Episode 43: How to build a business from a university lab discovery – The story of Acera Surgical with Dr. Matthew MacEwan

"Definitively Speaking" is a Definitive Healthcare podcast series recorded and produced in Framingham, Massachusetts. To learn more about healthcare commercial intelligence, please visit us definitivehc.com. Hello, and welcome to another episode of "Definitively Speaking", the podcast where we have data-driven conversations on the current state of healthcare. I'm Justin Steinman, chief marketing officer at Definitive Healthcare, and your host for this podcast. If you're of a certain age like me, you grew up watching "The Six Million Dollar Man" on television. You saw Colonel Steve Austin crash his spacecraft and get rebuilt using the latest scientific innovations to make him better, stronger, faster than before. And while today's guest is not implanting bionic limbs into anyone anytime soon, he is using advanced material science to create grafts that arguably outperform animal and soft tissue graft. These electro-spun fibers mimic the structure and architecture of cellular tissue, may deliver lower costs, and are supported by clinical data. If I've got you intrigued, or if you're just wondering what in the world electro-spun fibers are, then stick around for the next 30 minutes or so for my discussion with Dr. Matthew MacEwen, co-founder and chief science officer at Acera Surgical. Acera focuses on the field of soft tissue repair. Their electro-spun fiber matrix technology, better known as Restrata, is available in three configurations of surgical matrices, providing relief to patients who suffer from surgical wounds, trauma, burns, and chronic wounds among other indications. Dr. MacEwen is a co-inventor of Acera's nanotechnology platform, co-founder of the company, and current board member of Acera Surgical. He is currently responsible for managing Acera's IP and patent portfolio, new product research, and the design and implementation of clinical studies. Dr. MacEwen graduated summa cum laude with a degree in biomedical engineering from Case Western Reserve University with a specialization of polymer biomaterials biomaterial biocompatibility, and then went on to complete his PhD in biomedical engineering from Washington University. Dr. MacEwen, welcome to "Definitively Speaking". That is one heck of a scientific background!

Thank you, Justin, it's a pleasure to be here with you today.

We are glad to have you here. So there was a lot in my introduction, there, and I gotta be honest, that felt a little bit to me like I was describing a science fiction podcast. So, but what you're doing is anything but science fiction. So let's start with the basics. What is a soft tissue repair?

Sure, it's a great question. So as you know, all of our bodies're made up of many different types of tissues like muscle and skin. And for many different reasons our bodies can get injured, right, from trauma, from disease. And in many of these cases, you know, our soft tissue can heal themselves. But in some instances where maybe the the injury is too great or the wound is too large, sometimes the body needs some additional help. And that's really where our technology comes in, it's can sort of help some of these soft tissue deficits heal and get you back to, kind of, your normal state of living.

So give me an example of what a soft tissue deficit is, because when you say deficit I think of a budget deficit.

Sure, sure, yeah, so when you think of, like, a soft tissue deficit, it's essentially like a big piece of tissue that's sort of missing in your body. Like, let's say unfortunately you're in a car injury or a car crash and you end up having a big, you know, laceration on your leg, right? So maybe you have a big piece of tissue that's missing or you have a big laceration that your body can't heal on its own and you're just missing some tissue. That might be where you need some type of advanced therapy to help your body actually fill in and heal that wound, essentially get that tissue to reform and get that wound closed.

Got it, okay, so you're kinda helping patch up big cuts and big gashes in the body almost, right?

Sure, sure, and it doesn't have to be necessarily all due to trauma, right? Sometimes these soft tissue deficits or wounds can result from other medical conditions, right? So for example, sometimes you can have underlying, you know, vascular or other sort of metabolic issues like diabetes that can cause, you know, the skin and other tissues to break down. So you can get these soft tissue injuries from a variety of different sources, whether it's traumatic or medical.

Got it, so then what in the world is an electro-spun fiber matrix? Sounds cool!

