different financial engineering around product development or at accessing grants.
Punit I think, you know, I think a read on your bio, your you have a in your experience, you've worked with some grants as well in your in your area. So the there's there's a lot of different accountability that's come along with that with the you know you have accountability to universities, you have an accountability with different pharma partners, lots of milestones.
Punit So I'm not I think I feel confident around the different players and stakeholders involved in this business. So it's not everyone's cup of tea, but my big I would say not petty, but just generally, I think that young entrepreneurs shouldn't be afraid of going after life sciences, even though they're not a scientist. I think there is a lot of great scientists around and and and experienced clinician that you can assemble a comprehensive team to advance a drug that has merit and there are a lot of unique skills required in any business.
Punit And life sciences is no different than a technology business or a, you know, automobile industry. There is almost the same correlative correlation of building blocks and experience and expertise required in any one of these industries. So there is a there's a huge plus of working in life sciences. You if you're working on unmet medical need labs. As I pointed out, it has impact on society, especially if you're if you're going after a certain large, you know, opportunities.
Punit Sometimes even the rare opportunities have tremendous impact on society. I think there's a lot to be on packed in terms of the way that certain diseases are now being managed. I my last experience, I was working in cancer immunotherapy and then another pathology over a decade that became the new forefront of what therapeutic class was available for patients that had cancer.
Punit And it was a game changer for most people that have cancer. Now they have a better chance of living than ever. Medical devices are now continuing to get more innovative. There is in the ocular setting, there's implants that have the ability to do dosing. So I think that drug development has a lot of different angles. We saw it happen during the pandemic with with with, you know, the world coming together and developing under tremendous amount of pressure, new vaccines that became available.
Punit And then at the same time on a country and regional level, there was there was a whole other innovation that happened with other regions kind of focusing on their own approaches and vaccines. So there's there's, I think, a lot to be discovered still. And there's there is a there shouldn't be an aversion to going after life sciences. I think that takes a bit of courage.
Punit But it is a business model that is very rewarding on the development side and on the entrepreneurial side for sure.
Matthew And I like your point about the the the basically the fundamental building blocks of any company, whether it's it's a tech company, a janitorial company. You've got this you still need the management, you still need finance, you still need all of these these pieces that are the same no matter what the industry is. You got to tweak them a little bit.
Matthew Sure. But the basics are the same. So you see plenty of kids going out and raising money to to start a new tech company who know, you know, nothing about the underlying technology or anything. They've got the idea of the business plan and they get funding for it. So I think to your point, they don't it shouldn't just be Silicon Valley stuff.
Matthew There's a whole, you know, there's a whole industry that that that should be attracting that town as well that and you don't have to be a scientist to go after it.
Punit Yeah. And do you notice like sometimes like that a novel experience or some, you know, outside experience coming into the industry brings a whole new perspective. So it's usually you're, you're able to make those big innovation leaps when Google, you know, started looking into investing in health care or Apple looking at it from health care and devices like they're they're able to transcend all of, you know, what's been happening in the industry for decades and come out with, okay, we're going to be doing glucose monitoring on your.
Matthew In the cradle.
Punit You're watching them turn right switches. Yep is a very very impressive so I think the there's still a lot of opportunity and there's a now this great overlap that's starting to happen between industries. AI has been a game changer. You know there's been a huge adoption of chat activity and the efficiencies that that you know, you can have with just rudimentary work that I can do that helps with workflow and improve improving workflow.
Punit And yeah, it's, it's going to be exciting to see. I think there's think we're I was always as a as a kid and you know I got I got involved in the life science industry out of both 1918, 19 I started working for a health care fund. So I got a great experience working on writing these investment memorandums.
Punit So I would I was working for this fund and it would basically have to correlate, plus articulate all of this data and then submit the investment memorandum to the investment committee that uses this information. So it was kind of it was great because I got a chance to do some deep diving into different companies or technologies or like segments of life sciences and through osmosis learning, all of that on the financial side as well as the science side or the business aspects of the commercial reasons why these products are being developed was was really helpful to get a broad grasp.
Punit And then over time you start specializing in different areas. But every decade it seems like I'm kind of working on a unique area. In the first part of my career, I started off in oncology was a drug device combination. Then we went into vaccines and then I worked. I started a company focused on cancer immunotherapy. So it was an evolution of of of an oncology product.
