Business as Usual: LifeX Labs CEO

So good afternoon, everyone. This is Audrey Russo. And it's great to be here on a Wednesday, we have a great guest very excited to be able to talk about life x lab. I'll bring on Jerry Vardzel in a moment. But before we get started, just want to get some housekeeping out of the way. And number one Huntington bank want to thank them for always being our partner and supportive of all experiments. And we're headed into our one year experiment. So I think it's probably institutionalize this point. And our organization at the tech council called 40 by 80. That's the longitude and latitude of Pittsburgh. That is where we focus on workforce development and entrepreneurship. So today, like every day, we asked that we've muted your microphone so that we don't hear things in the background. And we also have a chat. And I am here today without Jonathan kersting is usually with us here every day. And I'll keep my eyes on the chat and keep the conversation moving. But I am very thrilled to have really early on in the journey of the new CEO, President and CEO of life x, Gerald also known as Jerry Vartan Zell, and we're gonna bring him up to the forefront now. And I'm just going to say, Hey, welcome and hope you're safe and sound given all that's gone on and COVID. But I also want to talk about you Jerry, who is Jerry, tell us about your parents. Tell us about your journey to the point of where you are right now running life hacks.

So So, Audrey, thank

you very much for having me on today. It's a pleasure to speak to everyone. You know,

in my journey, who

is Jerry Vardzel is pretty well, anyone that knows me. It's I pretty well say, say it the way it is. I've been very fortunate through the years to have some of the most outstanding mentors, coaches. And folks to help me along my path I've been involved early in my career with Becton Dickinson, where I basically got to learn so many facets of the company. From there, I've had an opportunity to be with some startups have done some mergers and acquisitions been on the equity side, his advisors, there's been some great successes and, and there's been a few room for improvement, to say the least, through the journey. But, you know, it has been a journey and in a great journey. And I think at the end of the day, I'm fortunate, very fortunate, like I said, to have the the mentorship, the leadership behind me to continue to teach me along the way, both on on successes and a lot of learning to say the least learning experiences. But most recently, I had an opportunity to come back to Pittsburgh Adria is you and I were speaking before to acquire harmonics, a company in Lawrenceville, a diagnostic company, originally precision. And it was it was one journey that I think from all my experiences, I was able to put them all together and build a team, which I've been very fortunate to have outstanding teams through the years. We acquired that company in December of 2016 came back to Pittsburgh looking for a company to partner to be blunt. And I guess January, January 2017, I woke up and I said oh, well, this, this is gonna be interesting. And I always tell everyone, I think I owed or the company owed everybody in Pittsburgh something and, you know, we took over all the liabilities and it was three year journey, outstanding journey. And I have to give credit to the backyard of Pittsburgh not not necessarily in our funding mechanisms, but just the support with some of the folks to help us along the way. And of course we went we were acquired went public in 2019. April, and it's been it's been a great ride and it's a good success story in my opinion.

So here and Islamic still in Pittsburgh.

It is it is the labs are over in Lawrenceville. You know, the team, a good solid team. They're some of the folks that I've been a part of, I mean it just an outstanding team. You know, a headquarters is predictive. They're out of Minneapolis. But how omics the division of omics is still right here in Pittsburgh.

good story. So tell everyone about like, you're a Pittsburgh native, right? Yeah, I

grew up in Pittsburgh, you know, I was fortunate to go to the state stay in state go to go to the University of Pittsburgh. And, you know, upon graduating, move right out, not necessarily that that was my dream, delete Pittsburgh at that time, just had an opportunity to get into the medical space and, and accompany said, you'll do whatever it takes, right. And I remember the gentleman's name Walter burns, and I said, Yeah, to get a shot at it. You know, just give me a shot. You know, I think it was a time when everybody wanted to get into medical sales, pharmaceutical sales, and, you know, it came back, where do you have experience? And of course, you know, where do I got experience? I'm just graduating. So he said, All right, I'm gonna hold you to it, we're gonna move you to Los Angeles. And I said, Where, and they put me on a plane and sent me to Los Angeles and gave me a company car and said, here's what you're going to do. And, you know, it's a little different driving on the freeways out there, and the lifestyle out there, then growing up in Pittsburgh, you know, where we had two dressings, you know, we had French and ranch dressing to have all these other experiences. So it was an eye opener, Audrey.

