Show Notes
Antibiotics are used to keep cattle healthy and lower their feeding costs. But as with humans, antibiotic overuse leads to super resistant bacteria. Is there a better way? This week listen to Horace Nalle, CEO of Nutrivert and the winner of the 2020 Cade Prize for Innovation. Nalle is the co-inventor of “postbiotics,” which achieve the same beneficial effect as antibiotics without the creation of super bugs. If successful, Nutrivert could upend the nearly $4 billion market in antibiotics for livestock.
TRANSCRIPT:
Intro: 0:01
Inventors and their inventions. Welcome to Radio Cade the podcast from the Cade Museum for Creativity and Invention in Gainesville, Florida. The museum is named after James Robert Cade, who invented Gatorade in 1965. My name is Richard Miles. We'll introduce you to inventors and the things that motivate them, we'll learn about their personal stories, how their inventions work and how their ideas get from the laboratory to the marketplace.
Richard Miles: 0:37
Antibiotics for animals, specifically livestock, they keep cattle healthy and lower their feeding costs, but they also create antibiotic resistant bacteria. Is there a better way? Welcome to Radio Cade . I'm your host Richard Miles, Today I'll be talking to Horace Nalle, CEO of Nutrivert, the winner of the 2020 Cade Prize for Innovation. Welcome to Radio Cade, Horace.
Horace Nalle: 0:58
Thank you very much, Richard.
Richard Miles: 0:59
First off, congratulations. We had a virtual ceremony this year and I wasn't able to meet you in person, but I hope you enjoyed the evening. And we want to know, did you crack open the cocktail kit that we sent all of the finalists?
Horace Nalle: 1:10
Yes, we did. I had my wife and son here and we enjoyed the champagne and cocktails, thank you.
Richard Miles: 1:14
We would have sent champagne, but we don't have a license to ship booz across state lines. So who knew that you could not do that? So Horace, first of all, congratulations, it was a great field this year. I mentioned this during the ceremony, but this is the first year that we actually went beyond state of Florida for the competition. So it's great that you're currently in Atlanta, but you are using a technology I think developed at Auburn, correct?
Horace Nalle: 1:35
Auburn and outside Auburn. Bernhard Kaltenboeck recently retired professor at the vet school is a key inventor of this technology.
Richard Miles: 1:42
Okay. So at any rate, beyond the state board, of Florida, so we're very pleased in the first year in which we expanded the prize to see teams from outside of Florida, do quite well in the competition. But before we get too much further down the road talking about the company, let's talk about the technology itself so that our listeners fully understand what it is that we're talking about. I give a little bit of description of antibiotics in livestock , but why don't you first start with, what is the current state of using antibiotics for livestock? How does that work? Why is it necessary? And what is the issue?
Horace Nalle: 2:11
We looked very hard and we can't find a bigger pharmaceutical market on earth for antibiotics for livestock. Current estimates are on the order of 130,000 tons of active pharmaceutical ingredient. So this is just an enormous use of drugs. In about 1950, it was discovered that these products enable livestock to grow on less feed or to grow on worse feed. And as livestock producers experimented with the technology, they quickly found that you could cut the dose right down to a minimum and still have this effect. You could cut the dose to a dose that was too low to control bacterial disease. And it still had this miraculous affect of enabling livestock producers to reach target rates for their animals on the less feed. That was so attractive to them because feed 70% of their expense, and if they can cut the expense of the feed, but achieving the same output, it's just everything they want. And it's helped them to feed the whole planet in a way that they get too little credit for.
Richard Miles: 3:23
Just to be clear, the antibiotics are not to treat sick cows it's to make this whole feeding more efficient and lower the costs and therefore be able to deliver to market, or is it also used to treat cattle that are actually safe ?
Horace Nalle: 3:36
It's both Richard often antibiotics are given because animals are sick and then they tend to be given a doses sufficiently high, that they control the disease. That's one thing and Nutrivert supports it, but a very large proportion of these drugs are given a t s ub t herapeutic doses to improve feed efficiency. And thats thing that we think has to change very honestly, that e normous volume of drug, given that doses to low to k illed the p opulations of bacteria. I t kills only the weak and when it kills only the weak bacteria, it leaves the strong and it shifts the whole population in the direction of strong bacteria that just can't be treated with antibiotics. Then those bacteria l eap from animals to humans and give us diseases, that doctors just can't cure.
Richard Miles: 4:32
I think probably a lot of people are familiar with that. And everyone knows a lecture from their doctors when they get an antibiotic take the whole thing. Don't stop halfway through for precisely that reason. Otherwise the unintended consequences, you're letting the really strong bacteria live. And then they come back with a vengeance. So people in the ag business have known for a long time, antibiotics have this effect, but it seems like from what I understand, they weren't exactly sure about the causation. They just knew antibiotics are good, even at low doses, lower the feeding costs. So along comes this technology that you are developing postbiotics as you call them, how are they the same or different from antibiotics?
