Next time you enjoy a piece of holiday ham or a perfectly prepared slice of bacon, you might want to say thank you to its source.
2–products in the marketplace
5–organ products under development
(including a liver, kidney and heart)
6–years in business
$31–million in equity financing raised thus far
What Does It Do?
♦ Builds on a proprietary technology using pig organs to develop wound care products and organs (livers, kidneys, hearts and others) that can be transplanted into humans and not be rejected. On the back burner: a transplantable pancreas (a possible cure for diabetes), a more effective bone graft product and other products.
What’s the Technology?
♦ An exclusive patent on perfusion decellularization and recellularization—the process of running a mild detergent through an organ’s natural plumbing system (its veins and arteries, or vasculature) to remove its cells (decellularization) and leave behind a completely preserved version still containing the structure, mechanical properties, markers and proteins necessary for new cells to know where to go, and what to do when a receiving patient’s blood is pumped into it. The most common other method of decellularizing organs involves immersing an organ in a detergent and waiting for the process to break down cells inside of it. This ends up washing away parts of the organ needed in order to recellularize it to the point where it works once again.
♦ Pig organs are pretty much identical in size and shape to human organs. Pig skin tissue and heart valves have been used in medicine for decades because of their compatibility with the human body. At a more technical level, 11 percent of human DNA is made up of short interspersed elements (SINEs), and the most common come from the same protoplasm that is the source for the most common SINE found in pig DNA.
Odds of Succeeding?
♦ The company already has gross margin-positive products generating more than $1 million in annual revenue and in use with more than 1,000 patients. Its R&D is being assisted by researchers at renowned medical research institutions including Mayo Clinic, the Texas Heart Institute and Mount Sinai in New York. Human trials on liver and kidney transplants are years away, however, and nobody knows for sure whether they’ll be as successful as anticipated.
In the not-too-distant future, pigs may provide us with transplantable livers, hearts, kidneys and lungs that our bodies will not reject. No more waiting for an organ from another person; we’ll have an almost limitless supply, as needed.
And between now and then, pigs’ organs—combined with a revolutionary new process invented in Minnesota—are providing a new world of opportunities for medical researchers, and improved treatments for patients who need hernia surgery, chronic wound treatment and more. There’s even a potential cure for diabetes in the mix, but that’s further down the road.
All of this is being brought to fruition through the efforts of Miromatrix Medical Inc., a tiny 6-year-old Eden Prairie-based company methodically plotting its course through the complexities of commercializing a first-of-its-kind medical therapy based on research conducted eight years ago by Dr. Doris Taylor and Dr. Harold Ott at the University of Minnesota.
The U helped Taylor incorporate Miromatrix in 2009 and paired her with Robert Cohen, who, with 28 years of industry leadership experience, was named CEO. But within five months, the U and other shareholders voted to remove her from the company’s board. At the time, reports from Twin Cities Business and elsewhere indicated her leadership style conflicted with that of Cohen and the board. She still owns less than 5 percent of Miromatrix’s stock and is indirectly involved.
Since then, Cohen, EVP of product development Dr. Jeff Ross and Miromatrix’s board of directors (consisting of five shareholders), have quietly and carefully focused on developing, as quickly as possible, products that the FDA would approve and that people could begin benefiting from.
Walking Before Running
“We couldn’t start by saying we’re going to simply do all of this [organs for human transplant],” Cohen says. “Jeff and I figured this technology has dozens of applications, and different products with market potential that could be developed faster than [we could develop] organs. We needed to develop them first to prove we have good management here, that the FDA will approve [the technology being used] and that we can go to market.”
Miromatrix’s goal is to develop products that address significant markets with high unmet medical needs. Its first product, released in late 2014, was Miromesh, a biological mesh used for hernia repair, derived from a thin slice of a decellularized pig liver (see “Big Words to Know,” and “Miromatrix Products,”). The company received FDA clearance within 90 days and generated about $1 million in revenue on the product within its first full year of sales in 2015.
Miromatrix’s second product is Miroderm, basically a specially fileted slice of a pig liver used for wound care, including for diabetic foot ulcers, and, in the future, tendons, nerves and other needs. It received FDA clearance within 86 days and went on the market earlier this year.