No, I know it sounds a little science-fiction, like you said, but really what it is, is it's sort of a whole new class of matrix that we can use to help the body repair its own tissue and essentially heal some of these difficult, again, wounds or soft tissue deficits that the body couldn't heal on its own. So what these electro-spun matrices are is essentially a soft kind of compliant, almost like cloth-like material, but it's made up of these synthetic fibers that are many times smaller than individual cells. And so, as a result it does a really good job presenting a structure and architecture that looks a lot like native tissue and allows cells to interact with the material, grow into the material, and then essentially support the wound-healing process. And we actually make these materials in a really special way. So we use this technology called electro spinning, which is a really sort of fancy manufacturing technique that allows you to make these ultra-small fibers that're, again, so small that they're smaller than individual cells. So we use this unique process called electro spinning. We create these materials and we've created, sort of, this synthetic alternative that you can use, again, in the body to help encourage the body and cells to help, sort of, heal some of these difficult wounds or soft tissue deficits.

Got it, but this's is not, like, nanotechnology like I saw in Ironman 3, right? Like this's, like, That's like, smart nanotechnology, that's like, Marvel's cinematic universe. This is just like, nanotechnology in terms of like, smallness, right?

That's right, so when we're talking about the scale of the fibers, these fibers are, you know, sub-micron in size. So they're on the order of about 100 nanometers all the way up to, you know, about a micron in size. So again, many times smaller than individual cells. And what we found in our research is that if you make these fibers so small that they're, you know, many times smaller than individual cells, it absolutely changes the way that cells interact with them. Cells can actually grab onto these fibers, they'll grow on into the fibers, and they can use the fibers as a construct to form new tissue. And then eventually that new tissue can help heal some of these deficits.

Where did you get the idea for this? I'm sitting here, like, flabbergasted.

So when I was an undergraduate at Case Western Reserve University, around the age of like, 19, I just got really interested in material science, did my undergrad work in biomedical engineering. But when I was a freshman in college, I got into a research program and ended up working in the polymer science department at Case Western. And while I was there, I had a chance to work with a number of great folks, one of which was one of the, sort of, forefathers of this whole concept of biomaterial biocompatibility, or essentially how the body interacts with synthetic materials. And so, in some of that work I just got a chance to see how cells interacted with synthetic materials that we were putting into the body. And it got me thinking, could we design a better material that works better in concert with the body and could help sort of support this, you know, this wound healing process? And then when I came down to Washington University School of Medicine in St. Louis, I went through their MD PhD program. And while I was in the lab doing my PhD in biomedical engineering, I happened to work in the lab of a gentleman by the name of Yunan Shaw. And we got really interested in this unique type of electro-spun material. We found that cells could grab onto it and grow on it very easily. And we eventually found that it provided this kind of optimal structure or architecture for cells to grow on and grow into. And so, we thought maybe this electro-spun material might be, sort of, this optimal sort of engineered alternative that we could use to help encourage this wound healing process and could be, sort of, an alternative to all of these biologic and animal-based materials that people were using at the time in the operating room.

That's fascinating, so you have to have some patents. How many patents do you have on this?

So we have a number of patents. We actually started filing some of the patents when I was a grad student at Washington University, and we started patenting everything from the way we made the fibers to the unique manufacturing equipment, all the way to the end composition of matter of the materials, and we even patented some interesting, sort of, ways and tools for deploying the material in a variety of, sort of, clinical applications. And so, today we have over 80 granted or pending patent applications that cover the technology. So we're really trying to, kind of, help protect the technology and then also serve, sort of, the leader in this new, sort of, field of synthetic and engineered materials for soft tissue repair.

So you mentioned WashU. , my sister went to WashU, so did my brother-in-law, so I'm a big fan of WashU. But I imagine you took stuff out of WashU and so you had to work with the technology licensing and transfer office, right?

Mmhm.