Punit And now I'm working on a company that's developing ocular drugs or a completely different class like these. These, these cannabinoid pharmaceuticals. So I think it's really interesting that, like, I'm not a specialist in any one of those areas, but over time you take the time to read the literature. You surround yourself with really smart people that that have experience developing those drugs.
Punit Ask a lot of questions constantly and continue to help bring to you how my skill sets or my CFO's skill sets that are maybe out of the non science people on the team can help to continue to push the envelope on one development.
Matthew Well, I absolutely love founder stories. You know, just kind of how did you where did the idea come from? How did you put it together? How did you put the team together? How'd you finance it? Can you can you take us the you know, tell us what you can about that. The the founding story of of Sky Bioscience scraping.
Punit Okay. So yeah, it's one of.
Matthew The best ones.
Punit Yeah, unfortunately, yeah. The concern is I joke internally and we and we're I'm a classical life science entrepreneurs that is in a part of the let's call it the biotech mafia, though there's certainly a class of biotech entrepreneurs or or let's say venture backed companies that it's just like the tech industry, you know, they, you go to your venture partner and you got your milestone and you go back to your venture partners, you get new medicines.
Punit So we don't we don't have that same luxury like I in this in this particular case, I was a board member, I was an investor, and then I got involved because I wanted to see some changes made and then took on the responsibility of being the CEO then and basically kind of resetting everything. And I was employee one and then continuing to build on that team.
Punit So some of it was calling upon people that I've worked with in the past that I know I have a strong capability, stack or experience that was complementary to what we're doing. Others was came introductions to new people, others was recruiting. And now slowly we built up an organization that has all of the capabilities from clinical development all the way to R&D, and we've raised approximately 34 million today or last two years through a mixture of financing, 21 million through financing and about another 13 to 14 through a strategic acquisition, which was a business that we purchased, that we shut down, the business that we we leverage, that their cash and real estate.
Punit So 2022 was certainly a year to be creative because the equity markets weren't as accessible. And with valuations continuing to be crunched, we we had to be open minded about new, new ideas. So I was really open to looking at different opportunities. I was sitting on a board of a company that wasn't that, that their business plan wasn't working out really well for their shareholders and came up with a proposal that would be a win win for their shareholders and our shareholders.
Punit And the outcome was that we know that we had the capital to advance our clinical pipeline, which would be ultimately a win for for all of all of the shareholders. So I haven't been against, you know, being creative in different time points in our lives that I was in the part of the I had a front row seat during the 2008 financial crisis.
Punit I had a front row seat during the pandemic, and then I had a front row seat in terms of the the current contraction that we've seen in the marketplace. And each one of those has required all of these different experiences to rely on to be okay, well, let's just continue to be open minded and creative about how we're going to continue making advancement, because that's what it comes down to.
Punit From my job. It's removal protocols, keep moving the company forward and keep the company funded right As a CEO, that's where that's where my the simplest way to put my job description. And I want to make, you know, the shareholders money or return on to have a return on invested capital over over time as well. And I think that that's possible with the technology that we're developing.
Matthew I mean, that is wild. I mean, can can you go into that? Is this a an underdog reverse merger that we're we're talking about? I mean, how did I mean, it's fascinating. I love whatever details you you can share. I mean, even just the mindset of it to kind of share the how do you have it? What so the idea how do you come up with that?
Matthew So if you could, I'd love to. Just whatever you can share on that is would be great. Yeah.
Punit So it's all public. I mean, you can read about it on any of our press releases. Certainly it has its advantages and disadvantages. The advantages are of what I just outlined in terms of creating a win win scenario. And I think the best way to create a win win scenario is being very clear about the rationale. And I think in most startup environment or speculative companies, it's about outlining a strike strategy.
Punit How do you get from point A to point B and being very transparent about that with everyone saying, Yeah, this is the challenges and this is how we're going to get there. And most speculative companies and technologies don't do a very effective job of that. I feel. I think that's a void that we see time and time again where it's like this black box that we're going to create value, but not a clear explanation of how that value is being created.
