Thursday, July 2, 2020

Out of the Crisis #12: Curative founder Fred Turner and Celine Halioua on diagnostic supply chains, scaling up testing, and partnering with government

At the beginning of this year, Fred Turner was building a biotech company in the Bay Area to work on sepsis detection. When he realized that the technology the company had built could potentially be used to test for COVID-19, he jumped in feet first.

In one weekend, his assumption was proved correct. He spent that Monday trying to find the right kind of testing lab locally. When none came to light, he followed a lead to Los Angeles and by Wednesday he was signing a contract with a lab there that usually does anti-doping testing. Then, as he told me, he "accidentally moved to LA to work on it" along with the rest of his team.

The company expanded rapidly, growing from nine employees to 150 over the course of just five weeks. After looking at the diagnostic supply chain issues hampering existing test methods, they developed an oral swab test that returns results in 24 hours. They also formed a partnership with the City of LA that brought the first drive-through testing to the U.S., creating a model for how other cities can do it.

The story of how Curative pivoted and scaled is about moving with entrepreneurial speed to find a solution, then collaborating with investors and government for the public good. Celine Halioua, founder of a company called Celevity that is developing drugs to extend the lifespan of dogs, also played a key role. She believed so deeply in Curative's new mission and the science behind it that she went out and pitched investors on a company she didn't even work for--and got results.

Fred, Celine and I talked about how Curative's intense journey, how to scale testing, and why it matters not just for now but for the future.

You can listen to our conversation on Apple, Google, or wherever you like to download podcasts.


 


A full transcript is below.


Highlights from the show:

  • Fred on building a "COVID testing family" while quarantining and keeping in touch with his family in England (4:15)
  • Celine on being a war-time CEO at Celevity almost from the start, and when she knew the pandemic was serious (5:43)
  • Fred on the early signs of the pandemic's arrival (7:33)
  • What Fred and the company were doing pre-pandemic with their work on sepsis (9:10)
  • The two days when the decision was made to switch focus to COVID (10:42)
  • Fred's last company Shield, which began as genetic testing for dairy cows to predict how much milk they're going to make and made many pivots (14:04)
  • The conversation with Curative's investors (15:50)
  • The technology behind a COVID diagnostic test (16:29)
  • How Celine got involved (17:40)
  • How Celine and Fred met (20:07)
  • Celine on Celevity, raising funding for Curative, investor reactions and support (20:53)
  • Scaling, logistics, supply chain and startup thinking (23:59)
  • How fast, smart hiring done during shelter-in-place made it possible for the company to grow from 9-150 people in 5 weeks (27:02)
  • The invaluable support of local and city government and partnership with the city of LA(29:36)
  • Solving for higher through-put (33:05)
  • The long-term vision for the company (34:53)
  • The importance of mass testing (36:04)
  • Pitching investors a business that hopes to become obsolete if it's successful (37:54)
  • What's needed to roll out mass testing nationwide and be prepared for next time (42:12)
  • The City of L.A. testing playbook (45:53)
  • What to say to local officials about how to scale up testing (48:54)
  • What Curative needs to scale further (50:20)

 Show-related resources:



Transcript for Out of the Crisis #12, Curative

Eric Ries: This is the Out of the Crisis. I am Eric Ries. If we're going to reopen the economy, we're going to need universal testing. And because pandemics are exponential phenomena, every day matters. So, who is actually going to build the scalable testing infrastructure that is going to get us out of this mess? In this conversation, you're going to get to hear from someone who's really doing it.

Fred Turner was building a biotech company here in the Bay Area working on sepsis detection when he realized that the technology that he was building could potentially be used to test for COVID-19. Over a weekend, he was able to determine that the technology worked and could be used for those tests, and by Tuesday he was in action. He spent that Monday trying to find the right kind of lab here in the Bay Area to do the testing out of, and couldn't. But a colleague turned him on to a lead in Los Angeles.

He found a lab in Los Angeles that was normally used for anti-doping testing, and so Tuesday morning he flew down to LA. By the end of the day Tuesday, he had a contract signed with that lab to do COVID testing there, and by Thursday his entire team had been relocated from the Bay Area to Los Angeles. By now, the new company they formed called The Curative has performed something like 20% of all COVID tests in the state of California.

This is an incredible story of entrepreneurial speed in action, of yet another entrepreneur putting their normal business on hold to get into the fight against the pandemic. But it's also a really interesting story, because Los Angeles was very early in rolling out drive-through testing for the City of Los Angeles, thanks to the leadership of Mayor Garcetti. In this conversation, you'll hear about the funny set of circumstances that brought the technology to the mayor's awareness, but you'll also hear about how this public-private partnership between Curative and the City of LA has done a tremendous amount of good.

The mayor had the scientific advisors in place in order to understand the power of what this new startup could bring and was able to take action, rather than be paralyzed by the pandemic. Curative says that, in partnership with the City of LA, they were able to get the very first drive-through testing online in this country. They are a model for how other cities could right now, if they wanted to, be rolling this universal test coverage out to their entire population.

This came together incredibly quickly. As we speak, there's something like 150 people working in a sequestered lab in Los Angeles, scaling this to hundreds of thousands of tests. And they're opening locations all over the country, and this will clearly be one of the important steps to reopening our system. And, listen, I tell the stories of startups going fast for a living. I think even I would have seemed crazy if I told you this story in the old normal.