That's great. That's great. So talk talk about life x. So tell everyone, what is life x? What's the mission? What are the objectives? And what do you have in store?

So So, you know, I think there's, you know, no surprise, I mean, with life x and the incubators and accelerators in our backyard. I think if we could take a step back, if you don't mind, instead of just reading the mission, if I could just tell you a little bit of where the landscape from that perspective of where the mission is going. And and I think, you know, everybody says accelerator incubator, you know, and we're life x is going is is a combination of all the above, you know, I've been using lately a word, you know, and innovative capital growth company, which, which encompasses all those things, right. We've had many different entities and this is actually why my involvement in this after alarmists, you know, I was very fortunate to know the team know Evan, and the group there and get to be involved before moving forward. But from an outsider, I've seen all the different, you know, incubators, accelerators, whether, you know, it's a pls G, its alpha, all the ones that are out there, I've been very fortunate look at from the outside. And I think there's a lot of good things in some of them. And things like we said before, where I look and say, rooms for improvement. So where do we see life x going? is I think you're gonna see the mission, or the focus is ultimately to bring value to our backyard or ecosystem in the life sciences sector. I mean, that's easier said than done, right? We've had a lot of opportunities to get that done. But but it's a little broader than that. It's really taking that life science, not just from an economic perspective, or the ecosystem, it's how are we going to be measured, and that is the successes of those portfolio companies. And, and before we can really look at success of a company, we have to really realize what are we good at? You know, I mean, obviously, we're good at robotics, right? I mean, we've we've built that out in some ways, and it's a good sector, but have we really build out the life sciences sector? And it depends on who you talk to, right? someone's like, Oh, we we have the infrastructure, we just need funding, well, fundings an excuse, right, no kidding. I mean, if you and I started a company tomorrow, Audrey, we need funding. I mean, that's, that's just a no brainer. But so, so going back to what you said, What is life x, I look at it as an innovative capital growth company, not, you know, in in capital being part of it, but I look at it as very simply that our mission will be to de risk time, resources and investment. So so so if you think about that, in taking companies, you know, we've built out or you know, if I had a slide or a whiteboard behind me, I would show you we've built out what is de risked time, resources and investment Well, it's really four parallel lines, one, the commercial viability or success of a product widget or whatever you're bringing right in your company. The next one is your capital strategy. Third, facilities infrastructure and fourth resources ft ease Each of those have specific milestone segments towards whatever you define the success, the success of a startup company could be being acquired licensing, it could be a more social impact, you know, providing some instrumentation or something to a third world country that still success in terms of a portfolio, or it could be a billion dollar IPO. So, so we need to at life x, and in our backyard, we need to look at, from an investment strategy, a commercial strategy, we have to say, de risk, the time resources and investment going forward to bring these companies to some exit point or some successful entry point to where they wanted to go and commercialization. And they have to be focused, you can't just it's not one size fits all. And, and so as you see over the next month to three months, you're going to see those four criteria, or those four lines, we're going to exhaust them, build them out. And more importantly, create life acts very similar as we would want a portfolio company where a company in our backyard spun out of wherever it spun out of, to be able to look at how can we de risk the time, resources and investment to get it to that point. And and the only way we're going to do that, in all honesty, is we're going

to have to work inside our inside our infrastructure, ie, the western Pennsylvania, but we're going to also have to go outside of Western Pennsylvania and recruit in terms of not recruit just expertise, recruit the ability to leverage it to be known outside of Western Pennsylvania once we once were established inside western Pennsylvania.

So hopefully, that's helpful. their portfolio companies like talk about services, and is there space where people can you know, companies can reside? Can you talk a little bit about that, and also talk about what's the definition of Life Sciences?

