Who Says Raising Venture Capital Is Hard?
This Clinic Spin-Off, Focused on Regenerative Therapies, is Attracting Plenty of It
Dr. Rahul Aras
President & CEO, AcelleRX Therapeutics
When it comes to the nation's number one killer of both men and women--heart disease and heart failure, which accounts for nearly 30% of all deaths--there is currently no commercially viable cell therapy available. But what if there suddenly was? Just how valuable might that product become?
AcelleRX, a Cleveland Clinic spin-off, intends to find out. The company, founded in 2007, is a product of research conducted by the Clinic's Dr. Mark Penn. In an otherwise brutal market for venture funding, this uniquely promising start-up has attracted about $11 million in funding to date, including $6.9 million raised in October of this year alone.
The field of regenerative medicine, only about a decade old, is mostly built on recent advances in the field of genetics and the use of so-called stem cells, which act as natural therapies in fighting and preventing disease. President and CEO Rahul Aras explained to OVA members at the December luncheon that the company's products are based on manipulating and enhancing the body's own healing processes, or what he called "the body's natural rescue signal. After a heart attack, this process prevents cells in the heart from dying, and even recruits and activates stem cells from around your body, so it acts almost like a beacon, or a lighthouse" in promoting new blood flow through the traumatized tissue. "So our goal is to prolong that signal and reestablish it for a later time." He added: "we're actually able to rescue cells that die after a heart attack," as well as create new blood vessels to spur the healing process.
Possibly even more enticing, however, is the fact that the body's natural regenerative processes are similar across all the organs. As Dr. Aras put it, "the way we fix our heart is very similar to the way we fix our kidney. That means if you have one product (that works), you have the potential to utilize that product across multiple indications. And you can really start to leverage your manufacturing and research capabilities" across a wide range of possible therapies.
The company is supported by a glittering board of directors and advisors. One of the more prominent members is Dr. Roger Newton, who a decade ago co-founded a cardiovascular therapy company, Esperion Therapeutics, which was later sold to pharmaceutical giant Pfizer for $1.3 billion. He's considered a co-founder of what is now the world's most-prescribed cholesterol drug, sold under the brand name Lipitor. Dr. Aras, who holds a doctorate in biomedical research, previously worked for the Clinic's technology commercialization arm, Cleveland Clinic Innovations, where he managed the biotech and pharma areas, negotiating the two largest biotech deals in the organization's history.
AcellerRX's initial therapeutic product, which is expected to be delivered to the heart by means of a catheter, has already undergone animal trials, with human clinical trials slated to begin in early 2009. "We believe we'll have an effective heart therapy for about $2,000-3,000," he said.
Beyond the cardiovascular realm, however, the possibilities are vast. Dr. Aras noted that there is currently no therapy for the prevention of wounds associated with surgery, which opens the door to considering as many as 40 million surgeries each year, in the U.S. alone. "We have excellent clinical data in both heart failure and wound prevention," Dr. Aras said.
"There's a world of possibilities, and we're going to take them one at a time."
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January 9, 2009
Chief Executive Officer
The Union Club
1211 Euclid Ave.
Samuel Gerace, a successful serial entrepreneur, is the Chief Executive Officer of Veritix, a venture-backed state-of-the-art digital ticketing, event marketing, and relationship management solutions provider for the sports and live entertainment industries.
Sam is also the founder of Be Free (Nasdaq:BFRE), a comprehensive Internet marketing information services company processing over $2 billion in annual commerce transactions for leading retail and consumer businesses. He founded the company in 1996, and was CEO, CTO and a Director. Prior to Be Free, Gerace founded PCX Consulting, Inc., which offered custom marketing information systems for industry; and PCX Information Systems, Inc., which offered TERMS direct marketing software to the public-utility industry.
Sam chairs the board of Ayalogic, Inc., an Akron based communication technology provider for game developers, and served on the board of ValueClick, Inc. (Nasdaq:VCLK).
Sam served as Entrepreneur in Residence with Jumpstart, Inc., an Ohio corporation whose mission is to accelerate the growth of early stage businesses and ideas into venture-ready companies. In that capacity he worked with a portfolio of early-stage companies, assisting them through the seed and growth stages.
Gerace earned a B.A. in Biochemistry from Harvard University, and an MBA in Executive Management from the Weatherhead School of Management at Case Western Reserve University.
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Bringing 3-D Animation to Healthcare
Brainwashed Software was founded on the notion that teaching three-dimensional medicine in two dimensions is less than ideal. So the founders, two medical students at Case Western Reserve University Med School, have developed sophisticated animation that blends anatomical and clinical information. "Med schools are recommending a much more visual experience in their curriculum, which is part of what we provide," said co-founder Ken Hilty.
The company plans to initially launch with eight distinct products, including curriculum in the fields of endocrinology and pulmonary medicine, and is seeking $400,000. It has already been awarded a $100,000 matching technology grant from a partnership between Lorain County Community College (LCCC) Foundation Innovation Fund and The Great Lakes Innovation and Development Enterprise (GLIDE).
For more information, contact Ken Hilty, at email@example.com, or by going to www.brainwashedsoftware.com.
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Second Time Around for StaffKnex
StaffKnex is an application services provider that offers web-based tools for scheduling and managing staff in long-term medical facilities such as nursing homes, hospices, assisted living centers and hospitals. It provides proprietary software that helps facilities manage overtime costs and better coordinate care.
Earlier this year, the company presented its plan to the OVA (see April OVA newsletter), but it returned this month to talk about its more refined business model. "The business problem we're going after is labor control, labor optimization. It's 70% of the cost structure of long-term facilities," explained CEO Mark Woodka. "Our answer is to integrate a scheduling solution with a communications platform," thus allowing facility supervisors to manage staff overtime in real time.
The company has been approved for an Ohio Technology Tax Credit, and has received backing from both Jumpstart and the North Coast Angel Fund. It expects to close on a $1 million round of funding possibly as soon as this month.
For more information, contact Mark Woodka at firstname.lastname@example.org, or by going to www.staffknex.com.
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