We're going to need this kind of entrepreneurial thinking, decisive action, and public-private partnership, not just for testing but for vaccines, for health care policy, for hunger, for fixing our supply chain, for many of the problems that are caused by the pandemic. And in every one of those areas, because it's an exponential problem, speed will be of the essence. I hope this conversation shows everyone out there what is possible when we act boldly in a crisis. Here's my conversation with Curative.

Fred Turner: I'm Fred Turner, CEO and co-founder of Curative.

Celine Halioua: Hi, I'm Celine Halioua. I'm the founder and CEO of Celevity.

Eric Ries: Thank you both so much for doing this and for the work that you've been doing. It's just been incredible to watch it unfold. First of all, are you all right? How are you? How is your family? What's your quarantine set up like? Any quarantine tips you've uncovered?

Fred Turner: I think personally we've definitely had it pretty easy here, because we are testing every single employee every day and then sort of confining everybody to the building. That means internally we've been a lot more open than anybody else, because people are getting all their food here, not traveling far, not living with untested people. So, we've been able to maintain some sense of normalcy within the walls of the lab. My entire family is back in England and is all enjoying quarantine, and we've had a few Zoom parties on the weekend with my grandparents and my parents.

Eric Ries: It's like you're the only person in the world having a somewhat normal level of social contact.

Fred Turner: Yeah. It's been interesting talking to other people, because I haven't experienced as much of the isolation, because there's people running around asking me things the entire time.

Eric Ries: Wow. Has it been hard to be away from your family at this time? That I can't quite imagine.

Fred Turner: I have been living on a different continent from my family for the last four years that I'm kind of used to video call them. We've kind of built a COVID testing family here with everybody working 16-hour days and eating all our meals together. There's been a real sense of community built in the company that I think has been helpful in getting everybody through.

Eric Ries: Celine, how about you?

Celine Halioua: Yeah. It was an interesting feeling in the beginning when it started impacting people in the States, when COVID started impacting people in the States and you'd see people who were very sick or dying, and they were the ages of my parents. So, the first month was almost kind of paralytic. For context, both of my parents are in Austin, so not super far away, not as far away as England, but a world away when you're not able to travel and when actually traveling to them would put them in more danger. I was joking early that I started my company in January, and I thought I'd have maybe half a year of high times CEO before becoming a wartime CEO, but I've basically been thrusted into that from day one. So, that adjustment's been interesting, kind of learning how to be ambitious but also just realize that this is the hardest time of most people's lives right now and how to compensate and support people through that.

Eric Ries: Was there a moment where it really hit you that this was going to be real and that dark times were ahead, that you recall?

Celine Halioua: I don't know for you, Fred. For context, I had gotten a bit ill. I had a fever, had a really strong headache, and this was when the first cases in Seattle were happening. Fred had had ... One of his scientific employees had developed a test just in his free time, and Fred had come to my house at 3:00 in the morning to get a swab to see if I had COVID. We were just sitting in my stairwell and talking about what was about to come and what was happening in Seattle and the entire retirement home basically being wiped out and what was already happening in China, and just quickly realizing that, if I had it or if other people had it, then probably the transmission had already gone a lot further than anyone realized. That for me was a very strong moment of this big thing is coming, and there's nothing we can really do to stop it.

Fred Turner: I think there were a couple of moments for me. I think, when we did our very first day of testing in the lab, we immediately got a positive result, and a lot of the early testing we'd been doing had been family and friends that had sort of signed up for the service to try it out. So, the very first positive was actually someone that I had signed up to try the service and knew.

Eric Ries: Oh my.

Fred Turner: That was pretty sobering after just a day of testing to have a real result that was a person I knew. I think the other thing that sort of made me jump pretty early on the testing is we had been setting up this clinical trial with a partner for probably about six months, with a collaborator who had typically been incredibly responsive and would jump on the phone at a moment's notice. We were supposed to have the kickoff meeting. And this was probably mid February, and he didn't even reach out to cancel it himself. His assistant reached out and pushed the meeting back two months, and that was just so unlike him. That's because the hospital he was working in was beginning their COVID readiness preparations. It was just such a shift from what working with him had been like. I think it made it clear that things were going to be pretty different for the next few months.

Eric Ries: Of course I'm very curious to hear this part of the story, but let's actually go back and start with the company, what you were doing before the crisis. So, what were you doing before the pandemic? Tell us a little bit about how the company was founded and what you thought you were going to spend 2020 working on.

Fred Turner: Yeah. So, we were working on sepsis, which is basically where you get a bacterial infection of the bloodstream, and the immune system overreacts. It's actually your own immune system that kills you. It's a big problem in the US. There's about 1.7 million cases and 300,000 deaths a year due to sepsis. We were working on a technology for detecting sepsis much faster, several days faster, than current tests can, which would allow potentially 100,000 or so lives per year to be saved by reacting faster and getting people on the right drug.

So, we've been developing that technology. The company is pretty new and was only founded in January, but the core team had been working on similar infectious disease diagnostics for quite some time. So, that was our focus. We'd still like to get back to building that at some point. I think it's an important problem that needs to be solved. But we put everything completely on hold. Really the decision was made over a period of about two days to just suspend all operations and focus everything on COVID. Then I accidentally moved to LA to work on it.