Horace Nalle: 5:09
That's a very good question. Everybody knows what antibiotics about are, Richard and people generally know what probiotics are. There bacteria live bacteria, which you consume one way or another many people know that tree biometrics are things that you consume that are designed to provide food for the bacteria within you . But only in the last few years has this new class of agents called postbiotics been defined when science grasp the importance of the microbiome, they realized that at the microbiological level, the bacteria in you and there are trillions and trillions of release compounds into you. Some of them can be toxins, but that's not what we're talking about now. Some of them have coevolved with us in a way that's mutually beneficial because we've had this bacteria in our guts for a hundred million years and more , some of the bacteria can release compounds that help us. And they're called post-class because they kind of, after the bacteria, you need the bacteria to release them, they're postbiotics that are good for the health of the host.
Richard Miles: 6:21
So this I presume came from you and your co-inventors study of the microbiome to figure this out, right? Because it doesn't sound like it's necessarily intuitive.
Horace Nalle: 6:30
That's exactly right. We had to discover what it was about the bacteria in you that under antibiotic pressure, make your gut work better. And to do that, we had to think about what antibiotics work and what kind of bacteria they work on and what they do to those bacteria . And from that, we were able to kind of figure out what was being released postbiotically from the gut microbiome .
Richard Miles: 6:57
So Horace, this is put into their feed , or do you have to inject this into the livestock or anything?
Horace Nalle: 7:02
No it's in the feed.
Richard Miles: 7:02
And then what is the cost look like? Cause this is a significant cost as a percentage of the total feed, or is it pretty much nominal.
Horace Nalle: 7:09
No, this is not a significant proportion of the overall cost of the feed. Or the overall cost of producing livestock. And we will always charge a livestock producer, just a third of what's the feed savings that they get. So overall it will reduce expenses .
Richard Miles: 7:27
So they come out ahead because even though they're paying you a premium, they're reducing it by well into the profit zone to make it a worthwhile transaction. Yes . Okay. So this sounds pretty big if the numbers are all correct and pretty straight forward . And one thing we've learned from talking to other people in the ag sector, when we talked to the president of FourH we had her on the show a few months ago and she told me in the context of FourH that agricultural producers have always been early adopters of technology, because for them, the profit margins are so thin that if you can bring them to something that is going to improve their yield or reduce crop failure or reduce watering costs or whatever it is, they'll try it out. And if it works great, if it doesn't work, they don't use it. Particularly younger farmers are already prime to engage with new technology. So you put young FourHers, and then you say, here's a new thing and they'll go, let's try it right away. I'd never thought about that sector being early adopters of technology before we move on to what your path to market is or how you can expand this. Tell us a little bit about the origin of that idea, who the original inventors, and then who contributed and how long has this been in development?
Horace Nalle: 8:33
The original inventors are Bernhard Kaltenboeck, professor of veterinary science, at Auburn and myself, I spent a career in animal pharmaceutical companies that produce products that many of your business may have heard of like Frontline and Heartgard. And I took an early retirement in 2012. For years, I had known about the problem of low dose antibiotics for feed deficiency in livestock and the selection pressure that they create for antibiotic resistant strains of bacteria. For years, I had known that the mechanism of action, the way this work was described as unknown. And it seemed to me that if you were giving 130,000 times of drugs and creating antibiotic resistance strains, it just wasn't good enough to say, we don't know how it works. So with Barnhard, we kind of turned off the phones and turn off the computers and put our heads together and just thought, how can that be? How can that work? We did a lot of research. So we turn the computers on the do some of the research, but we were totally focused on this one problem. And the good news is Richard in the last 10 or 15 years. This scholarly community is just woken up about the microbiome. We just didn't think about the microbiome until this millennium. And suddenly the whole world has realized that the 30 or 40 trillion bacteria in our guts are actually doing something and Bernhard and I we're able to kind of dig in to the literature of what the microbiome does and to tease out of it , a single thread, that thread explains how antibiotics work at low doses for growth promotion, feed efficiency. Once we understood it, we could design analogs of the postbiotics, to solve the problem.