These two products are geared to serve markets valued at more than $2 billion a year in the United States alone, according to industry research firms. The hernia mesh device market is expected to grow to more than $3.7 billion by 2020. And as such, there already are some heavy hitters covering these needs today.
In particular, in the chronic wound care arena, there’s Acility L.P. of San Antonio, Texas. Its sales force of 1,700 professionals in 80 countries (primarily in the U.S.) work across multiple care settings and specialties, generating nearly $2 billion in annual sales. (How much of those is from acute care products is unknown. Meanwhile, its unit that most directly competes with Miromatrix, LifeCell, is battling 341 lawsuits claiming its earlier-model hernia repair products failed and harmed people, according to SEC filings.)
Also in the hernia patch business is the world’s largest medical device maker, Medtronic. Its recent acquisition of Covidien provided it with an array of composite meshes and other non-biological products used in hernia and other procedures, and it recently sold its millionth composite patch. Other competitors include Bard, Ethicon and Cook Biotech.
Cohen nonetheless remains confident that Miromatrix will gain market share, and eventual market dominance, in the areas where it’s focusing its efforts because of its proprietary technology: It is the only company in the world that can run fluids through an organ’s own vascular structure to flush out all of its cells, and then reverse the process with a patient’s cells before transplanting part or all of the organ into his or her body. And the process does it so well, the organ retains everything needed for it to be infused with cells and brought back to life. No one else has perfected this.
As a result, Miromatrix can efficiently and more rapidly produce products such as hernia meshes, he says. And they’re more effective given they come from fully functional livers, which consist of the most vascular tissue in the body. This means blood vessels can quickly connect with and feed what’s needed to keep the liver tissue alive and functional, and eventually convert it into human tissue. (See snapshots).
At left, a heart before decellularization. At right, what remains after every cell has been removed.
Miromatrix has the exclusive license—and sublicensing authority—on this process through the University of Minnesota (which owns it, since it was discovered there. In return, the U owns stock in the company and will receive royalties on related product sales). And Miromatrix has filed several patents in all major countries (except Japan, where patents are pending) covering the process of using an organ’s own veins and arteries to flush it of cells, and then recellularize it with a patient’s cells. “And beyond that, there are trade secrets,” Cohen adds.
The company continues to do all of its research and development in-house at its processing facility in Glencoe, Minn., and corporate headquarters in Eden Prairie. But it has tapped Mayo Clinic, Mount Sinai in New York and the Texas Heart Institute to help.
Mayo is transplanting recellularized pig liver tissues and livers from Miromatrix’s facilities into other pigs, then sending research findings to Miromatrix for further refinement of its recellularization process. The trick, Cohen says, is to make sure everything necessary is, in essence, installed in the right stages and in the right places in order to ensure the organ functions properly in the patient’s system. That starts with a layer of endothelial cells—a must in order to keep other cells flowing and from clotting. And that’s what the R&D team at Miromatrix is working on.
Big Words to Know
Perfusion Decellularization: Using mild detergents to remove cells, leaving behind an organ that can be infused with a patient’s someone’s cells and not only work, but not be rejected.
Biological Scaffold or Extracellular Matrix (EMC): What remains after all the cells are carefully removed from an organ. If decellularization is successful, what’s left looks and feels like an organ, and has its original structure, mechanical properties, proteins and vascular network of the original organ or tissue (see image at right below).
Perfusion Recellularization: Infuses waves of different types of cells into the decellularized organ, which because of the properties it still retains, basically guides the cells where they need to go, allowing the organ to function again.
Endothelial Cells: Cells that line the inner walls of blood vessels to help keep blood flowing and prevent clotting. These must be introduced first for recellularization to be effective.
Where to find more on this area of research?
Visit Miromatrix.com and U.S. National Library of Medicine’s manuscript site: http://bit.ly/2dLiqke
About two dozen animal transplants have occurred thus far and, he says, progress is on track with what the company and Mayo had expected. At this pace, the first full clinical trial of a liver transplant within an animal will take place next year.
While this will be significant, if successful, there may be much more potential in the bio-medical technology Miromatrix now has the right to further commercialize.
“It’s paradigm shifting,” says Dr. Allan Dietz, co-director of the Human Cell Therapy Lab within Mayo’s Center for Regenerative Medicine. “It’s almost like you have a new class of drugs you’re working on and you have potential you never had before. It’s not a half-step improvement of a currently used drug; you’re working on an effort that is truly a leap forward.”
