From the Baseball Diamond to Redefining the Boundaries of Medical Breakthroughs

Dean Petkanas, the co-founder of Kannalife Sciences, is an entrepreneur whose journey embodies the American spirit of innovation and a relentless quest for self-discovery. Fueled by a passion for science and a desire to make a difference in the world, Dean's entrepreneurial journey began in 2010 when he co-founded Kannalife Sciences, a pharmaceutical and phyto-medical company dedicated to developing novel therapeutic agents.

Before his work at Kannalife, Dean made significant contributions to the pharmaceutical industry. From 1992 to 1994, he served as the lead investment banker for Xechem International, Inc., overseeing private placement offerings and the subsequent IPO to finance the development of a lead target drug candidate. In 2002, he joined Xechem International as Vice President of Business Development, where he played a crucial role in securing financing for the development and commercialization of Xechem's drug Hemoxin (Nicosan) for the treatment of Sickle Cell disease.

Dean's early life in Fresh Meadows, NY, shaped his strong work ethic and competitive nature. Despite starting as an underdog in little league baseball, he transformed into a standout player, eventually earning a spot as the first-team pitcher in college as a walk-on. This same determination and resilience have driven his success in the business world, where he has established himself as a leader in biotechnology and pharmaceutical deals.


This week in conversation with TXP Talk


What inspired you to co-found Kannalife Sciences?


The inspiration behind co-founding Kannalife came from a friend and the other co-founder of the company, Thoma Kikis. He approached me in March 2009 to tell me about an idea of getting into the medical marijuana business. He mentioned his cousin died of a brain tumor and had heard that naturalists like Dr. Andrew Weil were using plant-based medicines to treat various diseases, and why not cannabis? I told Tom that I wasn’t interested, and he persisted to antagonize me for a full year. I reconsidered in March 2010, telling him that the only area I wanted to focus on was non-psychotropic cannabinoids, no violation of the Controlled Substance Act, and only the ethical pharmaceutical route. If he agreed, I would put something together and get back to him in a few weeks. April 2010, I called Tom and told him I wanted to first research cannabidiol (better known as CBD), as a potential treatment for hepatic encephalopathy. That’s when he told me his father suffers with the disease. I knew then we had a purpose.


How do you see the field of cannabinoids as antioxidants and neuroprotectants evolving in the coming years?


After this conversation with Tom in April 2010, I spent a great deal of time in scientific literature and also looked into an opportunity to license technology held by the National Institutes of Health regarding a U.S. Government owned patent #6,630,507 titled “Cannabinoids as Antioxidants and Neuroprotectants.” We acquired an exclusive license to this ‘507 patent and began to study CBD as a neuroprotectant. It became very clear to us early on in our research, that while CBD was a decent neuroprotectant, it had some limitations that could pose risks and side effects that may make it a very risky drug discovery program and problems in the future with the FDA.


As a result of our early research, we began our drug discovery research to solve for some of CBDs structural and pharmacological limitations, much of which come from its relatively poor physical (chemical) properties. CBD is a very oily compound and only soluble in oil-based vehicles. By pharmaceutical terms, it is a lipophilic compound.


My team and I went out on a limb at that time to openly speak out about the limitations of phyto-cannabinoids like CBD and what new discovery means to pharmaceutical breakthroughs. Nature provides so much, but still has limits. Historically, pharmaceutical discovery has taken the best of nature and made it better. Aspirin owes its start to testing the bark of the willow tree and synthesizing of salicylic acid (the active pharmaceutical ingredient found in the bark of the willow tree). There are many more examples, including the discovery of paclitaxel, which was also synthesized and had its beginning in the bark of the Pacific Yew Tree.


Nevertheless, there was a massive movement brought on by the cannabis craze that swept up not only medicinal and recreational marijuana, but the idea that CBD was a cure-all. When the capital markets, rife with heuristics, over indulged stakeholders with exorbitant valuations we warned of the dangers of skipping over science and supply-demand factors. Unfortunately, we were ignored.


Is there a future for cannabinoids? All I could say now, is you didn’t follow the leader when we took the pioneer’s role, maybe now common sense will take over. The path has always been and will always be from nature to synthesis and from preclinical studies to human clinical trials. There are no shortcuts.


What challenges did you face in creating and executing Kannalife's business model, and how did you navigate them?


The saying goes, God doesn’t give you what you want, He gives you what you need.