Eric Ries: Tell us about those two days, these kind of intense, crisis-driven, just all-in moments. I've now been witness to several of them, and it just seems like an unbelievably intense experience.

Fred Turner: Yeah. It was a Sunday night in mid February, and I think Celine and I had been chatting about COVID and whether the response would be sufficient. I had assumed, I think, that up until that point that existing diagnostics infrastructure would just scale up and everything would be fine and there would be nothing really to contribute to. Then I was just doing a bit of reading and sort of looking at whether that assumption was true, and it became pretty clear, staying up until like 3:00 AM that Sunday night, that that was not going to be case and that the current diagnostic supply chain just couldn't scale to even close to what was actually needed, and we were going to have this enormous shortfall in testing capacity. So, then I took Monday sort of off to work from home and tried to figure out, is there actually something we could do to help here. Called a whole bunch of CLIA labs that I know. So, to do the testing, you have to have one of these CLIA-licensed laboratories.

Eric Ries: Can I ask you what that is?

Fred Turner: Yeah. It's a certification from CMS, which is the Center for Medicaid and Medicare services. It basically qualifies a laboratory to run testing on human samples. So, Curative did not have one of these licenses previously. I, before Curative, worked on a company called Shield that operated a CLIA lab for about two years. So, I have some experience in running one of these labs but needed to find somebody that had a spare CLIA license with a facility that we could spin up COVID testing in rapidly.

So, I reached out to a few people I know in the Bay Area to try to find a lab that was willing to let us do that, got mostly nos and maybes in the Bay Area, so then started searching around LA. I actually went to a doctor I know pretty well, Dr. Jeff Klausner at UCLA, to see if he knew any labs. He put me in touch with someone who put me in touch with someone who knew KorvaLabs, which is an anti-doping, sport testing lab, and they're-

Eric Ries: So, apparently not very busy right now?

Fred Turner: Right. Not very much sport going on, not very much doping to detect. They had a 14,000-square-foot lab facility. So, we pretty quickly struck a deal to spin up a large COVID testing lab and basically close down all of their anti-doping testing operations. So, I think the first conversation with them happened on the Monday evening. I flew down to LA Tuesday morning from San Francisco, and we had signed the agreement by Wednesday. Then I moved our team down from Menlo Park on Thursday.

Eric Ries: How many people was that?

Fred Turner: Nine people. So, it was a small team at that point.

Eric Ries: Well, I think a lot of people hearing this story probably guessed that just your search to find the CLIA lab that you described probably took several weeks, and then it was several months of negotiation. We're talking about having an idea on a Sunday, find the person on Monday, the whole team moved on Thursday. What was that like for your team to go? It must have been like whiplash for them, upend their lives and do this.

Fred Turner: I think the team's used to me doing crazy pivots like this. A lot of them have been with me for a couple of years through different pivots, and a lot of them were working on Shield, which is the last company that was doing STD testing.

Celine Halioua: You should share what Shield started as.

Fred Turner: Shield started as genetic testing for dairy cows to predict how much milk they're going to make, and then that was called TL Biolabs, and then pivoted to STD testing, and then pivoted to sepsis, and then died due to a investor pulling out right at the end of closing a Series B funding round. So, a lot of them had followed me through all of that, and then one more crazy jump probably didn't seem too crazy.

I think partly the team's response to moving that fast was what really drove me to do it. Particularly Vlad, our chief scientific officer, who usually is pretty conservative about jumping into things, when we had the discussion around should we just stop sepsis, put it on hold, and do COVID, I was expecting him to say, "No, let's just monitor it for a few weeks and see what happens." And his response was just, "Yeah, we need to do COVID. We need to stop everything else. Let's do it now." That was pretty out of character for Vlad. He has been working in infectious disease diagnostics for over 30 years. I don't think there's probably anyone who knows more about it than him. For him to be so resolute that this needed to be done was a key driver in just dropping everything and making it happen.

Eric Ries: Did you have to talk to your investors about it?

Fred Turner: I did talk to our investors about it. They were very understanding. I think partly just the ... Well, the financial market right now for raising more money as a sepsis company is not a good place to be. So, they were incredibly supportive of the mission, but I think it also makes good financial sense for them to not have us try to fundraise as a sepsis company.

Eric Ries: Okay. You have the idea Sunday. By Monday night, you're already in action, finding this lab. How did you know that you could even do COVID diagnostic?

Fred Turner: The technology behind it is not that complicated. It's PCR testing. I've been working on PCR testing of one kind or another for probably a decade ish at this point, in cows and then in STDs and then in sepsis. Vlad has been doing it for substantially longer. So, the science behind it isn't that complicated. It's more how do you actually scale this up operationally and how do you fix the supply chain issues. So, knowing that we could do the testing wasn't really an issue.

Then Vlad had actually already built a prototype COVID test literally like in his spare time in evenings and weekends, mostly because he wanted to test himself. I think at the beginning it was just sort of he was interested in it, rather than he thought anything would come of it. So, he had already developed a lot of the actual test and had run it on a few people in the lab. We knew pretty quickly that it could be done. I think the unanswered questions were how fast can we scale this up, and can we actually provide testing at the scale of tens of thousands per day.

