BIOFEST INVEST APPLICANT

NovoThelium

Company Contact:

Legal Entity Type: LLC

Company Type: Biotechnology

Company Stage: Development

No. of Employees: 3

Desired Financial Amount: 300,000

Background

Company Background

NovoThelium was founded in October of 2015 by Bioengineers, Lauren Cornell and Bianca Cerqueira. Personal experience with familial breast cancer and a significant market gap in women’s nipple-areolar reconstruction inspired these budding entrepreneurs to apply their translational mindsets to finding a solution. NovoThelium holds a patent on their acellular nipple-areolar technology, has performed two successful small animal studies, and is primed for significant investment and market launch opportunities upon validation of our technique in a large animal model. We have been internationally recognized for our innovation and have developed relationships with France and Switzerland to expand our company globally once we prove efficacy in the United States.

Management

Lauren Cornell holds a Ph.D in Translational Science and a M.S. degree in Biomedical Engineering from the University of Texas Health Science Center at San Antonio. She has a B.S. in Genetics from Texas A&M University. Lauren began her career in science at the University of Oxford studying evolution and later moved on to focus on tissue engineering in the areas of materials development, nanoparticles, and guided nerve growth. She is principal investigator on a corneal graft replacement research project at the United States Army Institute of Surgical Research (USAISR), where her research has focused on tissue engineering methods, stem cells, decellularization and sterilization methods of multiple tissue types, animal models and surgical techniques. Bianca Cerqueira holds a Ph.D. in Biomedical Engineering and a Certificate in Translational Science from the University of Texas Health Science Center at San Antonio. She has a B.S. in Physiology and Neurobiology from University of Maryland and is an American Association of Tissue Banks Certified Tissue Bank Specialist (AATB CTBS). Dr. Cerqueira has research experience in project management, in vivo research protocols including IACUC and IRB submissions, with a focus on preservation of hypoxic cells and tissue. Shatha Dallo holds a Ph.D. in Immunology from the State University of New York and a B.S. in Biological Sciences from the American University of Beirut in Lebanon. She was formerly a Biomedical Engineering Fellow at University of Texas at San Antonio with 6 years of experience in translational biomedical research. She transitioned to industry in 2017 and moved from Senior Scientist to the Director of Research for Crown Scientific and CSO of NovoThelium. She has extensive background in moving products from the laboratory into the clinical setting. Haleigh Van Horn holds a BBA in Accounting from Texas A&M University as well as a MS in Accounting from Texas A&M University. She was a Senior Audit Associate with KPMG, Manager of Regulatory and JV Reporting with Plains all American and is currently the Financial Reporting Mangers with SiEnergy.

Board of directors

Our team is comprised of a full executive team, advisory board, and plastic surgery advisory personnel. Of note, Mr. Dennert Ware, previous CEO of Kinetic Concepts Incorporated (KCI), has joined our advisory board and has significant experience in launching products and promoting company development. He will aid in our commercialization pathway, contracts, and business expansion. Lynda de la Viña, Ph.D. is the Peter Flawn Professor in the Department of Entrepreneurship and Technology Management and the Director of the Center for Global Entrepreneurship at University of Texas at San Antonio. She was an inaugural member of the advisory committee for the State of Texas Emerging Technology Fund, a $200 million fund created to foster innovation, research and job creation in emerging high-tech industries. She has co-founded several companies including Operational Technologies Corporation (OpTech) and Pronucleotein Biotechnologies in San Antonio, TX. Paul Gallagher, MBA is currently the C.T.O. of Applied Materials. Gallagher has successfully created and led teams that are responsible for finding and winning new large volume markets for novel sensing technologies and applications. He has developed the business and resourcing plans as well as scenario analysis, gaps, positioning, pricing models and justifications. Our plastic surgery board consists of Dr. Curtis Cetrulo of Massachusetts General Hospital at Harvard University, a nationally renowned surgeon and key opinion leader, as well as surgeons from other prominent institutions throughout the US. Advisory Board Members: Lynda De La Vina (UTSA, Peter Flawn Professor), Paul Gallagher (Applied Materials, C.T.O.), Dennert Ware (Texas Business Hall of Fame Legend), Curtis Cetrulo, M.D. (MGH)

Product / Service

disease area / application

Nipple Reconstruction – This product would be indicated for patients with nipple loss due to surgery (such as mastectomy), trauma, or congenital malformation.

