TOOLS OF THE TRADE
Doctors become innovators
While doing his residency in medical microbiology at University of Toronto, Dr. Paul Lem thought about how he could have an impact on more than just one patient at a time.
“I saw a man from Northern Ontario. His chest X-ray looked like a snowstorm. He had end-stage tuberculosis that had destroyed his lungs,” he said. “If they had an accessible DNA test at the point of care, he would have been diagnosed earlier and it would have never gotten that far.”
They didn’t, so Dr. Lem invented one.
“DNA tests are usually run on big DNA analyzers that cost thousands of dollars and are not accessible — like big mainframe computers. I thought about how mainframe computers gave way to personal computers. I was thinking there has to be some way to get this powerful technology into more people’s hands,” said Dr. Lem, who had left his medical residency in 2002 to use his medical experience to build a company that could have a wider influence.
In 2005, Dr. Lem raised $500,000 from angel investors and cofounded Spartan Bioscience. The Spartan Cube DNA analyzer is the size of a coffee cup and costs about the same as a personal computer. The user collects DNA with a cheek swab, which is put into the device. Results are available in 30 to 60 minutes, a fraction of the time of lab testing.
The Ottawa-based company is backed by strategic partner Canon USA and is seeking additional partnerships.
Right now, the Spartan Cube identifies Strep A, the cause of strep throat; Legionella, the bacterium that causes Legionnaires’ disease; and recognizes whether a person carries a gene that makes about one-quarter of humans more likely to develop Alzheimer’s disease. The company is focusing on gene screening and testing for infectious diseases and food and water safety.
Dr. Lem believes physicians are uniquely suited to be biotech or health-care entrepreneurs.
“When you’re a doctor, you see patients and their families deal with devastating pain and death. That gives you a unique perspective on what really matters and enables you to build technology that can really help people. These new technologies also have the potential to drastically reduce the cost of health care. For example, the Spartan Cube is a fraction of the cost of a mainframe DNA analyzer and doesn’t require technical training to run.”
Dr. Lem is among a growing group of physicians translating medical expertise into health-care startups.
“We are seeing doctors frustrated with the status quo and wanting to do better for the system and their patients,” says Dr. Joshua Liu, co-founder and CEO of SeamlessMD. “Technology is also a reason; the costs are cheaper and we have more resources, making it easier to start a company.”
During his training at University of Toronto, Dr. Liu became interested in how technology could help educate patients and prevent unnecessary hospital re-admissions. He left medicine to develop SeamlessMD, which provides hospitals with an educational app to help patients prepare for and recover from surgery. The health-care team can monitor a patient’s pain or fever or see photos of how surgical wounds are healing. Hospitals using the app include Sunnybrook Health Sciences Centre in Toronto, St. Paul’s Hospital in Vancouver and Rush University Medical Center in Chicago.
Peter van der Velden sees great potential in physician-led startups. He is managing general partner of Lumira Capital, which he says is the most active private venture capital investor in innovative health-care companies in Canada.
“In many cases, physicians have invested their own capital and are heavily engaged, leveraging their work or insights to build a new company,” says van der Velden, adding that the health-care sector in Canada is seeing some big wins. “Half of Lumira Capital’s current portfolio is in Canada, which is a big change.”
Van der Velden points to a $7-million investment Lumira led recently in Edesa Biotech Inc., whose founder and CEO is physician Par Nijhawan. The company develops dermatology and anorectal treatments.
And as Dr. Darren Freed learned, commercialization is the path physicians and researchers must take.
Dr. Freed is a pediatric cardiac surgeon at University of Alberta hospitals in Edmonton and director of research for the Alberta Transplant Institute. His work focuses on finding better ways to preserve organs for transplantation.
“In our research, we didn’t have a machine where we could evaluate how a donor heart is functioning outside the body. So we came up with one. People started asking where to get it,” he said. “It became apparent that to put it into others’ hands, I would have to commercialize it.”
Dr. Freed is president and chief scientific officer of Tevosol, which was founded in 2015. The founders were able to raise $4 million in seed funding in 18 months. Its portable transplant technology significantly increases the number of organs viable for transplant, reducing the wait for transplant and improving outcomes of transplant recipients. It extends the organ’s life by keeping it warm and supplied with oxygen as if it were still in the body.
Dr. Freed, who is still a full-time surgeon, says physicians in business face opposing motivating factors, which is why his team has an extensive business background.
“As a surgeon and academic, you want to get this into everyone’s hands and save lives. But the business people tell me that is not a sustainable business plan,” he says. “Making as many machines as possible with the lowest possible margins doesn’t really work. Where is the cutoff point between ensuring the viability of your business and getting your invention into people’s hands? That’s a hard balance to strike.”
But physicians have one advantage when jumping into the risky startup world. “You may get anxious or nervous. But I’ve watched people die. In my opinion, those are the highest stakes,” Dr. Lem says. To us, maybe “a startup is not so scary. So you run out of money, so you fail. Medicine is really good preparation for being an entrepreneur.”