We have a lot of entrepreneurs that listen to this podcast. Talk about the process of working with the technology license and transferring office. How did that go? What should people know about working with offices like that?

Yeah, so when you invent something as an employee of a university, the university has the rights to your invention, right? So we first discovered this material and sort of figured out the application for it in soft tissue repair and in wound healing. We started filing all these patents. And so, these original, kinda, core patents were immediately, sort of, owned by the university. And so, when we decided that we wanted to sort of, translate this technology and actually bring it into the clinical space, we realized that first of all we needed a company to actually help move this forward. And then we also realized that we needed access to these patents in order to move forward with that company. And so, we went back to the university and said, "Hey," you know, "we think this technology has a lot of potential way beyond just the academic space, and we really wanna help commercialize this technology ourselves." And so, we worked with the tech transfer office at WashU and helped to get a license in place and they were just really great to work with. So not only did they help us, sort of, get a licensing agreement in place, but they also helped us with a number of other key functions. So they actually provided some non-dilutive funding for us to work out some of the basics of the technology. They even helped, sort of, introduce us to entrepreneurs and advisors, sort of, in the medical device industry. And eventually even the university ended up investing in the company through their entrepreneurship arm as well. So they've been just very, very great partners to work with, and we've been kind of working in conjunction with them, now, for over 10 years.

Wow, wow, so this company was founded when? 10 years ago?

That's right, we started Acera in 2013. So this's our 10-year anniversary this year.

Happy anniversary, so talk to me about the idea of building a company from a product that came out of a lab. What was that like, I mean, you started from ground zero. What're some of, kinda your lessons learned? What was the big mistake that you made, or the big success, or both of those?

Yeah, so I don't think I ever, like, necessarily meant to start a company or go into this area of, sort of, entrepreneurship. The reason that I actually went to medical school originally was I just wanted to be the guy who could, you know, potentially, you know, come up with some new ideas, some new technologies in the lab, and then also have the clinical skills to be able to apply it, right, in the clinical setting. And when we kinda came across this technology, we really kind of realized that maybe this, you know, synthetic electro-spun, you know, matrix could provide this, kind of, new alternative in this area of wound healing and soft tissue repair. And so, in looking at how we could potentially get this technology, sort of, over over this gap and into the clinical space, what we realized was the only way it was gonna make this leap is if we had, kind of, a company behind it. So I never really meant to just like, set out and and create a company, it was more, kind of, a means to an end to actually get this technology into the hands of surgeons and clinicians, you know, who could use it. And so, the way it worked was, you know, we kind of sat back and said, "Well, we need to put a company together in order to move this technology forward." So when I was a grad student we formed a little LLC, and essentially just went around the Midwest and eventually the whole US kind of pitching this concept of using these electro-spun materials as this, sort of, new alternative in this area of wound healing. And eventually we built a small team of about four people and raised a little bit of money here in St. Louis. And we went from this idea in the lab to our first FDA-approved product in about two, two and a half years. But the key was really, I think, surrounding myself with people who had complimentary skillsets. So I was lucky enough to find a amazing mentor who's still with us today, named Agnes Ray-Giraud, who came off the board of Express Scripts and who just did a great job, kind of, filling in some of the business knowhow that I clearly didn't have, you know, coming outta med school. And then we found some other folks who had more of that, you know, operational or business expertise. And so, it was really, kind of, that collaboration, right, that matching of skills that I think really allowed us to move the technology forward in such a quick pace early on.

Biggest lesson learned, what do you know now that you wish you knew back then?

That's a great question. I think if I could do it again, I mean, there's lots of ways that I think we could do it more efficiently. I think just kinda going back to it, I think I probably would have just kind of gotten started with it a little sooner. I think people, especially in the academic space, when they have these ideas and think about, kind of, commercialization and translation of technologies, they see all these hurdles, right? Raising money, and building a team, and all of this, and I think it can seem very daunting, right? And I know we definitely had those same kind of thoughts when we were thinking about getting started with Acera. And I think looking back on it, I think there's always gonna be potential challenges. Now seeing how how you can, sort of, overcome some of these obstacles and really move the technology forward, probably would've have have done a little earlier and probably jumped in with both feet even sooner, knowing that there's lots of supportive folks, a lot of, you know, team members out there who can really help you, sort of, achieve that goal of bringing technology to bear.