When it comes to Miromatrix’s decellularization process, “I’m impressed with the power of the [organ’s] matrix to contain information,” he adds. “It’s inanimate. Nothing’s alive. But it has powerfully informative information for cells and, together, they produce things that neither can do on their own.
“The analogy that comes to mind is if you framed up a house and put all of the materials around it, and you have a good contractor, you don’t need to give him the plans—he can figure out where the bathroom is and what goes in it, where the kitchen is and what needs to go there, and so forth. There’s information in the framing. Even though that house frame may be from a pig, all the pieces in there will be from the human.”
While Mayo is working on the recellularized liver project, it also expects to uncover other opportunities to improve health in faster ways using organs provided thanks to Miromatrix’s technology. In fact, the Mayo has submitted a paper to the scientific press along these lines, but won’t disclose what it entails until if and when the paper is published.
Meanwhile, Mount Sinai in New York is working on early tests for transplanting recellularized kidneys into animal subjects. And the Texas Heart Institute is working on developing a transplantable heart originally sourced from a pig.
Taylor—the scientist who co-discovered all of this and founded Miromatrix—is now working on her own invention once again, indirectly: She leads the work being done for Miromatrix on the transplantable heart at the Texas Heart Institute. (Taylor could not be reached for comment).
Who May Benefit First, and Why
With organs, Cohen says the company is focusing most of its efforts first on developing a marketable liver for three reasons. First, “if 15 percent of the liver works, you’re alive; if 30 percent of it works, you’re alive and well, so you don’t have to get it perfect right away. It’s also the only organ in the body that rebuilds itself.”
There also are costs; about 90 percent of them will be on clinical trials, and liver transplants are quick to yield results. “You do your implant, and within six months the patient is either alive or not. It’s black and white,” he says. “If a person lives three months beyond that, it’s still at least a bridge toward success.”
And most important is the need. The Centers for Disease Control and Prevention (CDC) reports more than 36,000 people died in 2013 due to chronic liver disease and cirrhosis. About 17,000 adults and children that have been approved for liver transplants and are waiting for donated livers to become available, according to the American Liver Foundation. Yet only about 6,000 liver transplants occur each year, leaving the majority of those needing a liver without one. At least 1,500 of them will die before a liver is available.
Miromatrix Products Already on the Market
(pictured at left)
Treatment: Abdominal wall repair (hernias)
Year sales began: 2015
Revenues so far: $1 million
Patients served: 800+
Marketplace differentiator: Other treatments are either synthetic patches (with a low success rate) or biological mesh made out of a tougher tissue with less vascularity, limiting how much blood can reach all parts of the mesh quickly and consistently. Miromesh is made from a thin slice of liver—the body’s most vascular tissue—providing faster blood vessel growth, thus a faster and more thorough remodeling of the mesh into the patient’s tissue.
Treatment: Chronic wound care, other wound care
Year sales began: 2016
Revenues so far: NA
Patients served: 200+
Marketplace differentiator: Other treatments are bio-engineered tissue or skin substitutes that vary widely in how fast and effectively they can close a wound; about 50 percent take 12 weeks or more. For the same reasons Miromesh is effective, Miroderm is expected to significantly improve wound closure times, as well as staying power.
Miromatrix hopes that the FDA will fast-track approval of its transplantable liver once clinicals prove its efficacy, given how dire the situation is for those who need a liver transplant. “Once you’re told you need a new liver, you have six months to live,” Cohen says. That’s not the case with kidneys, and usually degenerative heart disease provides more forewarning than a failing liver.
From there, it plans to focus on developing a transplantable kidney, since there are more than 460,000 people on dialysis in the United States alone. Worldwide, it estimates that number is as high as 2.2 million and as a result, figures the kidney is the most sought-after organ globally.
The company also hopes to soon have a marketable “cardiac patch” to help prevent the 610,000 deaths that occur each year in the United States due to heart disease, according to CDC numbers. Each year about 670,000 are diagnosed with congestive heart failure, which is due to damaged heart muscle. The Miromatrix patch is expected to help repair those damaged areas, in essence revitalizing the heart and curing the damage that otherwise leads to heart failure.
Last but not least is a transplantable heart.
