Science Entrepreneurship

Two Rochester Biotech Startups Enter Final Round of Minnesota Cup

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Two weeks ago, Minnesota Cup- the largest statewide business plan competition in the nation- entered into the final round. After narrowing down from an initial pool of 1600 applicants, only twenty-seven remain, including two life science startups from Rochester: Mill Creek Life Sciences and Thaddeus Medical Systems.

The goal of Minnesota Cup is to connect Minnesota’s entrepreneurial ecosystem, providing participating startups with business plan feedback, connections, media exposure, and access to over $500,000 in seed funding. Startups compete in one of nine different divisions. The competition has been running full steam since April 27th, when applications for this year’s competition were due. By mid-May, the competitor pool was narrowed down to ninety semifinalists, ten in each division.

Five teams from Olmsted County made it to the semifinal round of the competition this year, including: Busy Baby LLC (General Division), LipiQuester LLC (Life Science/Health IT Division), Mill Creek Life Sciences (Life Science/Health IT Division), Thaddeus Medical Systems (Life Science/Health IT Division), and B.A.S.I.C. BALSA (Youth Division). 

By the end of August, competitors were narrowed down again to three finalists from each division, which included Rochester-based Mill Creek Life Sciences and Thaddeus Medical Systems, both in the Life Science/Health IT division. 

Divisional winners will be announced on September 24th, receiving $30K in seed funding and the opportunity to compete for the Minnesota Cup Grand Prize, which will be announced at the final awards ceremony on October 8th.

Mill Creek Life Sciences, named after a southern Minnesota trout stream, is a research tools company based on Mayo Clinic licensed technology. Mill Creek produces two cell culture products, PLTMax and PLTGold, which are used to culture stem cells- undifferentiated cells that have the ability to develop into multiple different cell types.

Thaddeus Medical Systems is developing an all-in-one smart packaging solution for transportation of medical products. This company is challenging the standard cardboard box and ice shipping system with their product, iQler, a smart hardware and software shipping solution.

Press Release: Medical Alley Investment Report – Strong Start for 2018, but Loss of AITC Seriously Threatens Job Growth

Medical Alley Association released their first half investment report Monday, drawing attention to key developments taking place in the health technology industry. Medical Alley companies had a strong start to 2018, buoyed by new investments in biotech, with 45 companies raising $234 million in the first half of the year. Similarly, Medical Alley’s biopharma community had its best first half ever with $51.8 million raised by 10 companies, more than double the prior record from 2015.

However, the loss of the Angel Investment Tax Credit (AITC) is threatening job growth in Medical Alley. The fewest companies since the passage of the AITC raised money in the first six months of 2018, following the credits expiration.

“Clearly the loss of the Angel Investment Tax Credit has been detrimental to job growth in Medical Alley” said Shaye Mandle, President and CEO of the Medical Alley Association. “Lawmakers need to act to reinstate the credit, so that life-saving innovations and critical job creation can continue in Medical Alley, the global epicenter of health innovation and care,” Mandle said.

34 companies raised $4 million or less, the AITC cap, a 20% drop from the prior year, and a new low since the credit was first instituted.

About the Medical Alley Association

Founded in 1984, the Medical Alley Association supports and advances the global leadership of Medical Alley’s healthcare industry, and its connectivity around the world. MAA delivers the collective influence, intelligence and interactions that support Medical Alley.

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Press Release: Vyriad Announces Collaboration with Merck KGaA, Darmstadt, Germany, and Pfizer to Evaluate Oncolytic Virus in Combination with Anti-PD-L1 Antibody in Phase 1 Clinical Study

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ROCHESTER, Minn., July 18, 2018 – Vyriad Inc., a clinical-stage, privately held biotechnology company focused on the development of powerful first-in class oncolytic virotherapies, is pleased to announce a collaboration agreement with Merck KGaA, Darmstadt, Germany, and Pfizer to expand its ongoing Phase 1 clinical trial program in solid tumors to include a combination study of its lead asset, Voyager-V1, with avelumab*, a human anti-PD-L1 antibody. For more information on this novel immuno-oncology combination study, please see clinicaltrials.gov.

“We are delighted to be working with Merck KGaA, Darmstadt Germany, and Pfizer on this innovative combination treatment approach,” said Stephen Russell, M.D., Ph.D., CEO of Vyriad. “Voyager-V1 is being administered to inflame the tumors, and avelumab has been shown to release the suppression of the T cell mediated antitumor immune response in preclinical models.”

“We are encouraged by the potential of Voyager-V1, which has demonstrated early clinical activity in patients with solid tumors,” said Alise Reicin, Head of Global Clinical Development at the Biopharma business of Merck KGaA, Darmstadt, Germany, which operates in the U.S. and Canada as EMD Serono. “We look forward to investigating how combining Voyager-V1 with avelumab may advance patient care.”

“A primary focus of our clinical development program for avelumab is to evaluate the role and potential of immunotherapy combination regimens, in an effort to support patients with challenging cancers,” said Chris Boshoff, M.D., Ph.D., Senior Vice President and Head of Immuno-Oncology, Early Development and Translational Oncology, Pfizer Global Product Development. “We look forward to working with Vyriad to explore this novel combination for patients with solid tumors.”

Avelumab has received accelerated approval** by the U.S. Food and Drug Administration (FDA) for the treatment of patients with metastatic Merkel cell carcinoma (MCC) and previously treated patients with locally advanced or metastatic urothelial carcinoma (mUC), and is under further clinical evaluation across a range of tumor types under a global strategic alliance between Merck KGaA, Darmstadt, Germany, and Pfizer.

*Avelumab is under clinical investigation for treatment of various solid tumors and has not been demonstrated to be safe and effective for this indication. There is no guarantee that avelumab will be approved for specific solid tumors by any health authority worldwide.

About Voyager-V1
Voyager-V1 (VSV-IFNβ-NIS) is derived from Vesicular Stomatitis Virus (VSV), a bullet-shaped, negativesense RNA virus with low human seroprevalence, specifically engineered to replicate selectively in and kill human cancer cells. Voyager-V1 encodes human IFNβ to boost antitumoral immune responses and increase tumor specificity, plus the thyroidal sodium iodide symporter NIS to allow imaging of virus spread. Three first-in-human Phase 1 clinical studies of Voyager-V1 are exploring intravenous and intratumoral routes of administration.

About Avelumab
Avelumab is a human anti-programmed death ligand-1 (PD-L1) antibody. Avelumab has been shown in preclinical models to engage both the adaptive and innate immune functions. By blocking the interaction of PDL1 with PD-1 receptors, avelumab has been shown to release the suppression of the T cell-mediated antitumor immune response in preclinical models.1-3 Avelumab has also been shown to induce NK cell-mediated direct tumor cell lysis via antibody-dependent cell-mediated cytotoxicity (ADCC) in vitro.3-5 In November 2014, Merck KGaA, Darmstadt, Germany, and Pfizer announced a strategic alliance to co-develop and cocommercialize avelumab.

Avelumab is currently being evaluated in the JAVELIN clinical development program, which involves at least 30 clinical programs, including seven Phase III trials and nearly 8,300 patients across more than 15 different tumor types. For a comprehensive list of all avelumab trials, please visit clinicaltrials.gov.

Indications in the U.S.**
The U.S. Food and Drug Administration (FDA) granted accelerated approval for avelumab (BAVENCIO®) for the treatment of (i) adults and pediatric patients 12 years and older with metastatic Merkel cell carcinoma (mMCC) and (ii) patients with locally advanced or metastatic urothelial carcinoma (mUC) who have disease progression during or following platinum-containing chemotherapy, or have disease progression within 12 months of neoadjuvant or adjuvant treatment with platinum-containing chemotherapy. These indications are approved under accelerated approval based on tumor response rate and duration of response. Continued approval for these indications may be contingent upon verification and description of clinical benefit in confirmatory trials.

Important Safety Information from the U.S. FDA-Approved Label
The warnings and precautions for avelumab (BAVENCIO®) include immune-mediated adverse reactions (such as pneumonitis, hepatitis, colitis, endocrinopathies, nephritis and renal dysfunction and other adverse reactions), infusion-related reactions and embryo-fetal toxicity.

Common adverse reactions (reported in at least 20% of patients) in patients treated with BAVENCIO for mMCC and patients with locally advanced or metastatic UC include fatigue, musculoskeletal pain, diarrhea, nausea, infusion-related reaction, peripheral edema, decreased appetite/hypophagia, urinary tract infection and rash.

For full prescribing information and medication guide for BAVENCIO, please see www.BAVENCIO.com.

Alliance between Merck KGaA, Darmstadt, Germany, and Pfizer Inc., New York, U.S.
Immuno-oncology is a top priority for Merck KGaA, Darmstadt, Germany, and Pfizer Inc. The global strategic alliance between Merck KGaA, Darmstadt, Germany, and Pfizer Inc., New York, U.S., enables the companies to benefit from each other’s strengths and capabilities and further explore the therapeutic potential of avelumab, an anti-PD-L1 antibody initially discovered and developed by Merck KGaA, Darmstadt, Germany. The immunooncology alliance will jointly develop and commercialize avelumab and advance Pfizer’s PD-1 antibody. The alliance is focused on developing high-priority international clinical programs to investigate avelumab as a monotherapy, as well as in combination regimens, and is striving to find new ways to treat cancer.

About Vyriad
Vyriad is a clinical-stage biotechnology company developing novel oncolytic virus therapies for the treatment of cancers that have significant unmet need. Vyriad’s oncolytic immunovirotherapy product candidates are based on the company’s engineered Oncolytic Vesicular Stomatitis Virus (VSV) and Oncolytic Measles Virus platforms that enable selective destruction of cancer cells without harming normal tissues.

Vyriad’s product development pipeline encompasses multiple clinical- and preclinical-stage programs that target a broad range of cancer indications, as well as programs that pair the company’s oncolytic viruses with other cancer immunotherapy modalities, traditional cancer therapy, and newer targeted therapies. Vyriad’s lead program, Voyager-V1, is in Phase 1 clinical research in solid tumors and hematological indications (please see
clinicaltrials.gov). In addition, Vyriad is developing novel diagnostic/theranostic tests for more accurate prediction of immunovirotherapy response.

