Biotech startup comes to St. Louis for talent and capital; goes abroad for market
Duke Creighton’s degree is certainly a mouthful. But when you have a doctorate in physics with a focus on electromagnetism and a subspecialty in medical applications, questions about one’s envisioned career path come up immediately. Doctor? Physicist? Researcher?
“I wanted to be an artist,” he laughed.
And perhaps he is — of a sort. A few years of college-level art classes may have cured Creighton’s desire to make a living at the easel but it didn’t curtail his need to create. Today, what he has created is Pulse Therapeutics. Housed comfortably in the T-REx incubator in the Railway Exchange Building downtown, the startup is exploring a novel method for emergency treatment of stroke victims by using the power of magnets to help break up blood clots in the brain more quickly.
“The sooner you can get that clot-busting drug to a clot that’s formed in your brain, the better the survival rate and the better chance you have of walking out of the hospital versus going to a stroke rehab center or a nursing home,” said Jim Wachtman, CEO of Pulse. “Time here is brain.”
For startups, of course, time is also money. Like other such companies, Pulse has needed to raise cash, nearly $6 million since its inception in 2009. Much of that investment has been done locally through a Clayton-based group with a backer that has high credibility in the community and can attract cash from others. That’s an important consideration, said Wachtman.
“Otherwise Duke and I would have been out going door-to-door — probably with high net worth individuals — because that’s the stage of the company,” he said. “A lot of venture firms would say it’s a little early for them.”
Wachtman believes the enterprise’s success with investors has been built on the confidence they feel in both the market and the management.
“It’s extremely difficult for a company in the prototype stage to raise money,” he said. “What these investors are backing is Duke because of his experience in this area. They are also backing the disease state because there is clearly a need for a faster help for this type of patient.”
The magnetic field
The type of patient targeted is an ischemic stroke victim. Pulse’s plan involves the injection of microscopic iron particles only a few dozen nanometers across, a fraction the size of a blood cell, which respond to the action of rotating magnets placed outside the head. The magnets will cause motion in the blood that the creators hope will bring clot-clearing treatments to the affected area of the brain sooner than ever before, thus minimizing the damage often seen with debilitating strokes. The iron particles are harmless and easily cleared from the patient’s system within a day.
Magnetism is nothing new to Creighton.
“He’s an expert in the magnetic field,” said Wachtman with a smile. “Pardon the pun.”
But the size of the magnets is a bit of a change. Raised in Virginia, Creighton came to St. Louis with Stereotaxis, a startup that moved to the area while working on a way to use magnets to guide catheters.
The method involved focusing magnetism in a manner similar to how a magnifying glass concentrates light. The result was a product that used magnets the size of jet engines, a far cry from the ten-pound magnets Pulse now employs.
Pulse’s funding and company headquarters may be close to home but their introduction strategy isn’t. Pulse plans to roll out its product next month in two Australian hospitals to develop proof of concept which will help gauge the safety and efficacy of their device. If the rollout meets with the expected success, the next stop will likely be commercialization in Europe, perhaps as soon as 2014. Distribution back home in the U.S. will come later.
The circuitous route points out a challenge common to many startups in the medical field, where a sometimes daunting FDA regulatory process is often a lengthy and discouraging experience with murky, shifting timelines. Europe offers a more stable path where the time and cash required can be estimated with greater accuracy.
“I think predictable is the right word,” Wachtman said. “When you are using shareholder money, you want to make sure that you are taking the best, most predictable path to commercializing a device.”
He said going outside the U.S. first is not an unusual route. For starters, it’s a quicker path to producing revenue sooner. It also provides hard numbers on efficacy for data-driven regulators back home.
“There are a lot of companies that have died in the United States, trying to make it or break it here,” Creighton said. “That’s what a lot of VC’s (venture capitalists) will tell you.”
“When you go through the European process, you know within a few months how long it’s going to take to get approval if you follow all their rules,” Wachtman said. “In the U.S., if you follow all the rules, there’s no guarantee. It might take you three years. It might take you four years. Or it could be 18 months.”
Comfortable home in St. Louis
Creighton and Wachtman are grateful for the help they’ve received locally. Both are transplants to the area who married Missourians.
“If you have a St. Louis wife, you are now a St. Louisan,” quipped Creighton.
And the Gateway City has been kind, they say. Pulse is tucked away 12 floors above the downtown Macy’s in T-REx, an incubator founded last year, that provides low-cost office solutions for tech startups. Short for “IT at the Railway Exchange,” the space manages to seem both professional and freewheeling at the same time with everything from its cute dinosaur insignia to its impressive view of downtown.
According to Wachtman, T-REx really gives a leg up to small businesses like Pulse by providing flexible space arrangements on the cheap.
“You can’t go to a commercial office building and say ‘We’re a start up. Can we get a month-to-month lease?’” he said. “I don’t blame them but that doesn’t make for a good incubator environment. You can’t be spending money on anything except trying to get the right people to develop the right product.”
Even the furnishings came free. The pair simply scavenged from office to office looking for the items they needed. Wachtman compared it to an Easter egg hunt.
Still, he said those empty offices may not be around forever. He feels T-REx, like the rest of the biotech industry in St. Louis, is filling out fast.
“Every day there’s another entrepreneur who is down in an office cranking away on a laptop,” he said.