With the eye-popping cost of developing a new drug often rising into the hundreds of millions of dollars, if not more, early stage biotechnology firms that have yet to bring their products to market pose unique budgeting challenges for their CFOs.
At Bethesda, Maryland-based Gain Therapeutics — a biotech company with a drug candidate for treating GBA1 Parkinson’s disease in clinical development — the company’s newly minted finance chief Gene Mack is well aware of the pain points that come with high research and development costs. A CFO who has spent his career in various roles within the life sciences sector, he’s also mindful that focusing exclusively on cutting those research costs carries its own risks.
“You see a lot of CFOs, if they come right out of accounting, who go to war immediately with R&D, clinical — you know, ‘do it better, do it cheaper,’” he said in a May 1 interview. Instead, it’s important for finance chiefs to carefully approach and understand spending decisions, particularly when it comes to key clinical trials, rather than just focusing on spending limits, he asserted. “You have to have a perspective of growth...Picking and choosing where you spend your money is the difference between a good operational CFO and one that’s just looking at the line items,” he said.
Still, budget discipline is necessary, and clinical trial expenses are generally the single largest expense for biotech firms, he said. The CFO can contain those costs by understanding how contract research organizations that often run trials operate, how the contracts work, and where their elasticity will be tested, he said. The clinical and development teams understand the science aspects of those contracts, but the CFO is an ally who can make sure clinical trials stay on track while expenses don’t balloon out of control. “Clinical trial supply is very important, if that gets held up for some reason or another your whole clinical program is delayed and those delays are not trivial,” he said.
Mack, 50, took the company’s finance reins in early April, and serves as both the company’s CFO as well as its principal financial officer, according to a securities filing. The company’s previous CFO, C. Evan Ballantyne, resigned from the role effective March 1, according to a securities filing. In the interim, Gianluca Fuggetta, the company’s principal accounting officer, stepped up to serve as the company’s principal financial officer.
Mack has joined Gain as it faces liquidity pressures, according to a May 14 securities filing. Incorporated in 2020, it has incurred losses and negative cash flows from operations since its inception and it primarily funded the losses via its March 2021 initial public offering, according to the filing. The company has existing cash, cash equivalents and marketable securities of $12.7 million and “will need to obtain additional capital and/or other funding in order to continue operations beyond the first quarter of 2025,” the filing states.
Mack said in the interview early this month that the company has a burn rate of roughly $4 million a quarter, something he is looking to modulate through such actions as pursuing grant revenue opportunities and potentially considering licensing opportunities.
Mack brings more than 25 years of experience in life sciences to his new role, according to the release announcing his appointment. Most recently between 2021 and 2023 he was finance chief at privately held Imcyse SA, and he also previously was CFO at OncoC4, a privately held biotech spun out of Merck & Co’s $475 million acquisition of Oncolmmune in 2020, where he had also been finance chief, the release states. He also covered biotech and life sciences for such investment banks as Mizuho and HSBC.
After graduating from Fordham University with a Bachelor of Science in biochemistry and molecular biology, he initially planned to go to medical school before pivoting to get an MBA and pursue a finance career. He credits his experience as an analyst with giving him a broad perspective on effective drug development strategies and the types of approaches that management teams need to take to develop a drug program that is financeable. “Lots of ideas are good but not every good idea is financeable,” he said.
At the time of his appointment Gain CEO Matthias Alder said Mack’s experience complements the company’s management team “as we expand our outreach to the investor community and progress our lead drug candidate GT-02287 in the clinic,” according to the release.
In his first 100 days, Mack is aiming to raise the visibility of the company and its drug program via a lecture tour in which he will be getting in front of investors to explain the company’s strategy and science. The company’s lead program in Parkinson’s disease previously won funding support from the Michael J. Fox Foundation for Parkinson’s Research and the Silverstein Foundation for Parkinson’s with GBA.
Mack maintains empowering scientists and supporting quality data and scientific initiatives are key steps toward producing the kind of valuable clinical data and breakthroughs that will draw more funding from those investors. “Our chief financiers and investors are sharp and they are sophisticated,” he said, noting that many of them hold MDs and PhDs. “You have to show them something new or you get kicked out the door.”