References
1. Dolan DE, Gupta S. PD-1 pathway inhibitors: changing the landscape of cancer immunotherapy. Cancer Control 2014;21(3):231-7.
2. Dahan R, Sega E, Engelhardt J et al. FcγRs modulate the anti-tumor activity of antibodies targeting the PD-1/PD-L1 axis. Cancer Cell 2015;28(3):285-95.
3. Boyerinas B, Jochems C, Fantini M et al. Antibody-dependent cellular cytotoxicity activity of a novel anti-PD-L1 antibody avelumab (MSB0010718C) on human tumor cells. Cancer Immunol Res 2015;3(10):1148-57.
4. Kohrt HE, Houot R, Marabelle A et al. Combination strategies to enhance antitumor ADCC. Immunotherapy
2012;4(5):511-27.
5. Hamilton G, Rath B. Avelumab: combining immune checkpoint inhibition and antibody-dependent cytotoxicity. Expert Opin Biol Ther 2017;17(4):515-23.

Contact:
Titus Plattel
Chief Operating Officer
tplattel@vyriad.com

Five Legal Issues for all Healthcare Entrepreneurs

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A few weeks ago, the Rochester startup community heard from Fredrikson & Byron healthcare attorneys Ryan Johnson and Marguerite Ahmann for “Health Law 101: Key Legal Issues for Health Care Companies.” This event was hosted by the Mayo Clinic Business Accelerator and Collider Coworking.  

Here are five key legal issues that Johnson and Ahmann believe all healthcare entrepreneurs should have on their radar.

1.     False Claims Act (FCA). The FCA is the primary mechanism used by the government to combat fraudulent claims to the federal government. The FCA was originally enacted in 1863 to protect against fraudulent suppliers to the Union Army during the Civil War. This statute holds any person liable who knowingly submits false claims to the government and can result in payment of treble damages- or triple the amount of the actual damages- plus a $5,000-10,000 penalty for each false claim. This statute applies to many areas of healthcare, especially billing and coding and off-label marketing of drugs. It does not hold persons or entities liable for mistakes, including coding errors.

2.     Qui Tam Provision. This is a provision included in the FCA, which allows people not affiliated with the government, called “relators,” to file false claim accusations on behalf of the government.

3.     Anti-Kickback Statute. This statute makes it illegal to offer, solicit, or receive any payments intended to induce a referral of a federal healthcare program business. Safe harbor regulations outline financial transactions that would not be regarded as offenses under the statute. These specific allowances involve transactions at fair market value.

4.     Stark Law. These are a set of federal laws originally intended to protect against unnecessary testing and services that could increase healthcare costs. These laws prohibit a physician from self-referring Medicaid/Medicare patients for a Designated Health Service (DHS) to an entity in which the physician or an immediate family member has a financial interest. This is a strict liability statute, meaning proof of intent to violate the law is not necessary. Violation of Stark Law is a civil, not criminal, penalty of up to $15,000 per claim.

5.     Health Insurance Portability and Accountability Act (HIPAA). Enacted in 1996, HIPAA is a federal statute that safeguards Protected Health Information (PHI). PHI broadly refers to any information about the state of health, healthcare treatment, or healthcare payment that can be linked to a specific individual. HIPAA applies to “covered entities” – healthcare providers and health systems- and “business associates” – third parties who are contracted to work with the covered entities and have access to PHI. HIPAA provides patients with certain rights over their PHI and who can access these data. Sometimes state laws are more strict than federal HIPAA regulations. In these cases, the more restrictive law must be followed. This is the case in Minnesota, where the Minnesota Health Records Act places additional obligations on healthcare providers not covered under HIPAA. 

For more information about healthcare law, please check out these web resources:

·      U.S. Department of Health & Human Services

·      Office of Inspector General

·      Minnesota Department of Health

Press Release: gBETA Medtech to Hold Inaugural LiveBETA

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Minneapolis, MN – Nationally ranked startup accelerator gener8tor will host its inaugural gBETA Medtech LiveBETA (“Demo Day”) event on May 21st at the McNamara Alumni Center. The gBETA Medtech accelerator launched in March thanks to the sponsorship of Boston Scientific, with additional support from Mayo Clinic, the University of Minnesota, and the Medical Alley Association. gBETA Medtech is a free, seven-week accelerator that works with medical device, healthcare-related software, biotech and diagnostics startups. Each program is capped at five to six teams, and requires no fees and no equity. Participants receive intensive and individualized coaching and access to physicians, researchers, successful entrepreneurs, angel investors, venture capitalists and industry experts. The program is designed to help startups gain early customer traction on their product or idea, and establish metrics that make them competitive applicants for full-time, equity-based accelerators or seed investment.

gBETA Medtech “Spring 2018” kicked off March 22nd with six local Medtech startups selected from an all-Minnesota applicant pool of 30 companies. Descriptions for all six companies can be found at the bottom of this release.

The cohort graduates on May 21 during LiveBETA (“Demo Day”) where the six companies will deliver five-minute pitches to an audience of investors, entrepreneurs, mentors, and community members. The event will feature opening remarks from Jeff Mirviss, senior vice president and president, Peripheral Interventions Division at Boston Scientific and Vice Chair of the Medical Alley Association . The Medical Alley Association will also be hosting a panel discussion on “The State of Medtech Innovation in Minnesota.”

There will be an opportunity before and after the presentations to mingle with the startup companies and other attendees. LiveBETA is a free event, but those interested in attending are asked to RSVP.

gBETA Medtech runs three times per year with five to six companies per cohort to ensure a high level of individualized attention. gBETA Medtech works exclusively with startups focused on healthcare, including: healthcare products for diagnosing, treating and/or monitoring diseases or medical conditions including devices, software, biological technology, and healthcare services, as well as technology or process innovations that could serve any component of the supply chain.

gBETA Medtech is now accepting applications for the second 2018 cohort. Applications are open to startups across the globe. Startups interested in applying should contact gBETA Medtech Director Adam Choe (adam@gener8tor.com). For more information on the program and ways to get involved, please visit www.gbetamedtech.com.

 

gBETA Medtech Spring 2018 Cohort

ExpressionMed creates supplemental medical adhesives that increase the longevity and comfort of wearable medical devices while adding an element of customization through design. ExpressionMed has helped families in 49 states and 20 different countries and has seen an average of 54% month-over-month revenue growth since June of 2017 totaling $64,152. CEO: Meghan Sharkus | meghan.sharkus@expressionmed.com | www.expressionmed.com

Kobara Medical designs and manufactures cardiac rhythm management (CRM) and neuromodulation devices. Kobara’s cardiac lead technology provides electrophysiologists and surgeons a single solution to treat heart failure and cardiac arrhythmias. Kobara Medical has raised $120K, acquired pre-clinical and clinical data to demonstrate feasibility and clinical impact, and has built its first Cobra Pacing Lead that will be tested in a subchronic animal study in Q2 of 2018. CEO: Andreas Pfahnl, Sc.D. | andy@kobara-medical.com | www.kobara-medical.com

NeuroVASx designs and manufactures alternative solutions for embolizing vessel abnormalities. NeuroVASx provides clinical benefits by reducing the incidence of compaction and migration, reducing the need for retreatment. NeuroVASx owns an intellectual property portfolio of 13 patents within the focus area of endovascular delivery systems, implants, and manufacturing processes. CEO: Steve Ferry | sferry@neurovasxinc.com

Quench Medical develops novel formulations of approved inhaler medications to significantly decrease symptoms of lung diseases. Quench Medical’s first indication is severe asthma, where patients suffer costly exacerbations from uncontrolled symptoms. Quench Medical received a $225K SBIR grant from the National Institutes of Health in March 2018. CEO: Bryce Beverlin II Ph.D. | beverlin@quenchmedical.net | www.quenchmedical.net

Soundly reduces snoring by guiding the user through a gamified therapy to strengthen and tone their upper airway. Soundly reduces snoring without needing bulky devices during sleep. Soundly has received $80,000 in non-dilutive funding from the NSF and NIH and recently completed a beta test of 600 users where 90% of surveyed users reported reductions in snoring. CEO: Brian Krohn Ph.D. | brian.krohn@sleepsound.ly | www.sleepsound.ly

Vitrose Health provides an efficient way to diagnose common illnesses through a direct-to-consumer testing solution. Vitrose Health creates a new alternative for non-urgent care that is more efficient and affordable for both the patient and the healthcare system. Vitrose Health was established in November of 2017 and is part of the Spring 2018 gBETA Medtech accelerator. CEO: Bharat Pulgam | bharat.pulgam@vitrosehealth.com | www.vitrosehealth.com

 

About gBETA

gBETA is a program of nationally ranked startup accelerator gener8tor. gBETA Medtech is a free, seven-week accelerator that works with medical device, healthcare-related software, biotech and diagnostics startups. Each program is capped at five to six teams, and requires no fees and no equity. Participants receive intensive and individualized coaching and access to physicians, researchers, successful entrepreneurs, angel investors, venture capitalists and industry experts. The program is designed to help startups gain early customer traction on their product or idea, and establish metrics that make them competitive for full-time, equity-based accelerators or seed investment.

 

About gener8tor

gener8tor is a nationally ranked accelerator that invests in high-growth startups. Three times a year gener8tor invests $90K in each of five startups who receive a concierge experience during its 12-week accelerator program. gener8tor supports the growth of these startups through its network of experienced mentors, technologists, corporate partners, angel investors and venture capitalists.

To date, gener8tor’s 65 alumni have cumulatively raised more than $150M in follow-on financing. Of these 65 alumni, 58% have raised more than $1M in follow-on financing or have been acquired.

gener8tor invests in high-growth startups, including software, IT, web, SaaS, life science, medtech, e-commerce and hardware. Accepted startups receive $90K and 12 weeks of mentorship-driven programming. gener8tor is a proud member of the Global Accelerator Network (GAN) and is sponsored by American Family Insurance . gener8tor is a GOLD-tier accelerator in the U.S. as ranked by the Seed Accelerator Rankings Project . 