We started the company on a blank sheet of paper and had to sweat out our first two years of existence trying to raise seed capital. Again, God is the check writer and gives you exactly what you need when you need it. We raised $1.5 million in seed money in 2013 and immediately started to look at the potential for CBD. When we realized that the pharmacological difficulties of CBD would present long term problems and ultimately have pitfalls in the clinic, we decided to go the med-chem route and try to improve on the potential of CBD’s therapeutic value but remove the poor physical values that cause low bioavailability, poor solubility and other problems that were seen and detailed in 2018 after the FDA’s approval of Epidiolex for a rare form of child epilepsy called Lennox-Gastaut Syndrome. What we knew as potential problems in 2013 were clearly defined on the Epidiolex safety panel such as drug-drug interaction issues, along with liver and developmental toxicity potential in short- and long-term use.


Having been given a small amount of seed capital in 2013, we’ve been blessed to spend wisely from this limited amount of funding. We planted wisely and came up with our own technology which was rewarded by the receipt of $3.3 million in non-dilutive funding from NIH grants in 2017 and 2021. Convincing the brightest scientists in the world that our technology is worthy of funding is validation in and of itself. Being successful in the preclinical and IND enabling studies is a double portion. Our pedigree is our science, our common sense is shown in our approach.


Here’s the ratio of success in drug discovery. Typically, out of 10,000 new drugs that are blue-printed, synthesized and screened, 250 will get into preclinical studies. Out of the 250 that start in preclinical studies, only 5 will get into IND enabling studies –which is where we currently have our lead compound and almost successfully through IND enabling studies. Out of 5 that make it to this level, only 1 will get into FDA human clinical trials. We only had funds from our seed financing in 2013 to construct 22 compounds. What is the probability of getting to the present stage of success compared to well-funded companies? About 2 in 100,000. In the U.S. you’re 7 times more likely to get hit by lightning during your lifetime than to get to the stage of success achieved by our lead compound KLS-13019.


We’ve faced mountains of obstacles; in addition to grinding out the first two years trying to find seed and angel investors, after successfully licensing technology from NIH and receiving our seed round, we were constantly maligned by the cannabis community as a government sponsored anti-cannabis pharmaceutical company. Then there was the overinflation and collapse of the CBD market caused by some of the same cannabis industry participants, and for which we have nothing to do with. After the CBD market collapse (again, nothing we did other than research CBD and construct a better therapeutic), we were seeking our next round of funding and ironically, we were unfairly characterized by investment bankers as a CBD company.


Other major obstacles have been in the hearing and understanding of our message. On one end of the equation, the science is pioneering, and getting the buy-in and conviction in the life sciences community has been challenging. The industry is filled with copycats and followers. Until a groundbreaking technology gets into the mainstream mindset, conviction sits on the other side of the coin. We also believe that the pregnant negative of telling the marketplace that our lead compound is a non-opioid, which it is, draws attention to pain management. Our science has the capacity to prevent and reverse neuropathic pain. That’s a very different field of treatment than analgesic pain that has been owned by opioids since the 90s. We’ve gotten dismissed by virtue of rule of thumb heuristics, which is all too often a common practice among those reviewing and passing judgment on our science.


After the CBD market collapse, came COVID-19 and the hyperbolic move by the life sciences community to overvalue speculative biotech investments in vaccines, cancer research and gene therapy startups. That went from August 2020 to a peak in February 2021 and a crash that lasted until the fourth quarter of 2023.


We are still here, still standing, and excited to be heading into human clinical trials in 12 to 18 months. Our journey is best described by Paul’s letters to the Corinthians (2 Corinthians11:25-33; and 2 Corinthians 12: 6-10). Nothing good ever comes easy. We owe our preclinical success, stamina and persistence to divine providence and grace.


We owe our success to God and to our team of dedicated professionals and collaborators that helped to navigate these challenges and have positioned Kannalife for success.


How has your experience in investment banking and V.P. of Business Development roles influenced your approach to pharmaceutical development at Kannalife Sciences?


Experience can only take you so far. I’ve been told many times that we chose the most difficult industry to break into. I would simply say that the work I did as a merchant and investment banker in the field of biotech, was a good foundation for attempting to take the risk of creating a biotech start-up.


How sensible was it? It depends on your risk tolerance and ability to create a good blueprint. So, if you have at least that, it becomes one of the four cornerstones of the overall foundation. You need three more to start building your house.


The next cornerstone is seed financing based on your business model and assets. We had an exclusive license in hand from NIH in June 2012. We still needed to pay for it and had to find a seed investor who would buy into our business model. We secured that in February 2013.