Punit If you are Facebook and you're Mark Zuckerberg and you're working on the metaverse and you're spending $10 billion behind a curtain and you know you're going to be Willy Wonka, that's completely different. Or if you're Tim Cook creating the next car that you never have really publicly spoke about. But people are speculating that's completely a different realm. Their revenue companies, they have a tremendous amount of cash flow.
Punit We don't have that luxury. We have to be very clear about how do we develop a technology that potentially has an exit that is commercially relevant. And we've chosen glaucoma being a path that can be a great return on invested capital. So coming back to this whole scenario, the disadvantages are the the the challenges of going into an environment like that saying, okay, your business isn't working, your balance sheet is upside down, and we believe we have a better solution for your shareholders.
Punit And yeah, that takes a lot of courage to pull something like that. This was a unique story.
Matthew You I'm sorry, were you private at the time? And this is and this was your reverse merger to go public or was this you were already public and you leveraged that to get this this other company that you were on the board of, that things weren't quite working out. But then by by merging with them, you got the assets of the business, their investors, their you know, all of these these two come on board and kind of expand your company.
Matthew Is that that basically how this went.
Punit Yeah it was actually both both companies Republican so.
Matthew Okay.
Punit So their public company wasn't was under under water from a balance sheet perspective their cash was much higher than what their market cap was. So the shareholders weren't getting any value for even the cash. And that's where we said, hey, this could be to your advantage. We can give you a premium to your market value because it can give you value exactly at cash based on a fairness opinion.
Punit And we're giving you a clear rationale in terms of how there's an exit for your investors. So if your investors want to get out, there's going to be liquidity to get out because we're also public. But if your investors want to stay in, you know, there's a there's a upside associated with this. And the challenge in this scenario was that related parties, because I'm a board member on both companies so it's one is you know yeah there's an aspect of the genesis of the idea, but then there's an aspect of also being clear about how to accomplish that task.
Punit So in this case, we had to set up very clear separation that we had a special committee on both companies. We went through a full review of other potential, not only on this side, but they did as well. We looked at, you know, doing everything we could to establish independence along the way, including separate shareholder meetings. And so it was a unique structure.
Punit I think it was a one of a kind in terms of being being able to do. And I mean, I haven't I haven't given up in terms of looking at, you know, continuing to be creative. I don't think we'll go through something as extensive as that. But I think that there is a lot of opportunity that was presented in 2020 to where many I think at one point I did this analysis and I got a bit of an analysis done.
Punit It was like 180 companies listed on the Nasdaq that were trading below what their cash was in Biogen. Right. Which is which is something. Right. So they underwater, they weren't getting any enterprise value. And so you you know, that's a unique situation. I think it takes a lot of courage to do to to as a management team to one, sit down and think, okay, am I getting any enterprise value?
Punit If not, what what are my milestones ahead of me before I rode that cash? And will I make it or should I rethink this whole strategy? And maybe there's a there's a unique way to pivot at this point. And, you know, I think I'm I'm always opportunistic. I think in terms of looking at those kind of unique opportunities.
Matthew Yeah, I mean, it's interesting when you have so many in biotech where you don't get the advantages of the capital markets because people associate so much risk with it, it almost makes you wonder, well, why are you a public at all if it comes with that? You know, if you're not getting the advantages there, I'm sure some do, but that's got to be tough.
Matthew How do you how do you manage? How have you managed with with Sky to to do that, you know, and not have kind of the the the massive speculation hit or risk hit, if you will, for being pre-revenue. And, you know, you've got what you've got. You're going into stage two clinical trials. So is how do you keep from from experiencing the same thing that the company you emerged with was experiencing.
Punit Yeah. So that was a different business. They were the counter products and it was it was challenging. There was oversaturation in the market where their products weren't were selling. In this case, what we're doing is the differentiation. So the class of compound class of the indication is what's driving the value and fundamentally making hitting hitting the milestones along the way.
Punit So we've been very deliberate about demonstrate rating the progress from when this management team took over this company. So we as a management team and board are not the founders of this company, but we're the current stewards of the progress and the value creation. So I think it's very clear, very important to be clear about what are those inflection points along the way and demonstrating the differentiation of this class of compound or this lead asset relative to the market.
Punit So it's pretty easy for people to correlate that. Okay, there's a large market for glaucoma, a $6 billion market, but Sky has the potential to have a piece of pie, a slice of pie of that market. And what's the risk profile that we're willing to take to to do, you know, basically a discounted cash flow on that? Yeah, that that opportunity.