I don't really know the definitions, Life Sciences, and I'll say, sort of how I answered when I acquired Hill omics, and somebody asked me, How do you know what's your reimbursement, I said, I don't know how to spell reimbursement, because I wouldn't build a company, you know, on reimbursement. Because, you know, at the end of the day, we see where that goes. I mean, you know, I had a different mindset where we were going there. So I'll get back to your life sciences. But But what we have in terms of capabilities is, you know, we have the, you know, we have the the office space. Over on the south side, we have wet lab space over on over in Lawrenceville, in the Chocolate Factory, so so we do have the facilities or infrastructure, but where I think you need to look at Audrey is it you know, it's not the Field of Dreams, I hate to use that analogy, it, you know, it's not a fit for everyone. And this is where I struggle with, you know, growing a company, you don't need all those components, each company is different. So so we're on going back to where I said de risk. So if you want to de risk something, if you and I are starting a company, and we need some lab space, we may just need a benching in our garage, because we're worried about even getting a paycheck, let alone, you know, this all state of the art lab space, right. So that's where it goes back to this four segments that I talked about, number one, the current commercial viability to the funding kind of strategy or capital and three, the infrastructure and facilities, we have facilities that life x, but we have to branch out and look at other areas in Pittsburgh, there might be a better suited facility for one of our portfolio companies. It just has a lower, you know, has different expertise, different capabilities, we have to look at these companies is not a one size fit all, but to be able to create the viability to be able to get them there. So So to answer your question, we do have the facilities but that doesn't mean we stop there. There may be somebody you know, down the road that has some other space that's more suitable for one of our portfolio companies to help them de risk. Right to be able to move forward. So so that's that's where we are in terms of the facilities. I don't look. Is it life x? This is my opinion. I hope I share this with with the folks as we go forward. We're not a real estate group, right? I mean, what ultimately life x is is about moving companies forward, right. And if we're going to To be an innovative capital growth company, and bringing these companies forward, we have to de risk we have to be the same as our startup companies, or even an established company, we need to de risk time, resources and investment. So I think we have a great foundation, Audrey, but I think we, we need to continue to push ourselves and look and say, are these these facilities today? What we need tomorrow? Or are we going to need more or less or what? And I think that's where the flexibility comes in. As we go forward? The answer your question on life sciences, because I want to sway away from that, you know, Life Sciences is such a broad. I mean, Life Sciences today could could mean so many different things, you know, and, and I look at the definition of Life Sciences is no more so of those companies that are going to have a meaningful impact in terms of whether it's its health care lifestyle, from that perspective, and it could be a widget, it can be a drug, it could be all the above, it could be an AI component, you know, predictive models. So I think what we need to do is look at, at the end of the day, the companies that fit into the portfolio to get us defined it however you want to define Life Sciences, to be able to say, Okay, here's our niches within Life Sciences, that we can move forward, because the only way we're going to be measured in our backyard bluntly, is I can sit here and tell you all these great ideas, but at the end of the day, our success is just going to be measured on how we move those companies forward in our backyard, whether, like I said, they don't need to be a billion dollar IPO, but they need to move forward along their progression. And if we can do that, and move forward, I think we're making a major meaningful impact in western Pennsylvania, ie Pittsburgh.

And so yeah, it wasn't I wasn't trying to stump you. I just wanted people to understand what was Life Sciences mean? Is it diagnostics? Is it health IT medical devices, etc, etc. So you so you answered that. And so, companies, if companies when you say in your portfolio, you have companies, quote unquote, in the life x portfolio Now, did they get money? Do they get all the four things that you just spoke about? Some of them get space? is it just an array of things? Or and how could anyone who's in that life sciences space get engaged with life x?

