Mirna Therapeutics and Paul Lammers
ATC focuses a portion of each newsletter on executives who share their perspectives about the ups and downs of running life science companies. Following a series of good news from Mirna Therapeutics, we visited with the company’s president and CEO, Dr. Paul Lammers.
Paul Lammers, President & CEO of Mirna Therapeutics, will tell you the truth: drug development for cancer is a long, expensive process with a frustratingly low success rate. On average, only 8 out of 100 drugs studied in Phase 1 clinical trials will ultimately be approved by the FDA. But Lammers likes to play these odds. “Yes, there are risks, but the potential for success will mean a high reward for the company, its shareholders and especially for people with cancer who will have a new treatment option,” Lammers said. “At the end of the day, I am in it to help patients.”
Read more about Paul Lammers
Research Institute of Texas (CPRIT) in 2010, and signed a licensing agreement with Marina Biotech in late 2011. Mirna also accumulated a growing list of patents and more robust animal study data. This time around, Lammers and his team raised $34.5 million, one of the biggest private investment rounds ever in Texas for a biotech company. “We hope this financing for Mirna puts biotech in Austin and Texas on the map and leads to success for other companies in bringing in well-known, deep-pocketed venture firms,” he said. When asked about other challenges he’s faced in building the company, he cites finding employees with the right functional expertise to get products from “bench to bedside.” When he got to Mirna, the other employees were scientists with research backgrounds. Lammers recalls, “If you’ve never been involved in a drug development company, it’s hard to understand how it works. We had to educate our scientists and bring in other employees with experience at biotech or pharma companies who had knowledge of what drug development is all about.”
The beginning of 2013 is already off to a good start Mirna. First, it unveiled promising pre-clinical data. Lammers anticipates Mirna will begin the Phase 1 clinical study in patients diagnosed with primary liver cancer, or advanced or metastatic disease with liver involvement. The company’s growing profile in the biotech community also attracted a new board member, Clay Siegall, Ph.D., co-founder, President, CEO and Chairman of Seattle Genetics. With so much going in the right direction, Lammers has good reason to be bullish on the company. “We believe we have a game-changing approach in cancer treatment,” he said. “We hope ultimately to make a difference in patients’ lives.”
Industry Snapshot: Texas Medical Device Alliance
By Nishi Viswanathan
The growth of the life science industry in Central Texas has been accompanied by a wave of new business incubators, accelerators and professional organizations that provide a support system for local companies. Jack Hart, watching this unfold from his position as assistant chairman of the Department of Biomedical Engineering at the University of Texas at Austin and Industry Liaison for the department, saw a need that wasn’t being met in the Central Texas area: a group that focused specifically on the unique opportunities and challenges of medical device companies.
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As founder of TMDA and Executive Director of the Temple Health & Bioscience District, Hart works to support TMDA members with opportunities for peer networking and building synergy among the medical community, other biotech entrepreneurs, academia and medical device industry service providers. When TMDA was founded in 2009, it was referred to as the Medical Device Action Group. In 2011, the organization was incorporated and re-named the Texas Medical Device Alliance. Emergo Group, a company that offers consulting for QA/RA, device registration, clinical trials, reimbursement and distribution consulting, was TMDA’s first sponsor.
The TMDA roster has grown from around 35 names in early 2009 to more than 400 today. Each critical segment of the medical device community is represented, including entrepreneurial-minded medical doctors, biotech industry personnel, life sciences academicians, investors, service providers and others. “The meeting format is very simple,” Hart said. “TMDA meetings, held quarterly, are two hours long and include two service-oriented feature presentations and a significant portion of time devoted to networking.” Participation in the TMDA is by invitation only.
For more information and to request an invitation, visit www.texmda.org or email Jack Hart (email@example.com). About Nishi Viswanathan: Nishi is a medical doctor turned entrepreneur and a recent MBA graduate from The McCombs School of Business at the University of Texas at Austin. She provides business consulting services to life science companies in Austin, primarily startups, assisting them with their business plans and fundraising efforts. Contact her at nishi.viswanathan at utexas.edu.
Dennis McWilliams- Apollo Endosurgery
ATC sat down with Dennis McWilliams of Apollo Endosurgery recently to hear more about the company and receiving a Fierce 15 award.
ATC: Tell us about Apollo Endosurgery and your products.
DM: Apollo Endosurgery is commercializing products that allow surgery to be done less invasively with surgical tools that fit through flexible endoscopes. This means a new class of procedures can be completed without any visible scarring or trauma associated with typical abdominal surgical procedures. Physicians use our tools to treat ulcers, holes and bleeding in the gastrointestinal tract, bariatric surgery and early stage gastrointestinal cancer.
ATC: Apollo was recently listed in the “Fierce 15” medical device companies by Fierce Biotech. What did that mean for the company?
DM: Fierce Biotech granted similar awards in the biotech space before, but this is the first year they had a Fierce 15 list for medical devices. We were honored to be included in the first set of companies. Apollo received recognition in their publications and at the ADVAMED meeting, one of the largest events for the med device industry.
ATC: The award was great publicity for the industry in Austin, which in turn could create more opportunities to recruit life science companies here. What are your thoughts?
DM: Austin is turning into a very robust place for medical device start-ups. Venture financing is available locally with half a billion dollars focused on life science companies based in Austin. And with initiatives such as the Cancer Prevention and Research Institute of Texas (CPRIT) and Emerging Technology Fund (ETF), you create a more compelling place for young medical device companies to do business. Having the medical school plan approved should be another very solid reason for life science companies to set up shop here.
ATC: Speaking of CPRIT, Apollo Endosurgery has been very successful in securing financial support through a grant from that organization as well as venture capital — something a lot of entrepreneurs would like to achieve. What advice do you have for other companies?
