Episode 4. How to start your own biotech company – Part 2. Devices and Therapeutics

  NCI SBIR-funded biotech innovators Joseph Peterson, CTO and Co-Founder of Nanocan Therapeutics, and Craig Ramirez, CEO and Co-Foudner of Tezcat Biosciences, share advice on the priority steps aspiring entrepreneurs should take when starting a small business.

TRANSCRIPT

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BILLY: Hello and welcome to Innovation lab, your go to resource for all things biotech startups brought to you by the National Cancer Institutes Small Business Innovation Research, SBIR Development Center.

 

Our podcast host interviews with successful entrepreneurs and provides resources for small businesses looking to take their cutting-edge cancer solutions from lab to market.

 

BILLY: I'm Billy Bozza, a program director at NCI SBIR and today's host.

 

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In the last episode, you heard from two SBIR-funded therapeutic companies about how they started their small business. Today, you will hear from a therapeutics company and a device company about their journey going from lab to market.

 

 

Up first, we have a medical device developer Symbiosis who will share their journey going from academia to business and the resources they utilize when kick starting that path. Here's Joseph Peterson, the co-founder and Chief Technology Officer of Symbiosis.

 

JOE: Hi, I'm Joe Peterson, co-founder and CTO of Symbiosis, a pre-market med tech company developing software medical devices for precision cancer care. We're working to bring a tool for breast cancer treatment planning to the clinic. We've completed two phase one SBIR contracts and are working on a phase two contract now. I'm honored that the program organizers invited me to speak to you about our journey and my learnings.

 

Why did you decide to start a small business? Well, Symbiosis was founded to change the way we understand and treat cancer. We have the belief that comprehensive mechanistic bottoms up technology that accounts for biology, chemistry, and physics of cancer, paired with top down AI approaches, will be necessary to revolutionize cancer care.

 

It was this belief that spurred us to work to translate research from the lab out into the world. We aim to revolutionize cancer treatment by one, providing physicians with personalized navigation tools to better understand their patients and their cancers. Two, help patients make more informed decisions about the risks and benefits of treatments, ultimately to allow them to find the right balance of toxicity and likelihood of successive treatment. And three, to aid in the development of new life changing drugs so that patients live better, longer lives.

 

Most importantly for us, it was about improving patient outcomes and ultimately to help more patients experience and cure. How did you manage the transition from academia to small business and what would be your advice to those thinking about a similar change?

 

The transition is a continual learning process, personally, professionally, and as a company. I love this quote from Steve Blank, who is one of the creators of the Lean Startup Process. He says, “The startup is an organization formed to search for repeatable and scalable business model.” What this means practically to a scientist like me is that you're constantly generating hypotheses and testing them with data: market data, customer data, scientific data, and technical data. And ultimately making some bets along the way about what could be a product and who your customer would be.

 

My advice to those thinking about a similar transition would be first to prepare to wear many hats and finding others who are similarly willing. The startup process is long, requires adaptation, and your company will be understaffed for a very long time. Second, to spend time identifying your strengths and weaknesses, identifying gaps and either self-educating or finding others to complement you is so important to your success.

 

Third, as a technical person, you may be inherently uncomfortable with networking. Spend the time doing it. When you find people you respect, ask them to be mentors or ask help. It's critical at your early stage in this process. And fourth and most importantly, talk to the customers and potential customers early and often. You may be building the coolest widget in the world, but if it doesn't fit a customer need, you won't have a business.

 

What are some helpful resources? Non-dilutive funding is a must. Pitch competitions are perhaps the best way to obtain non-dilutive funding. This might be a traditional pitch competition in a startup friendly ecosystem or a less traditional competition forum such as a startup weekend or a hackathon.

 

Grants and contracts, whether SBIR or other grant programs are great opportunities to prove out of technology prior to development and all the major federal agencies provide these, whether it be NIH, DOE, FDA, or the Department of Defense. Be cautious of the grant versus contract distinction early in the value proposition discovery phase however, as a contract will be attached to a relatively rigid set of milestones, while a grant may allow for more flexibility and the ability to pivot.

 

Translational research grants, such as those offered by NIH, are excellent options as well, and are generally open to both nonprofit and for profit institutions, however they come with some restrictions. They require a strong track record of research success. Requirements are high, but they can be overcome with great academic or clinical partners. And best of all, early customers could be a pharmaceutical company or a hospital that might pay for your services or other early stage companies.