Eric Ries: Celine, how did you come into this story?

Celine Halioua: In a couple of different touchpoints. Again, that canonical moment in the stairwell really encouraged Fred to kind of explore COVID a little bit more in that it was something that was potentially the best use of his skillset to have the highest impact on health. That's a framework that's really important to me, and it's something that we've talked about a lot. It seemed clear to me that this was just the place where Fred could have just absolutely outsized value.

Eric Ries: How did you know that?

Celine Halioua: Because he's one of the smartest scientists I know, point blank. That plus the relevant background plus the obvious need that was coming and the fact that the standard sources were not going to meet that need and that the consequence of that is not going to be a slowed economy or whatever, it was going to be literal death, including potentially people that we were close to. It just seemed like the only moral option. I feel like the only moral option was for him to spend his time working on this.

After he decided to do it, went down to LA, convinced his team, the original Curative team was the sepsis team but also this ragtag team of volunteers who were just repurposing all of their time towards basically spinning up this company and getting as much testing capacity as possible as fast as possible. So, I think the core team of volunteers when it started was ... They're probably all CEOs or former CEOs or VCs of some sort or another, and a lot of those are people that I brought in by basically pitching Fred and pitching what he was working on.

Then I guess the other area I got really involved in was fundraising. It was kind of funny. I was half making pitches where I was pitching my own company, and then the next hour I'd be pitching Fred and his company, and kind of rapidly learning about infectious disease diagnostics and COVID and everything to be able to explain and give justice to what they were building. So, I was able to help Fred raise quite a bit of money in a short period of time.

Fred Turner: I think investors were definitely confused by the fact that Celine was raising money for a company she technically didn't work at.

Eric Ries: You were both in the Bay Area. Is that right?

Celine Halioua: Yes.

Eric Ries: So, the stairwell in question was in the Bay Area.

Celine Halioua: Yes. It was in my house.

Eric Ries: Yeah. So, Fred, you had already developed in the lab the basic test-

Fred Turner: Yeah.

Eric Ries: ... and were able to test Celine with it. Now, how do you know each other? How is it that you came to be doing this service under these circumstances?

Celine Halioua: So, Fred and I met in about May of last year, of 2019. I had just moved over from Oxford. More context, I was doing a PhD at Oxford before I left to become a chief of staff and a biotech VP. And Fred dropped out of his undergrad at Oxford. So, I heard the British accent, and I got super excited that there was a British person at this camping trip where I didn't know anybody and immediately basically jumped and him and started talking to him about England and Oxford. We've been friends ever since.

Eric Ries: Tell us about the company you were working on before you got culled into this COVID situation.

Celine Halioua: Yeah. So, I've been working on longevity and lifespan for probably five or six years now. I was previously Laura Deming's chief of staff, and then I left in December to start my own company that's developing drugs to extend dog lifespan, basically taking advantage of some genetic issues that we think are caused by dog inbreeding and cause dogs to have potentially much shorter lifespans than they actually should.

Eric Ries: Thank you for that work, by the way, on behalf of dog lovers everywhere.

Celine Halioua: Trying my best. So, human health and health span in general has always been a big passion, but I don't have any specific expertise or background in infectious disease.

Eric Ries: So, fast forward, you raised the seed round in January, and three months later you're raising money for a startup where you don't even work there?

Celine Halioua: Yep.

Eric Ries: Giving COVID testing and diagnostics. So, just how did you get from point A to point B?

Celine Halioua: I guess to give a little bit of context, I raised my seed as a solo founder. I didn't have any team. It was literally just a pitch deck. So, not to pat my back too much, but I'm probably at least a decent pitcher, and I can definitely talk very passionately about science. I was trying to think, what is the area I can be most helpful to Fred and COVID testing, and this seemed like the obvious place for me to contribute. I basically just started setting up meetings, taking first calls, and pitching people on why they should invest in Fred. Nobody batted their eyelids too much. I think I took the first two or three meetings with Fred's lead investor, which is pretty funny.

Eric Ries: So, what was the investor reaction like? I think there's been a lot of curiosity in the wider world about Silicon Valley and the kind of pivot to working on COVID and this question on are private investors doing their part or not. What's going on? So, I think it's important for people to hear what it was like to actually try to raise this money. What was the pitch, and what was the reaction?

Celine Halioua: Yeah. I mean, honestly, people were ... I think we raised about $1 million in four days or five days, including a weekend.

Eric Ries: Yeah, not five business days. The virus doesn't wait for weekends.

Celine Halioua: Absolutely not. And honestly, people were incredibly supportive. Everybody just wanted to understand what was the issue, why Curative was able to address it. Honestly it was just a lot of "If you have some tiny probability of having an impact on COVID, we want to support you." They didn't even ask or look for or kind of ask any of the standard questions around venture returns. That wasn't even kind of part of the equation. It was mostly just "Does this team have the ability to make an outsized impact on COVID? They do fantastic. We want to help," which was very heartening, especially since the majority of the investors were not biotech investors, almost entirely tech investors.

Eric Ries: So, Fred, you said earlier that the PCR based testing is not the hard part here, but the scaling and the logistics questions were. Walk us through this story from landing on the ground in LA and deciding to do this. Then what?