Richard Miles: 10:26
It's interesting that you say that I've had a couple of other researchers on telling me the exact same thing in different contexts about the microbiome, precisely what you said. It's like your gut, who cares. If it's not quote unquote, a sexy organ, we don't really even care about that. And all the things that research now discovering and how it relates to other parts of the body, how it relates to health how it relates, even mental health, a lot of things that you just wouldn't intuitively connect. And its there. That's pretty amazing. One thing I always find fascinating Horace is the personal journey of people in the ideas or in the invention business. So I know you're from Philadelphia and I know that you'd like to animals as a kid, but then you went off to the big city. You went to Harvard, and then you got your law degree at University of Pennsylvania. So I'm not going to make any jokes about being a lawyer and working with farm animals. But if you want to make those jokes feel free, but tell us a little bit about your path. Were you always interested in animals, but how did that all combine in your career as a lawyer? And then you worked for pharmaceutical companies in this area? Tell us a little bit about that story.
Horace Nalle: 11:25
All my life. I've wanted to take care of animals and make them better, make them feel better and protect them. And by the same token, we all know now that animals and humans share common repents share common, shared common diseases. It's natural for me to apply myself to kind of disease . Then once you apply it to humans or animals, it's all the same story . I was lucky to be able to work for the pharmaceutical company Merck. And at Merck a guy called William Campbell invented Ivermectin which he won the Nobel Prize. It has relieved more suffering from parasitic disease in humans, in animals than any other drug . And so it was a great honor and privilege to be able to work with him. Then when I decided at 55 to leave big companies, I thought, okay, this is your chance to do your own thing to chart your own course in these things you've already spent of doing. And that's how Nutrivert come to be.
Richard Miles: 12:25
That's a fascinating story. Sometimes you see this, that if you're in the midst of a large organization, some of the knocks on larger organizations is that large organizations find it difficult to be innovative. They find it difficult to be creative, cause they're all sorts of either bad incentives or lack of incentives within a large organization. But you're one of those folks that gained the experience. But as you said, once you went into a frame of mind where you could at least part of the time, turn off the computers and just think on one problem and really try to dig deep on that is when you develop this insight , okay. Or this is possible, but it obviously wouldn't have been possible without your previous training in a large organization and your experience in the animal pharmaceutical business. I think that's a great story.
Horace Nalle: 13:07
Thank you. Great ecosystem of innovation. And it used to be, I think that more than happened in big companies as a proportion, that is the case now. And most of the big pharma companies realized they have to sew a lot of seeds outside the company to reap the best innovation, but there's still an incredibly important part of the ecosystem in nurturing and cultivating these technologies and then delivering them to the world at large, right ?
Richard Miles: 13:35
And particularly in pharmaceuticals where the amounts of capital that you need to properly develop and test any pharmaceutical are massive. And even the most Intrepid venture capitalist is going to pause when they look at the price tag of bringing a new drug to market, whether it's for animals or humans, hurdles are pretty significant. And so along those lines, let's talk about that. A lot of people in your position or situation decide, okay, well, I've , I've developed a great idea. It's got mark potential, but developing it on my own or my own company tried to do that going to be hard. So they ended up licensing the technology to other companies. Have you thought about that? Where are you in terms of development? Is this something that Nutrivert, wants to do itself for awhile or what is the thinking along those lines to bring it to market? And then I guess there's a subset of that question. Where are you in terms of the regulatory approval, which is always huge as you know, from your experience, where are you in that process?
Horace Nalle: 14:25
I'll answer the second question first, we have made up our mind that the right way to develop Nutrivert is as a registered animal pharmaceutical. We understand that Food and Drug Act to require us because of the claims we're making for this product or that we will make for this product when it's approved to register it as an animal pharmaceutical. Now that makes that makes us jump over a higher hurdle than is the case with other products and agriculture, some other products. But we've done this before with ivermectin, which I referenced before and we intend to do it with Nutrivert, but it means several years until approval. And it means millions of dollars in investments before you can sell. So that's the stage we're at. We're funded now to continue the development of the product. And we're aggressively moving forward with studies and FDA studies to move towards registration. The technology in our opinion wants to be extended worldwide, and it wants to be extended to all the major livestock species . That means that it may be attractive and it may be efficient economic sense for a global pharmaceutical company to project it into those areas. At every stage of our development, we'll have two columns, one column, what it looks like if we develop it ourselves and another column, if we out license it to big pharma or others, and we will always do what's best for the technology, what creates the most value.
Richard Miles: 15:58
So if I understand your thinking on this, just as there are for humans as a whole class, so things like vitamins and minerals, right, where I can go out and take some sort of supplement and, buy it from whole foods that has not gotten FDA approval, doesn't need FDA approval, but their claims that they can make about it are limited, right? As opposed to getting a prescription medicine in which it says it , this is going to help X, Y, and Z. And that's the distinction you're making, right? Because presumably you could just say, this is a supplement with limited claims and that would be good.
