Key Stats: Biopact on Equifund CFP
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Biopact has been selected as a “Deal to Watch” by KingsCrowd. This distinction is reserved for deals selected into the top 10%-20% of our due diligence funnel. If you have questions regarding our deal diligence and selection methodology, please reach out to email@example.com.
Currently diseases such as Cancer are treated with Chemotherapy or Radiation or both. While these powerful medicines often save lives, the treatment is indiscriminately destructive. Doctors blast patients with poison and hope to kill more of the diseased tissues than the healthy tissues. These patients endure great suffering from the side effects, while waiting to see if the blast of poison killed the diseased tissues.
Recently the FDA approved a groundbreaking cancer treatment called CAR-T. CAR-T therapy, takes the patient’s cells out, equips the cells with better defenses and teaches the cells to recognize the toxic cancer cells, then puts them back into the patient. Once the CAR-T cells are back in the patient they create daughter cells which only attack the invasive cancer cells and not healthy tissues. According to the Cleveland Clinic, 80% of CAR-T therapy recipients experienced a complete or partial remission.
Currently there are two CAR-T therapies approved by the FDA, Kymriah and Yescarta. These therapies are part of a class of treatments called Cellular Medicine. Cellular Medicine is an umbrella term for treating a disease/condition by injecting a living whole cell into the patient. Once back in the patient these cells multiply and fix whatever is wrong. Currently Cellular Medicine therapies have been approved to treat cancer, rare vision loss and spinal muscular atrophy. This is just the start, CAR-T’s application potential is limitless.
But there is always a but, Cellular Medicine is very expensive. It’s two cancer applications cost around $400,000. The application for spinal muscular atrophy costs $2.1 million! This is not a case of pharmaceutical companies gouging customers. It is expensive because each treatment is personalized and labor-intensive.
It takes a team of doctors, in a highly specialized lab, weeks to prepare and grow enough modified cells to transfer back into the patient. The long timeframe is because the current method of cellular vehicle delivery requires “damaging” the cell by altering the cell membrane to insert the cell changes. While this is often done with viruses and detergents, it leads to over half of the cells or as many of 80% of the cells dying in the lab. For this reason, the doctors must culture many cells and repeat the process until enough of the cells survive the alteration process to put back into the patient.
Is there another way to alter the cell without “damaging” it?
BpCT (Biopact Cellular Transport) has exclusive rights and 77 patents to MGMR (Medical Grade Molecular Rebar), one of the first intracellular delivery vehicles. For all of you non-biochemists, BpCT has a microscopic tube which can carry any type of cargo into a cell without damaging the integrity of the cell. By not damaging the cell, the cargo moves into the cell and over 80% of the cells remain healthy enough to put back into the patient.
The current method of getting cargo into a cell results in 20% to 50% of the cells surviving. Utilizing BpCT’s MGMR product over 80% of the cells survive! This translates into a dramatic reduction in the time and manpower to create the cells, and thus a significant reduction in the cost to create the cells. MGMR is cargo agnostic, it can carry any cargo into the cell.
According to BpCT’s CEO, Kurt Swogger, since MGMR is used outside the human body, it does not need FDA approval to be used. MGMR is a tool to deliver cargo. The cargo is what the FDA is evaluating not the tools to get them there.
Mr. Swogger compared the MGMR tool to shovels used during the gold rush. Sure, those who found gold made a lot of money. Those who provided the most effective shovels for those miners, also made a lot of money. Mr. Swogger believes MGMR is the breakthrough delivery vehicle for cargo, in the Cellular Medicine revolution, which holds great promise to significant advancement in medicine.
While the MGMR tool will greatly benefit patients, they are not the customer. MGMR’s customers are scientists who are developing the groundbreaking Cellular Medicine treatments. The Journal of Nature reports, genome-editing technologies hold incredible promise to treating otherwise incurable genetic diseases, “major bottlenecks exist in the
development of efficient, safe and targetable in vivo delivery systems.” BpCT must sell it’s MGMR delivery system to those scientists who are developing the treatments.
Since cellular delivery systems are a major bottleneck to curing currently incurable diseases, there is a lot of activity in delivery systems. MGMR’s largest competitor is the existing method of cellular delivery. Today’s cellular delivery methods have been enough to get two breakthrough CAR-T treatments through FDA approval, resulting in an enormous financial windfall for the owners and investors.