Punit And every step along the way we're we're hoping to to mitigate that risk with the clinical progress certainly was a different place two years ago where we didn't even have a formulation for the drug. Now we're in phase one clinical trials where. We've confidently displayed safety from our from our drug. And the next step is phase two, where we're going to be measuring in addition to safety, we're measuring efficacy in glaucoma patients and ocular hypertension patients.
Punit So we're able to show this the main disease modifier, which is lowering of intraocular pressure in glaucoma. That's going to be a great outcome because that will signal to the market that there's finally a new drug that's able to demonstrate efficacy for these patients that have very limited innovation in the last two decades.
Matthew That's fantastic. And can you what is that? I know it's kind of conjecture, I guess, at some point, but I think what you're saying is part of the the value of the management team and the reason the capital markets are are, you know, kind of more supportive is because you're you're being very clear and you've come up with with pretty clear plans and you've laid those out, you've hit your milestones.
Matthew Can you share what is the plan going going forward? Is it, you know, after let's say, let's say phase two clinical trials goes, well, what's the plan in phase three? What's the is there a or are we looking at a pharma play or is it, you know, going to market or what's what can what can you share with us on that, if anything?
Punit Yeah. The goal for us is to commercialize the drug with a commercial partner. So the key inflection point that we're working towards is getting to phase two trial and phase two data. So there's two parts. There are phase two, there's the party and A, part B, and both of those have very important kind of data points for us for the overall package to present to a potential commercial partner.
Punit So I think investors or stakeholders are expecting that's going to be the outcome and us as a management team and board have done that historically. So I, I, my, my, collectively our team has been successful at partnering drugs with Big Pharma. So we're ultimately expecting a we don't want to build out commercial infrastructure at Sky. We want to work with the, you know, the top up ophthalmology drug developers because they already have their call points.
Punit They have that infrastructure and they would take it from there. So phase two is going to be the key major inflection point. And then from a pipeline innovation and evolution standpoint, we have another drug candidate that's on the heels of our lead asset. So either our lead asset bifurcates into more than one indication glaucoma and something else, or are our next clinical asset.
Punit As then comes into the pipeline. If the first lead asset becomes partnered, then there's also the possibility that everything that we're doing collective lead holistically is something that is attractive to a partner. They may not only like what they see on their lead us that they were saying, okay, this class of compounds has potential to be an overall platform because whatever reason that usual reason for Big Pharma is, their IP is running out and they're looking for innovative new things to plug and play into their whole infrastructure.
Punit So that would be the ideal scenario. I think everyone would be happy if there's an exit like that and it's been proven to happen. It's just time and and getting there. So that's what that's what we're working toward. So this year is going to be a big year. We like in 2022 was just about getting this is this trial started in 2023.
Punit We're enrolling between two studies over 100 patients. Nice for for these for our lead asset. So that's that's exciting for us. We're going to have a very strong database of human data and clinical data. And collectively, I think that that's what's going to be wholesome to be able to present to a commercial partner.
Matthew All right. Now, phase two can be, I guess it can vary wildly between as little as, you know, weeks to, you know, months or even years. Is there any do you have any idea what what you might be looking at for your phase two for your lead?
Punit Yeah. So our our data is going to be based on two weeks end Point. So it's it is, it is a I would say of a smaller lead time than oncology drugs which often take six months or even in some cases survival data. So the ophthalmology drugs, I think there is an opportunity for some level of efficiency there.
Punit We'll work our way up to three months of data in our phase to be, and that's what we're working towards. So initially for phase to a it'll be a 14 day day.
Matthew Very cool. Yeah. Okay. Well let me ask you, I know you're you may be getting short on time, but if you still have a few moments, I'd love to talk to you about Yale, Canada and, you know.
Punit Oh, yeah.
Matthew You could tell us about your work there. That would be that would be great. Yeah. It's really what Yale is. And. Yeah.
Punit Yeah, Yale has been awesome. We've been working on a, like, basically the first high school entrepreneurship course eligible for university credit, and it's providing you with basically all the practical tools and experiences they need to cope with succeed. And it is geared towards business and entrepreneurship. But I would say that the more macro way to look at that is leadership skills and and it's a program that's established in Canada and it's been around now for almost a decade and continuing to grow, you know, at a fairly conservative clip.