Minnesota Startups CranioVation, LipiQuester, and Aelios Technology Win Big at Spring Walleye Tank Business Pitch Competition

 Walleye Tank organizer Dr. Stephen Ekker (left) with overall winner Braden Eliason (right) of CranioVation.

Walleye Tank organizer Dr. Stephen Ekker (left) with overall winner Braden Eliason (right) of CranioVation.

 Walleye Tank runner-up Jake Orme of LipiQuester.

Walleye Tank runner-up Jake Orme of LipiQuester.

Last Friday the 2018 Walleye Tank Spring Opener, the fifth edition of this business pitch competition, was held on the University of Minnesota Twin Cities campus. Fifteen different life science and healthtech companies pitched their businesses for a chance to win entry into the semifinal round of Minnesota Cup and multiple other prizes. CranioVation, LipiQuester, and Aelios Technology walked away as big winners at this edition of Walleye Tank.

Walleye Tank is a life science business pitch competition that showcases lifesaving innovations being created in Minnesota. Companies developing science and health related technologies deliver 120 second pitches in one of two categories: Professional or Junior Angler (student) Divisions. Teams are judged by an expert panel, called the “Walleyes.”

This year’s Walleyes included: Julie Henry, Enterprise IP Contract Manager with Mayo Clinic Ventures; Perry Hackett, biotech serial entrepreneur; Sara Russick, Cofounder and General Partner at Capita3; Shaye Mandle, CEO and President of Medical Alley Association; and Fernando Bazan, Chief Technology Officer at Bio-Techne.

Over one hundred participants in Minnesota’s startup and entrepreneurial community attended this Walleye Tank event.

CranioVation, a Minnesota company using photodynamic therapy (PDT) to treat brain tumors without disrupting brain function, was the overall winner in the Professional Division, gaining automatic entry into the semifinal round of Minnesota Cup, the largest statewide business pitch competition in the nation. LipiQuester, led by Rochester resident Jake Orme, was the overall runner up with their patent-pending nutraceutical that impedes dietary fat absorption without the typical negative side effects. Aelios Technology, a team led by University of Minnesota Twin Cities students developing an Intelligent Plug for Devices, or IPlugD, to mitigate life threatening risks in healthcare settings during power outages, was the Junior Angler Division Winner, also snagging entry into Minnesota Cup.

Additional prizes were sponsored by: gBETA Medtech, Capita3, the University of Minnesota Technology Commercialization Venture Center, the Mayo Clinic Office of Entrepreneurship, Collider Coworking, Gopher Angels, and the University of Minnesota Medical Industry Valuation Lab.

The next Walleye Tank, the 2018 Ice Fishing Edition, will be held in Rochester on December 7th.

 Junior Angler Winners Aelios Technology.

Junior Angler Winners Aelios Technology.

Additional Prizes at the 2018 Walleye Tank Spring Opener:

·      Most Medically Impactful Venture: smartfri- an emerging startup developing a bite-activated drug delivery device to provide targeted pain relief to the mouth and throat. 

·      Most Promising Woman-Led Venture: Aelios Technology

·      Most Intriguing Venture (Rochester): LipiQuester

·      Most Fundable Venture: CranioVation

·      Best Ambassador of University of Minnesota Innovation: Addivax, an emerging startup developing antibodies to combat drug overdose.

·      Best Ambassador of Mayo Clinic Innovation (Arizona): Nipple by Number, a 3D-printed stencil that enables accurate and consistent nipple areolar complex (NAC) tattooing.

·       Best Ambassador of Mayo Clinic Innovation (Florida): sciLens, an emerging technology that combines hypersonic sound waves with noise cancelling technology into a small device that fits into a ceiling tile.

Free gBETA Medtech Accelerator Program Launches in Minneapolis to Support HealthTech Startups

 gBETA Medtech cohort participant Andy Pfahnl of Kobara Medical displaying his technology at the 2018 Walleye Tank Spring Opener. Kobara Medical is an early stage medtech company developing solutions for heart failure and cardiac arrthmia.

gBETA Medtech cohort participant Andy Pfahnl of Kobara Medical displaying his technology at the 2018 Walleye Tank Spring Opener. Kobara Medical is an early stage medtech company developing solutions for heart failure and cardiac arrthmia.

Gener8tor, a national accelerator that invests in high growth potential startups, recently launched its very first industry specific program, gBETA MedTech, right here in Minnesota. The inaugural gBETA Medtech cohort jump started the program in Minneapolis on March 22nd. This pilot class will culminate with a LiveBETA Medtech pitch session in Minneapolis on May 21st.

Unlike core the gener8tor accelerator programs, where gener8tor invests in startups in exchange for equity, gBETA programs are completely free. Gener8tor invests no funds in the companies and receives no equity in return. With the freshly minted gBETA Medtech in Minneapolis, startups still receive the “same experience of introductions to mentors and introductions to investors throughout the program,” explained Director of gBETA Medtech Adam Choe. “We spend a lot of time making sure their messaging is clear and their critical pathway is well understood.”

This industry specific gBETA accepts medical device, healthcare related software, biotech, and diagnostic companies into their program. Pharmaceuticals are outside of the scope of this particular accelerator.

gBETA Medtech is made possible through a partnership with Boston Scientific, the University of Minnesota Office for Technology Commercialization, Earl E. Bakken Medical Devices Center, and Mayo Clinic.

Choe says gBETA Medtech occurs from a “perfect intersection” of these three partners with the current Minnesota startup ecosystem. Choe understands the struggles of getting a startup off the ground and wants to help other companies achieve success.

“That first valley of death where you may not know the right people and funding is tight, we can help facilitate a lot of strategic introductions. If we do it right, we can do in seven weeks what would normally take seven months,” he explained.

Participating startups do not need to be headquartered in Minneapolis or even in Minnesota; the program just requires one founder to be in Minneapolis for the duration of the seven-week program.

 Adam Choe (at right) Director of gBETA Medtech during a panel discussion at the 2018 Walleye Tank Spring Opener.

Adam Choe (at right) Director of gBETA Medtech during a panel discussion at the 2018 Walleye Tank Spring Opener.

“We don’t want to come in and take over for a company,” Choe said. “We want to be there to supplement what they know is a weakness of theirs. Or maybe they don’t know it’s a weakness, but we can help them uncover some things that, when you’re in the thick of it, you kind of lose track of.”

gBETA Medtech’s first six-startup cohort spans a range of stages. Some of the current companies are funded just by the founders at this point; some by SBIR grants. Other startups in the program are led by students. For this reason, Choe says gBETA Medtech is more like a “Swiss Army knife for startups” instead of a one-size-fits-all bootcamp style program.

While this first gBETA Medtech class will continue to be a learning process, gener8tor looks forward to supporting two additional gBETA Medtech cohorts this year, attracting companies from Rochester and even outside of Minnesota. Choe hopes that involvement in gBETA Medtech will help startups attract follow-on funding and even get accepted into additional accelerator programs that can invest funding.

While gBETA Medtech is brand new in Minnesota, the core gener8tor equity accelerator program in Minneapolis has already graduated one class, investing $90,000 in five different companies. This cohort included Kaleidoscope, a company that designs and administers scholarships and locates and manages scholarship applicants and recently closed a $1.3M round of seeding funding. For equity gener8tor programs- located in Minneapolis, Milwaukee, and Madison- have invested in sixty-five companies.

By the end of 2018, Choe says twelve companies will have graduated from the industry agnostic gBETA that’s also run in Minneapolis. In addition, two more gBETA Medtech cohorts and another for-equity gener8tor accelerator class are anticipated to graduate from programs this year in Minneapolis, for a total of thirty-three startups.

“That’s thirty-three more startups that we’re hoping to help make introductions, facilitate mentors, facilitate investors, and just be their support and network that they need as they try to navigate the startup world,” Choe said.

Currently, gBETA Medtech is seeking more startups and mentors to help propel the program forward.

“It takes a village, it really does for a startup. We are just trying to build up the strongest network. There’s no reason why the strongest healthcare network, medtech network, can’t be in Minnesota,” said Choe.

Dayton Declares Today "Medical Alley Day in Minnesota"

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Governor Dayton has proclaimed today “Medical Alley Day in Minnesota.” This designation is in recognition of the “unique contributions to health care delivery and management, medical technology innovation, and entrepreneurship” that take place within our state. Medical Alley houses the world’s densest cluster of medtech innovation and was recognized as one of only six “Places of Invention” in the Smithsonian’s American History Museum.

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"The Hatchery" To Provide Lab Space to Emerging Rochester Life Science Startups

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Midwestern states are historic dry beds of Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) funding. SBIR and STTR are competitive, federally funded programs for US small businesses to aid in the commercialization of research and development activities to encourage, and in some cases, require collaborations between small businesses and nonprofit research institutions to bring scientific and tech innovations onto the market.

In the approximate thirty-six year history of these programs (SBIR was established in 1982 and STTR in 1992), funding has primarily focused along the coasts, particularly in California (with ~$9.7B in obligations), Massachusetts (with ~$6B in obligations), Virginia (with $2.7B in obligations), and Maryland (with $2.2B in obligations). Only two Midwestern states have garnered over $1B in obligations from these programs over the same amount of time (Ohio leads with ~$1.75B followed by Michigan with ~$1B); the states of Illinois (with ~$839M in obligations), Minnesota (with ~$645M in obligations), and Wisconsin (with ~$519M in obligations) trail closely behind.

Over the past five years (from 2013 to 2017), 4 companies in Rochester were successfully awarded 7 different SBIR/STTR grants, totaling about $5M. For comparison, in these same five years 5 entities in Fargo, North Dakota successfully received 12 different SBIR/STTR grants, totaling about $4.8M. Across this same time span, 55 different companies in Madison, Wisconsin were successfully awarded 162 different SBIR/STTR grants.

Compared to at least some similar Midwestern towns, Rochester is on par. But we can do better to increase the amount of SBIR/STTR grant applications, improve the positioning of Rochester startups, and begin to capture government funds that are leaking to the coastal regions.