 

There's no better way to validate your idea than to show that someone is willing to pay for it. In terms of entrepreneurial training, most large universities have some form of entrepreneurship course. As a tech focused academic, you might not be familiar with the courses offered by your business and engineering schools, but they almost certainly exist.

 

Most campuses these days also have startup communities that host networking events which are great opportunities to meet like-minded folks and share knowledge. Perhaps the best programs that I've seen are the innovation I-Cores, which is an immersive seven week experiential training program for scientists and engineers in the university focused on customer discovery.

 

These are also offered by most of the federal agencies and this program was a game changer for how Symbiosis thought about our own product. Finally, there are incubators and accelerators. Many large research institutions, research parks host startup incubators where free or cheap office space and entrepreneurial mentorship can be obtained.

 

There are also many independent and large tech sponsored technology accelerators. Some examples of the former in the biotech space are Alchemists in the San Francisco QB3 out of the University of California system, Start X out of Stanford, Alpha Labs out of Pittsburgh, or Matter in Chicago. Examples of large tech sponsored biotech accelerators include Johnson and Johnson's J Labs, Illumina Accelerator, and GE Healthcare's Edison Accelerator.

 

Are there any technology specific considerations when starting a med tech small business? When considering technology that will ultimately impact a patient, a risk-benefit framework is helpful, in fact, it is prescribed by regulatory agencies like the FDA. Similarly, when thinking about your company, there are risks and benefits besides financial benefits which benefits you value will have to be part of your company mission and vision.

 

The risks, on the other hand, are more predictable. One of our investors laid out their four part model for how they assess risks in potential biotech, health tech, and med tech investments. First, there is scientific risk, is the science sound? Often we can be tricked by confirmation bias or confounding factors. Second, there's technical risk. Can we actually build a technology based on the science? Scaling up what works in the academic lab is often harder than you might expect.

 

Third, there's regulatory risk. What is the potential impact of your technology compared with the potential harm of malfunction or misuse? Are these aligned and will the regulatory agency come to agreement in a reasonable amount of time to bring your product to market?

 

Fourth, there's market risk, is the customer actually willing to pay? Scientific processes should be applied to market research, but as with all human decision making, small and fickle preferences are uncertainties. Not to mention that if you land in the space that is worthwhile, there will be competition. Coming up with strategies to mitigate these risks will be an essential part of your journey as a med tech small business.

 

Finally, what are some of the key challenges you faced and how did you overcome them? Clinical partnerships are difficult to form without prior relationships in either academic or clinical research. Clinical data is king for health, med, and biotech companies, and is absolutely critical both for the pre-market feasibility and the marketing studies that you'll be doing.

 

Forming those clinical partnerships are more important, though, for the KOLs, who help define your product value proposition and who will ultimately evangelize your technology as they are early adopters. Forming these relationships early on was a huge hurdle. Getting data into the company was a huge hurdle early on, but you have to have persistence and you have to be deliberate in who you go after and how you approach them and bring them on board.

 

 

Ultimately, clinical collaborations are things that should last the lifetime of your solution. Where there's initial excitement and then you're burning a huge amount of money for a very long time until you develop that scalable revenue. This includes hurdles along the way, such as regulatory uncertainties, left hand, right hand turns, bumps and clinical and feasibility experiences, and ultimately in adoption.

 

As with any disruptive technology, the adoption will take some time. There need to be those true believers early on who will jump on board and frankly, we've had some success in this by bringing excellent people and talking to people who are leaders in the field willing to adopt new technologies. But ultimately, the place everybody wants to go and we haven't gotten to yet is reimbursement.

 

And it will take a huge amount of clinical data, clinical evidence and lots of use to support, but ultimately that's the Holy Grail, that's what's going to make your technology scalable.

 

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BILLY: Our second speaker is Craig Ramirez, co-founder and CEO of an NCI SBIR funded biopharmaceutical company, Tezcat Biosciences.

 

CRAIG: Thank you, NCI and the planned Webinar series for asking me to be part of this program today. So when I started on my journey, I truly felt lost and I'm glad there are programs that are helping facilitate this transition from academia to startups.

 

 

So my name is Craig Ramirez and I'm a scientific founder and CEO of Tezcat Biosciences. We are a preclinical stage company developing RAS Cancer Therapeutics platform out of NYU and we have been fortunate enough to be the recipient of two STTR awards through the NCI, and I've been asked to provide my take on the first steps for starting a small business out of academia.