“The heart is the most difficult one to get right. You have an electrical system, plumbing—every bit of it has to work,” Cohen says. “[Unlike with the liver,] 30 percent of the heart working won’t do you much good. Then it has to be synchronized with the rest of the body and the brain.” The good news, he adds, is that Taylor is leading the work on this one.
The Investor Timeclock
Meanwhile, Miromatrix’s investors are watching and waiting to see how all of this comes together—if it does. Frequently in the past, startups have touted breakthrough medical therapies that, once in human trials, turn out to fall short of expectations.
For example, Excorp Medical of Oakdale, Minn., has tried since 1995 to commercialize a bioartificial liver that started with a pig’s liver. However, after tens of millions of dollars in investor financing and a brilliant effort by its founder and CEO, Dan Miller, it appears it went dormant in this country: Its website has not been updated since 2014 and its phone number has been disconnected.
“[Miromatrix has] a lot of hype around what they could be, and a lot of meat on the bones of what they actually are,” Seth DeGroot of Brightstone Venture Capital was recently quoted as saying. His firm is reportedly an investor in the company.
Meanwhile, private equity investors in companies such as Miromatrix usually expect a return on their investments—in the medical arena—within ten years. While they can obtain some liquidity through future rounds of financing, most if not all want the big payout that comes from the company’s being acquired or going public.
Cohen remains focused on the long term, however. “I expect there will be a liquidity event before we bring an organ to market,” he says. “But I’d be as happy with a large strategic acquirer as I would and IPO. It’s all about working with others who can help us achieve our goals.”
Finding Pig Parts
When Miromatrix started up in late 2010, it didn’t have to look too far for a supplier of organically pure pig organs. Midwest Porcine Recovery was just down the road to the west about 40 miles in Glencoe.
“We did a broad regional search for a source of pigs, and lo and behold, found one sitting there in Glencoe. So we drove out there and met Dave,” says Miromatrix President and CEO Robert Cohen.
Dave Theis and his wife, Terry, had years earlier decided to turn their 120-sow operation in Gibbon, Minn., into a biomedical research facility that would provide porcine materials for biomedical and pharmaceutical uses. In the process, they also provided all-natural pork products to Twin Cities restaurants under the Mrs. Pork brand. In 2010, they expanded operations in Glencoe, adding to their harvesting facility incubator lab space, storage and warehouse space, according to Agrinews.com.
“We started buying parts from him, and while we were in [Dave Theis’] conference room, he overheard us talking about the little facility we had at that time,” Cohen says. “He said, ‘You know what, I built this facility bigger than it needed to be because I saw the future of biotech coming to Glencoe. Why don’t you build a facility right here within ours?’ ”
Theis received financing through the city of Glencoe to build out additional space for Miromatrix, which repaid that financing through five years of rent, Cohen says. The result was a pig processing/harvesting facility on one side and a laboratory on the other. For Miromatrix, it meant cutting its supply line to 20 feet.
And biotech came to Glencoe.
“We were fortunate to have them locate in town,” says Glencoe assistant city administrator Dan Ehrke. “They’ve been a great addition to town and have broadened our economic sectors.”
I’ll Help You If . . . Miromatrix’s most important partnerships.
University of Minnesota
♦ Miromatrix received an exclusive, worldwide license, with the right to sublicense the technology developed at the university. In exchange, the university received an equity stake of more than 10 percent, undisclosed revenue-based royalties on internally developed products, a percentage of sublicense royalties received.
♦ Mayo has invested in each of three financing rounds in Miromatrix and is conducting research for the company on a contract basis.
Texas Heart Institute
♦ Miromatrix entered into a sub-license agreement with the institute, allowing it to use the company’s technology to develop a heart for human implant. The work will be funded and performed by Texas Heart Institute. The first human implant of the developed product, including any relevant IP and research, will be transferred back to the company for further funding and development. The company will then market and sell the product, and the institute will receive an undisclosed royalty based on its net sales.
Dr. Doris Taylor
♦ Taylor co-invented the technology behind Miromatrix’s products while she was at the University of Minnesota, and founded the company. She was removed from its board five months after it started but retains less than 5 percent of its stock. Today, she is director of regenerative medicine research at the Texas Heart Institute, which is assisting with Miromatrix’s heart transplant product development work.
Dale Kurschner is TCB’s editor in chief.