One key factor that could fuel the growth of science and tech startups in Rochester, and in turn spur more SBIR/STTR submissions, is wet lab space. Currently, areas for life science startups to build and develop life science technologies in Rochester is slim if not non-existent.

Dr. Stephen Ekker, Director of the brand-new Mayo Clinic Office of Entrepreneurship, thinks he may have a solution with “The Hatchery”.

This concept utilizes unoccupied lab space within Mayo Clinic, which would otherwise go unused, to house emerging science startups and fuel biotech innovation in this city. The Hatchery provides some lab equipment including glassware, gloves, water baths, a thermocycler, and incubators along with desk and lab space to startups at low cost: $12/square foot or an equity agreement.

Space is currently available for interested life science startups in Mayo’s Guggenheim building.

Want to learn more about wet lab space and its potential? Check out the suggested stories below.

One Year Anniversaries and Fat Sequestering Nutraceuticals: the Latest 1 Million Cups Rochester

 Jake Orme of LipiQuester at February's 1 Million Cups Rochester.

Jake Orme of LipiQuester at February's 1 Million Cups Rochester.

This week at 1 Million Cups Rochester, the community celebrated the one-year anniversary of the program in this community. Jake Orme, a physician at Mayo Clinic, also presented his anti-obesity product, LipiQuester.

1 Million Cups has served as a “supportive, neutral place” to share stories of startup development for the past twelve months in Rochester. The program is industry agnostic; over twenty-two groups have presented their business in Rochester so far on this platform. This upcoming year, the 1 Million Cups Rochester organizers are working to refine and improve the vetting and coaching process for companies applying to the 1 Million Cups Rochester program. The organizers also look to provide better follow up with past presenters for the Rochester community.

Over the past year, 1 Million Cups Rochester has had diverse impact leading to: access to enterprise customers, job offers, sales leads, improvement for future presentations, company awareness in the community, pivots, and mentorship opportunities.

The program focused on one presenter this month, Dr. Jake Orme of LipiQuester.

Orme is developing a product that captures and sequesters fat from digested food within the gut, preventing fats from interacting with bacteria and causing negative side effects. 

Over one-third of American adults are obese, according to the Centers for Disease Control and Prevention. The first line of defense to treat obesity, Orme explained, is diet and exercise. However, this route is successfully sustained in only one out of ten people.

“Round two [of treatment] involves medications that aren’t that great,” he said.

This second line of defense includes drugs, like Orlistat, that prevent the body from breaking down fat. However, patients typically do not stay on these therapies for too long as they can lead to diarrhea, massive flatulence, and anal leakage.

Orme believes his product, LipiQuester, serves as a better solution than current drugs on the market to treat obesity. LipiQuester is a type of nutraceutical made of “thousands of tiny whiffle balls.” The outside matrix of these biodegradable, microscopic particles is similar to products like MiraLax, adding fiber to the diet. The inside of the matrix contains a hydrophobic resin that grabs and retains fats, eliminating them from the body.

LipiQuester has little taste and forms a suspension in water.

Orme’s team performed a small pilot study with the product in mice. LipiQuester prevented gains in body fat percentage in mice on high fat diets compared to animals that were not fed the product. The team is now looking to raise $10M to get LipiQuester onto the market, hopefully through the food additive pathway.

The next 1 Million Cups Rochester will take place on Wednesday, March 7th at 9 AM in the Bleu Duck Kitchen Event Space.

1 Million Cups is a free, national education program developed by the Kauffman Foundation. 1 Million Cups takes place every Wednesday at 9AM across 165 US communities to support and encourage entrepreneurs. The program is based on the idea that entrepreneurs connect and discover solutions over one million cups of coffee

Return of Medical Device Tax Expected to Disproportionally Hurt Minnesota Innovation

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As the federal budget deadline looms on the horizon, much remains at stake for Minnesota’s startup community. After a two-year suspension of a medical device excise tax, manufacturers of products like pacemakers, catheters, and artificial knees may have to start paying up by the end of the month. These expenses are expected to hit Minnesota harder than anywhere else in the country, costing the state in investment, research and development efforts, and jobs.

Let’s break it down.

The medical device tax, a 2.3% excise tax placed on the sale of medical devices within the United States, was developed as part of the Affordable Healthcare Act in 2010 to help finance the expanded health insurance coverage provided under this federal statute.

The medical device tax was highly unpopular in Congress, with particularly strong opposition from the medtech-heavy states of Minnesota and Massachusetts. With dual-party support, the tax was suspended on the sale of medical devices for two years, between January 1, 2016 and December 31, 2017.

“The suspension itself was a bipartisan package that was signed by President Obama. The history of this tax and its suspension included the architect of the Affordable Healthcare Act. This is something that we’ve felt was well understood and there was broad agreement on it,” explained Shaye Mandle, President and CEO of Medical Alley Association, a Twin Cities-based organization that influences policy, fosters connections, and gathers intelligence to support Minnesota’s health industries.

The tax was originally predicted to generate $30B annually to help fund the Affordable Healthcare Act, Mandle explained.

“The thirty billion never really materialized. It was a smaller number, more like twenty to twenty-one billion,” he said.

This tax was paid on revenue- not profits- and was expected to drastically impact medical device manufacturers, eighty percent of which, at least in the United States, employ less than fifty people.

With President Trump’s tax reform plan that was signed into law this December, the corporate income tax rate was lowered from 35% to 21%. However, repeal of the medical device tax was not included in the $1.5T tax reform package, allowing the suspension of the medical device tax to expire for sales of medical devices in the U.S. starting on January 1, 2018.  

So, instead of seeing a tax break, the medical device industry will actually see a tax come back that had not been contributing to the federal budget for a few years.

“For the last two years, we’ve seen medical device companies make significant investments in Minnesota,” said Mandle. “Investments in early stage companies across healthcare but also in devices, keeps going up. We’ve had record years for the past couple of years.”

The investments included a record high $735M raised in 2017 by 85 companies in Minnesota, $399M of which was raised by 44 medical device companies in the state, according to Medical Alley Association’s latest numbers.

The U.S. Joint Committee on Taxation predicts that repeal of the medical device tax will reduce federal revenue by $1.37B in this year alone. Other advocates of the tax say that medical device manufacturers will benefit from the corporate tax decrease enacted by the current administration. But Mandle says that besides massive, profitable companies like Medtronic and Boston Scientific, this tax cut is not even relevant to the majority of medical device companies.

There may be a prime opportunity for a congressional repeal of the tax in conjunction with the latest federal budget, which must be approved by January 19th. If the tax is not suspended once again as part of this deal, medical device manufacturers selling products within the U.S. will have to start paying the tax this month, which Mandle says will disproportionally affect Minnesota companies, especially early stage startups.

“The very first thing that the device tax will do is have an impact on existing companies and how many people they have and what they can invest in or not,” Mandle explained. “But the long term, I think and this is particularly important for Rochester, is how there can be growth in [the medical device] marketplace. Uncertainty about the device tax alone has an impact. Actually having the device tax has a significant impact.”

Mandle says the tax will likely influence hiring and spending in small medical device companies in the state. This ultimately could impede research and development efforts, innovation, and ultimately slow down technologies from getting to the patient. According to the U.S. Department of Commerce, 29,000 U.S. jobs were lost while the tax was previously in effect, leading to a $2B decrease in research and development efforts.

Minnesota’s ‘Medical Alley’- a region stretching from Duluth, through the Twin Cities, down to Rochester- houses the “most densely concentrated cluster of medical technology companies in the entire world,” said Mandle. This region has a denser concentration of medtech than even Boston and Silicon Valley. Recoil from the medical device tax is expected to hit Minnesotan small medical device manufacturers harder than anywhere else in the U.S.

If (or more likely when) the tax comes back, Mandle predicts it will be worse for companies than when it was originally instated in 2013. He said the industry was just not prepared for the tax burden, especially since the issue had previously been resolved. He said the medical device industry, advocates like Medical Alley Association, and Minnesota’s federal delegation are working hard to get their message across in Washington.

If not repealed or suspended, the medical device tax will not only affect the Twin Cities, it could also have significant impact in Rochester, especially in a region like the Destination Medical Center’s Discovery Square District, an area aimed at the rapid commercialization of technology to improve health. Mandle says a healthy medical device sector is essential to “grow and be successful along with digital health and biotech and all of the things that the Mayo Clinic and Rochester are world leaders in.” Uncertainty in the medical device industry from an unstable market or unclear timeline to get to sales or profits hurts investment for early stage companies, disrupting this piece of the puzzle.

“With Rochester being one of those places that is going to help define what economic and healthcare growth looks like, this is not helpful,” advised Mandle.

 

Further reading and References:

1.     Medical Device Excise Tax.

2.     Medical Alley Association.

3.     Medical-Device Industry Boosts Efforts to Fight Excise Tax

4.     ObamaCare Medical Device Tax

5.     Repeal the Medical Device Tax

6.     Medical Technology Firms to Trump: GOP Forgot to Ax The Device Tax

7.     Medical Device Tax, AdvaMed

Rochester Brothers Seeking to Grow Medical Writing Startup Superior Medical Editing

 Superior Medical Editing CEO Keith Kallmes during Rochester Global Entrepreneurship Week 2017.

Superior Medical Editing CEO Keith Kallmes during Rochester Global Entrepreneurship Week 2017.

Brothers and Rochester natives Keith and Kevin Kallmes are looking to take their business, Superior Medical Editing, to the next level. This nimble company provides customizable medical writing and editing services to make physicians more productive. Business for the brothers has taken off within the last six months; they are currently looking to nearly double their team to keep up with demand and continue to fulfill the evolving needs of their customers.

The basic idea of Superior Medical Editing is quite simple. The business essentially is a connector, linking people who have research experience and time to those who have research needs. Incorporated in 2015, the company offers a suite of medical writing and editing services to increase research physicians’ writing and publishing productivity. While the company can tailor their services to each customer, their real expertise is in medical writing- the creation of scientific documents such as case reports, journal manuscripts, and medical regulatory documents.

“Our vision is to take every bit of work that a non-expert can do off an expert’s hands,” explained Kevin Kallmes. “When a physician is writing a paper, the physician should give physician-level input. They don’t need to do anything below that.”

