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A NEW PARADIGM IN SKIN-GRAFTING Healthcare Innovation & Commercialization October 8 th 2014 Getting a Company off the Ground

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Presentation on theme: "A NEW PARADIGM IN SKIN-GRAFTING Healthcare Innovation & Commercialization October 8 th 2014 Getting a Company off the Ground"— Presentation transcript:

1 A NEW PARADIGM IN SKIN-GRAFTING Healthcare Innovation & Commercialization October 8 th 2014 Getting a Company off the Ground

2 My Story… Currently CEO of SevenOaks Biosystems Co-Founded with Dr Rox Anderson (MGH/HMS) previously.. Immunology undergrad, life sciences investment banker ( ) Harvard-MIT Biomedical Enterprise Program ( ) Started MoMelan Technologies with Dr Rox Anderson (Professor of Dermatology, HMS) in June 2009 Raised $5m in Venture Capital, acquired in Nov 2012 MoMelan - 1 st Venture-backed company Novel enabling medical device technology for automated epidermal expansion and transplant 1 full-time employee, 1 Rockstar scientific founder, 4 board- members, 4 inactive founders, 5 consultants 2

3 General points about start-ups & people When starting out, keep it lean Business vs Science Project Capital efficiency is key Impact on fundraising 3 Companies are continuously evolving at the beginning

4 Starting a company – key stakeholders 4 ‘Rockstar’ scientist ‘Working’ Scientists Entrepreneur Advisors Stakeholder can be one, or more of each Different motivations and desired outcomes

5 Motivation - Points to consider Assess risk profiles and weigh against contributions Rockstar scientist is probably going to bring in the $$ The ‘Entrepreneur’ (could be MBA, post-doc leaving to join company, etc) bears significant risk Scientists remaining in their job – less risk but should be compensated for job well-done Advisors – low risk profile but can be critical to success Stock is your primary currency Utilize vesting 5 Without How to break up the pie…

6 People, Evolution & Hiring Companies evolve quickly… Sometimes month to month - Rapidly changing For Example… First 12 months Early science ‘Rangefinding work’ Next 12 Months Critical path science Company-building Be mindful of personalities Passion Negotiate in good faith – be honest about aims and expectations 6 Use Consultants Hire – internalize talent

7 People, Evolution & Firing Obvious reasons to fire someone Fraud Assault Corporate espionage Less obvious reasons to fire someone Companys needs change Not as good as you thought they were Consultants with expectations You are attracting higher-quality talent Be honest, set aims and expectations, and don’t sugar coat bad news 7

8 Back to breaking up the pie Deciding how to break-up equity can lead to.. 8

9 Class Exercise Break up into groups of 5 Quickly choose a ‘company name’ Allocate roles 1 rockstar scientist 1 Entrepreneur type 3 post-doc types 1 is leaving to join the company 2 are staying 9

10 Class Exercise Scenario Your Rockstar scientist has invented a new medical device 3 of his post-docs have been working on this technology for 2 years as part of their job 1 post-doc is leaving to head the scientific effort at the company, the other two are remaining in the lab Your Rockstar has found an ‘MBA type’ to spearhead the business effort 10 Minutes to decide how much each person gets! 10

11 The Company MoMelan Technologies developed Epigraft TM (now called Cellutome TM ) Technology invented at the Wellman Center for Medicine, MGH, licensed from Partners Healthcare Scientific Founder is R.Rox Anderson, MD – Professor of Dermatology, Harvard Medical School Sameer Sabir – Co-Founder (& Student of Prof. Anderson) designed to make epidermal skin grafting minimally invasive, simple and automated Started the company with a concept, raised 2 rounds of investment capital, developed a commercial product, ran some clinical trials, cleared the FDA and sold the company….all in 2.5 years MoMelan Technologies

12 Timeline ► Co-Founded MoMelan with Prof Rox Anderson - Sept ► Series A Financing 0f $3.6m – June ► First patient treated – November ► Awarded $750k MA state award ► File with FDA – September ► ACQUIRED by KCI, Inc - November ► First financing of $1.1m – March ► First prototype complete – October

13 A NEW PARADIGM IN SKIN-GRAFTING

14 MoMelan Technologies - Overview The Company MoMelan Technologies is developing Epigraft TM unique medical device platform that enables optimized mechanical autologous epidermal transplant designed to make epidermal skin grafting minimally invasive, simple and automated Point of care, few meaningful competitive approaches $1.1m Seed round in February 2010 $750k Massachusetts Award Simple & Rapid Regulatory Pathway ► FDA 510k class 1 – exempt from pre- market notification The opportunity Large potential market applications for unmet needs ► Wound-Healing, including complicated wounds ($3bn) ► Synergies with existing wound- dressings, NPWT ► Dermatology, including Medical ($500m) and Aesthetic ($820m) Attractive economic dynamics ► 85%+ projected gross margins Reimbursement ► Patient pay or existing reimbursement, depending on application Office or outpatient procedure ► <1 hour procedure time in total