Horace Nalle: 16:26
Well, the way Nutrivert works is the same way antibiotics work except to a hundred percent antibiotic free. As I said before, antibiotics released postbiotics from the microbiome . And we're developing analogs of those because that's the mechanism, Richard, just like antibiotics, which are registered drugs. We think that the ethical course is for us to register Nutrivert as an FDA approved postbiotic.
Richard Miles: 16:55
Do you have any competition at the moment? Are there other companies out there doing something similar or what does that look like in terms of the competitive marketplace?
Horace Nalle: 17:02
Well, everybody's out there saying we have supplements. We have probiotics, we have prebiotics, we have enzymes, we have, immunostimulants all kinds of things are out there. In about 2017, the two Memorial Trusts did a review of all those classes. The problem is none of them are consistent. If anybody has anything that works as consistently as Nutrivert, we haven't found out about it. And we look all the time. It's possible that people have these things that are keeping them secret as they sometimes do with research projects. But in the published literature, we can't find anything that delivers the consistent results that Nutrivert delivers and we think it makes sense because antibiotics deliver those results consistently. And we're triggering the same pathway.
Richard Miles: 17:51
And obviously that'd be a huge deal for a large ag producer, right? Is that reliability and consistency. Cause you don't want a one off benefit that you can't replicate the following year .
Horace Nalle: 18:01
No they just won't use it. If it doesn't work consistently, you said before, if the FourH person who was telling you that the farmers are innovators and it's true , but they're quick adopters and they're quick, abandoners it's got to work or it won't be bought.
Richard Miles: 18:16
Tough audience, right? They'll welcome you onto the farm, so to speak, but they'll tell you to get lost. If your product doesn't work.
Horace Nalle: 18:21
That's just fine. They're very good at stopping by. They have to be because they have to deliver food at terrifically, low prices that they deliver that and they won't waste money on things that don't work.
Richard Miles: 18:32
So Horace we like to give everyone on the show, an opportunity to dispense wisdom. And so you've had a very interesting career in a number of different areas. And you're now right in the thick of developing new idea, what would you say to listeners who really want to pursue a career of entrepreneurship or invention? And they want to do the right things. If you are giving advice to say your 25 year old self, are there things that you think now like, wow, I should have done that. Or I shouldn't have done that. Whatever the category you'll probably ask to speak to groups from time to time on lessons learned. What are some of the things that you would say,
Horace Nalle: 19:05
Learn the ropes and follow your passion. Lots of people when they're asked the question, you're just asking me to say, follow your passion. And it might just be an entrepreneur inventing Facebook. I'm not sure, but in the biological sciences and in established industries, you have to learn. I think how the world works and have experience and make a lot of mistakes and see other people make the mistake to have the robust understanding of the ecosystem that you're entering into. So yeah, you kind of want the passion, but we couldn't have done what we had done. If we hadn't spent decades trying and failing and learning how the system works.
Richard Miles: 19:44
That's a great answer. And it's a version that I've heard from other folks, but useful corrective to this idea of like, we'll just follow your passion. I remember seeing a great graph. I think it was in the book Good to Great. The three Venn diagram. One was like stuff you love to do. And another will things you're good at. And the other one was things you could actually make money at . So it's where those three come together. Cause they don't necessarily overlap the things that you're really, really love to do. And the things you're actually good at and that have some sort of value that someone's willing to pay you for when they come together. And I remember Dr. Cade the inventor of Gatorade, who the museum is named after. He always said like, you have to be prepared. So an idea can strike you. But if you don't have, as you said, sort of the fundamental training, you're not going to be able to do much with that idea because you aren't really going to understand the mechanism to make it work. And so if you have the science and you have the training and the background and idea strikes you, did you like, why is it the antibiotics work? How is it that nobody understands that there's gotta be a reason and then you can actually do something with it.
Horace Nalle: 20:44
Fully agree.
Richard Miles: 20:45
Horace, this has been great conversation. I want to, again, thank you for taking the time to do the interview, but also more importantly, congratulations on winning the Cade Prize this year. You have a big idea and hopefully in a few years, we'll have you back on the show and Nutrivert will be a roaring success and will be famous and so on which doesn't always happen, but it happens enough to where good ideas remain good ideas.
Horace Nalle: 21:10
Thank you, Richard. Pressure to be on the show.
Richard Miles: 21:10
Look forward to having you back.
Outro: 21:12
Radio Cade is produced by the Cade Museum for Creativity and Invention located in Gainesville, Florida . Richard Miles is the podcast host and Ellie Thom coordinates inventor interviews, podcasts are recorded at Heartwood Soundstage and edited and mixed by Bob McPeak . The Radio Cade theme song was produced and performed by Tracy Collins and features violinist Jacob Lawson.