Beyond developing the main idea of the manuscript, gathering the data, and providing the methodology and final approval, the Superior Medical Editing team performs all of the paper writing process for the physician to help them submit more medical papers and have increased time for their patients.

“In addition to taking all of the non-expert work off of a physician’s plate, without our own organization, we never have someone doing something below his paygrade,” explained Keith Kallmes.

The Superior Medical Editing team utilizes a “hierarchy of competence” to draft, edit, and write medical documents, provide literature review, analyze and interpret data, and churn out statistics for medical papers. This hierarchy typically involves a team of four- depending on the complexity of the manuscript- including a medical writer, who is the leading force on the paper, a research assistant, who does the bulk of the literature review and figure making, a biostatistician, and a highly specialized physician consultant.

In the beginning stages of the business, Kevin thought he might be the sole medical writer, while brother Keith would bring in the clients for the business. The budding entrepreneurs quickly understood that a single medical writer, unless operating in a specific field in which they had lengthy experience, would not be very effective.

“If you want to freelance, you cannot do it efficiently. You have to have a system and you have to have a hierarchy of competency,” explained Kevin.

Currently, the brothers have five specialists who work day-to-day with Superior Medical Editing as either medical writers or research assistants to the medical writers. These positions are typically filled by graduate or recently graduated students from biomedical or biological science programs or those looking to gain experience before medical school. The company also contracts with ten physician specialists on a per-project basis for their specific, expert input.

The team is entirely virtual, although most contractors with Superior Medical Editing reside in the Twin Cities area.

The business does have competitors- particularly the freelance medical writer- but no one is following quite the same path. Instead of providing medical writing services in all medical fields, the team is instead focused primarily in neurology- including neuroscience, neurosurgery, and neuroradiology- to provide hyper-specialized expertise. They have also expanded into radiology and orthopedic fields.

A neurology focus was the perfect spot for the brothers to start. They grew up “with the language of aneurism and stroke” from neurointerventional radiologist father David Kallmes. Additionally, the brothers say this field usually includes physicians from the top of their medical class who are academically interested, but don’t have the time to churn out as much writing as they would desire.

“We came in thinking, what would a physician want to make their lives easier,” explained Kevin Kallmes. They did not want to teach physicians how to use another platform or another mobile application.

“We don’t think that that’s what’s going to drive productivity gain,” explained Keith. “I think people have lost sight of humans helping other humans.”

Instead, the team sees themselves as “extenders” for physicians, helping them to submit five or six times as many medical papers each year with the same effort on the part of the physician.

“We don’t think we’re better than the physician. We think that we make the physician better,” said Kevin.

The business has experienced a massive inflection point over the past six months and is responding to customer needs by developing new services.

“We’re very risk avid, but we also like to see the payoff from what we’re doing,” explained Kevin.

Their latest push involves development of an improved patient data management platform, which would dramatically enrich their overall business.

“Just like our writing service is intensely trying to help the individual physician write, we want something that intensely helps the individual physician manage their own data,” Kevin explained.

If the team received all the necessary data from the physician right away, the brothers predict they could complete a paper in two weeks instead of their current sixty-day average. Most of this hold-up is from “communication friction,” something they’ve had to tackle in dealings with both the physicians and their virtual writing team. The brothers say there’s still much streamlining that could be done to make the process more efficient.

Developing their management skills has been essential to overcome this issue, especially when dealing with people sometimes twice their age.

“We’re always younger than people expect when we show up to a meeting with someone that we were collaborating with,” explained Kevin.   

The brothers say they are “strange ducks” in medical entrepreneurship, with non-traditional backgrounds. Kevin is a current law student a Duke University; Keith is a recent graduate from the University of Minnesota Twin Cities with a double major in Economics and History.

Now, the brothers are embarking on a major hiring push to, hopefully, double their staff within the next three months.

“We’re very ambitious to expand our mission. We don’t want to sit around and be a five-person deal. We need to tap into that youthful energy,” said Kevin.

The team is looking to add on self-driven individuals with biological science training who want to begin writing. The brothers say this is excellent experience for anyone looking to develop their science career, especially those getting ready for medical school.

For those interested in the position, please contact Superior Medical Editing via their Facebook page or by emailing the team at outreach@supedit.com.

Fourth Walleye Tank Business Pitch Competition Provides Platform For Life Science Entrepreneurs

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This past Friday, the fourth Walleye Tank- a Minnesota business pitch competition- took place on the Mayo Clinic campus, gathering together entrepreneurs, investors, educators, and community members to provide a platform for the state’s life science entrepreneurs. Two Rochester startups- Brazen and Liver Cell Therapies- walked away as divisional winners.

Life science businesses at all stages of development compete in Walleye Tank in one of four categories: Junior Angler, Midlevel Reeler, Professional, and Bait Shop. The Junior Angler student teams enter the competition through an entrepreneurial course at Mayo Clinic or via the University of Minnesota-Twin Cities. The rest of the competitors join “the tank” through an open submission process.

This year, startups participated from Rochester, the Twin Cities, Madison, and Jacksonville, Florida.

During the competition Junior Angler, Reeler, and Professional Division participants delivered 120 pitches to a panel of Walleyes, highly experienced local entrepreneurs and investors, to win a variety of prizes.

This year’s Walleye panel included: Wade Beavers, co-founder and CEO of DoApp; Julie Henry, Enterprise IP Contract Manager in the Department of Business Development with Mayo Clinic Ventures; John Santini, serial entrepreneur and CEO of Vergent Bioscience; Christine Beech, Executive Director of the Kabara Institute for Entrepreneurial Studies at Saint Mary’s University of Minnesota; Perry Hackett, co-founder of Recombinetics; Carla Pavone, Program Director of Minnesota Innovation Corps; and Fernando Bazan, CTO of BioTechne.

Bait Shop entrants pitched directly to entrepreneurs at the event to connect these innovators to the resources they need. Participants in this division included Collider Coworking, Rochester Rising, Rochester Area Economic Development Inc., Fredrikson & Byron, and Destination Medical Center.

Brazen and Electronic Intrathecal Guidance startups tied to win the Junior Angler division, raking in $10K toward their projects from the brand-new Mayo Clinic Office of Entrepreneurship.

Brazen, a diagnostic for detecting contact sports-related brain injury, is being developed by a team of Mayo Clinic students. Current on-field brain injury assessment techniques can be subjective and mainly detect only significant brain trauma, explained the Brazen team. Instead, this startup is developing a small, portable device that gages eye movement, a symptom known to display asymptomatic brain injury. This tool will permit rapid assessment of brain trauma and prevent further injury. The team is currently developing an algorithm to support their concept. Their first target market are high school athletes.

Electronic Intrathecal Guidance is a Jacksonville, Florida startup developing an improved method for spinal tapping. About 400K spinal taps are performed in the United States each year, which are often done blindly at the patient bedside and have a high failure rate. When a spinal tap is unsuccessful, the patient is often brought to radiology to perform the procedure under X-ray guidance, exposing the patient to radiation, disrupting workflow, and resulting in $500 in extra healthcare costs. Dr. Vivek Gupta and his team are developing a technique using electronic guidance to improve the spinal tap procedure right at the bedside, without any imaging needed. His method detects changes in impedance- monitored through a patch electrode- to guide the spinal needle through tissue and cerebrospinal fluid. The whole system costs between $5-10 to produce; Gupta estimates they will sell for $25-30, creating a $1.2M market in the United States alone.

University of Minnesota startup Nominal Impedance also participated in the Junior Angler Division.

Jacksonville-based small business Concepts by Harshman won the Reeler Division, earning assistance in business development from the Mayo Clinic Office of Entrepreneurship.

This startup, built by surgical assistant Tim Harshman, offers modern solutions to the retractor. 48M surgical procedures are performed each year, according to Harshman, all of which require the use of a retractor. This piece of equipment separates the edges of a surgical incision, providing exposure and access to internal organs, tissues, and cavities. Retractors have seen little recent innovation. The current models on the market, Harshman said, are cumbersome and uncomfortable to hold for the extended periods of time required for a surgery. Every time a surgical assistant must change hands, exposure is lost for the physician and the surgery is slightly prolonged. Harshman is developing the Harshman Handle and Harshman Retractor- which touts an improved toe designed compared to current retractors- to reduce surgical assistant fatigue, reduce retractor slips, and lengthen exposure time for physicians to make surgeries more efficient.

Startups Soundly and Thorx also participated in the Reeler Division.

Rochester startup MindTech won second place in the Professional, or incorporated company, Division, earning in-kind professional legal services from Fredrikson & Byron.

MindTech- led by local entrepreneurs Chad Attlesey, Pete Wall, and AJ Montpetit- is developing a “microscope for everyone” to help foster love of STEAM (science, technology, engineering, arts, and math) in children. The team aims for this “rugged microscope” to be distributed alongside iPads and Chromebooks during the school year. Highly portable, the device allows kids to discover in the classroom, at home, and outdoors. The microscope is also extremely capable; it magnifies up to 200X, is Wi-Fi enabled, and captures 1080p video.

Liver Cell Therapies was the overall grand prize winner, taking home $2K from Fredrikson & Byron as well as in-kind professional legal services, assistance from the Mayo Clinic Office of Entrepreneurship, and a three-month full membership at Collider Coworking.

Dr. Scott Nyberg, a liver transplant surgeon at Mayo Clinic, and his team at Liver Cell Therapies are developing a liver support device to address liver failure, the seventh largest cause of death in the United States. The current solution to liver failure is organ transplant, which results in a major surgery and immunosuppression for the remainder of life. Instead, Nyberg and his team are developing the Mayo Spheri-Reservoir Bio-Artificial Liver, a support device that can hold 20-30% of a patient’s liver, helping the organ survive for days or weeks. This device can serve as bridge therapy for some patients, allowing time for the liver to heal and avoiding transplant completely. The team currently has a prototype and is raising $2M in funding to build a clinical grade device. The startup also has intellectual property for creating hepatocyte spheroids- or 3D globules of liver cells- through a rocking protocol. These spheroids can be used to treat liver failure outside of the patient.

Marvel Medtech, Thrivors, and Superior Medical Editing also participated in the Professional Division.