product / Service

Nipple areolar tissue regeneration is a much-needed area of research that would have a monumental impact on society. Patients often report not feeling “complete” or “whole” upon the loss of their nipples after mastectomy. This devastating psychological impact is well documented by numerous publications. Reconstruction options today are limited to recreating the appearance of the nipple through a surgical skin flap, first introduced in 1946, which requires a tattoo for desired pigmentation. All surgical flap reconstructed nipples will flatten by 50-75% over 2 years. In approximately 10-15% of reconstructions, the nipple will lose all projection. Only 13% of all patients were totally satisfied with their reconstructed nipple-areolar complex. Factors that may negatively affect projection include external pressure on the reconstruction, poor surgical design, thin skin and dermis, and lack of subcutaneous fat. The nipple is a site of specialized epidermis since it is glabrous, associated with a unique gland, has distinct patterns of epidermal stratification, and expresses unique differentiation markers that are not present in trunk epidermis/dermis. The nipple has deep infolding of the epidermis into an extensive papillary dermis with fine collagen bundles. The human areola has similar invaginations of the epidermis, although less dramatic. The human nipple-areolar complex is more pigmented than surrounding skin with melanocytes abundant not only in the epidermis, but also in the basal layer of the sebaceous gland and lactiferous ducts. It is thought that the growth factor environment of the NAC tissue promotes melanocyte survival in areas where they are typically not found. To date, there are no acellular nipple-areolar transplants on the market. While the concept of acellular human dermis in reconstruction is not novel, it is in the field of nipple-areolar reconstruction. This however gives us the advantage of penetrating a market that is already educated on the use of acellular products and their reimbursement. Our product, will not only enable women to have a more permanent solution to nipple loss after mastectomy but one that can also be easily incorporated into the existing medical infrastructure for patient use. Although this work focuses on the nipple-areolar complex, our methods can be applied to other types of specialized epidermis/dermis such as urogenital grafts and palmar tissue. The removal of cellular components from native tissues leaves behind a complex protein matrix, designated extracellular matrix, which can provide cells a combination of cues that closely resemble the in vivo environment in vitro. Studies suggest that superior function and complex tissue formation occur when ECM scaffolds are derived from site-specific homologous tissues compared with heterologous tissues.

technology / ip

All current methods of nipple reconstruction only recreate the appearance of a nipple. We are developing a novel method for nipple-areolar complex replacement by utilizing a tissue engineered, acellular extracellular matrix scaffold created from human nipple-areolar tissue, to enable the patient to regenerate an anatomical nipple made from her own cells. By using an extracellular dermal matrix derived from human nipple-areolar tissue, we can maintain the unique structural and growth factor environment of the nipple-areolar complex. We have been awarded a patent on this innovation, the idea of which was polished through two NSF I Corp awards.

distribution channels

Direct sales to plastic surgery offices/hospital purchasing groups through medical sales representatives. We will aid with health insurance reimbursement with suggested CPT (procedural) and HCPCS (product) billing codes. We will also work with Group Purchasing Organizations, working with advocates for our technology, to have our product supplied in hospitals throughout the nation.

market size

Our customers are reconstructive plastic surgeons and their patients seeking nipple reconstruction. One in eight women will have breast cancer in her lifetime. According to the American Society of Plastic Surgeons in 2020 there were 228,401 breast reconstructions by ASPS affiliated surgeons, and 63,746 mastopexies in reconstructive patients, which is a 75% increase compared to 2000 statistics. Nipple reconstruction trends vary regionally, with reported values of 35% in Massachusetts, 95% in San Antonio, TX and 50% in Houston, TX. Our matrix can be applied to current or past nipple reconstructions opening our market to pent up demand from previous reconstructions. Additionally, our product can be applied to patients who previously underwent reconstruction and are seeking an improved nipple replacement option expanding the potential market to 1.2 million breast cancer survivors in the US alone.

competition

Silicone nipple prosthesis: Prostheses do not require surgery and are relatively inexpensive ($18-760), however they are not permanent, require daily or weekly application, and lack sensation. Tattoo: Tattoos are also used to recreate the appearance of a nipple. They can be used in conjunction with a surgical flap, or alone to match pigmentation of the nipple-areolar complex. Artists with expertise in 3D tattooing can create a highly realistic nipple with the illusion of projection. However, tattoos lose pigmentation over time and some individuals have inflammatory responses to the pigments, particularly the color red. Nipple tattoos range in cost from $200-800 per nipple. Surgical Nipple Reconstruction: Surgical skin flaps can be used to recreate the appearance of a nipple. Skin from the breast or skin grafted from elsewhere on the body is cut and sutured together to create a “nipple”. A major disadvantage of this technique is nipple flattening due to retraction forces of the underlying tissue and contraction of scar tissue. To address this, surgical flaps may be augmented with autologous tissue such as cartilage or fat, alloplastic substances such as dermal fillers, decellularized pig tissue formed into a cylinder, or acellular dermal matrix rolled into a cylinder. Despite augmentation, nipples reconstructed by surgical flap still lose projection. Total cost for surgical flap nipple reconstruction is $6-9k per nipple. Additional surgical options include nipple sharing, where in the case of unilateral mastectomy, a section of the contralateral nipple is removed and transplanted to the other side. Technology in Development: Tulane University has developed a nipple-areolar graft from rhesus macaw nipple tissue. They are moving forward to translate their methods to human nipple-areolar tissue. They have a patent filing titled “Surgical grafts for replacing the nipple and areola or damaged epidermis” which states that a subsequent tattoo will be required for desired pigmentation. NovoThelium enables patients to regenerate a nipple made from their own cells, instead of just recreating the appearance of a nipple, like current reconstruction techniques. There is no product or method currently available in the market to regenerate the nipple-areolar complex. We are the first to develop a tissue engineered nipple-areolar complex from human donor tissue and the only product which maintains the microstructure necessary for natural re-pigmentation.