Fred Turner: Yeah. There's a lot of infrastructure that needs to be set up to do this at scale, and most of the problems come down to the fact that the US is out of pretty much everything related to COVID testing, including cotton swabs, that it needed. So, there's a lot that has to be figured out in order to not be blocked by the same supply chains that are blocking everybody else. One of the things that was important to me to put in place is, if all we were going to do is basically buy up the things other people were using for COVID testing and fight for them with other people, that seemed a bit pointless. Then it's kind of a zero sum-

Eric Ries: That's exactly what we've been dealing with in PPE, everyone buying from the same suppliers.

Fred Turner: Right. So, what's the point? So, what we really focused on is finding what we called orthogonal supply chains, so alternative items or going back to raw materials and making things out of raw materials in order to basically bring online completely new supply that didn't exist before.

Eric Ries: Can you give an example?

Fred Turner: Yeah. So, for example, the test kits are plastic tubes with a preservative inside. We've been having the plastic tubes injection-molded and filling it with a preservative that others are not using, and then when that runs out making the preservative ourselves and loading that into the tubes. We've been using a type of swab that is normally used for testing clean rooms for human contamination. Turns out, it works fine for COVID testing, but we had to validate that.

Eric Ries: Like from the semiconductor industry?

Fred Turner: Yes. So, nobody was using it for COVID, and there were millions of them just sat on a shelf. So, we validated that they can work, and now we have a factory spun up that is actually producing about a million of those a week.

Eric Ries: Wow.

Fred Turner: The real focus was how do we get online this orthogonal supply so that we're not blocking other people and taking resources away from public health or the CDC. We're actually bringing online new supply. We call the process validating, which is a CLIA lab term for basically checking that the test works across a large number of samples. Normally you would run a validation once, and then you would run the test for several years. We've pretty much been running a new validation every few days. As we bring in the new material, we saw something different, we find a new way-

Eric Ries: You have to make sure.

Fred Turner: ... of doing something that can scale up. There's a lot of rapidly iterating to find components that we can get in large quantities.

Eric Ries: The essence of startup thinking right there.

Fred Turner: Yep.

Celine Halioua: Yep.

Eric Ries: As I'm trying to wrap my mind around this story, I think the part that is hard to follow is ... Okay, I think people can follow that you were doing a startup, you were in the Bay Area, you made this pivot, you decide to move to LA. Everything's happening fast, but I think most people can think, "All right, yeah, I probably could find a CLIA lab if I had known where to look for it. Maybe not as fast as you did, but I could do it." But I see myself ... Okay. On Thursday, I have landed in LA. I have this team. I'm like, "I want to start testing people for COVID." But then how would you even get started? Who do you test? How do you get people in the ... I feel like it's such an immense problem, and there's such bias that somebody else would have figured that out shortly. I wonder, how did you experience it. How did you think through that problem? How long did it take to get the actual testing running? Pick up the story from Thursday. What happened Friday, Saturday, Sunday, Monday?

Fred Turner: A lot of hiring. I think that's the other thing we haven't touched on.

Eric Ries: Oh, wow.

Fred Turner: So, the initial team was nine people. We're now, as of five weeks later, 150 people. So, there's been quite a rapid hiring spree, and we're about to hire another 100 people over the next two weeks. Getting lab technicians in, trained, up to speed, and ready to run the test. We're operating three shifts around the clock in order to do this testing as efficiently and as high throughput as we can. We also brought on a lot of automation that makes it more accurate and more scalable, but we still need a large number of people to feed the robots and make it all work. So, a lot of the initial lift was finding all of those people in a city that we weren't from and had some network but more limited network than had it been in the Bay Area.

Eric Ries: And under a shelter-in-place order.

Fred Turner: And under a shelter-in-place.

Eric Ries: How many people are you at now?

Fred Turner: 150.

Eric Ries: Oh wow.

Fred Turner: Yeah. So, it's been a pretty rapid growth in the number of people. Putting in place the safety protocols to actually interview people in a safe manner, and then get them onsite into our little COVID-free bubble where everybody's tested every day. So far, we have not had any internal cases. We had someone that we hired that tested positive, was successfully quarantined, and then transitioned back into the group. Our safety protocols have worked effectively for keeping us all safe, despite having 150 people working in close proximity.

The other thing I would add here to the original question is I think partly why we've been able to scale up so fast is the amazing response of the local and city government here in LA. Definitely major shout out to Mayor Garcetti and the amazing work that the mayor's office has done. They moved exceptionally fast to stand up drive-through testing all across LA and sort of move heaven and earth to make that happen. The county of LA also put in an amazing amount of resources to stand up over 20 drive-through testing locations now across the city.

So, how it works is we have provided the training and some of the software for the drive-through locations. The city and county are providing all of the staffing for these locations, and that is mostly LA County Fire Department. Some of them are also run by volunteer groups such as CORE, which is Sean Penn's charity that have done some amazing work in running these drive-throughs. Then we provide the test kits and the lab services. I think that partnership with local and city government where they really have moved like a startup in a really good way in terms of how decisive they have been and how quickly they have moved to get testing out there I think really made all the difference.

