Ned Swanson and Denver Lough were plastic surgery residents at Johns Hopkins when they made a choice that would change the course of their lives – they decided to drop out and start a business.
Lough had a technology that they thought could help patients if it ever made it to the market, but their intensely busy schedules at Hopkins didn’t allow for a side project to grow into something bigger.
“To go down the academic road, get grant after grant, write paper after paper, it’s never going to make it to these patients that we’re trying to treat every day,” Swanson told Drug Delivery Business News.
“There are tremendous resources that these universities, especially a place like Johns Hopkins and there’s really a tremendous opportunity to collaborate and work with very intelligent people that are very innovative but in terms of developing technology towards industry and commercial use, it becomes extremely difficult. It becomes even more difficult when you’re talking about being an academic surgeon.”
Leaving a residency at any institution is a life-altering decision, since most places do not allow re-entry. But Swanson and Lough decided to hedge their bets on a technology that they believed could change the lives of the patients that they were treating on a daily basis.
“We really felt after looking at it backwards and forwards as many times as we could, this technology was never gonna make it to where it needed to go without people who understood the technology and the patient populations it could help, leading the charge and building it,” Swanson said.
The two surgeons planned a series of meetings with venture capital firms during their vacation time, hoping to convince someone to invest in their technology. Swanson decided to call up an old friend from college, John Stetson, to help them fine-tune their pitch.
It wasn’t long before Stetson called Swanson and told him to cancel all of his meetings – Stetson worked closely with Dr. Phillip Frost, a serial biotech founder and dermatologist, and he thought Frost would be interested in taking a look at their pitch.
Before they knew it, Lough and Swanson were inking a deal to merge with Frost’s publicly-traded company, Majesco Entertainment Company.
When the merger finalized earlier this year, PolarityTE formerly launched into the regenerative biotech space.
“We felt that it really put all our cards on the table just like we were doing with our careers and leaving residency and leaving behind academic surgery,” Swanson said. “We felt launching publicly put all our cards on table, in terms of what this technology was worth and what it could do.”
And the market responded. When the companies merged, shares were trading around $3 apiece. The company yesterday closed at $24.28 per share.
“We kind of hope to build a company in a different way, in a unique way that people haven’t seen before,” Swanson explained. “I think the biotech world has needed the leaders of the company to be coming from the field that they’re trying to treat.”
The young company has attracted a number of influential players to its leadership. Most notably, PolarityTE was able to recruit Dr. Stephen Milner as chief clinical officer following his resignation as former chief of burn surgery at Johns Hopkins.
And Stetson, Swanson’s old college friend, now works as the company’s CFO.
Lough serves as chief executive, while Swanson is COO. Having the technology’s pioneers in the C-suite was an important part of forming their company, Swanson said.
“It’s just not seen in any other industry and we wondered why in one of the most complicated fields and industries in existence, is management leadership in the companies being built around it, not from those fields,” he said. “No one questions Marc Zuckerberg or Bezos or these dry tech founders, Bill Gates, being at the top, they would find it odd if those guys weren’t.”
“We’re just basically saying why aren’t the leaders of new startup biotech companies from medicine, from science, as opposed to business minds trying to understand the science and the medicine behind it,” he added.
The tiny Utah biotech made a splash earlier this year when it hit a milestone long sought after in the regenerative medicine space – they were able to regenerate skin in an pig model.
This work is the foundation of PolarityTE’s first product: SkinTE. The product has been registered by the FDA and the company is in the midst of planning a limited product release.
Here’s how it works: when a patient with burn wounds comes to the hospital, their provider can use the SkinTE kit to harvest a full-thickness skin sample which is then packaged into a cooling system and shipped overnight to PolarityTE in Utah.
The next morning, the company will process the tissue and send it back to the provider. The product arrives at the provider in a syringe, looking like a paste. The provider can then apply the autologous skin tissue product directly to the patient’s wounds and apply dressings just as they would for any other skin graft.
In the company’s studies, PolarityTE has seen that the SkinTE product produces full-thickness skin that grows hair and has features like sweat glands and sebaceous glands.
“Under the microscope, the regenerative skin looked like native skin,” Swanson said.
The skin even has rete ridges, waves that project downward from the epidermis, which are critical for the skin’s strength.
“You can’t just overlook little elements like that,” Swanson said, pointing towards other models of regenerated skin, which usually have laminar interfaces that slide and sheer easily.
PolarityTE isn’t the first company to try to regrow a patient’s skin, but Swanson thinks their company’s technology is different because they approach regeneration differently.
Instead of isolating stem cells and growing them on a scaffold with a cocktail of growth factors, the company built their technology around what they call a minimally polarized functional unit, or MPFU. Swanson explained that a MPFU is the smallest unit of tissue that maintains all of the complex components needed for regeneration.
“We don’t break it down into single cell suspension. We keep cells interacting with each other. We keep them interacting with the extra cellular matrix. We let the growth factors that they are secreting to each other and to themselves. We let all of that stay intact to some degree,” he said.
Now that its first product is registered with the FDA, PolarityTE is working to build out its manufacturing capabilities and develop other products.
Swanson said the company sees its technology as a platform and has already begun working on other applications, like its bone regeneration OsteoTE product, which is in large animal pre-clinical trials.
The company is also readying for a pilot study of SkinTE, designed to compare skin grafts with PolarityTE’s technology. Every patient enrolled in the study will have a portion of their wound covered with SkinTE and a portion treated with skin grafts, Swanson said, allowing the company to directly compare the healing capacity of their technology with the standard of care.
“That’s why that study is being put in place,” he said, “to really start generating right out of the gate high level evidence and things that we can hopefully point to, to convince surgeons and patients, healthcare facilities, hospitals and insurance companies that this is the real deal.”
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