Now you have two corners filled.


The next cornerstone is the knowledge in the field of life sciences. If you’re going into a new therapeutic area, as we chose – cannabinoid therapeutics – and there is little to no expertise in the field, you had better be a quick study and take the lead. Part of this cornerstone is also getting the buy-in from scientists who join the team to reinforce this block. We did just that and set our home at the Pennsylvania Biotechnology Center and built a team around medicinal chemistry and neuropharmacology.


The last remaining cornerstone is the one that takes the longest to set. It is validation of scientific discovery. We now have that too and we have the ability to build a skyscraper of a company if we so desire. This will require significant capital. The good news is we own the ground in which we poured our foundation.


Did my experience on Wall Street prepare me or influence me for starting Kannalife? Somewhat, but mostly life and my previous start-up experience. The greatest impact has been my faith and trust in God, who makes all things possible and for having been blessed with an outstanding team along the way.


What advice would you give to aspiring entrepreneurs in the pharmaceutical or biotech industries based on your experiences?


My closest relationships have told me time and again, starting a pharmaceutical company from scratch without the proverbial big-pharma pedigree or Silicon Valley club membership is more odds defying than playing the lottery. Yet here we are, defying all the odds and marching towards our goal of bringing life changing medicine to millions who have been waiting for decades for alternatives to opioids for pain management.

That’s purpose. And it is singularly the most important factor in taking risk as an entrepreneur. If you experience the trials of Job and can relate to Paul’s afflictions and yet don’t quit, you’re on the path towards success. For aspiring entrepreneurs in the pharmaceutical or biotech industries, my advice would be to stay resilient, stay focused on your vision, and surround yourself with a talented team who shares your passion. Communication and messaging are essential in the process, especially if you keep it simple for investors to understand. Be prepared to adapt to changing circumstances, weather multiple storms, and never lose sight of the impact your work can have on improving human health.


What do you consider the most significant challenge facing the pharmaceutical industry today, and how do you think it can be addressed?


Getting out of its own way, being more responsible to the early-stage innovations, not letting the tail wag the dog (see: use of GLP-1 inhibitors for weight loss versus diabetic patient needs), and stop shifting the bar when the markets take on a bad skein (see: Biotech Bear Market 2021 to 2023).


We’ve had high level discussions with a few of the largest bio pharmaceutical companies in the world and would love to have more discussions. The timing is perfect for us right now to leverage the NIH grant and give a collaborator an opportunity to score big with KLS-13019. As you know there is a paucity of research and development in pain management due to the crowding out effect of opioids over the past 25 years.


I’ve written an OpEd that was published in Nasdaq in June 2022 that speaks to this very problem. Now the FDA has even offered a change of heart and is providing guidance for replacing opioids in the treatment and management of pain. We know that the adverse selection of ignoring other pain therapeutics in favor of opioids was a terrible barrier to innovation, yet it was a blessing in disguise for us because we are pioneers in the midst of a sea change in prescription patterns. Removing opioids from the landscape of prescriptions is a real process currently underway. This is opportunity knocking at the door as the FDA and other regulatory agencies around the world seek to dramatically reduce the use of opioids for pain management.


What’s the best piece of advice you’ve ever received over the course of your career?


It’s a funny question, making me reflect on years gone by and being a recipient, whereas nowadays I’m the one giving advice.


Completely unrelated to my endeavor at Kannalife, I was once managing a different project when something went terribly wrong and caught me off guard. At that time, my dear friend Ralph Mantynband, now passed on, witnessed me in Steve Jobs-esque fit of anger. Ralph being the ever even-keeled genius that he was uttered the following words to me. “Quos deus vult perdere, prius demantat.”


I jokingly told Ralph I didn’t drive a prius, he laughed and said; “He who the gods seek to destroy must first make angry.” I replied, “Indeed.”


It sticks with me today as a reminder that temperament is extremely important and while it is human to experience feelings of anger, sadness, joy, contentment, anger should be minimalized while conducting business. Whether it helps you clear your pipes and can be cathartic, it gives observers a perception of lost control to which a string of bad outcomes can most certainly occur. Is it ok to be angry? Sure, but as the saying goes, everything in moderation.


The ultimate advice comes from my conversations with God, through reading the word, and being open to hearing His voice. Be patient. Be faithful. Stay the course. According to scripture, Christ once counselled his disciples, “With man this is impossible, but with God all things are possible.”


Photo: Dean Petkanas/Kannalife Sciences, Shutterstock

March 27, 2024