Well, the answer your question, yes, we have some companies in the portfolio, I think we we do provide some of the basic ingredients. In terms of office space facilities, we have some great e ir EIR we have some, definitely the expertise. And and we have some very strong strategic partners, right. I mean, we do have, you know, the Innovation Institute at CMU, we have we have the infrastructure is when I came to Pittsburgh, in our backyard, right? I mean, Pittsburgh, think about it. I said just the first day when I was when I was asked why why did I want to come back and do this in Pittsburgh? Well, you know, we have the universities we have a University of Pittsburgh, we have a Carnegie Mellon, not in we're not disc discounting Duquesne Park and all those, but we have those universities pit in terms of the NIH, Carnegie Mellon in terms of their AI and all those years. Oh, and by the way, we also have health care systems, we have UPMC, we have Allegheny. I mean, we have that kind of infrastructure here. So we need to leverage that. To answer your question, are we providing all four of those segments to our portfolio companies today? I would boldly put needs improvement, and then under it needs improvement. And then one more time needs improvement. And where I'm going with that is how can people help? Well, there's no reason we need to rebuild things, just like I said, these other accelerators, incubators of the past, there's some good things we can learn from that. Right. And, and, and we need to take those things and, and, and, and the things that we're working we need to continue to build off of, but in terms of the for, you know, I call them the you know, we're building it out the commercial viability, the first, the funding, and then ultimately the facilities infrastructure and then the resources. We're going to be building out in advisory group, I'm sharing a little bit of what we're doing, we're moving, we have Ei Rs, but what we need to do is we need to build out an advisory board. And it's not just the expertise in Pittsburgh, of building out these, these domain expertise, we may need to go beyond and, and where we're going with this just to give you a snapshot is we want to be able and I was talking to one of one of our portfolio are actually one of them in our pipeline this morning, just before I got on this call. And I was talking to him about one segment of his business that we need to work on. So if you could go back to what I was saying earlier, and look at those four criteria. Notice that each one has a trigger point that impacts each other, right? So if you hit you need regulatory to get pre a pre ind, right? You need regulatory expertise, it's going to impact your funding strategy, your capital, right? Because if somebody's going to say, once you get that, we'll be able to write you a check. The problem is, how do I get it right and create their de risk that then you need the facilities, and then you need the resources. So this advisory group would be instead of bringing one individual, or one or two individuals to look at that portfolio company, let's bring in a segment of experts. So so I can bring Audrey who's done regulatory work out of California, I can bring in who's right here in our backyard that works for XYZ that's sitting on our advisory, and I can bring Charlie and Bob and I bring for them together. And they work with that company, for their regulatory path. So you're getting expertise from for folks to be able to hit that trigger point. So So I guess the first thing, the answer your question is what we're looking for. I'm looking for domain expertise in every functional operational component that's needed in the company. Now, do I need Adri every single time and every single project? No, but I'm going to call you Audrey and say you're a regulatory guru, you know, would you mind sitting on this panel with these five other individuals to help this company on their regulatory strategy?

So So number one, it has been so people want to help and participate? Should they reach out to be Oh, what's your website?

WWE, WWE dot life x labs.com? hyphen, life x hyphen? labs.com. But But even before going to the website, email me. I mean, I this is something I want to do it. This has to happen, Audrey?

Yeah. So you're saying that the nimbleness is all depending upon what the companies need, and that you're going to try to pull in the expertise about where they are in their leg of the journey of building their business and infuse them with the skills and the talent that they need for that milestone

that they're at? Because each company is different.

Exactly. And it's different.

In a funding strategy, we need to build out our funding strategy. We haven't even talked about that. Right, I was gonna get

into that. So if I'm part of your portfolio company, talk to me about that. What's the fun? What's the help I have the company? Do now I'm solving something that's tied to the pandemic contact with something? And what's the help?

So right now, you know, we're not in a, we're not fortunate enough to say that we have a little lump sum of money there to be able to put some seed money into some of these companies. I mean, that's obvious. So So that's something we need to look at Audrey. And I won't get into specifics today. But it's really a two tier approach. So so so we definitely need to be able to look at some capital to be part of that earlier, pre seed seed money with some of these companies, we also need to be able to have the ability to to look at the additional funding based on that milestones going forward. So that is work in progress. And like I said earlier, funding, we all need funding. So how do we help today is we're building that out. Well, you know, one thing that we need to do is we need to be realistic, right? I mean, you know, we have to look at those portfolio companies and not just look at how many we bring into the portfolio. These companies, we have to do our due diligence, right, and be able to say, I'd rather know up front that if I'm a go no go right, like a drug company they'd rather know out of the chute. Right, we need to do the same thing. And sometimes we just, you know, we bring, we bring these these companies in, and and they're highly touted, but when you do the due diligence, they're not going to be able to move forward. So so we need to do a better job, collectively, of doing our due diligence and de risking these companies, then we need to look at, we can't just blame the backyard that we don't have funding, right, because everybody, you know, has issues with funding, you know, we'll hear about Silicon Valley, we hear about Raleigh, which I spent a lot of time in, and we'll hear about Cambridge, and all these areas, but at the end of the day, if we show some successes and help our companies build the model, we can look at not a non traditional means of investment, right? I mean, a lot of things that we're doing now is is not just looking at Angel investors, you know, we can do the introductions to some of the VCs and, and some of the equity groups, and you know what they're gonna say, right? Talk to me when you hit X, or talk to me when you're a lot. So So why keep doing that? Well, you want to do that, because if you create the scorecard with them, then you're on their radar, but they're not going to fund you today. But let's look at some non traditional strategic investments. Let's look at some of these portfolio companies and say, you know, is this an opportunity that you could go to XYZ company and get some funding in a pilot? Or is this an opportunity to be introduced to an equity group that has another company in their portfolio, that your product line, your widget could be an add on so so we got to start thinking that this capital, that that line is funding capital growth matches up to the commercialization plan. And so so it at the end of the day, what we're doing is we're taking a look at the quality of our portfolio companies coming in, and then looking at how we can move them to each of the milestones. And it doesn't have to be and it works, I understand that, you know, you go A to B, C to D, and that that has been a proven path. But there's also other paths that we can look in a non traditional way, by using the resources we have in the backyard to do that.

