“In Rare Diseases, It’s Personal”: Dr. Matthias Schmidt, JCR USA

In April 2020, Japan’s JCR Pharmaceuticals, a specialty pharma company focused on rare diseases, acquired ArmaGen (San Diego), with the California biotech becoming a wholly-owned subsidiary of JCR. Having led ArmaGen since October 2016, Dr. Mathias Schmidt became President and CEO of JCR USA following the merger.

Schmidt joined the pharma industry in 1999 after several years working at various cancer hospitals in Germany and the US. He held various positions with Takeda and its subsidiaries before joining Takeda California in 2012, where he built a biotherapeutics unit serving all therapeutic indications and all research sites within the global organization.

Here, Dr. Schmidt talks to Pharm Exec about what propelled him from the lab to the industry 20 years ago, and his new role leading the US subsidiary of Japan’s JCR Pharmaceuticals after a “far-from-easy” merger last year.

PharmExec: You made the transition from the lab to the corporate world quite early on in your career. What was your motivation to join the industry?

Dr. Mathias Schmidt

Dr. Mathias Schmidt: I spent the priming years of my career working at cancer hospitals in the US and Europe. My Ph.D. project was to engineer an antibody-enzyme fusion protein for the treatment of breast cancer. By the end of my Ph.D. work, it was ready for administration to patients. It would not have been possible without the help of a major pharma company in Switzerland that produced the drug for clinical trials. As a young researcher, I was very fortunate to experience how it benefitted patients whose hopes rest on our shoulders.

Drug discovery becomes personal when we see the patients’ experiences with our own eyes. However, no matter how close we are, there is always a deep cleft between the patients who face a life-limiting diagnosis and those of us who are trying to change those patients’ fate. Ever since the beginning of my career, I have felt a strong sense of purpose to help change the future of those individuals facing a challenging prognosis. I believed that the best place to accomplish this would be in the pharmaceutical industry.

After some years working for Takeda, you took up the role as CEO at ArmaGen. How did you find making the transition from big pharma to small biotech? What were the challenges and opportunities of making that move?

It felt like finally arriving in the real, not-so-rosy world that was hiding from me behind a curtain. In the biotech arena, we are confronted with issues and challenges we hear very little of in the big pharma world: How do we pay the salaries of our employees and their families? How do we find affordable and pragmatic solutions without having a massive infrastructure that provides almost “concierge services”? How do we close the next financing round? How can we make meaningful progress with our limited funds?

However, more transformative for me was the entry into the rare disease space. In some therapeutic areas, there is so much redundancy in the system that it does not even matter if a program fails, because there will be another 10 companies that work on the same approach. This redundancy is much less common in rare diseases. Here, the failure of a program is like taking away the lifeline from patients whose hopes so desperately depend on the success of such programs. In rare diseases, it is personal, and whether we want to or not, we will get to know the patients on a first-name basis. To this date, it fills me with the deepest sense of purpose trying to help create a better tomorrow for these patients. I will be forever grateful for these experiences.

What was your role during the merger with JCR Pharmaceuticals? How is JCR a good fit with ArmaGen?

Honestly, the merger was far from being an easy process. We had to solve a plethora of legal challenges, some of them appeared almost insurmountable. However, both sides were very committed to the merger and we created a deeply trustful relationship during these times and together, we found courageous and creative solutions. In hindsight, it forged our relationship in a literal sense, and I developed a deep respect for the leadership and people at JCR Pharmaceuticals.

The merger is a good fit for multiple reasons. JCR has an immensely strong platform, the J-Brain Cargo® platform, that builds on the groundbreaking discoveries of ArmaGen founder Dr. William Pardridge and his work on the human blood-brain-barrier. The greatest news is for the patients, as we now can develop these platform programs on a global level, which would not have been possible without the merger.

With your experience of working with two Japanese-headquartered pharma companies, do you see similarities in the way they operate? What appeals to you about the culture of these organizations?

I have the greatest respect for the Japanese culture, their sense of responsibility for one another, quality of thought, work ethic and long-term strategic thinking. For me, joining JCR was almost like joining a family after the long merger period. We share a lot of our personal values and desire to improve the quality of life for the most vulnerable patient populations. Every human life is worth the same, no matter how many stars we have on our shoulders. I have the deepest admiration for how my colleagues go above and beyond their call of duty to accomplish a change in the most vulnerable patients’ lives via the drugs we develop. Their humbleness and reliance on the power of the team is authentic and exemplary to all of us.

What have been your key priorities and achievements since taking on the role as President and CEO at JCR USA?

We have submitted JR-141 (pabinafusp alfa) for marketing authorization approval in Japan and Brazil for the treatment of mucopolysaccharidosis type II (Hunter syndrome). If approved, it will be the first approved biotherapeutic designed to cross the blood-brain-barrier and to address a pathology in the brain, a huge unmet need in many lysosomal storage diseases. The highest priority has been for us to design and initiate a pivotal global study, which could lead to approval of JR-141 in geographies outside Japan and Brazil. In February 2021, FDA granted Fast Track Designation to JR-141 and also granted IND clearance to initiate our global Phase III trial of JR-141 in the US. The global trial also has study sites in the UK, Brazil, Germany, and France.

At the same time, we have several other high priority programs in our portfolio. JR-171, our investigational therapy for the treatment of mucopolysaccharidosis type I (which includes subtypes Hurler syndrome, Hurler-Scheie syndrome, and Scheie syndrome), is currently in global Phase I/II trials and was granted an Orphan Drug Designation by the FDA in February 2021.

Another important aspect has been to identify potential partners with whom we can team up in the development and/or commercialization of assets in our pipeline. With our J-Brain Cargo technology, we see multiple opportunities to develop therapies for other lysosomal storage disorders.

What are your goals for JCR USA in 2021 and beyond?

JCR USA has an important strategic role: to be in close proximity to our key partners in the US, including clinicians, investigators, patient advocacy groups, and most importantly, individuals affected with the conditions we aim to treat. Everything we do has to be for a purpose. Our goals are threefold: to enhance and support our development capabilities for global studies, to strengthen the bridge between JCR Pharmaceuticals in Japan and JCR USA, and to explore commercialization capabilities in the US for select programs that are currently in development.

Similarly, what are JCR’s global expansion goals going forward?

For the last 45 years, JCR has built a strong reputation in Japan as biopharmaceutical company with a focus on protein therapeutics and cell therapies, and our focus for global expansion is on developing therapies for the treatment of rare conditions. JCR was/is the first company to market an allogeneic stem cell product in Japan and invested years of effort to build a substantial portfolio around the J-Brain Cargo® technology. These are two examples of JCR’s aspiration to become a driver of innovation in the rare disease field.

If our upcoming pivotal trial with JR-141 is successful, it will allow us to bring this innovation to the global stage. We also believe that other molecules built on the J-Brain Cargo® platform have similar potential to ameliorate the worldwide disease burden in other lysosomal storage diseases. In this regard, it is a platform technology that catalyzes the global expansion goals of JCR Pharmaceuticals. We could not do this without JCR’s strong foundation of biomanufacturing skills and capacities, which have been built over decades. We will further expand manufacturing as a core strength of JCR, which may even include building additional biomanufacturing capabilities outside of Japan.