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Colliers LabNotes: Sue Dillon of Aro Biotherapeutics

Sue Dillon of Aro Biotherapeutics

Revisit our chat from February 2021 with Susan Dillon, PHD, about her journey into the life sciences sector through her passion for immunology; her first job in a clinical laboratory; and the beginnings of her career at GSK. Learn from her insights on the next pharmaceutical revolution and how she and her business partner made Aro Biotherapeutics a reality.



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Good afternoon, I'm Joe Fetterman with Colliers Life Sciences advisors. This afternoon, we’re joined by Sue Dillon of Aro Biotherapeutics. Sue is the co-founder, president, and CEO. Sue, welcome to LabNotes, we’re delighted to have you.

Thank you Joe, glad to be here.

So we had a chance to catch up a little bit sometime ago, tell us a little bit about how you got into the life sciences and how we find you at the helm of Aro today.

Okay, sure. So you know, my entry into science was in undergraduate school. I did not come in knowing that I was interested in science. It was very serendipitous, but I learned through taking certain classes that I was extremely interested actually in immunology. That led to an undergraduate degree in basically laboratory science to work in a hospital laboratory. So I had a degree in medical technology, I got certified, and my first job was in a clinical laboratory. But I soon recognized that my real calling was to be able to do research and so I went back and I got a Ph.D. in immunology and ultimately did a postdoctoral fellowship in immunology. By that time, I was very steeped in the concept of applying what I had learned to find new ways to treat and prevent and maybe even someday to cure immune disease. 

That led me to a career in [the] industry. So I started my career in [the] industry at GSK and I had many years there. After a short stint at a biotech company in California, I then joined Centocor around the early 2000s, about 2001, and spent the next 16 years leading their discovery group and ultimately their immunology development group as well working on monoclonal antibodies for autoimmune disease and that's kind of my career in a nutshell. It wasn't what I would call scripted in any way and I certainly was not one of the people who knew when they were in you know, 6th grade, that they wanted to be a scientist. It never even entered my mind until much later.

Well, you know your time at Centocor just really raises a really interesting question because in my mind that was somewhat the first renaissance in Philadelphia, the emergence of new growing startups and now, boy, we’re in the throes of a second. I'm curious if we can take a second just to talk about how those two compare in your mind.

Well I think that the impetus behind the renaissance of course was really the pivotal acquisition of Centocor by Johnson & Johnson, which was what allowed the building of the incredible portfolio of monoclonal antibodies that ultimately emerged from the Centocor group and then the broader Janssen group. I think that that was coincident with where the technology was at the time, so back then, which again early 2000s, there were only a handful of monoclonal antibodies that had made it all the way through to approval. 

One of those was Remicade, which was a human-mouse chimeric antibody and back then, you know, that was the technology. But the field was already moving ahead to fully-human antibodies when I joined Centocor. That really became the focus of our work to build a pipeline, to build or buy all the technologies to be able to produce human monoclonal antibodies and that became the foundation for the industry that's grown up around that technology and now you know many new drugs that have been really life-changing across all sorts of different diseases.

I think that timing is everything and there is an analogy I believe to what was happening then to what's happening now in our industry and in Philadelphia. That is the emergence of another very important and new drug modality which are nucleic acids. You know, broadly speaking, and of course there's many different types of nucleic acid drugs but it's only really recently that there have been such drugs that have made it all the way through research, development, and onto the marketplace. And yet, maybe I don't know – there’s maybe four, five, six that are approved but there are hundreds that are now in development and this is the next revolution. I don't think anyone would dispute that. Nucleic acid therapy and also cellular therapies are the new frontier and so that emergence of new technology platforms is kind of at the foundation of these– of this era, just like back then it was monoclonal antibodies. 

That's very exciting! So let's shift gears a little bit– I’m thinking about you and your partner and co-founder Karyn [O’Neil], while you are at Centocor J&J and the conception of and development of Aro and how that came to be.