Because the cellular delivery systems do not require FDA approval and the customer is the elite group of scientists working on cellular medicine solutions, it is difficult to assess how many competitors exist. At this moment there is no indication of a viable alternative to the current cellular delivery systems or there would be lots of chatter. There are countless journal articles touting the potential of Cellular Medicine and identifying the current delivery systems as a major roadblock.
Kurt Swogger – Founder and CEO – Mr. Swogger spent thirty-five years at Dow Chemical. He spent his final seventeen years at Dow, as VP of research and development. While at Dow, he was well known for leading the creation of new products, processes, businesses and companies inside Dow. One of his noteworthy accomplishments was to redesign plastic bags, thus introducing zippered plastic bags to the food industry.
Most noteworthy for Mr. Swogger’s current venture is his experience on the board of directors for Univation, a joint venture between Dow and Exxon. While involved in the venture, Mr. Swogger had to protect the intellectual property of Dow against Exxon’s claims. Mr. Swogger reported spending ten years steeped in litigation and filings to protect Dow’s intellectual property.
After his retirement from Dow, Mr. Swogger served on multiple boards before founding Molecular Rebar Design which created Molecular Rebar. Molecular Rebar makes individual carbon nanotubes which dramatically enhance energy storage, rubber durability, coating durability, 3 D printing and medicine. The venture is currently in the market rewarding investors with lucrative returns.
Why We Like it
- Mr. Swogger’s Experience: Mr. Swogger is a seasoned executive with the experience and skills to succeed. He has demonstrated success in developing tools which are essential to commercially successful end products. He not only developed the products, he brought them to market and defended their intellectual property. Mr. Swogger leanly staffed the BpCT team with biotechnical experts. Mr. Swogger will use the funds from this round of funding to add a sales expert to convince scientists to use the MGMR to deliver their cargo to the cell.
- Product: A savvy investor always must ask the essential question, does it work. It does. MGMR is put on the outside of the cell, and the cell basically decides to naturally absorb them. There is no forcing or disruption of the cell. The chemistry of the tubes is enticing and non-threatening to the cell, so it simply absorbs the tube into the cell, thereby peacefully delivering whatever cargo is inside to the cell. This non- disruptive delivery process ensures a dramatically higher rate of cell survival, thus more efficient and lower cost without compromising the integrity.
- Market Need: The excitement over breakthrough medical technologies such as CAR-T cells has been muted due to the astronomical costs. CAR-T is a miracle technology, but only for those who can access $400k+ to pay for the life saving treatment. MGMR can slash these costs in half or more. Dramatically decreasing the cost of CAR-T or any other Cellular Medical treatment will increase its adoption and mass market appeal.
- Patents: BpCT has 77 approved patents on MGMR. 27 in the US. 17 in Japan. 9 in China. 19 in Europe. They have at least 40 more patents filed and in review worldwide. A patent is only as good as the rules the country who issued it, construction and willingness to defend it. Mr. Swogger has years of experience with the resources of Dow to defend patents against the powerful resources of Exxon.
The Rating: Deal To Watch
According to Harvard Business Review, 70% to 80% of a company’s value is in intangible assets such as brand equity and intellectual capital. In the case of intellectual property there are three components. First, as mentioned above, how well does it work. Second, how well is the patent constructed. Third, how to extract value from the product.
According to Mr. Swogger, MGMR works. While I have not reviewed any of the 77 patents, it is probably safe to assume Mr. Swogger learned a lot about constructing effective patents during his time protecting Dow’s patents. The question is whether Mr.
Swogger can lead BpCT to extract value out of its MGMR. If he is not, then it is likely someone else will purchase BpCT’s patents and figure out how to extract value.
Due to the high level of risk involved with biotechnology endeavors, the company is rated a Deal To Watch as an investor must consider his or her risk-reward curve. There is still a significant chance that this product never makes it to market, and thus fails to become a highly valuable business.
However, if trials and implementation of this tool do make it to market for cancer treatments, there is tremendous upside in the business from here.
About: Meridith taylor
Meridith Blank Taylor has spent the past two decades providing strategic guidance to early stage businesses. Meridith has a BA from the University of Pennsylvania and an MBA in Finance from the University of Chicago.