Cabaletta Bio is a clinical-stage biotechnology company focused on the discovery and development of engineered T cell therapies for B cell-mediated autoimmune diseases. The company hopes to harness the immune system through innovative cell and gene therapies to deliver accessible cures for patients. Pulse writer Alex Yoo connected with CEO Steven Nichtberger to learn about his experience as an operator, investor, and founder in the biotech space as well as take a closer look at the CAAR technology.

Steven Nichtberger, CEO of Cabaletta Bio

The Pulse: Could you share an overview of your career path and the twists and turns that led to your current role as CEO of Cabaletta Bio?

Steven Nichtberger (SN): That’s a long story. So my career path got its initiation when I was only 12-years-old and my older brother had passed away. His death was unexpected because he suffered from a chronic illness and we didn’t think it would kill him so young. It was because of his death that I decided to devote my professional life to improve the lives of others through healthcare. I chose to go to the University of Pennsylvania for its great natural science program and strong business school. I came to college believing that I would go to medical school, but not stay a doctor long-term, which back in 1979 when I started at Penn nobody did.

 I went through medical training, finished my internship, residency, and fellowship in New York, and then joined Merck in the commercial marketing function, new product planning function. I ultimately came to some US operational roles for a variety of brands, managing about $4 billion worth of business across a number of brands and then became the head of marketing for the company. In that role, I developed a great understanding of commercialization, the planning that goes into it, and the execution and innovation for our clients.

I left Merck in 2003 and started my first biotech company called Tengion which worked in cell therapy to replace and regenerate bladder tissue among other kidney tissues as well. In 2010, I left Tengion and I started teaching at Penn for the Vagelos Life Sciences and Management Program. The work that I did with the Vagelos Program and ultimately teaching the senior capstone course allowed me to become familiar with a lot of early-stage technologies because students form teams and develop companies around these technologies.

During this time, I also started investing in companies, traveling, and spending a lot of time with my kids. One of the most important career choices I made was to invest time with my kids when they were in middle school and high school, before they went off to college. I was really enjoying life when I came across this technology published in Science in 2016. I brought it into the senior capstone class for the 2016-2017 academic year, and by 2018 the scientists behind the technology, which ultimately became the basis for Cabaletta Bio, were interested in having me launch a company with them. We raised $25 million from public equity investors who were interested in an early-stage opportunity that could transform autoimmune disease. This was a CAAR (chimeric auto-antibody receptor) technology when applied more specifically to only the B cells causing the autoimmune disease of certain types, we could potentially cure those diseases. It was an attractive opportunity and I wanted to see it go forward. I liked the scientific cofounders very much and we worked really well together and so we launched the company.

The Pulse: At this point in your career story, you’re involved with a very early venture with an exciting scientific idea, a great founding team, some data, and access to capital. Is this the point at which you decide to go all-in? 

SN: After long discussions with my wife, my kids, and my own introspections on what I want to do with my life over the next decade, I came to the conclusion that I was jumping into this full-time. We still didn’t have any employees and I hardly had a license to the technology but there was a lot of trust, a lot of deep agreement among the investors, myself, and the scientific cofounders of what we were going to do. And so we funded the company in August 2018 and by early 2019 we raised over $75 million, hired about 20-25 people, got the first Investigational New Drug Application up and running, filed, accepted by the FDA. A month later, we took the company public, raised another $75-80 million, and with enough money in the bank, started along the path to execute very efficiently the first human study with novel CAAR-T that would either prove or demonstrate the challenges of CAAR-specific platform to address certain autoimmune disease and potentially cure them.

The Pulse: If successful in trials, can you describe the impact your novel therapy could have on standard of care for patients?

SN: Today’s standard of care is very expensive therapy given to these patients on an annual or recurring basis with modest treatment effects. So the opportunity to cure with CAAR T therapy has not only clinical benefit which is paramount, but also financial benefit of the sort you see with vaccines: a one-time cost cuts off an ongoing cost that could last for decades. Many of the patients suffering from these diseases are 20-30 years old who have decades in front of them. So unlike cancer where if you save a life, it costs the healthcare system money, this is a place where in autoimmune disease if you can treat the patient and cure the disease, you might actually save the current payer significant dollars over the next few years.

So the basic biologic opportunity was elegant, the clinical opportunity was compelling, and the financial opportunity was as full as it could be. For those reasons, I jumped in full-time. We built the business and decided to partner with Penn on our manufacturing to diminish our fixed costs, and we benefited from using the original technology that Penn developed for KYMRIAH as the basis of our manufacturing. Manufacturing by a highly-competent, highly-capable partner at the University of Pennsylvania was a very capital efficient way to go about prosecuting the first product. While doing so, our strategy included developing many other products just behind it because once we demonstrate that the platform works, everybody in cell therapy and autoimmune disease would want to be in this field so we needed to have the intellectual property filed well before we had that evidence.

The Pulse: Can you tell us more about the CAAR technology and how it differs from CAR-T therapy? What is the additional benefit of CAAR vs CAR?

SN: The CART19 technology that is currently approved for certain cancers and hematologic malignancies and our CAAR technology both use T-cells taken from the patient, they both use a genetic modification of that T-cell done ex vivo which adds in a signaling chain and a targeting domain. In CART19, that targeting domain is an antibody that will identify the CD19 antigen on all B cells. Our scientific founders found that they could use this same killing mechanism, the same signaling chain, but change the targeting domain such that it doesn’t bind to all B cells via the CD19 antigen and instead bind to the B cell receptor on the pathogenic, autoreactive B cells only. That pathogenic B cell has a specific auto-antibody on the surface of the cell that connects with our CAAR T cell’s targeting domain. So our CAAR-T cell, that is the drug, binds to the auto-antibody on the surface of only the 1% of B cells that are causing the disease. And that binding allows the T-cell to destroy the B cell.

