Transforming Obesity Treatment with Precision Medicine with Mark Bagnall, CEO of Phenomix Sciences

[00:00:02] Hey everyone, welcome back to the Outcomes Rocket. I'm so excited to really bring another amazing guest to you all. His name is Mark Bagnall. He is serving as the CEO of Phenomix Sciences. Mark is an entrepreneur and business manager in the healthcare industry, and he's held roles as CEO, COO, and CFO during his career.

[00:00:28] And he's served on the boards of several public and private biotechnology companies. The past six years have had a lot of action. Mark has co-founded three startups and has advised and invested in several others. Before Phenomix, Mark worked with Health 2047. That's the innovation subsidiary of the AMA, and most recently as an executive in residence there.

[00:00:53] I'm excited to have him touch on a very key topic on the work that they're doing with Phenomix Scientists around weight loss. And how do you know what's best for you and your body? Mark, thanks for joining us. So great to be with you. Hey, I've been looking forward to our chat. We had a nice pre-chat, Mark, and I was like, wow, this is going to be a good one.

[00:01:14] So really to kick things off, help people understand more about you and what inspires your work in business and also entrepreneurship, right? Because we care as much about healthcare as we do entrepreneurship here. Well, as I said, it's great to be with you. I'm excited to share some thoughts with you, particularly on the world of obesity.

[00:01:33] As for me, I've spent almost 30 years in biotech, and I think I spent that long in the field because of just amazing progress that's been made in 30 years. You know, I've listened to a bunch of patients who struggle with a variety of different diseases, and the need is out there, right? And when you develop a product that has a benefit to somebody and really can change their lives, that's a big deal.

[00:02:01] That's pretty, that'll drive you to create new companies, to create new products, and to really push the boundaries of the field of medicine. The thing that inspires me the most, though, I got to say, the physicians and the researchers who are at the forefront of the field.

[00:02:20] So, the folks that I'm currently working with, for example, Dr. Andra Sikosta, Dr. Michael Camilleri, both physician scientists at Mayo Clinic, we care about what happens to their patients and set out to understand why it is that, for example, not all obesity medicines work the same.

[00:02:43] So, what's inspirational is to be able to work with folks like that and to see how their innovation, their care for their patients can transform the field. Yeah, that's great. You know, and it's those collaborations that make the biggest difference. And you guys are doing some really interesting things at Phenomic Sciences. Let's dig into it.

[00:03:08] You know, there's a lot to unpack around specifically how you guys help people identify what's best for them. Yeah. So, we are a precision obesity medicine company. What does that mean? It's exactly what you said. It's we're looking to find the answer to the problem that I laid out before, which is not all patients respond the same to interventions.

[00:03:33] And so, how do you identify the right intervention for each patient? And we know how profound precision medicine has been for oncology. You know, oncology, we used to treat all cancer the same way. And now, thanks to innovations over years, we now think of oncology as not breast cancer versus lung cancer.

[00:04:00] But we think of the specific biomarkers expressed by these cancers that allow us to really target drugs to patients and their cancers individually. We want to do that in obesity. We thought of obesity as this kind of uniform type of disease. Like many things, we love the idea of a silver bullet. So, at first, it was, well, this drug, you know, keto diet is a silver bullet.

[00:04:29] It's the thing that's going to fix all obesity. And then it was another diet. Now, we've decided it's GLP-1 drugs, right? So, it's exempt. It's got to be the silver bullet. And sadly, obesity, like other diseases, is way more complex.

[00:04:45] So, our job at Phenomic Sciences is to create, first of all, a way of understanding that there are subtypes, figure out what the subtypes are, figure out what types of medications are best for each of those subtypes.

[00:05:02] Then, most importantly, create a systematic way of identifying those subtypes that's easy for both the patient and a physician to get to that subtype or get the right treatment. That's what we're trying to do. I think it's great.

[00:05:18] And so, if you guys are struggling with weight loss or your health system or even a payer working with people to get these types of drugs, wouldn't it be nice to know if they actually work before you started spending $1,000 a month per patient on it? And that's what we could know now. We could know if it works with really taking a look at your individual DNA.

