Imagine if technology similar to a car’s GPS could be used to track regenerative cells as they travel through the bodies of ALS, Parkinson’s, or stroke patients. A pseudo navigation system that would allow researchers to monitor the path cells take to facilitate healing for a wide spectrum of neurodegenerative diseases.
That is exactly the goal of Bell Biosystems. With their innovative Magnelles–Bell Biosystems’s coined term for magnetic organelles–they are changing the way researchers think about tackling degenerative disease. Propel(x) had the opportunity to speak with CEO Caleb Bell about the significance of their approach and how they’ve grown their business.
Propel(x): Can you tell me a little more about what Bell Biosystems does?
CB: We’re developing tools based on a synthetic biology platform. It’s actually inspired by a natural process by which nature makes these compartments inside a cell called organelles. If you think of a cell as a house, the organelles are the rooms in the house, and they have specialized functions that enable things like photosynthesis from the chloroplast, enable the generation of energy like from the mitochondria. What nature did to make these organelles is start from bacteria that already had those functions and adapt it to survive in the cell; essentially the cell acquires abilities just like businesses do–from someone that’s already optimized the process. And so what our core platform technology is is a way to identify the bacteria to start from and make new organelles that have specialized functions. And our first product is the Magnelle, or magnetic organelle.
We’re going after applications in regenerative medicine, or cellular-based therapeutics, as these really are the most promising next wave in treatments for cancer, and a whole class of neurodegenerative diseases (like ALS) and where pharmaceutical or surgical options are generally lacking. For these cell therapies to work, you need to get the right cell into the right place. And with our Magnelle technology, we enable researchers to track and eventually control where those cells are. So for example, if you’re trying to rejuvenate brain & nerve tissue to halt or cure ALS and the cells that you’re injecting end up in the lung, there’s really no chance that that technology will work. Today, people find out the cells are in the wrong place by autopsy. Our technology enables researchers to see where the cells are while patients are still alive, so if there are problems we now have the ability to potentially change the outcome.
Propel(x): Help me understand how this is a leap vis-à-vis that current state of the art.
CB: For the direct application of our Magnelle technology, particularly in humans, the way cells are tracked is by autopsy. So that’s a little bit of a pain point. You don’t have the ability to make any changes that could save the patient’s life. So that’s what we’ve endeavored to change. But in the big picture– we’re kind of on that cusp of the biotech century, and advances in synthetic biology and regenerative medicine are really accelerating, we see a world were other synthetic organelles are developed for biomedical needs like little drug factories or to enhance crops through salt tolerance or nutrient fortification. Since we’ve tapped into a natural process for adding functionality to cells, the potential applications are staggeringly diverse.
In our case, the bacteria that we base our technology on (“magnetotactic bacteria”) coordinate over 100 genes to make the magnetic phenotype– basically making the bug magnetic. Since the 1970s when researchers discovered these bacteria, they have been trying to pilfer one or two or five or more genes from that bacteria and put them in stem cells because, again, magnetizing cells is of huge value to biomedical research and clinical practice of cell therapy. But because that functionality is so complex in the bacteria, requiring 100 genes, those efforts haven’t yielded robust results yet. We took a completely different approach, and that’s to make a new organelle using the bacteria as a building block (while keeping those 100 genes to ensure that magnetic phenotype is preserved).
Propel(x): What are some of the potential applications of this technology?
CB: The most immediate applications that we’re working on are using the Magnelle for tracking cells. In addition to the research and clinical benefits of knowing where these cells are, the regulators (FDA) are calling for such data before they approve new cell therapies. We’ve already demonstrated that the Magnelle enables you to track the cells by MRI in small animal models, and that alone is disruptive for regenerative medicine and cellular-based research. In addition to that, through commercial and academic partners, we’re working on developing version 2.0 of the Magnelle where you not only use it to image, but you can now also use the Magnelle as kind of a remote control module, using deeply penetrating magnetic fields to enable non-invasive control of the cells where we plan to eventually develop means to communicate back and forth. By our estimates, that will take about five years to develop. And we’re coining the term magnetogenetics to develop that technology.
Propel(x): Tell me a bit about where you are in the marketplace.
CB: We’ve been in external testing through an alpha and a beta program for over a year now. Our alpha concluded at the end of 2014. We did some refinements in our data program started in mid-2015, and we expect that it will go to about mid-2016. These external key opinion leaders have been amazing in helping us develop our products, really scale it to the customer’s needs. And also it gave us significant capital efficiency; through the data generated with these partners we are leveraging about $4M in non-dilutive funds for development and see a clear path where most of the remaining R&D and regulatory undertaking can be supported by these funds.
Propel(x): You have been able to partner with some renowned institutions. Who are you working with to test the Magnelles?
CB: We are currently working with a number of different research groups at Stanford, Cedars-Sinai, MD Anderson and Berkeley. We’ve also worked with teams at the NIH. We also have partners internationally at the University College of London and a team in Singapore. There is global interest in what we are developing.
Propel(x): Your funding has been very milestone driven. Can you tell us about your funding history?
CB: Our very first round was right after I left Stanford with my PhD. We closed $55,000 in capital from my PhD advisor, myself, and from some very early, very visionary angel investors. At that time, all we had was the idea on a piece of paper and a whole lot of passion. Perhaps also a little bit of naivety too, as we pushed forward with only $55K in the bank. Surprisingly we did operate for over a year on that money and with a bit of good luck, we obtained positive proof-of-concept results. With those results, we then got a grant from Breakout Labs, a project of the Thiel Foundation.
And from there, we closed a $1.5 million seed round in a convertible note and executed on some of our milestones. With those data, we got some federal grants – two NIH Phase I SBIRs and one NIH R01, and in addition closed our Series A. In total we’ve raised about $4.5 million in equity dollars and have supported efforts with the non-dilutive sources. Our investor base is primarily angels right now, and we have the Stanford StartX Fund as well since we went through the StartX program in our early days. Many of our investors have participated in multiple rounds with us, and we anticipate that they will continue. We really have a fantastic base.
Propel(x): I know you have a special relationship with StartX. Can you tell us a bit about that?
CB: The Stanford StartX Fund provides 10% of every round that we raise, provided we meet a couple of metrics. When we meet the goals set they come in as passive investors.
Propel(x): Are there any particular challenges when fundraising because you are a life sciences company?
CB: Oh, absolutely. We’re in Silicon Valley as well, and there’s been a huge surge of mobile apps and big data companies and essentially software plays aimed at healthcare outcomes and markets. And those companies have massively low capital needs and much shorter timelines, but we’re competing for the same money. And if you literally only run the financial analysis of that, those sorts of companies will win every time because they need less capital and a shorter time to hit the equivalent, and in some cases larger outcomes. What we’ve found is that finding the investors that really care about the long-term improvement of healthcare and long-term disruption of various things, it requires actual legwork. It has been a challenge for us to really find the investor base that has that double-bottom line.
Propel(x): What tips would you give to other technology science companies when it comes to fundraising?
CB: You just have to keep at it. You’ve really got to keep at it, and look for those investors where that really resonates. And that takes kissing a lot of toads before you find your prince. You keep at it, and I would say lead with passion. Lead with what you’re really going after, and that will help you figure out if those are the right people for you–the right investors to embark on the journey of building your company.
Propel(x): When Bell Biosystems is a huge success ten years from now, how will society be impacted?
CB: We will change the world by unleashing the power of biology to improve our environment, to improve our health, and to improve our society. I think if in 10 years or 15 years I can run into a person whose life or health was positively changed by a Magnelle-powered cell therapy, that to me would be a huge success.