Financials

Desired financial amount

300,000

previous funding

$6,000 – Founder’s Investment, $5,000 – National Science Foundation Innovation Corps Award at MD Anderson, $40,000 – Donation from Lester Smith Foundation, $5,000 – 1st place Women’s Startup Pitch Competition, $5,000– 1st place UTSA CITE Business Model Competition, $500 – 1st place Tissue Engineering and Regenerative Medicine International Society Business Plan Competition, $3,000 – Rice Business Plan Competition Finalist Chevron Technology Ventures Prize, $10,000 – Rice Business Plan Competition Spirit of Innovation Prize, $25,000 – Texas Business Hall of Fame Best of Texas Prize, $700 – Venture Challenge Audience Choice Award, $20,000 – 1st place Venture Challenge Award, $10,000 – Texas Venture Labs Investment Competition, $50,000 National Science Foundation Innovation Corps Award at Midwest Node, $6000- 2nd place Women’s Business Enterprise National Council, $75,000 – MassChallenge TX Platinum Award, $42,000 – Private donations, $3,000 – 2019 Texas A&M New Ventures Challenge 3rd Place Elevator Pitch Award, $4,000 – 2020 Texas A&M New Ventures Challenge 2nd Place Elevator Pitch Award.

current financials

Like many other companies, we have made several financial modifications to reduce our burn rate during COVID. Our current monthly expenses approximate around $500-$1,000/month excluding major planned experiments. Our available cash is less than $10,000, however, we have managed to complete significant traction with our company, securing a patent and performing two in vivo experiments, with minimal financing and hope this will provide “proof of concept” for interested investment parties that we can achieve our company goals, especially with the proper resources. We have been invited to submit an SBIR to the NSF and are currently preparing for a Friends and Family Round.

financial use

We intend to use the funds to secure our International Patent application, as well as to pursue contracts for packaging, sterilization, and shelf-life testing of our product. Meeting these milestones will enable us to start working with our clinical partners to test our product for efficacy in a human population.

revenue

While our company has no significant revenue to date, our reimbursement strategy is fairly clear. Our product will be sold directly to plastic surgeons or hospital purchasing groups who will either bill the patient prior to surgery (private pay) or seek reimbursement through the patient’s health insurance. In 1998, the Women’s Cancer and Health Rights Act was enacted and mandates that health insurance companies must cover breast reconstruction following mastectomy, including nipple reconstruction. There are existing reimbursement codes for nipple reconstruction that can be used for our technology including CPT 19350 Nipple Reconstruction and CPT 15777 Implantation of a Biologic Implant. HCPCS codes reimburse for products used in surgery and HCPCS code Q4100 is already in place for the reimbursement of skin substitutes. However, we will pursue our own brand-specific HCPCS code to establish a reimbursement rate specific to our product. To the best of our knowledge, our product is regulated by the FDA solely under Section 361 of PHS Act according to 21 CFR Parts 1270-1271 as a tissue product and does not require FDA premarket review prior to sales, reducing cost and decreasing time required to get to market. However, our product must be processed in accordance with Good Tissue Practices and the American Association of Tissue Banks Standards. We plan on using a contract manufacturer that is AATB accredited for our clinical testing and for our product launch. We want to demonstrate market demand before investing capital in major infrastructure. Further, we have submitted a TRIP application to the FDA to clarify our product designation.

exit strategy

While we have had interest in acquiring our company, we have been told we will need to be on the market before any potential acquisitions can occur. To that end, we have partnered with tissue procurement and testing organizations to acquire nipple-areolar tissue from donors. The tissue is shipped to us and then processed to create our matrix. As we expand, we plan on using a contract manufacturer that is AATB accredited for our clinical testing and for our product launch. We want to demonstrate market demand before investing capital in major infrastructure. We will seek licensing, merger, or acquisition involving a company such as LifeCell, a world leader in acellular dermis with their AlloDerm product, which is commonly used in breast reconstruction. Other companies that may be interested in our company are Mentor, Ethicon, Synthes, and Covidien who are all involved in regenerative medicine or breast reconstruction markets. To date, we have spoken to the VP of Purchasing at Bristol Myer Squibb and a representative at Mentor for potential acquisitions upon market penetration. We have also had parties interested in licensing our technology, specifically a Florida based tissue bank. However, we would like our technology to be further developed before pursuing any licensing agreements.

Pitch Video

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