[00:05:45] Can you help us understand how your product, MyPhenome, works? Yes. So, thank you. So, we introduced earlier this year the MyPhenome test. What is it? It's a simple, easy-to-use saliva test, and it measures a lot of genes, a lot of gene variants, like 6,000 gene variants across 40 genes. Wow.

[00:06:09] And using AI, we have been able to determine the appropriate algorithm and weighting of all of those elements to determine the subtype of obesity you may have. And what we've shown is that if you have the right, if you identify with the right subtype, you either respond or not respond to the latest drugs, like semaglutide.

[00:06:36] So, semaglutide is the generic name for Rosempic and weight coffee. And we showed last year, did a presentation at a prestigious conference that showed that in what we call hungry gut, so there's subtypes of obesity, one of which we call hungry gut. What is it called? Hungry gut? Because a hungry gut is a subtype, one of four subtypes of obesity.

[00:07:02] If you're hungry gut negative, you only lose half as much weight on weight coffee as if your hungry gut positive. So, a real difference between the benefit that this drug can give you if you are that subtype of the disease. And so, it's long been understood.

[00:07:26] If you look at the clinical trial results of any of the drugs that have come to market or the drugs that are in development, there are patients who lose a lot of weight, 30% of their body weight loss, and some who lose almost nothing, 1% or 2%. And so, what you'll see is, for example, for Wago V, the package insert, the label will say average of 15% total body weight loss over 52 weeks, over a year.

[00:07:55] Well, actually, that's made up of a whole bunch of patients who lose a lot of weight, a whole bunch of patients who lose up. So, what we're trying to do with this test is identify those patients who should take the drug. You lose 20% or 30%. And then those folks who are going to lose 1%, 2%, 3%, 5% weight loss, you really shouldn't be using the drug. It's expensive, and there are side effects.

[00:08:19] And by the way, something that people don't really focus on, there are many other drugs out there, not many, but there are other drugs out there that have been out in the market for years that are as effective if you pair them with the right subtype or phenotype of the disease. So, for example, we have another subtype of the disease that we identify. We call it hungry brain. Hungry brain?

[00:08:45] Hungry brain is another subtype or another phenotype of the disease. Okay. And if you are hungry, brain positive, we've shown in our studies that a drug called QSIMIA will generate up to 17% weight loss. Now, QSIMIA has been around for years, and the difference in price is about 10 times less, right? And just as effective.

[00:09:13] And by the way, no nausea, no vomiting, no having to titrate up the dose to get around the side effects. Does that one have side effects? It's been used a lot. There are some warnings, but there's no side effects. There's nothing like the dose-limiting side effects.

[00:09:32] One of the issues that we don't talk about much with these new GLP-1 drugs is the number of people who actually end up having a dropout of using them because of the side effects. They just can't tolerate these very difficult gastrointestinal side effects. Yeah. I've heard stories. I've heard stories of really bad situations.

[00:09:53] Really bad situations we've heard from some of our patients who we've been working with who put a lot of pressure on themselves to continue to use the drug. My friend lost 60 pounds. I'm going to continue to lose her. And just being absolutely miserable. Their entire life's compromised. Terrible. Now, I don't want to suggest these are terrible drugs. I think it's wonderful that Lilian Novo developed the drugs, that they're on the market.

[00:10:23] They've made life better for a lot, a lot of people. But our job is not to say that it was a terrible drug. Our job is to say we should use the drugs judiciously and we should use them on the right pace. Yeah, I love that. And you know what? It's responsible. It's responsible medicine. To not just say, hey, it's out there. Take it. Like, we're in an age of advanced medicine here, guys and gals.

[00:10:49] Like, I mean, thankfully, Mark and his team have come up with something that we could use to be responsible for with these things. Oh, and by the way, there's alternatives that so many of us aren't talking about. So I love this, Mark. And yes, you know, we're not saying they're bad. Side effects are bad sometimes. And so what else is out there like this? Are you guys the only game in town? So commercially, we're the only game in town.

[00:11:15] And from time to time, we see researchers publish on projects where they look for biomarkers that associate with response to drugs. And there was a recent publication.