Punit And now we're finally getting into some some unique national other national other cities across the country. So we're looking at constantly expanding. One of the unique things about this program is that the students are getting real practical experience by entrepreneurs coming into the classroom and speaking to the students. And then the other part of the experience is that they get to participate in a business plan competition.
Punit And it's much like Shark Tank where they present to a bunch of VCs and there is a there's a kind of the semifinals and the finals every year. So there is a bit of notoriety around certain schools or certain, let's call them that school zone. But I.
Matthew Districts.
Punit Districts and constituents that that have had more wins. And and there's a bit of competitiveness amongst the students. But this year the venture challenge is coming up actually in April is the semifinals and May is going to be the the finals. And yeah, we're we're continuing to make a lot of investment in that. So it's the program that I co-founded with two other entrepreneurs and in Canada and all of us come from different disciplines.
Punit One of the co-founders who's the managing director is amidst Nandu and he's a like one of the most prominent developers. The other co-founder is that his name is Robin Bagga, and he's been in and involved in wellness and and also his business has been in the food industry. And so they have a distribution inside of their host, like whole ingredients and a lot of different business, a lot of different businesses, restaurants due to Whole Foods.
Punit And so and then I come from the life sciences space. So collectively we've been young entrepreneurs that continued to build our own experience in our respective areas. And then we've continued to build a great community around that and teachers and students and alumni now and and parents as well as the district superintendents and a lot of endorsement and it's it's also funded by the government.
Punit So we've been able to get a mixture of government grants as well as industry grants different partners.
Matthew That's fantastic. So if if any entrepreneurs, you know, watching or listening wanted to participate or help or, you know, kind of further the cause, what could they do?
Punit Well, they can just go to the website Yellow Canada dot org and there's a tab called get involved and. There's many different ways to get involved at a community level. If you're a student participating and seeing where the classes are available, if they're not available, your school, there's other ways to certainly participate in the curriculum. And yeah, there's a there's all the information is on the website and you'll Canada dot org.
Matthew I love it. Okay and we we like to ask all of our our guests if they've got particular mentor that that they'd like to share with everybody. You know candidate you'd like to know whether it was an author or a person that kind of guided you along the way, whatever it was.
Punit Yeah, I think I've benefited from a lot of different coaches in my life, athletic, so like swimming coaches or triathlon coach. So there have certainly been mentors in their own right because they've offered a certain of structure and accountability to continue advancement. And then I had a I really appreciate it kind of the the other professionals that I've met in my career.
Punit So one of the inspiring people has been my the scientific co-founder of the last company. I was involved with, Dr. Dale Dowd. He's been a great, I think, risk taker and proponent of advancing the progress in oncology. And he he took a risk working on the technology that we were working on and in the last company. And he's continued to be a very preeminent melanoma doctor and skin cancer doctor.
Punit So, you know, it's people like that that that are always on the cutting edge and they're they're really humble in terms of advancing that what they believe in. And, you know, and it seems like it's the ultimate kind of place be in terms of fulfillment, because I don't I mean, I don't think there's I mean, sure, there's a financial element of of of any any profession, But certainly from what I've experienced by working with him, it's never been a financially driven thing.
Punit It's always been about what the patient outcomes could be with these cutting edge therapies. So I like that mindset and I think that there's been a lot of similar people that I've come across in the life science industry that are really interested in making a difference for patients. On the author side, I do like to read. So I mean, one of the the books that I have always leaned on is one of my which is one of my favorites is The Lean Startup by Eric Reece.
Punit And it's basically like a guidebook for startups on how to build and grow their businesses in a very cost effective way. I also like Shoe Dog by Bill Knight. I'm looking forward to that movie that's coming out soon called Air Jordan. Yeah, yeah. And I've also enjoyed Jim Corliss. I've had a chance to meet Jim Collins on several occasions.
Punit I read all of his books. I think one of my favorites is good to great. And so those those are some some books that I'm sure a lot of people have come across, but those are the ones that come to mind or they're fantastic.