Congratulations to all the teams that pitched at Walleye Tank. Look for the next competition to roll out in spring 2018.

Five Rochester Health and Wellness Startups Honored by Minnesota Business Magazine

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This month five Rochester businesses were honored by Minnesota Business Magazine as “Innovators in Health and Wellness” to celebrate local leadership.

Awards were given in sixteen different categories including: Startup, Software Web Application, Health and Wellness Campaign, Excellence in Facility Design, Health Care Executive, Medical Breakthrough, and Wellness Advocate.

Four Rochester businesses or startups were finalists in their respective categories and one local business came away as the overall winner in their division.

Charter House- Mayo Clinic Retirement Living was a finalist in the Health and Wellness Campaign Division.  Charter House is a senior living facility in downtown Rochester, operated by Mayo Clinic, that advocates for healthy aging.

Healthtech startup OneOme was a finalist in the Medical Breakthrough category. OneOme’s solution, called RightMed, is a gene panel that analyzes patient DNA to determine how an individual will respond to medications for a wide range of conditions. The company was co-founded by Troy Kopischke, a managing partner of the Twin Cities incubator Invenshure, and John Black, a consultant in the Division of Clinical Biochemistry and Immunology at Mayo Clinic.

Joselyn Raymundo, Founder at Rochester Home Infusion, was a finalist in the Emerging Leader category. Rochester Home Infusion is the only home infusion provider in southeastern Minnesota, providing many in-home therapies including anti-infective, immunoglobulin therapy, transplant therapy, and pain management.

Ambient Clinical Analytics was also a finalist in the Excellence in Data Analytics category. Ambient Clinical Analytics leverages Mayo Clinic technology in clinical decision support tools to lower healthcare costs and improve patient outcomes. This Rochester-based company is led by CEO and serial entrepreneur Al Berning.

Rochester startup Geneticure was the overall winner the Startup division. Geneticure takes the guessing out of hypertension drug treatment. This company developed a comprehensive panel of genes to analyze patient DNA and determine an individual’s response to certain drug treatments to tailor therapy. Geneticure was founded by Rochester natives and brothers Scott and Eric Snyder. University of Arizona genomics expert Ryan Sprissler and Mayo Clinic Professor of Medicine Thomas Olson are also on the Geneticure founding team.

How to Build a Startup with Mayo Clinic Technology- Lessons Learned from Mayo Clinic Entrepreneurs

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Last week the community received a sneak peek at Global Entrepreneurship Week with the second annual “Lessons Learned from Mayo Clinic Entrepreneurs”. This panel discussion, hosted by the Mayo Clinic Business Accelerator, gave three entrepreneurial Mayo Clinic employees the opportunity to share their story and discuss lessons learned from building a startup with Mayo Clinic technology.

The panel included: Allan Dietz, Assistant Professor of Laboratory Medicine and Pathology at Mayo Clinic and Scientific Advisor at Mill Creek Life Sciences; Kah-Whye Peng, Professor of Oncology at Mayo Clinic and Co-founder and Chief Operations Officer at Imanis Life Sciences; and Karl Clark, Assistant Professor at Mayo Clinic, Technology Consultant at Recombinetics, and Chief Scientific Officer at Lifengine Technologies.

All three startups took very distinct paths to move their technology out of Mayo Clinic and turn it into a company.

Mill Creek Life Sciences, Dr. Dietz explained, had a unique and organic evolution.

“I’m an accidental entrepreneur. I never set out to be one,” he laughed.

 From left to right: Karl Clark, Kah-Whye Peng, and Allan Dietz.

From left to right: Karl Clark, Kah-Whye Peng, and Allan Dietz.

Dietz was originally running a Good Manufacturing Practice (GMP) facility within Mayo Clinic, developing cells as therapeutics. At the time, his lab was growing cells in media- a liquid that supplies cells with the nutrients and food they need to grow- and calf serum. However, this serum ultimately had to be removed for the cells to be used as therapeutics in patients.

To avoid this issue, Dietz’s lab searched for an FDA approved substitute for serum and stumbled across platelet lysate, a product derived from expired platelets originally donated for blood transfusions. His lab successfully substituted the platelet lysate for calf serum, developing the main product that Mill Creek sells today.

Use of this serum-free media organically gained a commercial customer and, consequently, needed to get out of the Clinic. Dietz took the Intellectual Property (IP) for the product and launched a Limited Liability Company (LLC) to move the product forward. Today, Mill Creek Life Sciences is located on the second floor of the Minnesota BioBusiness Center and will likely outgrow the space soon.

When Dietz first began the startup in 2012, he said there was “almost nothing” to support entrepreneurship or Mayo Clinic startups in Rochester. Over the past five years, he’s learned some key lessons about building biotech startups in Rochester.

“Don’t do it to get rich,” he joked. “Do it because you don’t have enough things going on in your life and you’re bored and you’re tired of watching Netflix.”

He quickly learned that the whole process of product development must go quickly. He advised seeking out experts who can supplement your own knowledge and finding trusted partners in line with your goals for the company that can help you move fast.

“If it’s a good idea, there are other people working on it,” he said.

Dietz said there also must be separation between your role as a founder in your startup and your responsibilities at Mayo Clinic; he said it’s not a great idea to do both and suggested that you’re better off focusing on the Mayo job or the startup to really succeed.

Imanis Life Sciences had a slightly similar path, but a bit of a different outcome. Imanis is a reporter gene imaging company that is developing a range of reagents and services to monitor the fate of cells and viruses in real-time, non-invasively, in animal models.

Since Imanis launched in 2012 as one of the first companies out of Mayo Clinic’s Employee Entrepreneur Program, Dr. Peng said the biotech community in Rochester has grown tremendously.

“Five years ago, it was really kind of lacking,” she explained.

In the early stages of the company, Peng said they struggled to find a wet lab space in Rochester to build their technology, an amenity that she said still does not really exist in the city. Imanis eventually found a home in the lobby level of the Minnesota BioBusiness Center.

“We could afford the cheapest place, which is a place with no windows,” she laughed.

Imanis was self-funded in the beginning stages by Peng and her business partner Dr. Stephen Russell, founder of sister company Vyriad. Two years after the company’s launch, Peng said they had to take larger capital investment to hire staff.

Now, the business is celebrating its five-year anniversary and has global reach. Imanis is currently focused on growing their brand and building their customer base.

Alongside the community in Rochester, the startup hopes to “build a solid foundation for a dynamic biotech industry in Rochester, because it can be done.” Creating such a community, Peng said, offers alternative career options for highly trained scientists and helps to create new industries.

Lifengine Technologies, conversely, is a very new company, launching just last year to manufacture and sell gene editing reagents, products that can very precisely modify the genome- or all the DNA content- of an organism. Dr. Clark said most of the first few months were spent just figuring out direction for the startup.

Clark’s time with Lifengine may be limited so far, but he spent years with two other gene editing companies, Discovery Genomics and Recombinetics, where he witnessed, first-hand, growth from startup to small business.

“The pathway that you think you’re on in the first year, is not the path you’ll be on in your third year,” he advised.

Instead of moving Lifengine into the BioBusiness Center, Clark instead took advantage of a brand-new program within Mayo, called “The Hatchery”. Using this concept, he rented vacant lab space within Mayo Clinic on a month-to-month contract, allowing Lifengine to churn forward with little upfront capital.

Lifengine has its first part-time employee and is currently in bootstrapping mode, where the company is seeking to fund itself without outside investment.

Although the three founders followed different paths, the startups all faced issues with raising capital and identifying qualified workforce.

As far as the funding goes, “The number one source of capital is you,” Dietz explained. To attract significant money from outside investors to fuel the business, investors look for founders to have some of their own skin in the game.

Moreover, if you need to significantly develop the technology within your company, it’s riskier. Expect that process to suck up more capital and be prepared to give more equity away.

Small business grants, such as those provided through the Small Business Innovation Research (SBIR) program, are also available. These offer an attractive alternative capital option, especially for founders with a strong history in academia, and give away no equity. The process, however, is quite slow.

Attracting trained scientists to a startup can also be tricky, especially when you’re competing with benefit-rich employers like Mayo Clinic. Peng said Imanis de-risked a lot of payroll issues by hiring contractors; their full-time employees are mainly people on their scientific team. She said there are people interested in the technology and the draw of a startup, you just have to pay them more than what Mayo is offering.

Dietz said it’s not too difficult to attract scientists, but hiring on the business side is a struggle.

“The idea that Rochester itself will natively or organically grow a great biotech or entrepreneurial thing is really naïve,” he explained.

Recruitment of qualified talent, he believes, is a significant challenge faced by the city today.

Eleven Rochester Biotech Companies Showcased at Investors + Innovators Forum

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Last week eleven life science and biotech startups pitched their business at the Destination Medical Center’s Investors + Innovators Forum to shed light on Rochester’s innovation culture. Participating startups included: Ambient Clinical Analytics, Apri Health, Forge Biotechnology, Geneticure, Gila Therapeutics, Imanis Life Sciences, Mill Creek Life Sciences, Rochester Medical Technologies, Smartimplant Systems, SpineThera, and Universal Prosthetics.

Here’s some insight on four of these Rochester startups.

 

Geneticure, LLC

Geneticure is developing technology to replace the trial and error associated with hypertension therapy by harnessing the power of genomics. This largely Rochester-based team is tackling one of the largest causes of preventable death facing today’s healthcare system, high blood pressure, which affects 80M U.S. citizens and results in 5M new diagnoses each year. The current method to control high blood pressure through drug treatment is fifty to sixty-five weeks long, where the patient’s response to various types and doses of hypertension drugs are evaluated. This is an expensive and inefficient process, with only half of all patients effectively mitigating their disease. To solve this problem, Geneticure developed a panel of genes and proprietary algorithms to guide hypertensive drug treatment by predicting how patients will respond to certain therapies. Patients are genotyped, or their DNA content is sequenced at precise regions of the genome, through a simple cheek swab. The patient’s DNA is run on the Geneticure panel to examine the individual’s gene sequence at specific regions involved in drug response and the information is used by the clinician to guide therapy. The first Geneticure product results in the use of fewer ineffective medications and improves patient adherence. The team completed a 100-person retrospective study for their product and is now recruiting eight hundred participants for a prospective randomized control trial. The company has recently taken investment from the California-based venture capital firm Wireframe Ventures. Geneticure has two other products in the pipeline.

