One of the nice things about being in San Diego is the diverse community of startups we have in the life sciences. One such startup I’ve been following for a while is Nanomedical Diagnostics. They’re developing a graphene-based label-free detection platform with many potential applications in the life sciences and diagnostics markets. I recently sat down with their CEO, Ross Bundy, to learn more about their technology (covered in this post) as well of some of the trials and tribulations of starting up a company in San Diego (to be covered in part 2 of the interview).
Shawn Baker (SanDiegOmics): Can you give me a little background of what Nanomedical Diagnostics is about?
Ross Bundy (Nanomedical Diagnostics): The company was founded initially by my co-founder and I, as we were discussing ideas and things we wanted to do. We started getting calls from people in the Lyme disease community around some academic work that my co-founder Brett [Goldsmith] had published using a sensor with carbon nanomaterials to directly detect the pathogen for Lyme disease. While he’d done a bunch with things like prostate cancer and anthrax and bunch of other things, this is the only one where doctors in the community called him up and said “Hey, I read your paper. Where do we buy this? This would be great.” So we were like, hey, you know, the market is validating what we want. Here’s an interesting use case. Let’s give it a shot. And so we founded the company with an intent to go towards diagnostics. Both he and I also had a desire to do something that, beyond building a sustainable business and commercializing a technology, we thought had a really tremendous and far-reaching potential, but also had broader humanitarian values. We’ve always had this vision towards diagnostics because it directly helps people get better. Lyme disease turned out to be an interesting market for us because diagnostics is really the core problem. A better diagnostic would directly affect patient outcomes and make people get healthier. We started there. We decided to work with this nanomaterial, graphene. We spent a year bootstrapping the company, really just understanding our plan going forward. We didn’t really want to raise too much money and put people at [financial] risk until we had a sense of where the hardships and milestones were that we’d have to cross. We learned a lot and realized that graphene as material was going to be core to making the sensor work and there is no industry around it. So we were going to have to build that – that’s the first challenge. Second, the FDA was not nearly as scary as we thought. Especially if you’re open and up front and work with them, they seem to be very collaborative. So that was a good finding. Insurance was going to be a really hard challenge – that’s the third finding. And then fourth was having to build a graphene sensor. There’s an element of validation because it’s such a new technology to make a diagnostic work. And also in order to scale this and get to the cost levels that would make this a sustainable business while we’re selling the diagnostic, we needed to step our way towards that. And so we made a decision to start really in the life science community and to focus on areas and problems where we could add value and bring some unique capabilities. And that’s really served two ways. One is you bring a product that has some unique value to the customers, but, in return, our customers start stretching the boundaries of the technology beyond what we understood. Our customers do more interesting biology on our chips than we do. We learn from that. We talk to them, we help them figure it out. And that has informed us in terms of how we approach some of the nuts and bolts aspects of the biology of how we think about new surface chemistries, new blocking, about ways to make assays more robust, more efficient. And that directly translates into our diagnostic work as we move towards a future in diagnostics. We’ve also learned that there are a lot more opportunities in the life science market, so we’ve made it a core mission to solve problems in the life science world. [We want to] build on that customer community and user community to have a better diagnostic product and put that more towards our long-term vision. By doing that we think we have a better shot at being more successful with diagnostics as well. So that’s the quick and dirty history of us as a startup trying to balance [several competing factors]: how do we scale, balance the needs of building value for investors, meet our customers’ for investors, meet our customers needs, and build a community of users to validate what we do. Given some of the big issues in diagnostics and startups in the last couple of years we felt that validation from the scientific community was going to be critical, rather than being secretive. In the current environment we thought that was a better way to go.
Shawn: Tell me more about your technology. What is it you’re building and how is it different from what was available prior to your start?
Ross: We’re able to directly integrate biology and electronics into a single system. What I mean by that is that if you actually drew an electrical diagram of our chips, the proteins and the biological samples would have a place on the electrical diagram – they’re part of the electronic circuitry. That allows us to measure biology, bio interactions, changes in proteins, changes in different molecules, in a way that’s entirely electronic. Therefore, you’re gaining the advantages that electronics have brought to so many industries, but has really been missed in the life science industry. A lot of instruments today are big steel boxes that have lots of optics and flow cells, mostly because biology is very corrosive and very destructive to electronics. So you have to bridge them and that’s usually through either optical methods or temperature methods or things like that. But you don’t think about directly putting a circuit into biology and measuring it electronically. But that’s what we’re able to do. And we’re able to do that primarily because of some of the advances in some of these new nanomaterials like carbon nanotubes and graphene. These materials are unique because they’re carbon, but they’re conductive. By being highly conductive, like copper or silicon, you can do a lot of things electronically with them, but they’re different because they can be directly exposed to biology and still remain stable. You wouldn’t have been able to do what we do with the silicon transistor because the silicon would interact with the oxygenated environment and destroy the transistor, so you’d have to have all these protective layers which then reduces signal and then you get nothing meaningful. These carbon nanomaterials allow you to directly couple. We actually covalently link proteins and aptamers, and a variety of different biomolecules, and directly integrate them into the electronic circuitry through transistors made out of these carbon nanomaterials. That gives us this unprecedented level of sensitivity and understanding of what’s happening at a biological level, at the transistor level. And it’s something different. Some people look at what we do like it’s electrochemistry, but it isn’t even that. It’s kind of a next step. We’re actually measuring it. There are no charge interactions, there’s no charge transfer. That’s part of what drives a circuit. But other things that drive changes on the system are conformational changes of proteins, motion of the proteins, motion of DNA – all these sorts of different things that might happen biologically that drive interactions but couldn’t be picked up in an optical environment or electric chemical environment or temperature environment. All of those get picked up on our system.