Well, Karyn and I were both very grounded in monoclonal antibody discovery and development. Karyn is a protein engineer and she was the leader of the antibody discovery group way back when at Centocor and basically, we came up with the idea that it would be a great advantage to develop different kinds of proteins that on the one hand could behave in a similar way to monoclonal antibodies, in terms of having exquisite specificity for their target, but on the other hand, be easier to work with. That very early thought kind of is what was the impetus behind centyrins, what ultimately became centyrins that Karyn developed with the team at Jansen. They were very successful in terms of showing different applications for centyrins, which are simple proteins that can be identified to bind to many different receptors on a variety of cells; tumor cells, normal cells, et cetera.

The activity that most excited me and Karyn was this possibility to use centyrins for targeting of other drugs and most notably for targeting nucleic acid drugs. This is again because of what was going on, our discussion started in 2016 back in Janssen. It was really apparent to us that this whole field of nucleic acid drugs was going to emerge as a major field, however, there was still a lot of skepticism. There had not been success in terms of approvals yet in any broad sense so it was risky, but nonetheless, it reminded both of us of the early days of antibodies and the promise that we all saw and were a part of.

We wanted to be able to apply the centyrins technology to the field of drug delivery for nucleic acid drugs specifically. This was exciting because we felt it could open up the whole field selected tissue targeting nucleic acid drugs. That was the kernel of the idea and we were both passionate that there were a lot of things around this particular technology that would make it feasible to reach the goal. So we decided that the time was right and we pitched the idea internally, and we were very fortunate to have a lot of support all the way up to the top for the concept and for helping us get started. That's how it blossomed, basically. We founded the company, we officially announced the company in January of 2018. We had seed financing from the venture group of J&J which is called JJDC. Over the next few years, we had additional seed financing from a few different sources that ultimately led up to our series A

What a great segue to talk about the series A. A big event, and J&J is still one of the investors, which is exciting to see. You have a broad list of investors. Can you talk to us a little bit about the thinking that went into and the assemblage of that team of investors and how you arrived at the solution that you did?

Sure. We were looking for investors that had experience with the power stage of company and who we felt could help get us to the next level. That experience spans both their investing experience as well as their network in the investing world as well as frankly, their ability to work with us to assess the best scientific and development direction for the company. Because having a platform is a great strength, but at the end of the day it's all about what you use a platform for and there are many choices to make.

We ultimately were really fortunate that the round was actually oversubscribed! We were able to select four excellent major investors that are now on our board. In addition to that, we had a few smaller investors who we also felt added a specific value for different reasons. We’re happy that we have investors that are primarily U.S. [based] but at the same time, we did want more of– let’s say– an international exposure, and we have a great European investor as well. I think that the important thing for us is that obviously the financing gives us now the resources to build our team, which we’re doing. 

You asked about or I think you’re interested in how we’re going to use this funding, well beyond building the team, we’re going to progress our programs now into preclinical and then clinical development which is really the next kind of step up in terms of value creation for the company as well as proof of concept for our platform. 

We're really excited that all of this is happening in Philadelphia and I can imagine part of that is your deep roots here and Karyn's ties here as well, but you probably could have done this anywhere. Why Philadelphia? What is it about the cluster that has made this the place that you’ve chosen to grow Aro?

We do have – both of us do have roots here. That was definitely a consideration. But you’re right, I mean we could have gone any place. [We] could’ve gone to Boston, California, New York, et cetera. I think that for us Philadelphia was the best place because of the combination of a number of factors. Number one is where Philadelphia is on its growth curve and it is definitely on the steep part of that trajectory. We felt that matched our – not only where Aro is as a company but our enthusiasm for where we can go with this concept and with this company. We liked kind of being in that environment where it's not just our company that's building, but it's the whole, it’s this whole Philadelphia city and region that's simultaneously being built into a real biotech hub.

"[We] could’ve gone to Boston, California, New York, et cetera. I think that for us Philadelphia was the best place because of the combination of a number of factors. We liked kind of being in that environment where it's not just our company that's building, but it's the whole, it’s this whole Philadelphia city and region that's simultaneously being built into a real biotech hub."

The other thing is access to talent, always critical and we knew frankly from our many years in the region that there is tremendous talent here. There's a lot of talent coming out of pharma, not just executive-level but scientists who are interested in having a role in biotech, so great training and there's you know –  a wealth of companies with many disciplines spanning research all the way into development. There's also the universities, and our company is right smack next to Penn and Drexel and then there’s of course other universities in the region and we have an opportunity through that both for talent recruitment as well as research collaboration.