 

Gila Therapeutics, Inc.

Gila Therapeutics is a clinical stage pharmaceutical company that is developing novel treatments for obesity. Two-thirds of U.S. adults are overweight or obese, costing the healthcare system $190B each year. Obesity leads to a variety of health concerns including diabetes, hypertension, and cardiovascular disease. Each year, 100M Americans attempt diets, but less than one percent of these people lose weight. There are currently five obesity drugs on the market, but these therapeutics only capture a small percentage of the $60B spent every year on weight loss products, diets, and surgery. To tackle this issue, Gila Therapeutics is developing novel treatments for obesity. Their current therapy involves topical application of the satiety hormone PYY to the tongue, where the peptide interacts with local receptors and induces a signaling cascade to make the body feel full. PYY is normally produced by cells in the small intestine upon food digestion. The hormone gets released into the blood and works its way into the saliva to interact with receptors on the tongue. For therapeutic applications, the hormone is delivered before eating to activate satiety centers, making the patient feel fuller sooner and eat less. Gila Therapeutics has raised $4M in Series A financing, which was led by a Boston firm. This August, the team completed a Phase I trial to examine the safety of their therapy. Currently, they are undergoing a Series B effort with the hopes to raise $5M in capital to fuel the next phase of drug development.

Imanis Life Sciences, LLC

Imanis Life Sciences is a research tools company headquartered in downtown Rochester. This business develops reporter gene technologies to enable live, high-resolution imaging in animal models. Their licensed proprietary technology includes Sodium Iodide Symporter (NIS) reporter imaging, allowing the visualization of specific cells and viruses in real time. Their products include reporter gene lentiviral vectors, reporter gene cell lines, and oncolytic viruses. Imanis Life Sciences was founded in 2012 as one of the first Mayo Clinic employee entrepreneurial startups. Currently, the business has eleven employees and has taken $1M of investment. They plan to grow organically through sale of their products and tools.

 

Mill Creek Life Sciences, LLC

Mill Creek Life Sciences is a research tools company located in the Minnesota BioBusiness Center. The company, founded in 2010, was one of the original Mayo Clinic spinouts. Mill Creek Life Sciences created the very first human platelet lysate for stem cell growth for use in research and clinical trials. Human platelet lysate is derived from expired platelets donated for transfusion and has abundant growth factors and cytokines- cellular molecules that function in immune response. The company also holds patented technology to mediate growth of targeted cell types. Customers for these core products include academic clinical labs, large biotech corporations, and contract manufacturing groups. Now, Mill Creek Life Sciences is expanding the business to treat glioblastoma, an extremely aggressive type of brain cancer. The company has completed a small Phase I clinical trial for glioblastoma treatment at Mayo Clinic.

Genome Engineering Expert Says Minnesota Needs Big Money and Risk-Tolerant Attitude to become true Biotech Hub

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Genome engineering expert Dr. Perry Hackett was the guest of honor yesterday at the Byolincs “Meet the Expert” series. His mission: to examine ways to make Minnesota a world center for biomedical technology as a 21st century Silicon Valley.

Hackett built a strong career in genetic engineering, or techniques to specifically modify the genome, or all the genetic material, of an organism. Hackett spent a thirty-seven-year career at the University of Minnesota Twin Cities (UMN) and helped to found two biotech companies, Recombinetics and Discovery Genomics.

During his talk, Hackett laid out four key ingredients that he believes are necessary to make Minnesota a world-renowned hub for biotech: money, scientific talent and creativity, biotech leadership, and attitude.

Let’s start with the scientific talent.

“We are one of the world’s hubs for genome technologies and innovation,” Hackett explained.

Several groundbreaking genetic engineering technologies were developed in Minnesota, including the Sleeping Beauty Transposon system and Transcription Activator-like Effector Nucleases (TALENs).

The Sleeping Beauty Transposon system was created by Hackett himself in 1997. This system was integral to perform a technique called gene transfer, the long-term insertion of DNA into the genome of vertebrate cells. This technique can be used for gene therapy, or replacement of defective DNA with functional DNA to treat disease. The Sleeping Beauty Transposon System spurred Hackett’s first biotech startup, Discovery Genomics, in 2000, using the Sleeping Beauty system to treat blood diseases.

TALENs are enzymes, or specialized proteins, that precisely bind to and cut very specific DNA segments. These breaks in the DNA can be used to create defined mutations, or alterations to the DNA sequence. Alternatively, new DNA can be inserted in a highly specific manner between the cut sites. This technique, developed in part by UMN scientist Dan Voytas in 2010, completely revolutionized gene editing, allowing precision targeting of specific regions of DNA at levels “ten million fold higher” than ever before.

Voytas used this technology to launch his own biotech company Calyxt, a bioagriculture startup that genetically engineers healthier, more resistant food plants. Calyxt just issued an initial public offering (IPO) on July 20th, offering stock at $8/share. Less than two months later, the stock is now selling for $28/share.

Hackett’s own graduate student Scott Fahrenkrug used TALENs to also start a genome engineering company called Recombinetics, which Hackett says is a “Minnesota biotech story in the making.” Hackett is co-founder of the company.

Instead of genetically engineering plants, Recombinetics specifically edits the DNA of animals to create more robust, healthier livestock and generate highly specific animal models for pharmaceutical and medical device testing. The biotech firm largely works with pigs as a biomedical model, an animal that is a better mimic of human disease, lifespan, and organ size than mice and rats.

Minnesota arguably has the talent and scientific leadership to be a real biotech hub. What we’re lacking, Hackett said, is money and attitude.

Hackett explained that we need to foster a culture in Minnesota where “early failure is an option” and companies can make mistakes and not be penalized for them.

Hackett himself was told he was a failure for not having an IPO with Discovery Genomics. Some of Hackett’s first research at the UMN was to engineer faster growing Minnesota sports fish. After he successfully made the fish, the project was closed due to ecological concerns from releasing the fish into the lake systems.

“Our work was phrased as a biological Chernobyl that would extend from Minnesota to all the way down to New Orleans,” Hackett explained.

However, he said the team did not give up. This technology eventually led to the Sleeping Beauty system, the UMN Beckman Center for Transposon Research, the UMN Center for Genome Engineering, and Discovery Genomics.

Hackett said another piece missing from the Minnesota biotech ecosystem is big money from venture capital. Although the state was recently ranked as the thirteenth wealthiest city by Fortune, Hackett says that money is not making it into the state’s biotech startups. He explained that without local venture capitalists providing money, attracting outside capital, and bringing in validated leadership, Minnesota biotech companies will be forced to relocate to the funding sources.

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Byolincs is a group within Mayo Clinic dedicated to training and encouraging entrepreneurially minded scientists and medical professionals. The group holds their “Meet the Expert” series on the second Thursday of every month to learn from active bioscience entrepreneurs.

How to Pivot a Digital Health Startup: The Story Behind Apri Health

Apri Health, a data analytics and healthcare startup incubating in the Mayo Clinic Business Accelerator, is expanding their focus. The five-year-old company uses machine learning and artificial intelligence (AI) to query large sets of medical data to create “ecosystems of action within healthcare systems.” Now, they are applying their data analytics platform to ask more questions and transform that information into actionable results for healthcare systems.

Apri Health Founder and CEO Dr. Mark Ereth had a very successful, twenty-five-year career in anesthesiology at Mayo Clinic before retiring- and then launching a company. Ereth, a native of North Dakota, attended graduate school and performed his fellowship at the clinic; he then remained on staff as a physician/scientist. During his time at Mayo, Ereth pioneered an analytics program to reduce unnecessary blood transfusion expenditures, saving the healthcare system $25M.

“But I was ready for something different,” he explained.

Ereth licensed some of the intellectual property that he developed from Mayo and launched his own startup in 2013, called Transfuse Solutions, with serial entrepreneur and physician Dr. Jamison Feramisco, an expert in telehealth and high tech.

“The best thing I happened to do was get a good partner,” Ereth said.

With Ereth’s expertise in reducing blood transfusion costs and Feramisco’s seasoned career in digital health, the team set out to attack overutilization issues in healthcare, focusing in on blood transfusion. These events, Ereth explained, are the most common medical procedures in the country. However, they are often unnecessary and expensive.

Ereth, Feramisco, and their team of “cutting edge AI and machine learning experts” developed a patient blood management solution that used machine learning to query large sets of medical data and provide a solution to reduce blood transfusion-associated costs to the healthcare system.

However, Ereth says he always knew the company would expand beyond the blood market.

In June 2016, Transfuse Solutions rebranded to Apri Health with the mission to “transform data-rich, insight-poor environments into profound ecosystems of discovery and action.”

The team had already built the data analytics platform that could interface with electronic health records (EHRs)- comprehensive, digital records of a patient’s medical history. The platform used machine learning to develop new algorithms, daily, to query these massive EHR datasets, delivering actionable intelligence to healthcare systems.

“If you have the records, you just have to change the question,” Ereth explained. “You can run an experiment every four hours by just changing the questions.”

They now have applied their data analytics system to solve other healthcare overutilization issues beyond blood.

Recently, Apri Health has applied their machine learning to solve the issue of cost of care. They’ve partnered with a hospital in Hartford, Conn. to help the system assess how much it costs to deliver specific items of care and analyze how these rates impact the institution.

As one example, Apri Health examined congestive heart failure patients admitted within the Hartford system with the same clinical diagnoses and identical outcomes. They discovered that patients treated by cardiologists incurred a much higher daily cost to the hospital system than those treated by hospitalists- physicians, nurse practitioners, and physician assistants who provide general medical care to hospitalized patients.

“We were able to say if we’re looking at value-based care, why have a cardiologist take care of patients when the hospitalists can get them out of the hospital, with the exact same outcomes, for essentially $5,000 less per visit?” Ereth asked.

