Dr. Sara Nayeem was selected three times as one of GrowthCap’s Top 40 Under 40 Growth Investors. Having earned her MD and MBA simultaneously from Yale University and worked within Merrill Lynch’s Global Healthcare Group, today she uses her knowledge and experience in both medicine and business to invest in and advise biopharmaceutical companies as a Partner at New Enterprise Associates (NEA), a global venture capital firm diversified across technology and healthcare. Read on to learn more about her work investing in biopharma companies at NEA’s Chevy Chase, MD, office, and what she believes are the most promising advancements in today’s drug industry.
"I was reluctantly pre-med in college. My father was a physician from India, my mother worked in the healthcare field, and my sister went to medical school, so there was a certain expectation that I’d follow in their path. While I liked science and the idea of helping people, I wasn’t fully convinced that I wanted to be a clinician. During my junior and senior years of college, I began to take economics classes and worked part-time at a local consulting firm. I soon realized that I found the business world fascinating as well.”
Pursuing a Joint MD/MBA Degree
When the time came, I applied to medical school, but ended up deferring at Yale for two years in order to work as an investment banking analyst at Morgan Stanley. At the end of those two years, Yale reached out and asked if I was coming — if not, they’d need a good reason to keep holding my spot. While I enjoyed learning about finance, I realized that I didn’t really know that I didn’t want to be a doctor. Looking back on it, I liken my pre-medical school banking experience to eating oranges to see if I liked apples. There was no way to know if medical school was the right fit until I actually gave it a shot. So, I made the choice to enter medical school and become a clinician.
Once at Yale, I found myself gravitating toward business and policy aspects of medicine again, so I decided to pursue a joint MD/MBA degree. During this time, I focused my time and research efforts on ophthalmology, a relatively entrepreneurial field which I thought would offer a good balance of patient care and business challenges. But after a couple of months into my MBA work, I realized that I liked the strategic aspects of healthcare more than clinical work.
Working in Venture Capital at NEA
While I got a fair amount of pushback initially on my plan to go into investment banking full-time after graduation, my family and medical school dean were supportive once they realized I had thought through the decision carefully. The transition from investment banking into the venture capital space a couple of years later was comparatively easy. Though I was in one of the early graduating classes of Yale’s joint MD/MBA program, MDs and PhDs have now become very common among biopharma venture investors, particularly those who have entered venture capital in the past 10–15 years. This trend makes a lot of sense given that biopharma investors regularly evaluate basic science, clinical data, and unmet needs in different disease settings, and having medical or scientific training is extremely helpful for those types of analysis.
Of course, medicine evolves rapidly, and I graduated from medical school 13 years ago, so I’m often researching best practices and innovations in the field. In fact, each time I look at a particular disease, I research the latest in clinical care, new drugs, and programs in clinical development. Having an MD in my line of work is like knowing a language, in that it’s easier for me to get up to speed on new drug mechanisms than if I didn’t have that scientific training. And having had a couple of years of clinical experience in medical school, I can come to some initial conclusions about treatment practices and patient perspectives. Regardless, all of our work at NEA is always heavily complemented by discussions with clinicians, both leading academic researchers and community physicians.
Witnessing Advancements in the Drug Industry
The drug industry has entered an unprecedented and exciting era in recent years. In my view, the biggest advances have been in two areas, the first of which is new treatment modalities. Some of these have the potential to provide one-time cures, such as gene therapy (delivering a copy of a missing or defective gene), and gene editing (which involves editing a cell’s DNA to insert, delete, or modify a gene). Another is mRNA therapy, which is related to gene therapy. Instead of delivering DNA one time and depending on the cell’s machinery for transcription to RNA and translation to protein, mRNA is delivered chronically. The advantages of mRNA therapy over gene therapy include greater predictability of clinical benefit and wider potential use, but the disadvantage is that it doesn’t represent a “cure.”
