Out-of-the-ordinary life science ideas offer potential business success
Turning a “cool idea” into the “next big thing” takes perserverence, an unwavering commitment to a vision, and usually, in the life sciences, a boatload of cash. Local entrepreneurs say the challenge lies in convincing funders (or customers) of the value proposition of the product, whether by presenting data to show the financial gain the product offers, or providing a compelling picture of how it addresses an unmet medical need.
David Rose is all about the data. His company, Cambridge-based Vitality Inc., is the maker of GlowCaps, a telemedicine solution that reminds patients to take their pills via a “smart” pill cap and reports back to doctors and loved ones. The value proposition targets both insurance and pharmaceutical companies: For pharmas, better adherence to medication regimes boosts the bottom line.
To show brand managers, who are responsible for sales of a particular drug, how the introduction of GlowCaps will help them meet revenue quotas, Rose and his team have just designed an iPad application that shows the potential upside of using GlowCaps. It multiplies the likely increase in adherence, by the cost of the drug and the number of patients taking it. In the test case, that upside is $350 million.
“If I could give one piece of advice, it would be to get some early data that you can offer to investors, as soon as you can. Even if it’s 10 patients for two weeks,” Rose said. His first set of data was 30 patients, over two months. Now the company can provide real-time data to pharmaceutical companies to help them see where adherence is weak, and even help determine if advertising in certain markets is working or not. If not, of course, it’s a good time to buy more GlowCaps.
Vitality is also now targeting insurers with a pilot program. The pitch there is that when people take their medicines consistently, they manage their illnesses better, potentially saving insurers millions of dollars in avoided hospital admissions. The company is currently selling the first version of GlowCaps, which requires patients to be tethered by an ethernet cable to transfer the data from the GlowCaps. However, a new version, which is being manufactured now, uses the guts of a 3G phone inside a “night light” that is plugged into the wall, to create a local wireless connection, similar to a cordless phone in your house. The company is not yet profitable and may need to seek additional venture capital funding before that happens. So Rose is armed with reams of data in case he needs it for any pitches.
Pitching a life sciences-related product for the global good can be more challenging. Una Ryan, CEO of Cambridge-based Diagnostics for All, is developing a cheap, paper-based diagnostic the size of a postage stamp, to monitor liver function (see related story, Page 16). Intended to deliver results via cell phone, it is designed to be used by governments, non-governmental organizations and local clinics in the developing world. She said that in poorer countries, roughly 20 percent of tuberculosis patients and 25 percent of HIV/AIDS patients, suffer serious liver complications due to their medications. In the United States, better diagnostics prevent that.
Diagnostics for All has received a $100,000 grant from the Bill and Melinda Gates Foundation, designed to help it advance the technology and write a grant for a larger sum, potentially $1 million.
“We need more funding so we can reach more milestones to write a decent grant. So we are always out there looking for money,” said Ryan, former CEO of Avant ImmunoTherapeutics and Waltham Technologies. Her current company is seeking donations from individuals, non-profit foundations and corporate foundations.
Diagnostics for All is a nonprofit, but also includes a for-profit division, which is seeking to partner with diagnostics companies that may want to license the technology. Ryan said that while the tests will be cheap to make and distribute in the developing world, companies may choose to pursue more profitable avenues for the technology in the developed world. That’s just fine with her. Licensing and royalty income will help advance the mission of providing the devices to vulnerable patients in less-developed countries. Ryan said that Diagnostics for All needs a few million dollars in the near term, as it prepares to test the device in the field at local clinics abroad. Eventually, she said the company will likely need about $10 million.
The products in development by Vitality and Diagnostics for All have clear-cut, well-defined applications. But what about early-stage ideas that may solve problems as yet to be determined: if you build it, will they come? Draper Laboratory in Cambridge is designing an intercochlear drug delivery device that is intended to restore hearing, not replace the hearing mechanism as cochlear implants do.
Even though that revolutionary drug to restore hearing doesn’t yet exist, the project has had no trouble raising funds: to date, it has received $3.5 million from the National Institutes of Health, and the grant has been extended for several years to the tune of almost $1 million per year. Principal investigator Jeff Borenstein said Draper is also in talks with the U.S. Department of Defense about possible funding, due in part to the large number of those who serve in the armed forces who suffer some level of hearing loss, particularly those in the Air Force or those in the Navy who work on aircraft carriers.
“We’ve also been in talks with companies and academic centers. But we don’t want to prematurely promise something,” Borenstein said.
The implant would be temporarily inserted in a surgical procedure, a potential drug would be administered, and the dream is that it could cure some types of deafness. The device is currently being tested in guinea pigs, using existing drugs that cause temporary deafness. If the drug succeeds in making the animal deaf, then they think it could work using a drug to make a patient hear. But it will be five more years, Borenstein said, before the device will be ready for clinical trials.
The device could be used potentially to treat other auto-immune ear diseases that now require systemic steroids that often cause significant side effects. It might even, way down the road, turn out to be an effective way to deliver drugs to treat central nervous system diseases by delivering drugs closer to the brain.