So we only have a few minutes. And there's there's a lot of questions that I still have. And and one of them is that we went during this pandemic, there are people who have tried, you know, to build solutions, but there are also a whole playing field of capability here. What do you see around the bend in terms of our opportunities in this quote, unquote, sector? You see, are you seeing things that are just, you know, stellar, or re you know, it's the opportunity here, just a rich gold mind? Tell me what you're bullish on.

I, you know, the pandemic,

you know,

we go on and on. I mean, there's, there's not there's a lot of negative connotation, right. I mean, people lost lives and all that, but from a business, that business perspective, I have a totally different perspective. You know, I understand that the restaurants and by no means am I downplaying that area, but in terms of life sciences, in terms of healthcare, I think this has been a reset. Audrey, I think this, it, if you asked me today, the best time to start a company, I would say this is the best day right now. I think the opportunity is there, I think we have a reset, I think we're going to look at some some niche, unmet needs, both in healthcare that with it, you know, some of the most successful companies are right, or the ones you sit here at the dinner table or sitting with colleagues and say, Wait, I've been thinking that for the past 15 years. That's not that that's not rocket science. And all of a sudden, the next thing you know, you know, there is some valuation that you're saying, I wish I would have bought that stock A long time ago. But but so I think we are in a great opportunity. I ye in Pittsburgh, that's why I'm here. Like, I think there is going to be some some really, really jewels in the in the rough, to say the least, to be able to look I think the AI space look at I think as we look at predictive modeling, and doing things in healthcare, virtual pharmaceutical companies, I mean, you know, diagnostics and a new way of looking at it from formularies. I, you know, I could go on and on IV i, this is one of I think one of those trigger points, that this has been a reset, and now we can go forward. So hopefully I answered your question.

Yeah, I mean, you know, we're, we're bullish. So we want these things to succeed. There's been a long history of trying to help Life Sciences community and it does take heavily Lifting, it does take larger amounts of capital often not always. And so we, you know, asked everyone to go to the life app site that we put out there, reach out to Jerry, if you have some ideas, sounds like he's putting together, you know, teams of people who can help at different inflection points for many of these companies. And many of you who are on this call, understand that and have capabilities. So I think what we should do is check in with you again, Jerry to see how it's going, like as you've taken this on, and what kind of partnerships you've formulated, I personally, on behalf of the tech community would like to see more shingles put out here that are from around the world, we're working on complex issues, and helping to lift up these companies who come out of the University of fit, who have deep research who have been working in Carnegie Mellon, and that their shingles are here in Pittsburgh, because they know this is where the next great set of things are going to come out of. So my hat's off to you taking this new role. And we'll keep in touch with you. I really appreciate you taking 30 minutes out of your day to talk about some of these things. We certainly didn't cover everything but go out to life x reach out to Jerry, if there's anything that you're interested in, he said he was open. He said he needed help. And he wanted to help. So I want to thank everyone, for being with us today and tomorrow. Who's here who's going to remind you here tomorrow we're gonna hear from a new venture fund that was was created by Jay cadherins ik Mike Stiegler. And will Alan we're going to talk about, we're going to talk with them tomorrow. So we're still Jerry talking about capital, right? And the Taylor without the events, we're talking about capital, we've talked about it each and every day, almost everything that we touch relates relates to that what we care about is building Pittsburgh's innovation and technology ecosystem. So that we have these big companies that are here, the talent is here. And the passion is here, as we've heard today. So I want to thank everyone. And thank you, Jerry, for taking the time with us. We'll see you here tomorrow. Take care. Thank you.

Transcribed by https://otter.ai