 

Why did I decide to start a small business? Well, I felt like I was in the right place at the right time. I was trained by a world expert in RAS cancers during my PhD. And during this time I discovered a way to harness my observations for potential therapeutic gain. And my thinking was that if this idea is to be pushed forward and given a chance, I will need to spearhead the company as a subject matter expert.

 

And as I began to think about how this would be done, I grew to appreciate aspects of industry that were not part of my day-to-day in academia. So with my scientific co-founder, Dr. Andy Hauser, we founded Tezcat Biosciences. The transition we took has been gradual. We looked at where we were in the development of our technology and where we needed to take it.

 

And to reduce personal risk in an already very risky industry, we maintained our positions at NYU while we built out the company. So we started to build a foundation through networking, exploring business models, and really going down rabbit holes of where our technology could potentially be applicable. And when we decided we were ready to explore the next step, we found a university mentor to begin the process of applying for an STTR.

 

And once we finally received our first award, after many submissions, I took on a full time position at Tezcat. And for those of you contemplating the same transition, three pieces of advice as you start off.

 

One, be your worst critic about the opportunity your technology addresses and why it should be developed. Number two, set milestones that will fill those gaps or address those concerns you've identified. And three, make sure you really believe in your technology and have the personal ability to execute on your plans.

 

The first step we took to protect our IP was to disclose what we were working on to NYU's Tech Transfer Office and with their advice, we worked on further developing our data package to support claims that we want to make in our provisional patent application in the future. And importantly, as I say we, I mean the inventors of the technology as university employees.

 

And once these applications were filed with the USPTO, Tezcat negotiated and executed a license agreement with NYU for exclusive worldwide rights to the technology. And we were fortunate to have help from a law firm for negotiations, but I would be happy to discuss other resources that may be available.

 

And as Tezcat, we have continued to pursue additional patent applications to broaden the protection of our technology and approach. So two challenges that we have faced include building a robust development plan and understanding key experiments or milestones. So for the development plan, we're not necessarily taught about toxicology, manufacturing, regulatory, or clinical trial design during our academic training, you know, depending on what track you're on.

 

But thanks to our time in the Texas Medical Center Accelerator for Cancer Therapeutics, we have developed a development plan that will help us get to the next stages. The second obstacle was understanding the most value building experiments in the eyes of potential stakeholders. And so once again, coming from the academic training, we know how to carry out experiments in our field, however, those key experiments that we need to prioritize or address were not always obvious to us.

 

 

So thankfully, you know, we listened. We had to, you know, be humble and listen to others. And we always asked potential investors, pharma partners, or other stakeholders what data they wanted to see in order to feel more comfortable with our approach, and this has greatly helped with setting our development milestones, our story, and utilization of funds, which in the early stages can be limited.

 

And I'll just briefly highlight some resources that I have found helpful over the years, but I welcome any other suggestions or questions. So these resources include city networking events, which can be found through university groups or city and state life science resources. University classes and events have also been a useful place to meet other like-minded people and, you know, really explore ideas and resources that they have been utilizing.

 

And some universities even have venture groups which can be useful when testing your vision for the startup. Make sure to keep up to date with what is happening in industry through blogs, articles, or newsletters like Fierce Pharma or Fierce Biotech. Also cities, states, and even VCs have incubator or accelerator programs with various offerings.

 

We participated in Entrepreneurship Lab NYC very early on and then more recently we finished our time at the Texas Medical Center Accelerator for Cancer Therapeutics program. And I would say in terms of resources, just don't be afraid to ask for help. This may not be something you are used to from the academic culture sometimes, but if you don't ask, you will not receive. So I look forward to participating in the future panel discussion and really answering any questions you may have. So thank you.

 

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BILLY: As always, don't forget to check our website sbir.cancer.gov for the latest funding opportunities and commercialization resources to support your journey from lab to market.

 

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This was Billy Bozza from NCI SBIR. Please join us again for the next installment of NCI SBIR Innovation Lab and subscribe today, wherever you listen.

 

If you have questions about cancer or comments about this podcast, email us at [email protected] or call us at 800-422-6237. And please be sure to mention Innovation Lab in your query. We are a production of the U.S. Department of Health and Human Services, National Institutes of Health, National Cancer Institute. Thanks for listening.

 

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