The second area with major advances in recent years is immuno-oncology, which involves harnessing a patient’s immune system to fight cancer. The promise of “I-O,” as it’s called, is to not just push out survival curves, which may buy patients a few more months, but to actually “lift” the curve, by providing a subset of patients a real cure with long-lived responses to therapy. Checkpoint inhibitor therapy involves “releasing the brake” on the immune system, and has become standard of care in a number of cancer types and lines of therapy. Sales of PD-1 and PD-L1 inhibitors alone are expected to top $30-$40B, though some other classes of therapies that showed great promise in combination with PD-1 drugs have disappointed in the clinic. Cell therapies such as CAR-Ts, which involved genetically engineering a patient’s T-cells to find and destroy the cancer, are also promising. However, we have mainly seen cell therapies work in hematologic — or blood-based — tumors, and not in solid tumors, which make up the vast majority of yearly deaths from cancer.
From here, the industry needs to capitalize on the potential of new treatment modalities and demonstrate that they can be as transformative across as many diseases as hoped. Immuno-oncology will truly fulfill its promise when it can be applied more broadly, such as to immunologically “cold” solid tumors, and when response rates can be pushed higher.
Entering the Genomic Age
The genomic age has arrived, finally! It took time for researchers to go from sequencing the human genome to understanding how to “drug” it. In addition to the new drug modalities mentioned above, such as gene therapy and gene editing, which have helped us address rare, devastating genomic disorders, we also have new ways of defining subsets of patients. We now have highly effective drugs for patients with certain rare mutations in non-small cell lung cancer, for instance. If a patient is “lucky” enough to have an ALK, RET, or TRK mutation, they are likely to be responsive to drugs that are specifically targeted to disrupt those drivers of disease with less toxicity than drugs such as chemotherapy. One of our former companies, Loxo Oncology, was the first company to get an approval for a drug to be used across cancers with a particular genetic mutation, as opposed to an approval for a particular histology such as lung or colon cancer.
Synthetic biology represents another way of harnessing genomic data. Our company Synlogic, for instance, is developing a therapy for patients with phenylketonuria, or PKU. These patients are unable to process phenylalanine (Phe), an essential amino acid that enters the body as a component of dietary protein. To reduce Phe buildup in the blood, Synlogic engineered a strain of the bacteria E. coli Nissle with the ability to metabolize the amino acid. The medicine is taken orally and remains inactive until it reaches its final destination, where a programmed “switch” is activated to trigger enzyme production.
There are many other examples of development programs that utilize genomic information to deliver new drug modalities, or to better select patients who will be responsive, but there are also new ethical quandaries in the field. Some of these have obvious answers, but others are more subtle. We recently observed the challenges the scientific community faces in setting stepwise, ethical guidelines for gene editing with Chinese researcher He Jiankui’s rogue experimentation on two human embryos. When announced, this set off an international firestorm and belated dialogue on how to rein in premature in vivo experiments. The field is also confronting tough questions around how to develop more effective therapies in diseases that are severe, or even fatal, when a therapy that works in a subset of patients has come to market. How can one ethically test a new gene therapy that might be more effective, but might also have more toxicity, against an approved drug? Society has wrestled with these questions for a long time, but the quandary becomes even more difficult when we’re talking about a treatment that’s permanent, like gene therapy and gene editing.
Drug development has always encompassed weighing ethical concerns — at its heart, trading off speed of delivering a new drug to patients with severe unmet needs against the need to demonstrate long-term safety and efficacy. However, the genomic age does present some unprecedented ethical challenges alongside enormous potential to improve human health.
Supporting Women in the Healthcare Venture Space
The easiest way to support other women in healthcare venture is by sharing deal flow. In venture, you are defined by the quality of companies you invest in, and by the innovations you help advance. Even the process of looking at companies that you ultimately pass on is important for learning and networking.