[00:11:30] And there was a recent publication that just came out exploring biomarkers in patients who had taken WAGO-V, and they had not been able to identify a predictor response. And this was looking at data from patients who had been on drug for a year and then looking at their electronic medical record history.

[00:11:54] And so we know that there are a number of organizations, that's just one of many, who are looking at this, who know that there is a need to understand that we need to look at these differences in responses and understand the heterogeneity of the disease and what that really means for treatment of medicine going forward, that we need to move into a world of precision medicine.

[00:12:19] In fact, the NIH has been working on precision obesity medicine. We got a notice from them recently suggesting that we contribute to their discussion on precision medicine for obesity. Everyone understands that in the research field, in the obesity research field, understands that this is where the future is going.

[00:12:47] In fact, one last thought on Oppenheimer, a big investment bank, had a report released late last week explaining all of the drugs in development. And there's a lot of them. Oh, yeah. So this is fresh off the press. And in their research report, one of their thoughts, one of their major highlights was the field of obesity is going to move towards precision medicine, going to look a lot more like oncology. They cited one of the slides from our founders.

[00:13:15] But when you see the number of different drugs in development and the number of clinical studies, over 100 clinical studies going on in obesity and the different types of drugs and the different mechanisms, you realize that what is going on is this idea that it is going to require a number of different approaches. And we're going to be tailoring medicine to individuals for the best possible outcomes.

[00:13:42] And so while the drug companies are moving towards these differentiated medications, there needs to be somebody keeping a score. There needs to be the traffic cop in the middle saying, yeah, you take that drug and you take that drug, right? And so that's us. And as I said, to your point, so far, we see us as the only company looking at predictions that is already commercialized. That's great, Mark. Really appreciate that.

[00:14:12] And hey, how about, you know, I'm just had this thought. Like, what about for people that say, I want to do the old school way. I want a calorie count and I want to do this or that. Yes. Does this test help them? Absolutely.

[00:14:51] Is this? How rampant it is. I mean, just how it's exploding in the U.S. in particular and in particular in young people, which is very scary. We are not going to tackle this with drugs alone. We're going to need to use every intervention at our disposal, starting off with how we exercise, how we feel, what we eat, et cetera, et cetera.

[00:15:19] So the beauty of this approach that we have is the test. The test is the test as we identify these subtypes of obesity. You can really tailor your diet and your exercise program to these subtypes. Oh, you can as well? So one of the things when you get a test result that you get is what kind of diet, what kind of exercise? Are you better off with a lot of seps, cardio?

[00:15:48] Are you better off with a resistance training? Are you better off with a high protein diet? Are you better off with a high volumetric diet? All of those can be tailored. And that's important because for those patients who don't want to be on a drug, can modify their lifestyle to their biology. Understand your biology better. Understand your genetics better. And then tailor your lifestyle to your biology and genetics.

[00:16:15] Or if you do want to be on a drug, that will help enhance the benefit of being on whichever drug your physician thinks is right for you. So what we want to do is provide a physician, patients, maybe even their whole healthcare system if you like. But if you understand your biology as well as you can, then whatever innovation you pick, you can do better. And I think starting, of course, with a better lifestyle.

[00:16:44] As I said, we're not going to fix 100 million people on $1,000 a month drugs. It's going to break the whole healthcare system. But also, that's just not the right response to this type of issue. Love it. No, thanks for that, Mark. So hey, by the way, everyone, this includes you. So if you're not thinking about taking a GLP drug, GLP-1, like me, right? I'm working on losing some LBs, Mark, and everyone out there. I don't want to take them, man. I read the label. I saw all the...

[00:17:13] I'm like, I don't want that. Man, are you kidding me? Like thyroid cancer? No thanks. Yeah. You know, but anyway, so great to know that this is about precision medicine and making great decisions. Mark, I want to ask you too about... Because you've been down this road a lot. You see where the puck is going. So I love that you're here again, creating another company. How has your background as a CPA and your work with EY and all the things that you've done helped you as an entrepreneur?