Apri Health is also moving into the field of pharmacogenomics, using genetic testing to predict metabolic response to drugs. The team formed a partnership with a large genetic firm and launched a successful pilot study with Georgetown University and the University of California, San Diego. Now, they’re looking to move into other areas, such as opiate metabolism.

The digital health company has also applied their data analytics platform to a less sexy area: medical billing. They’ve used the software to query 1.3M lines of bills- from seven years of healthcare data and $3B worth of billing- and found “450M in fraud, waste, or abuse.”

“We started off as this blood company, but now we’re doing all this other stuff. And part of our problem today, as a company, is keeping focus in what we’re doing and yet also expanding what we’re doing,” Ereth explained.

In his long career in medicine, Ereth has seen what it takes to be a successful clinician/scientist: a mix of asking the right questions, pursuing the right questions, and mobilizing resources to address those questions. He also sees a lot of commonalities between medicine and business.

As a physician, Ereth said, “You’re making a decision on behalf of the patient, sometimes with only eighty percent of the information you’d like. It has short and long term implications. And death is always out there.”

The same is true in business. But instead of death of a patient, that same choice can lead to the demise of a company.

Ereth thinks the environment in Rochester is now primed for entrepreneurship, thanks to the work of people like Xavier Frigola and Gary Smith at Rochester Area Economic Development, Inc., along with others in the community. Things are now much easier for entrepreneurs in this exciting time of development.

He says what’s lacking is capital and local angel investment. Apri Health themselves has only one investor in Rochester; the rest are spread across the country.

“There’s a lot of innovation in town. And I think it’s really capital [that’s needed] to drive that innovation,” Ereth explained.

Rochester Home Infusion Seeking Ground in Destination Medical City- Part 2, The Ask

Missed Part 1 of this story? Click here for the first of this two part series on Rochester Home Infusion.

 Rochester Home Infusion Founder Joselyn Raymundo. Photo courtesty of Rochester Home Infusion.

Rochester Home Infusion Founder Joselyn Raymundo. Photo courtesty of Rochester Home Infusion.

Rochester Home Infusion (RHI) Founder Joselyn Raymundo and her team strive to provide their patients with the best care possible so they can achieve some sense of normalcy.

“What matters is the patient," she tells her team. "They’re the ones who are sick. They’re the ones who may be having financial difficulties, medical crises, family crises. It touches so many aspects of their lives.”

RHI is currently licensed in Minnesota, South Dakota, Wisconsin, Iowa, Illinois, and Colorado. Raymundo hopes to soon move into markets in Nebraska, North Dakota, and Michigan to cover seventy percent of patients who travel to Rochester for the Mayo Clinic.

She says RHI has taken the time to understand the patient experience at Mayo and is well poised to deliver that final, positive impression.

“We can augment the Mayo experience. We can collaborate with [Mayo] and deliver something very special. Not just for the patient, but also for Mayo Clinic,”
 she stated.

RHI utilizes an extensive clinical monitoring program to extend medical expertise from the hospital to the home.

“We try to really, truly respect what the patient needs and what the hospital needs,” Raymundo said.

When a Mayo Clinic patient requires an infusion, they are given the option to use the clinic’s Infusion Therapy Center (ITC) or a home infusion service. RHI should be included on a list of in-home providers- alongside giants like CVS, BioFusion, and Option Care- which is then given to the patient.

 RHI clean room. Photo courtesty of Rochester Home Infusion.

RHI clean room. Photo courtesty of Rochester Home Infusion.

If RHI is chosen as the provider, Clinical Nurse Manager Kris Gillard arrives at the hospital within an hour to instruct the patient about their medication and how to infuse at home. If the patient lives in Rochester, Gillard would then visit their home at least once a week to assess and monitor recovery with a carefully curated list of questions and measurements. Then, RHI pharmacist Steven Ly follows up with a phone call.

If a patient does not live in Rochester, RHI works with a local nursing agency provider and again supplies the attending nurse with list of questions to ask and measurements to take to ensure that patients are recovering and to address potential relapse as quickly as possible.

“That prevents rehospitalization and ER visits. It’s good, all around, for everybody,” Raymundo explained.

To launch RHI and fill a healthcare gap in southeastern Minnesota, Raymundo took a huge risk in relocating her entire family- three kids and a husband- to Rochester. RHI was the first and only medically-focused tenant in the BioBusiness Center with absolutely no ties to Mayo Clinic.

“Nobody ever asked me to come here. And I didn’t ask anyone’s permission,” she said. Raymundo self-funded the whole business, taking money from no one to launch her vision.

Now, she’s just asking for a fair shot and working to raise awareness that an alternative to the ITC exists in Rochester. She says RHI is not in competition with Mayo; it would be a major success to even get a small fraction of the clinic’s infusion patients.

“ITC is not for everybody. Some patients actually would want to go back to work sooner. Some patients cannot even drive to get there,” she explained.

Unfortunately, RHI does not always get presented to patients as a viable option.

“Awareness is big. Just being given a fair chance. We’re not asking for any special treatment from anybody. We just want to be presented to patients in a way that is objective so they are aware that they have options,” explained Raymundo.

She says that Mayo needs to create a more competitive environment for people following some of their patients, like RHI.

“If they make it competitive, then everybody will be trying to do their best to outdo each other,” she said.

The Destination Medical Center draw pulled Raymundo to Rochester in the first place. However, she says DMC needs local success stories to inspire other entrepreneurs, especially those without ties to Mayo, to pick up and move to Rochester.

She thinks DMC needs a homerun with a large company.

“But guess what? That’s not how it’s built. You need to hit a lot of singles. …You need a lot of people like me to hit the singles. That creates the entrepreneurial environment. And I’m trying to get the double. I’m sprinting for the double but I’m kind of in a pickle,” she said.

Raymundo could easily move her family back to the Twin Cities and commute to Rochester for her business. But she wants to be part of the community, including all the ups and downs.

“Because if you’re part of the community, then you’re invested. And if you’re invested, then you really take it to heart what your community’s trying to establish,” she explained.

Rochester Home Infusion Seeking Ground in Destination Medical City- Part 1, Nuts and Bolts

 Photo courtesy of Rochester Home Infusion.

Photo courtesy of Rochester Home Infusion.

Rochester Home Infusion- the only home infusion provider in Rochester, Minn.- brings intravenous (IV) therapies to the patient in the convenience of their home or temporary residence and gets patients back to a normal life as quickly as possible. This four-year-old healthcare startup is revolutionizing in-home patient services in Rochester and augmenting Mayo Clinic care outside of the hospital walls. Now, Founder Joselyn Raymundo says Rochester Home Infusion (RHI) is just asking for an even playing field so they can continue to grow and build upon this city’s strong history of healthcare.

Raymundo herself has a lengthy history of experience in entrepreneurship and just starting something. The Saint Paul native spent several years at Children’s Hospitals and Clinics of Minnesota, where she launched both their Respiratory Syncytial Virus (RSV) and Home Infusion programs. Her vision allowed Children’s to dominate the child-specific home infusion market in the Twin Cities for several years and be a fierce competitor to their main rival, Pediatric Home Services.

Raymundo pioneered the home infusion program at Children’s for eleven years before being courted by Accredo- a Tennessee-based specialty pharmacy- to run their multi-state Midwestern division as well as their home infusion department, called Critical Care Systems.

 Rochester Home Infusion Founder Joselyn Raymundo. Photo courtesy of Rochester Home Infusion.

Rochester Home Infusion Founder Joselyn Raymundo. Photo courtesy of Rochester Home Infusion.

After Raymundo ran Critical Care Systems for about a year and a half, Accredo was acquired by Express Scripts, a massive pharmacy benefit management organization based out of Saint Louis. The focus of Express Scripts was much different than her own; Raymundo felt it was a good time to cut ties with the organization and strike out by herself. She dreamed of launching her own home infusion company for several years and decided the time was ripe.

The stint with Accredo had opened Raymundo’s eyes to the entire home infusion market in Minnesota. She realized that southeastern Minnesota was drastically underserved in this regard.

The breadth of this market gap really struck home one night during some 2AM internet market research when Raymundo came across the old Destination Medical Center (DMC) website. DMC is a massive public private partnership to make Rochester, Minn. a global destination for healthcare and wellness. At the time, the site contained a map of all destinations for medical treatment in the United States. Places like Cleveland Clinic, MD Anderson, Johns Hopkins, and Mayo Clinic. She then mapped all home infusion centers within one hour of these medical cities.

“Pretty much every single one of them had at least five, if not eight, home infusion providers,” Raymundo explained.

All except for Rochester.

People who travel to these centers for their first, second, or even third opinions need to take that tailored expertise back home to continue with their work and life. Home infusion centers serve to “extend that excellence of care really from the hospital to the patient’s home, wherever they are.”

To solve this problem, and bring Rochester up-to-speed with other medical destination cities, Raymundo launched Rochester Home Infusion out of the BioBusiness Center in downtown Rochester in late 2013.

Raymundo and her team of pharmacists and clinicians at RHI work with the patient and their physician to create personalized care plans for in-home IV medical treatment. RHI provides common infusion therapies like antibiotics, magnesium balls, immunoglobulin treatment, and home parental nutrition where it’s convenient and comfortable for the patient.

All the medications are prepared in RHI’s state-of-the-art clean room, right here in Rochester. Treatments are packaged into an ambulatory device that works best for the patient- like a backpack, fanny pack, or other small package- so the patient can medicate at home or infuse discreetly at work or during social events- like proms and weddings- so that patients can continue with their lives as normally as possible.

Without a provider like RHI, transplant patients could spend up to four hours, daily, receiving treatment. This includes traveling from a residence- temporary or permanent- in Rochester to Mayo’s Infusion Therapy Center (ITC), parking, checking-in, waiting, and then finally infusing for two hours.

With RHI, patients instead are set up with an infusion device, which they are carefully instructed by a RHI clinical nurse how to care for and use. Patients can then fill the device with their pre-packaged medication, connect to their PICC line, and are quickly ready to infuse their treatment at home or while they go about their daily lives.

“Being in your own home is a critical part of the healing process that gave us a sense of feeling normal again,” explained one RHI patient.