So you've mentioned a couple times that this is an alternative solution. People been getting cuts for thousands of years. What were people doing to treat this before you came along?

Yeah, so today, most of the clinicians and surgeons here in the US are kind of using a few different technologies to treat these difficult-to-heal soft tissue deficits or wounds. So the first, I guess, material they're using is the patient's own, you know, the own skin, right? They might harvest the patient's skin and graft it into a wound or a deficit, you know, where they need to sort of, promote healing. The problem with that approach is that you end up with this donor site that now has sort of lost some tissue, and now you have, sort of, another wound you've created, right? So that's one option. The other option is that there's a number of different animal tissues that folks have developed where they'll harvest, say, tissue out of a cow, a pig, or now even things like a fish. And they'll actually harvest that tissue and throw that into a wound bed to help promote tissue healing. Now, in those instances, while those materials can be, you know, inexpensive, a lot of times they're challenged by things like biocompatibility. You know, your body can recognize that those tissues are not human, right, and your body's going to try to get rid of those materials and it's gonna have inflammation against those materials. And there's a even a potential for, you know, disease transmission. So those're some other limitations associated with, sort of, the animal tissue option. And then, more recently, there also have been a series of materials that are human derived, right? So maybe harvested cadaveric, you know, human tissue or human amniotic tissue that folks're using to try to promote healing. But again, those can be very challenging to procure. They can be difficult or costly to use. And so, as a result we really see our synthetic-engineered material as sort of a whole different, you know, paradigm shift, right? Moving away from this concept of just harvested, you know, human or animal tissue. And now using sort of the most advanced material science to sort of engineer a matrix, engineer a material that has all the right properties that doctors need to encourage tissue healing. And then, also that can potentially add to some other, you know, logistics or economic outcomes down the road as well.

We had a xenotransplantation, actually, topic of an entire podcast, here. So this's the second podcast episode where xenotransplantation has come up. We did one around the pig transplant, heart transplant, earlier this year. Never thought I'd be having, I didn't know what xenotransplantation was 12 months ago, that's where I'm coming from. So here we go. So what's been the adoption? Like, you talk about this as an alternative, you're creating a whole new category. Has it been faster than you expected? Slower than you expected? How's it going?

Yeah, so I think in the... You know, it took us, like I said, about two, two and a half years to get our first product, you know, through FDA approval and into the market. And at the time, of course, you know, it feels like an eternity, right? Trying to get all of the pieces in part, get all of the testing, get all the packaging together to get that first product out. But since that time, I think we've just really seen the adoption of the technology, and the interests from the clinical community just really skyrocket. So I think that's really interesting. There's a lot of different, kind of, changes happening right now in clinical medicine, especially around how we treat some of these soft tissue deficits and wounds. And what we're seeing is just that there's sort of an interest in finding a new alternative, to get away from some of these higher-priced options that were around previously like, for example, those harvested human tissues. And we're really seeing folks gravitate to this new engineered alternative. And it's really what we're seeing, sort of, that folks're sort of looking for this new alternative and they're really finding a lot of value in this, sort of, engineered option. And so, over the last two years or so we've really seen this go from maybe something that a few people've heard here and there to now getting entire systems moved over to the technology, and we're just seeing some really amazing clinical results with the product as well. So while the first few years definitely felt like it, you know, felt like it took a while to get the product out there, now really I think we're seeing a lot of momentum and folks're adopting it pretty quick.

So what're some of those amazing clinical results? Talk to me about this.