So the difference is that we have a personalized, highly-specific therapy that can allow patients to maintain normal immunity, which is particularly important in a COVID world. Maintaining normal immunity, having the ability to be vaccinated, and being able to respond to infection while eliminating the disease, perhaps permanently given demonstrated 5-year response rates with CAR T technology in oncology.

The Pulse: During your time at Merck when you were first transitioning to the business side from the clinical side, what were some of the challenges you faced?

SN: My approach at Merck was to never talk. In the 1990s, there was still a sort of reverence for doctors and an attitude that “they know it all” and doctors thought they knew it all. My idea was to never be that guy so my rule of thumb for the first three months at Merck was to never talk unless somebody asks for my opinion and then we’d talk. And so I got more integrated and people became more comfortable with me.

Around that time, I became familiar with emotional intelligence literature. There was some emerging data suggesting that the qualities of self-awareness, self-control, team awareness, and team influence were meaningfully associated with success. And so I tried to model my behaviors at Merck around those disciplines and it seemed to work out pretty well in terms of my career. I took this approach into the biotech companies I’ve started. Culture is central to how I’ve performed my jobs at various companies I’ve been involved with. People not only get passionate when times are great, but they also stay committed when times are less great.

The Pulse: You’ve been both an operator and an investor in the pharma / biotech industry. What skills are most important when transitioning between the two roles?

SN: In biotechnology, particularly early-stage biotechnology, you need to be able to figure out not only where there is great science that has high promise, but whether the valuation is appropriate. So the skills required as an investor and as an operator are obviously different. One deals with strategic thought and the other is how you implement and operate, so in a sense they’re very different. But, the skillsets you need to do either are pretty similar in the sense that you need to understand the science, and if you don’t understand it you need to find people you trust who do understand it.

Once you understand the science, you need to figure out what it’s worth, what the value-creating milestones that would allow investors to pay more tomorrow than they did yesterday. As an operator, you develop a plan that allows you to achieve each milestone and then get by to live long enough to raise new money. As an investor, you need to decide whether an investment today is going to get a company beyond that milestone and raise money at a higher price tomorrow. And if you don’t believe they’re not raising enough money, you shouldn’t invest.

The discipline required for investing is similar to the discipline required for operating in that motivating people, attracting talent, and retaining them are most important. I have a strong belief that it matters less what the technology is and more what people you’re surrounded by. A great team can make a modest technology a big success, but a terrible team can destroy a great technology. So I’m very invested in the team. 

The Pulse: This year’s Wharton Health Care Business Conference theme is “A Fair Shot at Health.” When researching and commercializing exciting therapeutic advancements, how important is it to prioritize equitable access to new therapies? What steps should the pharma / biotech industry consistently take to prioritize access and health equity?

SN: Access is critically important because it goes hand-in-hand with the value-proposition and pricing choices that companies will make. Without access, pricing discussions can’t proceed, and you can’t limit access due to price.

To your question on equity, inclusion, and diversity – it starts with who you hire to make the choices you’re going to make as a company. Do you have a mindset as a company that values equity, inclusion, and diversity? With that as a starting point, when you make choices about allocating resources, choosing a CRO, partnering with institutions, decisions about equity start there because if you only go to neighborhoods where the patient population is homogenous, then that’s what you’re going to get in your trial. Unless you make diversity of trial participation a priority from the outset, you’re not going to achieve it. Company builders need to think about equity and access from the inception of a company. It needs to be in a company’s DNA and stay a priority.

The history of healthcare inequity for Black Americans has been so profound and a reaction to not trust healthcare providers or the healthcare system is, in my view, justified. Encouraging black patients to enroll in clinical trials can be challenging and it’s important to do so in a way that engenders trust. For the COVID vaccines, Moderna waited an extra couple of months to file to be sure they had enough diversity of representation in their trial. It was a great decision because if they couldn’t enroll a diverse population in their vaccine trial, then they likely can’t build confidence across all populations. For vaccines, this means we also likely can’t achieve herd immunity. It’s in the best interest of society to have a diverse and inclusive approach to access and to the choices we make as developers of therapeutics.                                             

The Pulse: Do you have any advice for students who want to pursue a career in pharma / biotech?

SN: I’m a big advocate for pursuing your own path based on what you’re interested in. None of us know how long we’re on this earth. You need to enjoy the journey as well as the outcome. Being happy is of differential importance to different people. My approach has always been to pursue your passion and pursue what you’re good at, because you’ll be great at it. If you love what you do, you’re going to immerse yourself in it and be great. Don’t copy someone else’s path. Look and learn from everybody else’s but then pursue your own path based on your interests. Whatever it is, do what you love and do it with people who you trust, who you can empathize with, and who allow you opportunities to thrive, grow, and be authentic.

Interviewed by Alex Yoo, December 2021.

On Feb 10-11, 2022, Wharton is excited to feature more expert perspectives like this one at our annual Wharton Health Care Business Conference. This year’s conference is virtual and themed ‘A Fair Shot at Health’. Tickets available here.