In 2012, Ethan Perlstein challenged the academic status quo. Now as CEO of the start-up Perlara, can he do the same for the biotech industry?
In 2012, molecular biologist Ethan Perlstein very publicly stepped off the academic treadmill. In his view, the system was raising more young researchers than it could absorb, driving people into an increasingly long training cycle. Perlstein, at the time wrapping up a prestigious postdoctoral fellowship without a job offer, had had enough.
Using Twitter to call out problems in the system and promote a crowdsourced science project, Perlstein embarked on an independent research career—whatever form that might take.
Six years later, it’s fair to say that Perlstein has successfully charted his own research path. Since 2014, he’s been the CEO of Perlara, a rare-disease-focused biotech firm that he built from the ground up with the aspiration of bringing small-molecule treatments to diseases that industry often overlooks.
As a first-time founder fresh out of academia, leading a team that is also new to industry, he’s matured alongside his company. Pointing out that most start-ups fail within the first two years, Perlstein claims some degree of victory. “I think I’ve grown into the role of the CEO and leader,” he says. “I’m now on the other side of a small mountain and see a larger range ahead of me.”
Like Perlsein’s other ventures, Perlara is not conventional. For starters, Perlstein established it as a public benefit corporation, which means its mandate extends beyond profits to include social and environmental responsibility. And from the early days of the company, Perlstein has been transparent about its progress—whether detailing accounts of its spending or updating each of its discovery programs—through a regularly updated blog.
Perlara also isn’t bowing to the biotechs and big pharmas of the world. Although the company’s first deal was with Novartis, most partners are rare-disease-focused patient advocacy groups trying to push forward a treatment. They commit money in tranches to what the company calls PerlQuests: staged research projects that lead to a drug candidate ready for human testing.
Moreover, Perlara’s scientific platform challenges the conventional approach to drug discovery. While the drug industry tends to rely on target-based screens to find starting points for medicinal chemistry campaigns, Perlstein is convinced that directly testing compounds in genetically engineered model organisms like yeast, worms, and fruit flies is more efficient.
But bucking convention can make for a tougher road, particularly for someone starting a company. As even the most seasoned executives will admit, raising money, getting traction in translating ideas into drugs, and convincing potential partners to make a commitment can be a lonely, humbling process.
Although new to industry, Perlstein did walk into the C-suite with some relevant experience: His last postdoc, at Princeton University, put him in charge of a half-dozen researchers. That job taught him how to manage a budget, benchmark salaries, and lead a team.
“I definitely felt prepared for the enormity of the challenge,” he says of the move to company leadership. “But once you’re in it, every day there’s a new fire; every week, there’s maybe one thing to celebrate that gets you through.”
Fundraising was particularly grueling. In 2017, Perlstein pitched his company to 75 investors as he tried to secure Perlara’s first big round of cash. Interactions he had with venture capitalists in the firm’s early days led him to suspect that his chances of attracting marquee life sciences investors were slim. After all, he was a first-time founder trying to start a company for rare diseases with often tiny patient populations.
Those months of bootstrapping were difficult. “Honestly, I would have hoped that we’d have had an easier time fundraising,” he says. “But I think every founder or founding team deludes themselves on that—unless they’re part of the club.”
The club, which Perlstein also likes to call “the VC cartel,” is the group of life sciences-focused venture capital firms clustered in Boston and San Francisco that these days tend to incubate companies themselves before committing tens of millions of dollars in funding.
That fundraising experience has forced Perlara to be scrappier and more creative, Perlstein says. And when things feel tough, he says, he takes a step back and thinks, “This is exactly the journey that our PerlQuest partners in every rare disease make.”
In addition to the struggle of raising a child with a rare and often fatal disease, Perlara’s partner families must climb a similarly steep path to a treatment. Their journey often starts with finding other families in the same position, then figuring out the science and possible therapeutic avenues, and finally, scraping together the money to fund drug development.
“They basically have to stumble to figure it all out,” Perlstein says. “I feel like ultimately Perlara is a reflection of our partners.” In the end, Perlara was able to bring in $7.4 million in its first formal round of financing, which closed a year ago
. The company also secured 10 PerlQuests, providing what Perlstein calls “a bona fide pipeline and portfolio” that covers a wide range of genetically driven diseases, including chronic pancreatitis, lysosomal storage disorders, and disorders of glycosylation and deglycosylation.
Next for Perlstein will be proving his corporate strategy is sustainable. Among the tests will be showing his model organism platform can indeed generate drugs more efficiently than traditional small-molecule screens. And while Perlara researchers quickly found a lead in their first program, a compound for Niemann-Pick disease type C that led to the partnership with Novartis, the challenge will be repeating that success for other rare diseases.
Just as critical as scientific success is finding financially viable development paths as programs mature. Diseases that affect just a few dozen or a few hundred people still need clinical trials. That’s an expensive proposition, even for patient groups that manage to raise money to support the development of a drug candidate.
“We’ve revised our thinking on commercialization paths” in the past year, Perlstein says. Rather than pursue licensing deals with larger biotech firms, the company wants to work with patient advocacy groups to spin off drug candidates as new companies or jointly fund their clinical development.
As his company faces its next critical steps, Perlstein still finds himself playing the role of rabble-rouser on social media. Rather than targeting academia, this time he’s targeting industry for the insular way it funds and rears companies. But even as he stirs the pot with his tweets, he says it’s time for the spotlight to shift to what he and his team have built.
“I hope the company has moved beyond this phase where it’s about me,” Perlstein says, “because it really isn’t.”