Gosh, so I mean, we've seen our technology, our electro-spun matrix in our products like Restrata heal some wounds that have not responded to any other therapy, right? For example, there was a patient that we treated just recently who had a large tissue deficit related to, sort of, a surgical procedure that they had previously. And the clinicians who treated her tried every option you could think of. They tried treating, you know, this wound with multiple different animal-based products, multiple different human-derived products, and nothing would work. You know, the wound was, you know, very big, very difficult. They needed to fill in quite a bit of tissue. And eventually what was neat is these clinicians who were treating this patient actually reached out to one of their colleagues who had a lot of experience with our product, with Restrata. And they said, "Well, you know what, you know, this is sort of our last option. Let's give it a, let's give it a chance." And they ended up using Restrata and the electro-spun matrix in this patient. And not only were able to get this wound filled in and eventually reepithelialized, but actually were able to get this patient who had been in the hospital for months ambulatory, and actually got that patient discharged. So what's really exciting is we're just seeing the technology work in some of these most difficult cases. And we're just, as a result, seeing it really make a significant impact in the quality of patients' lives.

So are you selling to surgeons in hospitals? Is that your target customer for this?

Yeah, so we're definitely seeing a lot of different types of surgeons and clinicians using the product. Mostly we're seeing folks utilize our technology in the OR, in the surgical suites. And we're working with a number of different types of clinical subspecialties. So we're working with plastic surgeons, vascular surgeons, foot and ankle surgeons, so a number of different specialties. Even folks now in, you know, surgical oncology, right, using this to help treat wounds that might be created after, say, a resection of tumors or cancer. So what's really neat about that, though, is that we're just finding all these uses for the product across a variety of different clinical specialties. And we're just seeing it now work in some of these, you know, in treating some of these wounds or soft tissue deficits that we had just, sort of, never even envisioned, you know, early on with the company. So yes, we have a number of folks who're using it now in the operating room. And in select settings we're also using it in the outpatient side as well. But we're seeing some really great results across a variety of different clinical specialties.

So when you're selling this, what's the most common objection you hear from physicians you're talking to about this and how do you get them over it?

So overall, I think the biggest challenge we have is just that this is such a different approach. It's just such a different type of technology than folks are using, right? I mean, a lot of these clinicians and surgeons are used to using harvested tissue products. And so, the idea of using an engineered synthetic material instead But what we end up doing is sort of explaining to them how the technology works, how this electro-spun material is designed, you know, to be similar to the structure and architecture of native human ECM and how the material, you know, works to support, you know, wound management and wound healing. And then, this is where we kinda show them some of the basic science work that we've done with the technology and some of the clinical research that we've done. And typically we can get folks over that hurdle and give our technology a shot in some of their difficult cases. And what we've seen is people just be blown away by the clinical results and really just be shocked at how well, sort of, engineered material can work in some of these cases. So I think, you know, to that end, I think that all of our, you know, investment over the years and all of this basic science, you know, research and now, sort of the clinical data has really paid off, 'cause we have just some great data behind the technology, behind the products, that really show folks how unique this technology is and how great it can do in their hands.

It's just amazing. So when we were prepping for this podcast, you mentioned to me that steering the clinical process is like steering the Titanic. What'd you mean by that?

Yeah, so, you know, it's interesting, coming out of academic medicine, I think that we have this view, right, that clinicians and systems across the country are just, you know, very progressive and can, you know, turn on a dime, right, in order to sort of adopt, you know, sort of, new clinical techniques and technologies. But what I've found, kind of going out and working with, you know, systems across the country is that it just takes time to, you know, kind of convince folks that there's a new and a better way to do things and then, you know, build that adoption. So what I've realized is that, you know, it definitely takes time to kind of move and change standards of care and clinical practice. And I think what we're doing now is we're finally, you know, getting more and more partners on board. And I think we're starting to see, you know, this technology kind of make an impact in this area of healthcare. So yes, big changes take a while, you know, to come down the road. But I think once you have this, you know, once you have this kinda momentum and you sort of built up some of this critical mass, I really do think that you can, you know, change a clinical practice for the better.