Eric Ries: I've heard that praise of Mayor Garcetti now from several people who have been working in relief efforts. Being in San Francisco, we of course have a natural rivalry with LA, and we're very proud of our leadership here, but it seems like they took the response in LA to a whole nother level. Can you talk a little bit about how did you first come into contact with the mayor's office? Again, you've got this test in a CLIA lab that was used for anti-doping until five minutes ago. How did you go from that to all of these drive-through locations and this full city partnership?

Fred Turner: Yeah. So, we actually initially got started with the LA Sheriff's Department, and it just happened that one of the LA sheriffs was the mayor pro tem of San Dimas where the lab is based. He reached out to just sort of see what we were doing and try to get some testing for the sheriff's department, and he set up a program for testing first responders, which then got noticed by the city and by the county who were working on setting up these drive-through locations and needed more testing.

I think the sort of initial push from the city, which was fantastic, was around the self-collection point that we had been working on. One of the limiting factors that they had seen in some of this drive-through testing, they'd be doing some with other labs, is the need to have a large number of medical staff around for the nasopharyngeal swab testing. So, that's where a medical practitioner needs to insert the swab about three inches up your nose. We sometimes call them brain swabs. It's not a very pleasant experience. It requires a lot of medical staff. It creates a lot of exposure potential for medical staff, and it uses up a ton of PPE.

So, they had been trying to find a way of scaling testing to thousands per day, were struggling with the NP swabs sort of being a limiting factor there. One of the things we have been pushing very hard on early is how do you actually build a test that is scalable, not just on the lab end, but from a logistics standpoint. Because if you can do a lot of tests in the lab but you can't actually distribute it, there's not much point.

The self-collection is really an important piece there, because it allows ... At a drive-through that the kit is handed off to the individual who then self-collects in their car by swabbing the inside of their mouth. They then drop that kit in a bin as they exit the drive-through, and there's no need to have any physical contact between the staff at the drive-through locations and the patients coming through. That really enables a much greater level of scale. We've seen some of the LA City drive-through locations process up to 800 tests per day, whereas the NP swab based sites are typically doing 100 to 150 per day.

I think they were looking for a solution that would allow them to do higher throughput, and we were focused on building something that allowed that high throughput. So, that was the foundation for a great partnership.

Eric Ries: How many people have you tested so far?

Fred Turner: We have tested slightly over 75,000 people so far.

Eric Ries: All in LA?

Fred Turner: Mostly in LA. Some Bay Area, some now starting to spread out across the county. We've just been doing our first tests in Florida and doing our first delivery to Alaska as well.

Eric Ries: And it's your aspiration to scale this up even beyond California to these other locations?

Fred Turner: Yes.

Eric Ries: Tell us a little bit more about what your long term vision is here for this as a ... Recognizing that, in COVID, long term sometimes means a month from now.

Fred Turner: Yeah. The true long term is that we're hoping to put ourselves out of business, but that's always a very interesting thing to-

Eric Ries: Wouldn't that be great?

Fred Turner: Yeah, exactly. But our plan is to scale across the country. We actually just started on Monday construction of a second lab location in Washington, DC, which we're expecting to go live with testing on Saturday. Our plan is to have several labs across the country supporting tens of thousands of tests per day per lab in order to be able to support the return to work effort without a significant increase in cases. I think our endgame is to try to get as many tests out there as possible, and I know there've been some predictions showing millions of tests per day are needed to fully reopen the economy, but to provide as many tests as we can until there is a vaccine available.

Eric Ries: Talk a little bit about how testing is so critical to this interim period between now and when a vaccine is presumably developed.

Fred Turner: It's critical to be able to find positive cases and find them early and then isolate those individuals. The way to stop the spread is isolated people with COVID, and you can do that in one of two ways. You can do what we're doing now, which is isolate everybody, or you can try to find the cases that are positive and isolate them and allow the negative individuals to go about their business.

Eric Ries: For those that are not familiar, we'll put a link to testtraceisolate.org, which has a complete for-the-public explainer on why this is such a critical approach and what jurisdictions need to do as this testing becomes available at higher and higher scale.

Fred Turner: I think the other thing I would add, and we'll probably publish a little bit more about this in a journal over the next few weeks, is we've seen some really interesting data that there's a lot of variability between people in their viral load and how much virus they're shedding. One of the things we've been looking at is it looks like there may be these sort of super infectors that have very high viral loads and likely are infecting a lot of people, and then there are others that have not really that high a viral load and are probably not that infectious. I think one thing will be doing a lot more research on and investigating over the coming weeks and months is whether we can actually use that quantitative score in any way to isolate the super infectors first.

Eric Ries: Fascinating. So, it's not just a matter of infected or not infected, but there's some kind of scale or quantity to it as well?

Fred Turner: Yes. Yes.

Eric Ries: I want to pick up on something you said that your goal is to put yourself out of business. You're of course not the only COVID related business that I've spoken to that has that as their mission. Talk about what it was like to pitch that to investors, when normally you're trying to pitch that this will be an enduring solution that will be needed forever.

Celine Halioua: I think one thing that you can definitely give the tech community credit for is they have been very cognizant of the dangers and consequences of COVID-19. There was no market sizing pitch or whatever that one had to do in the beginning to explain why this was such an important problem. Everyone was very, very cognizant of the effect that COVID already had had and was going to have.

