Thirteen years ago Greg Altman, president and CEO of Serica Technologies Inc., blew out his knee playing football. After reconstructive surgery on his ruptured anterior cruciate ligament, the former All-American at Tufts University found the rehabilitation process so challenging that he set out to develop an alternative.
That led to the 1998 founding of Tissue Regeneration Inc. (later renamed Serica), which sought to commercialize Altman’s doctoral work in biomedical engineering. Although its initial focus on developing a tissue-engineered ligament from adult stem cells didn’t pan out, the company was able to shift gears and examine the potential of silk-based biomaterials. In late 2008 the company won 510(k) clearance from the Food & Drug Administration for its SeriScaffold, a silk-based surgical mesh designed to repair and remodel damaged connective tissue, avoiding the erosion and scar formation that can result from surgery.
MassDevice spoke with Altman about leveraging a platform technology to address multiple unmet clinical needs, the importance of strategic marketing and creating a “learning organization” and the potential impact on innovation of a proposed tax on the medical device industry.
MassDevice: Serica makes silk-based tissue repair products. Can you give us a little background on the company’s origins and where you stand today in terms of your product pipeline?
Greg Altman: Serica was founded on the premise of finding a replacement for anterior ligament repair. The goal was to create an off-the-shelf tissue scaffold that would support ligament regeneration following surgical repair. The goal of the program was to avoid some of the long-term consequences associated with what is in the field referred to as autograft reconstruction, where you harvest healthy tissue from one part of the body to heal, repair or replace damaged tissue in another. So it’s the same as robbing Peter to pay Paul. We would like to keep all the healthy tissue in place and instead provide a external solution made from the bio-engineered silk that Serica has been developing for the past five years.
One of the competitive advantages we have is that we combine an engineering talent with a very unique and in-house manufacturing process that is totally within our control. That has been one of the key elements that has sustained us. Having manufacturing integrated with research and development and engineering has been critical for us.
We’re dealing with a natural product. We are essentially improving its ability to interact with the body following implantation. The ultimate goal is so that the body can actually begin to use the physical and mechanical properties of the scaffold to stabilize the repair area while the body is able to engage its own regenerative processes to recreate the damaged tissue.
Those regenerative processes are designed to recreate and remodel tissue. The beautiful part of the process is that in order to get new tissue to develop and remodel the body is simultaneously engaged in biodegrading the silk scaffold. That’s one of the key advantages of silk, in that it’s a natural, protein-based polymer made by silkworms. So at the end of the day it breaks down into essential amino acids that the body is able to digest readily.
MassDevice: On a personal note, how did you get into the medical device arena? What do you like about the industry — what makes it a good fit for you?
GA: Medical devices occupied a very personal place in my life as I underwent anterior cruciate ligament reconstruction and utilized my patellar tendon, or the middle third of my patellar tendon, to reconstruct my torn ACL. That surgery happened to occur somewhat prior to my endeavors in graduate school in bioengineering. I tore my ACL playing football. I had a plan to go into grad school and while in grad school I began an interest in why my knee hurt.
It was the perfect marriage between understanding an unmet clinical need and then at the time having access to the internationally recognized researchers at Tufts University who began to introduce me and some of the co-founders of Serica to the abilities and potential of tissue engineering. I’m the founder and there is David Kaplan, who is currently the chair of the biomedical engineering department at Tufts University, I consider him a co-founder, and John Richmond who is currently the chairman of orthopedics at the New England Baptist Hospital. John was actually the surgeon who reconstructed my knee and he also held joint appointments at Tufts Medical School. Together we set out to see if we could address the unmet clinical need, which is an off-the-shelf scaffold that could allow the body to regenerate native ACL tissue.
MassDevice: Where do you stand as far as your regulatory path is concerned?
The clinical trial path in the United States is a long, drawn-out path, so we are still in need of performing our pivotal clinical trial that would lead to the ability to commercialize the product in the United States. So that is between four and five years away. We’re pursuing both [U.S. and European clearance] in parallel, but we don’t see a significant difference as the goal is to prove efficacy for a period of time in humans before any major adoption is going to occur for the product.
MassDevice: What’s the biggest leadership lesson you’ve learned, and how and where did you learn it?
GA: As essentially a scientific founder learning the ropes of managing a company that is now an integrated operation that does have its first product 510(k)’d, one of the lessons in these high-risk, high-reward endeavors is to mitigate your four essential risks: Your financial risks, your marketing risks, your management risks and your technology risks.
Obviously early-stage medical device companies are faced with many risks, but the majority of the investment goes to solving the technology risks. One of the things we have done well is we’ve learned to manipulate this silk biomaterial such that it may support alternate product configurations. While our key focus is on ligament repair, we’ve been able to increase the breadth of potential unmet clinical needs that can be met with our biomaterial platform.
One of the greatest lessons learned is that of creating a learning organization. That is defined in multiple ways by multiple people, but for us it is to be open both at the management level, at the team level, at the cultural level and frankly at a strategic level, be open to new ideas, pathways and multiple perspectives.
For me personally one of the greatest lessons I’ve learned is the value of what I consider to be strategic marketing. In strategic marketing we’re spending the majority of our time on understanding the unmet need. It’s easy in the medical device realm, as we can look to a clinical need or medical problem, but sometimes they may be hidden from you. Early on one could fall prey to developing a technology and then trying to find a need that that technology meets. I would say Serica has been lucky, in that we have always been able to start with the unmet need and have the facilities and resources to develop technology to that specific need. That’s what I mean by strategic marketing: You truly understand where you can have a significant impact in a sustainable manner.
MassDevice: How has the economic downturn affected your business? What strategies and tactics have you adopted to weather the downturn?
GA: It certainly had an impact on our knowledge of available capital. We were lucky enough to have a strong contingent of investors that put money into the company. Our strategy has been one in which we want to leverage the diversity of our product platform to financially support the company and its various product opportunities. That has been our number one strategy which has been working well for us thus far.
MassDevice: What’s your take on the proposal to tax medical device companies to help pay for healthcare reform? Are you worried that the proposal to tax based on FDA device classification will mean a big hit for Serica?
GA: My recollection is that we are working very hard to exclude startup medical device companies under a particular revenue cap. If that does not, occur we put innovation at significant risk. There’s a grave concern. And even those companies, quite honestly, that are approaching the $100 million revenue mark, they are just beginning to break even and being able to cycle back into the research and development phases to continue their pipelines.
So while I realize we all must contribute — and I am a believer in universal healthcare — my greatest concern is not fully acknowledging the innovation that the medical device industry is responsible for.
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