You know, they always say, "Necessity is the mother of invention." That's kind of a classic phrase, even a cliche if you will. And you could say that hospitals right now are under unbelievable financial pressure to do things differently, lower costs, do some stuff like that. Are you finding hospitals're more open to innovation and new ideas now than they were, say, five years ago?

Yeah, so as we've gone out and talked to more and more of the hospitals and the hospital systems, I think what we're finding is that everybody is just, you know, extremely cost conscious these days, right? And everyone's trying to find how we can improve upon, you know, cost of care for patients. So I do find that a lot of these hospitals are just always upfront thinking, "How can we reduce the cost," or "How can we reduce our spend on products in this particular space?" And that's really, I think, one of the really unique opportunities that we have because our technology, you know, being synthetic, being engineered, remember it's just, logistically it's, you know, easier to... It's easier to make, you don't have to go out and harvest human or animal tissues and then decellularize them and store them in a tissue bank. So logistically, you know, our technology can provide some benefits, and potentially our technology can also reduce utilization, and reduce number of applications, and potentially also reduce cost of care. So overall we're finding some ways that our technology can not only, sort of, improve clinical outcomes and help some of these clinicians treat some very difficult, you know, cases that they have, but we also have the opportunity with the technology to, you know, reduce the hospitals', you know, spend in this area too. So I think there's some really great ways that we can sort of help solve this problem of increasing, you know, cost of care and also potentially solve some of the hospital's issues with wanting to find less expensive solutions.

You know, Matthew, it's just been an absolutely fascinating conversation. I got one question before I let you go, here. It's just kinda, what's next? What else can you do with this technology? What's in your pipeline? Spill all your secrets!

So, yeah, so moving forward, I mean, we're just, I think, you know, kind of scratching the surface with this technology. I think there's so many interesting applications for electro-spun materials, and we're really excited to explore applications of technology, not just in, sort of, the wound care and the soft tissue repair space, but beyond that as well. So there's many different ways that you can actually tailor these materials and dial in many different properties that might be suitable for other clinical applications. So down the road, we really see Acera bringing out multiple products across many different clinical applications and really serving as, sort of, the primary, sort of, driver of this electro-spun technology into the healthcare space. So down the road I think we have a lot more great, you know, concepts that'll be coming out, and hopefully we can use the technology to improve care in other areas of medicine beyond, you know, wound care and soft tissue repair. Fascinating, I have just learned a ton today, and I can't wait to see what comes next from Acera Surgical. Thanks again, Matthew.

Thank you for having me.

Our pleasure, and for all our listeners out there, thank you for listening to "Definitively Speaking" a Definitive Healthcare podcast. Please join me next time for a conversation with Brian Drozdowicz, who's the senior vice president and GM of the acute and payer markets at PointClickCare. PointClickCare is a leading healthcare technology platform, enabling meaningful collaboration and access to real-time insights at every stage of the patient healthcare journey. More than 27,000 long-term and post-acute care providers, over 3,100 hospitals and health systems, 2200 ambulatory clinics, every major US Health plan, and more than 70 state and government agencies use PointClickCare, enabling collaboration and value-based delivery from millions across North America. Brian and I are gonna have a conversation around the challenges and opportunities of delivering value-based care across multiple physical locations. And we'll see how many times I can say PointClickCare correctly versus doing the tongue twister that the name of that company is. I do hope you'll join us and listen, and perhaps even laugh at me. If you like what you've heard today, please remember to rate, review, and subscribe to the show on Apple Podcasts, Google Podcasts, Spotify, or wherever you get your podcasts. To learn more about how healthcare commercial intelligence can support your business. Please follow us on X or Twitter at DefinitiveHC, or visit us at definitivehc.com. Until next time, take care, please stay healthy, and remember to stay away from soft tissue deficits.