15 The Momelan Team Sameer A Sabir Chief Executive Officer 10 years experience in life sciences JPMorgan, Commerzbank Securities, Cinnabar Consulting Andrew Ziegler Lead Engineer 25 years experience in mechanical engineering design and prototyping Design Continuum, iRobot Robert LaRoche Vice President of Market Development 26 years experience in medical device sales and marketing CR Bard, Cambridge Heart, Candela Jeff Cerier Project Manager 30 years experience in device project management Co-Founder, TDC Management Board of Directors Sameer A Sabir Chief Executive Officer, MoMelan Technologies Robert Forrester (Chairman) – COO, Verastem Bill McCullen General Partner, Launch Capital Josh Tolkoff Managing Director, Ironwood Equity Sridhar Prathikanti Member, Life Science Angels

16 The Momelan Team – Scientific Advisory Board Roy Geronemus MD Director, Laser & Skin Surgery Center of New York Clinical Professor of Dermatology New York University Medical Center New York, NY Rebat Halder MD Professor and Chairman Department of Dermatology Howard University College of Medicine Washington, D.C. Professor Rox Anderson, MD Professor of Dermatology, Harvard Medical School Director, Wellman Center for Photomedicine Massachusetts General Hospital Boston, MA David Armstrong DPM, MD, PhD Professor of Surgery and Director Southern Arizona Limb Salvage Alliance (SALSA) University of Arizona College of Medicine Tucson, AZ Thomas Serena MD, FACS Co-Founder & CEO, Serena Group Vice-President, American College for Hyperbaric Medicine

17 Meeting a Significant Need Enabling epidermal skin grafting ProblemInnovationSolution Epidermal skin grafting is effective for many skin disorders, but is rarely utilized -imprecise -inefficient -invasive MoMelan’s automated device can precisely and reproducibly generate an optimized epidermal skin graft A fast, minimally invasive, cost-effective solution for repigmentation & wound healing ► Minimally Invasive ► Repeatable & Reliable ► Biomechanically Precise

18 EpiGraft TM – How it Works

19 Large US Market Opportunities Medical Dermatology ($500 million) Vitiligo (3-6m pts) Skin cancer wound repair (800k cases/yr) Aesthetic Dermatology ($820 million) Post Laser Treatment Hypopigmentation (500k cases/yr) Scar Revision – Including hypopigmented scars (1.6 M cosmetic surgeries/yr) Wound Care ($2-3 billion) Diabetic foot and venous leg ulcers (3.4m cases/yr) Pressure sores (1.9m/yr) Burns & Trauma (600k cases/yr)

20 Low Regulatory Hurdle – Class 1 FDA Device Product Concept Prototype Clinical Testing Notification Path ► Autologous tissue ► Purely Mechanical ► No Chemicals, Biologics, Enzymes ► “Non-Significant Risk” Designation by multiple IRBs for case studies ► No IDE from the FDA Required ► Conclusion is That Device is FDA Class 1 ► Predicate: Electric Skin-Graft Mesher ► Needs Only General Quality Controls, Not Marketing Release by FDA MoMelan does not need FDA 510K Concurrence before selling a Class 1 Device

21 Financial Incentive to Adopt EpiGraft TM System Patient Insured ► For acute and chronic wounds ► Existing epidermal grafting CPT codes ► Facility fee where applicable Patient Pay Out of Pocket ► For aesthetic applications ► Vitiligo, hypopigmentation, scar revision ► Patients willing to pay to look better Physician Fee/Gros s Profit Facility Fee Gross Profit EpiGraft Disposable Price Physician Gross Profit EpiGraft Disposable Price In Office In Facility Physician Gross Profit $200 $145 Differentiated disposables will separate self-pay/out of pocket markets

22 Intellectual Property Method Patents 4 Patent Applications Protects key processes encompassed in EpiGraft Approach Method Patents 4 Patent Applications Protects key processes encompassed in EpiGraft Approach Device Patents 4 Patent Applications Protects key features of EpiGraft Device Device Patents 4 Patent Applications Protects key features of EpiGraft Device Design 1 Patent Applications Protects key design features including interface between control unit and disposable Design 1 Patent Applications Protects key design features including interface between control unit and disposable Manufacturing Patents 1 Patent Application Protects key disposable production process Manufacturing Patents 1 Patent Application Protects key disposable production process BARRIER TO ENTRY Broad series of 10 commercially relevant patent applications BARRIER TO ENTRY Broad series of 10 commercially relevant patent applications Exclusive Worldwide License to MGH IP & 9 additional ‘MoMelan’ patent applications

23 Class Exercise Break up into groups of 5 Quickly choose a ‘company name’ Allocate roles 1 rockstar scientist 1 Entrepreneur type 3 post-doc types 1 is leaving to join the company 2 are staying 23

24 Class Exercise Scenario Your Rockstar scientist has invented a new medical device 3 of his post-docs have been working on this technology for 2 years as part of their job 1 post-doc is leaving to head the scientific effort at the company, the other two are remaining in the lab Your Rockstar has found an ‘MBA type’ to spearhead the business effort 10 Minutes to decide how much each person gets! 24

25 Find your niche, find what you are good at, and focus on that. And be a good person along the way - if you try to take shortcuts it will just come back and haunt you… Thomas Flohr Aviation Entrepreneur


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