BioMatrix B.V., a spin-off from the Dutch Technical University of Eindhoven (TU/e), is developing a gel to repair degenerative damage to the intervertebral discs located in the lower spine. The Brabant Startup Fonds is investing €350,000 in this low-risk treatment of back pain. Almost half a million people just in The Netherlands suffer from these problems. The spin-off wants to use the money to complete the preclinical study. According to CEO Bob Guilleaume, this will most likely lead to a pilot with patients early next year.
Wear and tear on the intervertebral discs is a natural phenomenon. The disc becomes progressively smaller with age. This affects the nerves, ligaments and blood vessels in parts of the spine and can eventually cause pain At the moment, patients are first prescribed pain medication and treatment by a physiotherapist. When that fails to help, patients may undergo surgery. The intervertebral disc is then replaced by a prosthetic or the vertebrae may even be fully fixed into place.
No more surgery
According to Guilleaume, this treatment is very old-fashioned. He has been developing medical equipment for the orthopaedic sector for more than 35 years. “An operation involves a lot of risk and recovery is a lengthy process,” he says. A few years ago, TU/e-professor Keita Ito developed a gel made of biomaterial which allows the intervertebral disc to regain its volume. This can easily be injected into the back, Guilleaume states. “As the larger disc brings the vertebrae back to their normal distance between each other, pain subsides fast,” the CEO explains.
“But that’s not all,” he continues. “After a while, the gel is absorbed into the intervertebral disc, which in turn allows the body’s own cells to regenerate.” That process takes about six to nine months. “But we can’t stop the degenerative process. So it could be that over time, the intervertebral discs will become smaller again and the complaints will resurface”. He points out that they haven’t done very much research into the long-term consequences as yet. “At the moment, it looks like we will be able to reapply the treatment.”
In addition, the biomaterial gel is not just exclusively for the spinal treatments. “This can also be a solution for wear and tear on the cartilage in the knee. We might soon be able to develop this further,” says Guilleaume.
Currently, NC BioMatrix is focusing entirely on preclinical research in order to be able to use the gel in the spine in the near future. “A lot of testing has to be done before the gel can actually be used in practice. For example, we will initially carry out biomedical tests with human spines. After that, we will have to do extensive safety trials. Only then will we be able to apply for certificates to use the product on a large scale.” Guilleaume hopes that the pilot with a dozen or so patients can take place in the first half of 2021. He expects it to take another three years or so before it can be used commercially, provided everything goes according to plan.
Early phase financing
A lot of money is needed for the development process. In the research phase, the company does not yet have any turnover. Yet money is being spent, for example on materials and man-hours. “This early funding, when the product is not quite ready, is very difficult to find,” says Guilleaume. Such funding generally doesn’t come from private investors. They often find it too risky at this stage. That’s why there are various public initiatives to support these young companies. The Brabant Startup Fonds, who NC BioMatrix has procured funding from, is one of these. The Dutch province of North Brabant plays a major role in this.
Bringing knowledge to the world
It is important for the province, the university and society that research from the university is further developed into a product. It’s a shame if knowledge is left lying in a drawer gathering dust. That is why TU/e, through their Innovation Lab for instance, supports researchers in setting up spin-offs. Business developers take a look at the business plan and help put together a team.
That’s how Bob Guilleaume got to join NC BioMatrix via their network about 1years ago. “Because of his experience in setting up and running a company, he’s a great asset to any researcher who mainly has substantive knowledge about the product,” says Frank van de Ven, Business Incubation Officer at TU/e Innovation Lab. “It’s nice to see that a spin-off is really gaining momentum on account of his experience.”
Of course, any investment also contributes to this. Van de Ven first assesses whether a spin-off is prepared for that. “We then check whether the business plan is formulated in such a way that it appeals to investors,” he explains. “We then look, for instance, at the justification of the financial requirement. Spin-offs need to be able to accurately outline how much money they need and what they plan to spend it on.”
Subsequently, Van de Ven assisted in drafting applications for funding. “That was really valuable to us,” Guilleaume explains. Each financier has their own terms and conditions. For example, the Brabant Startup Fonds must see a high growth potential and a Brabant-based component. For one thing, the company must be located in Brabant. The fund generally issues loan covenants. The companies must eventually repay the money or convert the loan into company shares. Van de Ven: “Once a spin-off has been accepted by the Brabant Startup Fonds, it tends to attract other financiers more quickly.”
Financial car wash
“The funding of start-ups and spin-offs should be seen as a kind of financial car wash,” Van de Ven explains. “They often start out with subsidies, which are generally not very large amounts of money. This is followed by loan covenants, like that of the Brabant Startup Fonds.” These are called soft loans because the fledgling companies are often given the opportunity to develop further before they have to repay the loan. “After that, when the product is almost ready to enter the market, start-ups or spin-offs start selling shares to large investors. This frequently involves huge sums of money.”
It is a complicated world where it is important that you know your way around. “Without the contacts at the various funding bodies and the university’s expertise on how to tap into them, we wouldn’t have had any luck in getting this funding,” Guilleaume says. “Partly because of this, we will be able to help so many patients with more effective treatment in the future.”