[00:17:43] Is it fundamental? I don't know. I think the beauty... It's a great question. Well, it was a while ago. A part of the reason is a while ago. Yeah. I thank EY for putting me on a lot of biotech clients. And I eventually joined one of those. And I do think the benefit of being trained as a CPA is the discipline. Mm-hmm.

[00:18:07] Because part of what you need to do as an entrepreneur is that blend of no discipline and lots of discipline. And knowing when you need the discipline part and when you need just to let it go and go break things. And so I think the overarching benefit of that training was to... What I used to love as a CPA is at the end of every day, you make your checklist.

[00:18:36] Here's the list of stuff I need to do this week. Here's what I've crossed off, but here's what I need to add to the list. And as an entrepreneur, it's exactly what you do. The biggest thing you do as an entrepreneur is not be super clever. It's not to have the greatest idea. The biggest thing you do as an entrepreneur is to move things forward. Every day, make progress on something. Right? My challenge is to constantly be moving things forward. You know, I've checked this stuff off this list.

[00:19:06] What's the next list of stuff to do? Because you've got to move things forward. So that was really what that training led me to do. The thing that I had to forget was as a CPA, you don't take any risk. Right? As an entrepreneur, you've got to learn how to take risks. And you've got to learn that you should be taking risks. You should be, again, as you move the ball forward every day, you know, you're going to hopefully, if you're doing something worthwhile, it's going to be something novel, groundbreaking.

[00:19:35] That's going to really, you know, change the game. And that means you're going to be taking risks and you're going to be happy with it. And so it's that balance of I'm going to be disciplined about what I do and be happy and comfortable taking risks. That's the fun thing. I love it. No, that's great, Mark. I appreciate that. I'll share this one with my brother, Hector. He's a CPA at EY. He'll get some inspiration. I'll send him your bio in this. No, I love it. Talk to him. It's great.

[00:20:05] Love it. Absolutely. Yeah. He's been there for like seven years, eight years now. Time for him to move on, do something more fun. Hector, you hear that, right? Mark's giving you some advice here. No, I love it, Mark, for sure. And look, getting back to the company, who do you want to target with this? Like, who do you want to be hearing your message right now? Is it the payers? Is it the employers? Is it the providers? Is it all of the above? Tell us who you really want to work with. No, I think so.

[00:20:33] That's a really great question because one of the things that I've noticed about this company that's so different than any other that I work with is that the range of target audiences just seems to be endless. When we founded the company, we knew this was great science. We knew this was going to be meaningful, but the exemplary thing had not hit. And then a year afterwards, the exemplary thing hit, if you know what I mean. Right? Yeah. And now we're in a different world.

[00:21:02] Now we're in a world where my mom knows what exemplary is, right? My mom knows what a GLP-1 is. Yeah. Ten years ago, I was a 25% owner in a GLP-1. Nobody knew what they were. Now everybody knows what they are, right? And so we have kind of a list of folks who we're targeting.

[00:21:25] The key right now are patients who want to learn more about their disease and obesity specialists who are the thought leaders in the industry, who are the people who we can engage with, get their feedback, understand the patient stories, understand the issues that they're dealing with and be as responsive as possible to them and their needs.

[00:21:49] But we are also getting interest from payers, large provider systems, and pharma companies. Weirdly, everything that begins with P. Payer, provider, pharma. Yeah. Physicians and patients. Anyway. And physicians and patients. Oh, wow. I didn't even think about those yet. Each, you know, and what's happened, right, is with that, all of a sudden, this acknowledgement,

[00:22:14] it took till 2013 for the AMA to acknowledge that obesity was a disease, right? Until then, it was just a condition. And good luck, patient, you needed to manage it. It was kind of sort of the healthcare system, not the AMA. The healthcare system's view was condition, good luck, patient, you need to deal with it. After 2013, we didn't really do much about it. And it's really been the introduction of these drugs.

[00:22:42] This is why I give Lilianovo so much credit. The introduction of these drugs has really caused us to understand that obesity is a disease that needs to be managed like it, right? But because there's just been this wave going from zero, no understanding of it, to yes, it should be treated as a disease in a few years, three or four, right?