Matthew And then for the cyber aspect of the Cyber Business podcast, he has to throw it in there at the end. We had such a good time about everything else. I got to ask you, you know, on a lot of manufacturing, you know, we've got a lot of manufacturing clients with at Cyberlink's that that and there's lots of of cyber attacks.
Matthew Now on the manufacturing aspect, I'm kind of curious on the the biotech side, are you is that something that you guys are seeing a lot of or is it just on the financial stuff, lots of phishing attempts? What are you guys seen on on your end there? It did you.
Punit Did you look at our press releases and did you know that we got hit with a cyber attack?
Matthew I did not know it.
Punit So last year this was one of the things I was hinting at before. But obstacles out of your control, Our manufacturing clinical development manufacturing organization got hit with a cyber attack. It basically threw a wrench in our whole timeline. So we were ready to go to manufacturing and it was literally weeks before our clinical trial was about to start.
Punit We just got regulatory approval from the Ethics Committee. We're finishing the idea that the expectation was to finish our manufacturing, shipped the drug off and our clinical trial would start and we got hit with this notification that the CDMO was was hit with a cyber attack. And it was it was one of the most challenging things I've ever experienced because I never I've never been involved in one of these.
Punit And we didn't get like this was an internal thing. This wasn't this is all, you know, working with our our manufacturing partner. And oh, you should have seen my frustration level because I was, you know, I didn't recognize how all of these systems on the IT level are all integrated with these controls. And the way that, you know, the whatever the aseptic conditions that are required for a certain manufacturing site.
Punit And I'm like, why can't we do everything manually? Why do we need to connect it to the servers and having them kind of, you know, the challenges that they had to deal with in terms of dealing with the intrusion, risk, setting up their system, and then also our timelines, meaning our timeline. So we thankfully, you know, were able to manage through that.
Punit It certainly was a reputational challenge because we had set expectations and guidance on timelines and then we had to push them out. And as a public company, that's always a very difficult thing to do. And in a situation like this where you try to, you know, do everything we can to control timelines and yeah, you have this anomaly situation that was very, very frustrating.
Punit But we, we, we navigated through it and we were also successful in terms of managing with our cdmo to be the first one out of the gate. Once manufacturing was open, because then there was a whole backlog we had to deal with and we were already dealing with 2021 backlog with supply chain issues. So if you take into account like manufacturing delays associated with just materials, like we have a very specific nylon filter that's used for our manufacturing well, this nylon became rare and I think we were in control of the majority of these filters in the world in 2022, you know, and then then it turns into the cyber attack that ends up having
Punit an impact on timelines. But I don't ever want to experience that again. It did prompt us to start thinking about more of preventative measures at Sky in House. So not only from an insurance standpoint, but internal controls and systems. More two factor authentication. We are we get all of the same stuff, lots of phishing attempts, but Our team is pretty sophisticated to know that I don't send an email in the middle of the day to send a wire to something that's very mysterious for We're like, we're like, these people are really like, silly to think that that's not how it happens, but it is pretty interesting, like how some people in their phishing scams are
Punit very sophisticated to understand the company's process and try to circumvent. I don't know how they they do that, but they must have just they just they must do a mass approach and see what sticks.
Matthew Well, it's wild because there's so many different, you know, that the attack surface is so broad, even for a relatively small manufacturer. There are so many ways to get in. And statistically, 60 to almost 90% of those attacks end up happening because somebody makes a mistake. Right. They they, you know, plug in something shouldn't have. They downloaded some they clicked on something they should know or they they reused.
Matthew And a very typical one is they reuse the same password because they're tired of you know, they don't use a password manager and they only write down but so many and so they reuse that. And one of those passwords gets compromised. They didn't have multifactor authentication on or, you know, you name it. And so these just become very easy ways in.
Matthew So once they're targeting a specific one and I love the fact that most small businesses think that they're too small a small manufacturer. We had a we had a a private equity firm come to us that, you know, had gotten hit and they thought they were too small. We're talking about hundreds of millions of dollars in their world.
Matthew They're tiny. They're I get it. You're a guppy. But in in the world of the, you know, normal people in business, you're a large target for a you know, for some third world hacker. You're you got, you know, tons of money. They only need a small chunk of that. And you've made their year, right. So it's really funny that it happens, you know, far too, too easily and often.
Matthew But yeah, so. Well, that's a great story.