Honestly, I think everybody just wanted to help. Right? And if you're not an infectious disease biologist, if you're not a physician who's able to work in the hospitals, you can't directly ... They didn't feel like there was a direct way to help. So, the best way to help was with resources that one did have which, in the venture capitalist case, is capital. So, I think people were very excited to be able to support a team that had the capacity to scale up and be able to have some slice and be able to maximize their personal potential benefit towards reducing the impact of COVID in the US.

Obviously it'll be a bonus if they're able to get some return on that capital, but I don't think ... Or, I know actually, for everybody who invested in Curative, this wasn't a ... That wasn't a necessity. We had a lot of discussion of how to think about it as a philanthropic donation almost. Kind of my disclaimer to everybody was "Assume you will not get this capital back. Do you still want to have this conversation?" And everyone said yes.

Fred Turner: I think I'd add two things to that as well. Firstly, we've seen investor helpfulness sort of on another level than I've seen previously. DCVC has practically been working as a sales team in terms of working with local governments and states to help them bring online drive-through testing and get our testing out there using their network.

Eric Ries: This is Matt Ocko's team, right?

Fred Turner: Matt Ocko, Scott Barclay, and Matt Michelsen. Yes. So, we've seen an enormous amount of support from investors in helping us do that and helping with recruiting. Chris Anderson is also an investor who invested pre-COVID and then again in the COVID efforts. So, we got an enormous amount of support there.

I think the other thing that we were pitching is hopefully we can put ourselves out of business on COVID. We would love to go back to sepsis, which is a problem that isn't going to go away anytime soon and build an enduring business there once this is all over.

Eric Ries: It kind of cuts against the stereotype people have of greedy tech investors and VCs and tech bros and all that. What do you make of that?

Fred Turner: Pandemics change people.

Celine Halioua: I always say pitching longevity's actually relatively easy when people realize that no amount of capital return or multiplier on your firm will prevent you from, god forbid, getting some horrible, age-related disease, which is a bit kind of morbid, but it's just kind of accurate of the situation that we have right now and how vulnerable we are to the processes of biology and disease. I think once people are kind of activated to recognize that, they're very interested and excited to support efforts to increase human health across the table. I was very impressed that my investors were so ... I mean, they saw me pitching Fred. I pitched some of the same people for both Celevity and for Curative, and nobody batted an eyelash, nobody gave me any kind of negative words. Literally immediately after, I closed my own round, which I was very thankful for and I think is non-standard.

Eric Ries: What's it going to take to roll this kind of testing out nationwide?

Fred Turner: More local governments to respond like LA. I think we have a good base now from the lab side to be providing potentially up to several hundred thousand tests per day of lab capacity. There are several other companies also providing large amounts of capacity. I think we will get there on the lab side. I think there's a lot of logistics that still have to be built out at the local and state government level to actually get this testing to people. Some of what we've been working with there as well is working with a group at the Air Force to potentially use some of the logistics support they have there to get this testing out to the masses. But there really is a lot of logistics to get these kits in people's hands, test them in a safe manner, and then get the kit back to the lab for testing.

Eric Ries: Have you or has the City of LA open sourced this playbook of what are the complementary pieces that have to get done to make a lab like this effective?

Fred Turner: We have created a bunch of documentation on how to stand up these drive-throughs and then how to do that. We're making that available to every city that's interested in working with us.

Celine Halioua: The other thing, one thing I wanted to add here, is the other important kind of part of the puzzle is preparation for the next time this inevitably happens. I mean, viruses by default are evolutionarily designed to evolve and be able to escape and kind of come and be more infectious. This will happen again in our lifetimes, almost certainly. It's unfortunate that we were kind of so vulnerable by it this time, but hopefully we can learn so this doesn't happen again. We need to work on being able to scale up testing of individuals as quickly as possible, but also on the other aspects, in terms of the emergency rooms not being able to scale capacity, shortages of drugs because we don't have a supply chain within the United States. We're dependent on other countries. We're very prepared for certain negative scenarios, but for biological issues we are very unprepared, and those are, I think, a lot more scary than any sort of war situation.

Fred Turner: Yep. I think I would add there that the supply chain for diagnostics is used to running with almost no slack. The only reason there's a little bit of slack is that there's a flu season every year, which creates a seasonal spike in the need for flu tests. But typically the supply chain runs with plus or minus a few percent of slack. So, when you suddenly ask for 10 times the number of tests, and then 100 times within a few months, it's not built for that, and it falls apart. So, we really need to have better preparedness systems in place so that, if something like this happens again, we have the ability to respond with rapid testing and large amounts of capacity.

Eric Ries: We would probably have to say when this happens again.

Fred Turner: Yes.

Eric Ries: The epidemiologists have been warning us about this for years and decades even. Hopefully now we will heed their warnings.

Fred Turner: Hopefully people will listen to Bill Gates when he warns about things in the future.

Eric Ries: Yes. I think if he warns about something next year I think it's very likely we're going to get right on it. So, I hope he'll use that power with great responsibility. Can I go back to the City of LA playbook for a second?

Fred Turner: Yes.

Eric Ries: What are the elements of what LA has done that has allowed it to scale so rapidly?