[00:23:06] All of a sudden, when we can introduce product like my phenom test, that gives you much greater insight into what it is about your disease. What's really going on in your body? What is really happening? How you should be treated? That all of a sudden, then beyond who we thought our initial targets were going to be, which is patients and their physicians, all of a sudden, you get interest from payers. Oh, my goodness. How am I going to pay for all this?

[00:23:36] Pharmaceutical companies that don't have GLP ones. Well, how do I find the patients who should be on my drug, not on that drug, right? So all of a sudden, we find ourselves in the middle of this explosion of interest in this disease area. And I think, and I give our founders a lot of credit because of the work they did, because of just the rigor of the clinical work they did.

[00:24:02] We are able to bring a different point of view, differentiated point of view, and some knowledge that nobody else has, right? And so here we are, relatively small company, relatively early in our stage of development, but able to give people something that otherwise wouldn't be able to see or learn. Yeah, great timing for the solution, Mark, for sure. And I mean, we didn't talk about employers. I would imagine self-funded employer plans. Yes.

[00:24:31] They also want this, the big guys, right? Yeah. And look, it's, you know, I've heard some statistics from large self-insured employers that, you know, I think the first year that Wego Vios introduced their budget for weight loss drugs went up, you know, 5x. And then the next year went up another 5x. So that's 25x. And then it went up 3x on top of that. So now it's 75x, right?

[00:24:59] Like these are, so here you are trying to manage the budget of their health plans. And it's just, you've got one segment that's completely out of control. Yeah. Are we the complete solution to that? No. Can we help with that? Absolute. So the good old phrase, utilization management, right?

[00:25:19] So how do you figure out the best way to use these drugs for the best effect on the folks who are going to benefit most? We can definitely help. And so, and I think the value is, it's not just, oh, sorry, you're not qualified for Wego V. You're going to get nothing? No, you don't qualify for Wego V. But there's something else over here that we've shown works just as well. But your plan is not going to go bankrupt.

[00:25:49] So we've shown, we've done some back of the envelope calculations. And, you know, if you use a test like ours to pay the right drugs for patients, you can lower the cost of overall medications for a health plan by up to 40%. And so, you know, if you're a health plan, lowering costs 40% is great.

[00:26:15] If also, at the same token, the overall amount of weight loss is increased because people are on the right medication, even better. And so those kinds of calculations we've done, and of course, are super interesting to plans and to insurance companies. Thanks, Mark. Yeah, I mean, frankly, I look at it as the MRI scan or the x-ray that you need before the surgery. Like, where are you going to operate, man? You got to know where you do it.

[00:26:43] Well, we can, like, there's a whole segment we could do on AI and precision medicine, Mark. So if you're game, let's definitely do a part two. But for today, I want to thank you for joining us. If people want to learn more about you, about phenomic sciences, if they want a test, where can they reach out? Well, definitely look up our website at phenomicsciences.com.

[00:27:09] I'm on LinkedIn at MarkNKBagnall. And I'd love to hear from you. We're doing great work. But in a disease area like this, all the input, all the advice, all the help is definitely welcome. Sol, and I really appreciate you inviting me on. Of course. I think this was going to be fun based on our first meeting. It's been fun. Love to do it again if you'd have me. You know, I would love it.

[00:27:38] Maybe if you're game AI and precision medicine, because none of this would be possible even, I think, five years ago. That is right. It has taken a lot of sophisticated technology for us to create this algorithm. You don't make an algorithm out of 6,000 anythings, unless you have some pretty sophisticated data scientists on your team. By the way. And computing power. And computing power. The GPUs.

[00:28:07] I mean, crazy now. And really, really good data. I'll give a shout out. And clean data. All right. So, Mark, you just teed us up for our next one. So, I'm excited for that. Folks, Mark Bagnall, he is the CEO of Phenomic Sciences. Don't recommend GLP-1s unless you've taken this test or you've had your patient take this test or your employees. Love it. Because it's blind medicine if you don't. So, check him out. Reach out. Now's the time. Let's be responsible.

[00:28:37] Mark, thank you so much for being with us. Sol, thanks so much. Bye. Bye.