But the instruments are circuit boards, so they’re very simple. You gain all the advantages of miniaturization, parallel processing, and automation, in terms of analysis by being able to directly link it to the biology and not have to translate it through a bunch of different steps like [you would with] optics. And then there’s miniaturization. Our instruments are small and we can make them even smaller – that’s on our roadmap. That allows for new use cases like handheld and disposable, which would be very difficult to do with much more complex instruments.
Shawn: Over the years there has been a lot of interest in graphene. Are you the first ones who’ve been able to actually translate this into a life science detection instrument?
Ross: There are a few companies that have commercialized graphene in a powder form that goes into material where you’re gaining some sort of material strength properties similar to what we do with carbon fiber, but we are the only company in the world that has any sort of electronic product using graphene and we’re the only ones that are even remotely close to that. I would say that’s a core strength for us. So why were we successful with that? A lot of that has to do with [the team]. Brett and I as founders and then some of the team we’ve brought on that have come out of the graphene world, our perspective is very different than what is common in the graphene community, which is very academic. They’re looking at different scientific properties and features of the system. That’s good for publications, but it’s not good for a company. Our focus from the beginning was batch-to-batch consistency and high yield rates, which is not something that’s academically publishable, but it’s critical to make a successful company. So we started right from the beginning thinking about how are we going to package a product. There are some other companies out there that are trying to produce a graphene sensor. The way you read out those sensors, though, is you put it on an electronics probe station. It will be on a wafer, and you’re maneuvering needles on each transistor. That’s never going to work in a bio lab environment. So we’re trying to think about what does an instrument look like product-wise that fits in a bio lab environment and how do we produce these at scale? And that changed everything that we thought about graphene as material. And that changed everything we thought about sensor design. And how you would use the sensor with a common biological protocol as opposed to an electronics protocol. That’s really where most of the graphene world is thinking about – how you would use this an electronics lab and not thinking about how you’d use this in a bio lab. We tend to focus on very different things. We had to spend a lot of time defining quality assurance. How do we look at our transistors and eliminate bad ones in terms of what makes a good sensor, which is a very different way than in terms of how people [typically] measure graphene. We look at different optical qualities and different electrical qualities. How we measure that really correlates back to the final product and what creates a consistent consumable chip. Our design is where a lot of our IP is – we’ve actually patented around designs. It’s very different than what you see in academia. Most biologists are not going to be doing protocols where you have to account for changes in pH and changes in salt content that would affect most electronic systems. Our design automatically accounts for those things and allows a biologist to work in the buffers that they would use – in serum, in different levels of pH. We’ve done everything from pH 2 to 12. We’ve done it with different salt contents, we’ve done with all these things that are more common in a bioassay and gotten the same results from the sensor because the sensor is built to deal with those things so the biologist doesn’t have to. They’re just working with their experiments. It’s really more of an eye towards our end consumer, which is the biologist, and not building it the way we would think about it, because we’re a bunch of electronics guys.
Shawn: Speaking of the consumer, who are the first people who are really wanting to use this device that you’re building?
Ross: For our first instrument, while we do have some aspirations towards diagnostics, we did decide to start in the life science community. We found a need in the pharmaceutical world. Pharmaceutical development is getting more and more expensive. It’s difficult to suss out what are good drug candidates at the early stages and eliminate bad ones so you’re only sending through good candidates to clinical trials, which was where things get really expensive. They want to get the best candidates in the clinical trials and optimize those expenditures and that’s not been happening as effectively, particularly with small molecule drugs, some peptide drugs and then some other very common drug targets like GPCRs. And there are some unique advantages with our sensor with small molecule drugs, with GPCRs, with smaller types of drugs, engineered drugs like peptides and things like that. That’s our core focus – people working with those drugs at the early discovery phase, pre animal trials, trying to sift through all the different potential drug candidates to find the best one that they would then move forward with in a clinical trials program. The current tools that they use for that are optical based. They use other techniques like SPR and BLI. Those are pretty good for antibodies, so while we have a couple of antibody customers, our main focus has been small molecule therapeutic developers in the lab screening through candidates to try to find the best drug candidates as they move on to clinical trials. That’s been our core focus. Due to the approachability of the technology, primarily they’re using it for a yes/no binding to understand what’s happening there; troubleshooting assays because biochemically it’s simpler than a lot of the assays they use. And then in some cases it is a real time kinetics assay, so you can actually generate affinity measurements and do affinity ranking, even though with single throughput it’s a little slow. But people will also use it for developing kinetics as well for some of their drug candidates. So those are the main use cases and the main customers.
In part 2 of the interview, Ross will share some details of the plusses and minuses of starting up a company in the “high tax, high tech” state of California, as well as some specific advantages about being based in San Diego.