Punit Yeah We learned we learned from this externality situation, but it did help us beef up our own internal like one of the things I've been proud of with this organization is that we, you know, compared to a decade ago even or you know, although we have a server room here, it just houses the switch think that it's mainly for our internet.
Punit Everything else is in cloud native environment. Right? And if all of the systems that we use, we have every single internal control here at the organization is in some sort of virtual environment or a virtual application. And that's it's, it's been I think it's been game changing in terms of productivity because the systems now, you know, they talk to one another.
Punit So you can be on this very applications that are capable of speaking to one another none more than just the office environment like the Microsoft environment is great because it has teams and all of that integration on the Office Suite. But maybe you're using like a, you know, an accounting software that then talks to another application or the accounting type of software talks to the we have a a virtual environment just for all of our SCC filings.
Punit And and because not all of our staff is located in San Diego, it's made us super productive to be able to work through all of our workflows and never skip a beat like we can. It's, it's also saved a tremendous amount of money. I think instead of having everything housed on a server and then you have upgrades Associate I I've gone I've become more comfortable with the aspect of purchasing the right types of applications and then planning and then paying for the service fee associated with the upgrades or the continued evolution of that in the work environment that's required for your business.
Punit And that's where I.T I think has really now step stepped up a notch, whereas you know, you remember back in two decades ago you had a bad server and like all these things that you had to like house and it was everything all your data was had to be VPN into your, into your closet at the office. And then it was a nightmare.
Matthew Yeah. And not anymore. But it's funny because it's just like, you know, we all learned that lesson about saving, you know, whatever you're working on, saving it frequently and backing up. Everybody learns lesson the hard way. And it's sad that that so many people are having to learn the lesson of, you know, cybersecurity, you know, and basic cyber hygiene, the hard way.
Matthew But it is funny because once you've learned it, you learn it because you know somebody, you were connected to it and it sadly it it impacted you. But we're we're starting to see that, you know, there's a a cyber risk not just for you, but your partners as well. And it impacts us. You know, we're no we're a very interconnected world now.
Matthew So, you know, whoever you're doing business with, they're getting attacked can can affect you. So we're finding that we going back to like private equity, we've got we're now helping the people that they do deals with to make sure that before those deals are announced that they're cybersecurity up to speed because once they announce they become a bigger target.
Matthew Right. And so even before that, you know, you got to make, you know, kind of spreading that that idea of, hey, while we're well, we're talking, how are you guys? And it should be like, you know, I look forward to the day where it's common for to in business parlance to be like, how's what are you guys doing for cybersecurity?
Matthew Because if you get hit, you know, it can't impact. And, you know, I get that your insurance will pay for it, maybe, but that's not going to help us so much when we take a reputational ding.
Punit No, we look at it as from a sophistication. It's not like that's one of the things we do for due diligence. Now, whenever we're looking at outside parties of potential partner, it is a sign of how sophisticated that team is in terms of the way that they've set up their internal controls now. But, you know, we're saying we're we know all of it, but it I think we're proud of what we've been able to build over time and we're at a place right now where where we have the redundancies that make us comfortable.
Punit So it's a good baseline to then do a comparison against others saying, okay, well that's the exposure that we're going to have to equate for or whatever. So yeah, it's, it's certainly, you know, things are moving fast. I'm pretty excited to see, you know, how that's working out. Well, and as long as that off the higher end, you know, kind of nothing against i.t professionals.
Punit I just better be a biotech company or being lean on that side.
Matthew So you got.
Punit To I want to keep it to one of the on its side, but it seems to be working out well because these are outside providers exactly as.
Matthew Perfect. Well, I loved having you on, but before we go, can you tell people where they can learn more about your offer and get a copy of your fantastic book? Uh, so yeah, no place where where can they find it?
Punit So the book is available on my website at Middle Glencore. Um, there's a tab, I believe called Book, and it's available on Amazon. So in multiple forms, hard copy, soft copy, digital and audio and appreciate the opportunity to speak about the book because I haven't done that in a while. And we and the company information is available on Sky Bioscience stuck up Fantastic.
Matthew I it was an absolute pleasure. Thanks so much for being on and I keep up the great work Thanks.
Punit Thanks so much Mat appreciate.
Matthew It You got thank you.

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