DM: Persistence is key. We started in 2006 and were lucky to have strong venture capital support early. When the financial crisis hit, Apollo struggled like other companies, but we were persistent with the business plan and maintained our vision. It was a challenge when we had to slow down and keep burn rate low as we worked on growing and building the company. Also, you need to understand what venture capital firms want. Today, they are looking for companies with less regulatory risk and those that fit into the current healthcare environment by combining greater efficiency with lower cost.
ATC: Let’s talk about the regulatory environment. What should other company executives think about as they prepare to get a product through the 510K or other process with the FDA?
ATC: What else needs to be done to put Austin on the biotech map to attract more talent and capital?
DM: We need to continue to see success happen here. Companies like Arthrocare and Hanger have products on the market and are building critical mass. Others like Spinal Restoration have exciting products in development. If companies like that continue to be successful, it will drive a lot more interest in the local community. In addition, you are now seeing more collaboration between the different life science stakeholders, like ATC. We are not the Bay Area, so sharing our resources and collaborating between the groups makes a big difference.
Jim Graham- Santé Ventures
By Nishi Viswanathan, ATC
According to the Austin Business Journal, Central Texas bucked a national trend by posting a 19 percent rise in venture capital investment in local companies during the second quarter of 2012 versus the same period last year. What’s the outlook like for Central Texas life science companies? Jim Graham of Santé Ventures, an Austin-based venture capital firm, recently shared some insights.
ATC: Can you tell us a little bit about Santé Ventures?
JG: Santé is an early stage life sciences venture capital firm with offices in Austin and Houston. We’ve been around since 2006 and have raised two funds of approximately $130 million each. Within life sciences we invest broadly − our portfolio includes medical devices, biopharmaceuticals, healthcare IT and IT enabled services as well as diagnostic and research tools. We most often invest in Series A but will also invest earlier or later. Geographically, we invest across the U.S. and preferentially focus on the middle of the country, especially Texas.
ATC: Why focus on Texas?
JG: The level of healthcare innovation in Texas is high in terms of academic output, NIH funding and other measures. But there are relatively fewer venture capital firms active in this area considering the intellectual capital developed here. How would you describe your investment style? We like to invest in technologies that will have a significant impact, things that are really going to change the practice or delivery of healthcare. The way the healthcare market is evolving, economic value will increasingly correlate to clinical value. As early stage investors, we are interested in opportunities that have considerable upside. We look for technologies with a discernible and manageable path to market. That relates to the regulatory process as well as resources for development and marketing to get to cash flow break-even. Like most VCs, we want to see a deeply engaged, high-performing team that includes entrepreneurs with relevant experience and past successes.
ATC: Can you tell us about interesting companies in your portfolio right now?
JG: Molecular Templates, based in Georgetown, is developing a platform with multiple leads targeted to oncology indications, specifically lymphomas and melanomas. They were recently awarded a CPRIT commercial grant to develop a lymphoma product. Spinal Restoration, another portfolio company, is positioned to be first-to-market with a cost effective, non-surgical, biologic treatment for the most significant unmet need in spine health management: discogenic low back pain. The company recently completed enrollment of its Biostat System clinical study, a prospective, randomized controlled Phase III Investigational New Drug (IND) study. Submission of its Biologic License Application (BLA) should occur mid next year. Biostable is developing an advanced three-dimensional angioplasty ring for aortic valve repair. The product is currently undergoing late stage clinical studies in Europe. What they are doing provides an opportunity and a framework to advance the whole field of replacing and repairing diseased aortic valves, a huge problem related to heart failure and many other heart conditions.
ATC: From your experience, what does the talent acquisition scenario look like in Central Texas?
JG: Major urban areas in Texas have academic heft, world-class experts and very talented people. The quality of life is high and the cost of living is manageable. In general, we have been able to identify good talent in Central Texas or have been able to access it by recruiting outside Texas. This is a part of the country that many people don’t mind relocating to.
ATC: What are some challenges for companies looking to be based in Central Texas?
JG: Although urban centers in Texas have a smattering of large life science companies, we lack the critical mass of corporate presence that other centers of innovation have. Often, a large company can be a great place to develop deep-rooted professional relationships. As people move on to other opportunities, they reach back into that network and access colleagues or get referrals to help with specific questions. That’s not to say that we don’t have very successful companies here in Central Texas, but we lack the depth you would find in a place like New Jersey or San Francisco, especially on the biotech side. If you are developing a company right across the street from Genentech, it will be easier to recruit experienced people, because talent is close by. And for a less obvious reason, the person you recruit knows that he or she will likely be able to go back to Genentech or another big company if your start-up doesn’t pan out. Moving away from that network can be daunting.
ATC: Do you have any advice for companies seeking funding in the next couple of years?
JG: It is a challenging environment right now. In general, our advice to new entrepreneurs would be to cast a wide net and have reasonable expectations about what it’s going to take to get risk capital in this market. In Texas, we have the advantage of alternative funding sources such CPRIT and ETF. These have been instrumental in getting companies off the ground and fostering entrepreneurship in Texas. In addition to state funding, new companies should look at the broad spectrum of funding opportunities from angel investors, crowd-funding, and strategic investors, as well as traditional venture firms like Santé.
About Jim Graham:
Graham came to Santé from the Boston Office of McKinsey & Company where he was an engagement manager in the Pharmaceuticals and Medical Products practice. Prior to McKinsey, Graham was an analyst in the technology investment banking group of Deutsche Banc Alex.Brown in San Francisco. He received his MS and MBA degrees through the Harvard-MIT Biomedical Enterprise Program and his BS with Honors in Biological Sciences from Stanford University.