Another way to support one another is by mentoring younger women in the field and helping them advance their careers. Even small gestures, like making them the first contact on a new deal, can raise their profiles within their firms. I think many professional fields lose high-potential female employees once they have children; many decide to become part-time, consult, limit themselves to board work, or leave the professional world entirely. But I do think venture is a field with a long view, unlike some other finance jobs, such as hedge fund investing. Some venture firms recognize the need for flexibility in terms of travel; for instance, they may allow partners to invest more selectively with respect to geography. We have to reach the point where within a multi-decade career, a few “slower” years when kids are young is acceptable for women AND men — not that all women slow down!
Leadership and visibility are vitally important — women investors serving on panels, being active on social media about their investments, serving on boards of industry groups such as the NVCA or NEVCA — this participation sends the message to junior women in the field that women can be leading voices in the industry.
Finally, simply getting to know other women in VC can have a significant impact. Socializing with co-investors outside of board meetings has been fun and fulfilling for me, and these friendships also make us better advisors for our portfolio companies. Often, those of us who have young children are pulled in many directions at once, and we feel guilty about taking the time to socialize — but I think it’s well worth the investment, professionally and personally.
Investing in Inspiring Companies
The most satisfying investments are those that lead to important new drug approvals; these companies also always end up being great returns for our limited partners, which include pension funds, endowments, and other large pools of capital. Two companies that have been incredible to watch have been Loxo Oncology (mentioned earlier), and Tesaro, which developed an important new drug for ovarian cancer patients. Both companies have pushed forward ground-breaking drug development programs. Both were also acquired — for $8 billion and $5 billion, respectively.
I spend a lot of time in the rare genetic disease space, which is very emotive given the high unmet need and lack of treatment options for these patients. For instance, Nightstar is a gene therapy company developing treatments for blinding inherited retinal disorders. Another is Clementia, a company focused on patients with ultra-rare bone disorders, including fibrodysplasia ossificans progressive, or FOP. This is a devastating disease in which soft tissue transforms into threads and sheets of extraskeletal bone. Patients’ joints, including their jaws, can become “locked up” and immovable; the disease is also extremely painful. Both Nightstar and Clementia were acquired earlier this year and are in pivotal trials for their lead therapies. It’s exciting to watch the progress, but also a bit nerve-wracking, since clinical trial development can be tricky — particularly in rare diseases where the natural history is not always well-known and patients’ courses can be variable. The best moments in this job are when a new drug developed by one of our companies gets approved — it makes all the twists and turns along the way worth it.
Being a Part of the NEA Team
NEA is a large, diversified venture firm that’s been active for nearly 41 years. Throughout that time, NEA has invested in the healthcare space in one way or the other, but in the past couple of decades the firm has ramped up its investment in the life sciences space. At NEA, I get to work with a diverse group of people, including scientists and people with medical backgrounds, people with experience in business development and large pharma, and those with more entrepreneurial backgrounds. Because of NEA’s longevity in the healthcare space, we’re able to make a crucial difference in the industries in which we’re invested. Our most recent fund was 3.35 billion dollars in size, 40% of which is being deployed into healthcare across biopharma, medical devices, healthcare services, healthcare IT, and digital health. It’s gratifying to be a part of a fund that deploys transformative capital across the healthcare landscape.
Next activity on your bucket-list? Since my husband and I had kids (three boys six and under!), we have put a pause on international travel. When they’re old enough, we’d love to have a honeymoon 2.0 and bring them with us to Ravello, Italy, our favorite European destination.
All-time favorite movie? It’s rather nerdy, but I’m a big fan of The Lord of the Rings trilogy, as well as the books. In fact, I have a LOTR quote for nearly every moment in life.
Favorite spot in DC? Air & Space Museum outside of Dulles.
How do you de-stress after a tough week? I like to exercise, and my husband and I just recently jumped on the Peloton train. I also love spending time with my kids — their shenanigans always help me clear my mind and put things into perspective.
Best advice I’ve ever received “You don’t get what you don’t ask for.” I remind myself of this one often, and think it’s particularly applicable to women, especially in the venture space. Studies have shown that professional women don’t raise their hands with respect to career progression or recognition as often men do. But putting yourself out there and asking is the best way to get what you want and often, what you’ve earned.