The other is almost a more practical consideration which is – we did actually look at Boston for example when we were first setting up shop – and just the cost of real estate and being able to have a beautiful facility is much much more expensive in that area than it is in Philadelphia. So again, it's getting in at that right [moment], where the curve is on the trajectory but it hasn’t gone so far yet that the costs go out of the roof. That was just great, it was great to be able to use our resources not all on rent but to be able to defer some of that to hiring people and progressing our programs.  

As you look at the Philadelphia clusters too, are there any things that you had a magic wand, you’d wave it, and you would change this over the next year or so?

One is just the practical reality of space. Ever since we started looking at space, there's been new space developed. We've seen some of these come from the idea on paper to – for example, the beautiful building that we’re in right now, and there are lots of other projects underway in Philly that are right now either at the paper stage or the shovels just went in the ground stage, et cetera, different sort of stages of readiness. There is plenty going on.

Even with what's going on, my prediction is it isn't enough. We need more and we need it faster. That's one thing, an encouragement to the real estate developers that the demand is going to continue, it's going to continue to grow, it's literally exploding, and we need to build a space for not just the biotechs but you know, we now have new kind of anchor very large companies here. SPARK [Therapeutics] is a great example, recently acquired but they're going to keep their headquarters in Philly which is just fabulous. 

Also, when you think about all the supporting types of companies that we all work with, the contract research organizations that we need for specialty work for manufacturing work, et cetera, we want those to be local as much as possible as well. There's a lot of need I think for continued infrastructure and growth.

The other thing is from the view of– you know, every biotech is financed in some way or another. While many companies in the Philadelphia area have attracted excellent investors as we have, and many others have, as well as big dollars, most of these investors are anchored elsewhere geographically. They're either anchored in Boston or a few in New York, San Francisco is another hub, a few in Europe, et cetera. But I really believe that it's time to start an investor community that is residing here in Philly and there are few but again it's nowhere near what I think would be really advantageous. It could be new firms, it could be branches of existing firms, which has been done very successfully in other cities but I think that's another piece that would really help embellish our growth.

I guess I'll say one third thing which is that there are all sorts of investors and the seed investors in addition to sort of the series A– they are not necessarily the same investors. We need both of those. 

There's so much work that's coming out of the universities. Some of it is translated into companies, we've seen lots of examples, but believe me there's a lot more coming behind that. This is another passion of mine is to see the work have the right support in that critical period of translation between an academic setting and a more biotech setting. When you know they're not ready for a series A, there's a lot of work to be done and it truly is a seed-stage enterprise. That is what eventually then leads to great companies.

I should mention that I do sit on the board of The Wistar Institute and that is one great example. Along with of course Penn and other local universities, where there is so much on the cutting edge of research that just needs the right kind of financing and frankly, experienced investors and business people to help translate that great science into the medicines of the future. I think Philadelphia has a lot of the pieces, and we have a lot of success, but we could use more of the business end located here.

Sue, thank you very much! What a great perspective on both what's going extremely well here and some of the areas that need attention. I know there are many of us who are paying close attention to some of the things you've raised. The good news is, you're right. There's a lot of pipeline on the drug development side and the real estate developers are hard at it with great recognition for what's coming. They'll be really thrilled to hear what you had to say, that the pipeline is steady and growing and that there's a long runway ahead. Thanks for being with us on LabNotes, we look forward to your continued success and to talk again soon.

Thank you very much!

Learn more about Aro Biotherapeutics

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Joseph Fetterman

Executive Vice President | Healthcare and Life Sciences


Joe joined Colliers International in 2012 to lead and grow Colliers’ Office Brokerage Division.  Today he focuses on providing strategic solutions to local, national and global Health Care, Life Sciences and Corporate clients. Joe’s background in architecture, real estate development and financial analysis provides clients with an experienced professional and strategic leader who integrates  complex factors to create successful results for clients

Joe is a Healthcare Fellow and serves on Colliers National Healthcare Services and Life Sciences Steering Committees. 

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