Fred Turner: I think part of it is the self-collected piece and definitely ... So, we received the emergency use authorization from the FDA last week for that. Under the FDA's guidance, these kind of tests can be implemented and used whilst the FDA's reviewing that guidance. LA really worked with us to have their medical team review the data and launch this whilst it was going through that regulatory process completely within the bounds of all of the guidance. But I think that allowed them to use the self-collected tests much faster than other places that were just 100% waiting on all of the final FDA authorization. This self-collection has really enabled a much broader scale of testing.

I also think, again, it does come down to the leadership at the city level, of decisively bringing on a large amount of testing, mobilizing the fire department, and making sure the funds are available at the city level to pay for the staffing and the testing immediately and not hesitating.

Eric Ries: Have you had conversations with the State of California government about rolling this out statewide?

Fred Turner: We have had conversations with the governor's office, and they have pointed us in the direction of where testing is needed most. But we are still seeing a lot of the decision-making happening at the city and county level.

Eric Ries: Do you think that's how it should be, or you think that's simply the only entities that can act fast enough to get going here?

Fred Turner: I think it will move more to the state level. It does just take a bit more time for the states to institute things like this, whereas some cities have had the resources to get going very quickly. I think we've now seen more and more cities start implementing these kinds of programs. We've been having a lot of conversations across California and across the whole country with cities wanting to follow LA's example. So, I think the cities have the opportunity to sort of break out first. We're hoping that the states will follow. The final step is a federal testing program-

Eric Ries: Of course.

Fred Turner: ... which I think at some point we will likely see.

Eric Ries: What's the expression? From your lips to God's ears?

Fred Turner: I think the federal response, although there's been some criticism of lack of a federal testing program, most of the states and cities are getting reimbursement that is either state reimbursement or FEMA reimbursement, and that is what is enabling them to do this testing.

Eric Ries: Yeah. So, the backstop is working even though the primary has not functioned?

Fred Turner: Exactly.

Eric Ries: Yeah. So, if I'm somebody listening right now and I have the ear of the governor or the mayor or the county health official of my jurisdiction, what would you want me to tell them?

Fred Turner: Mayors need to implement drive-through testing first to enable first responders and essential workers to get tested frequently-

Eric Ries: Yes, please.

Fred Turner: ... and then to enable a broader set of the population, beginning with symptomatic but starting to get broader than that, to allow businesses to reopen. I think the best format for delivering that testing is drive-throughs or walk-throughs, and those really need to be organized at the city level.

Eric Ries: So, if the mayor says, "Yes, I'd like to do it," who should she call?

Fred Turner: She should call our drive-through team that has been setting these up in LA. We have a whole training program to bring online new drive-through locations if they as a city ... We've seen some cities just don't have the staff available to run these drive-throughs. There are various partners we've worked with, CORE being one of the key ones, that can provide staffing for the drive-throughs. They operate as a charity and have received a number of donations to make that possible. So, I think reaching out to us directly, we can certainly get drive-throughs set up in a matter of days.

Eric Ries: So, what is the rate-limiting step here in terms of scaling this up? Of course we need the partnership of the governments themselves to want to do it. What else would you need to make this big?

Fred Turner: That logistical piece is really the main focus, and then on our end having that funding in place to pay for the testing is really important. We've scaled up to 150 people very rapidly and have really invested heavily in automation. We're running a large clinical trial team that is investigating new testing approaches. And that is all really an expensive endeavor. Having the funding available for the testing ensures that we can keep scaling as rapidly as possible and not be worrying about ensuring that we're not going to go out of business.

Eric Ries: I think, compared to the headlines that people are reading and consuming right now, this is a pretty shocking story. You're saying that right now we have the laboratory capacity, the testing capacity, to test a large percentage of the population, which would be the critical missing ingredient to be able to do contact tracing and test isolation, which could then lead to a healthy reopening of the economy.

I know there's a negativity bias in the media of course, and it's hard for people to keep track. The developments here are so fast-moving. But what would you want to say to people who are feeling that sense of despair and feel like that we're never going to get through this and, because we made mistakes in the past, there's no recovering from this? What would you want to say to them, just by way of saying "There is some hope here"?

Fred Turner: I think we've started to see the curve flatten in a lot of places. We're seeing the rates here in LA drop off, and I think we're going to have the lab capacity available to begin testing at least essential workers and then reopening essential businesses and then adding the capacity to begin reopening the entire economy. I think it can be done. We really need to move towards a vaccine to fully reopen. But I think we are going to have the testing capacity to contain this as a country.

Eric Ries: Fred, thank you so much. Celine, really appreciate your efforts here. Both for taking the time today, but of course for all of your work on behalf of all of us. It's much appreciated.

Fred Turner: Great. Thank you. Thanks for having us.

Eric Ries: This has been Out of the Crisis. I'm Eric Ries. Out of the Crisis is produced by Ben Ehrlich, edited by Jacob Tender. Music composed and performed by Cody Martin. Hosting is by Breaker. For more information on COVID-19 and ways you can help, visit helpwithcovid.com. If you have feedback or you're working on a project related to the pandemic, please reach out to me on Twitter. I'm at E-R-I-C-R-I-E-S. Let's solve this together.




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