Matariki Medical has no sales. It has no products. It has a part-time chief executive, but he’s unlikely to hang around much past the early stages of the company. But Matariki Medical wants to raise $1.25 million. And that’s only the tip of the iceberg — it will need more within the year.
It might sound like a challenge, but CEO Neil Domigan is confident investors will stump up with the cash. So what does it have? How about an idea, some good connections in the US, and knowledge of some early trial data on potential new stroke diagnostic technology.
Matariki Medical was formed by Pacific Channel, a New Zealand life sciences investment company, and its biotech investment partner NMD Biotech Consulting, owned by Domigan, who is a biochemist and former business development manager with Genesis Research and Development.
Through Pacific Channel’s affiliation with the much larger, but similarly focused Channel Group in New York, Domigan and Pacific Channel director Brent Ogilvy were introduced to Lesanne Life Sciences — a company formed by Channel to develop a new stroke diagnostic technology.
The technology is based on a protein biomarker, discovered by Ann Cornell-Bell, a former researcher at Yale and now Lesanne’s chief scientific officer. The protein biomarker is released into a person’s bloodstream within 15 minutes of an ischemic event — a blood clot that can lead to stroke — and can help identify correct early treatment.
Stroke is the third highest cause of death in the Western world, with more than 5 million people a year killed, and another 5 million disabled through paralysis. About 85% of strokes are ischemic, caused by clots; the rest are haemorrhagic. When identified, an ischemic stroke can be treated with the clot-dissolving drug, TPA (tissue plasminogen activator). But it has to be administered within the first few hours following the stroke, and the treating physician has to be sure the stroke was caused by a clot, and not a haemorrhage, because TPA can increase bleeding.
Currently there’s no cheap, easy way of testing for an ischemic event, says Domigan. Patients have to wait for an MRI or CAT scan, yet scanners often aren’t available or scans aren’t run early enough as it’s expensive — even though the costs of rehabilitating stroke victims is often far more costly. Currently TPA is administered in about 2% of stroke cases, but data suggests that could leap to 20% with a decent diagnostic kit.
So where does Matariki Medical come in? It’s cheaper to run clinical trials in New Zealand than the US, says Domigan. Thus Matariki Medical was formed to run the clinical trials, develop biological diagnostic reagents and, all going well, market the new diagnostic tool in New Zealand, Australia and East Asia. Lesanne will market it in the US, Europe and Japan.
The $1.25 million will be used to buy a 20% stake in Lesanne, run the clinical trials, investigate a couple of other diagnostics (one from an undisclosed New Zealand company) and basically get the company up and running, says Domigan. How much more money will be required down the track depends on the quality of the initial New Zealand trial results.
It’s a win-win situation, he says. In essence, Matariki Medical is buying a chunk of the action by putting up its hand to run the clinical trials. Similar arrangements will be used for other diagnostics identified by either Matariki Medical or Lesanne.
“It’s about doing what makes sense in New Zealand. Not what makes sense in the US,” says Pacific Channel’s Ogilvy. “We get the distribution rights for our region and we also get an equity position in the technology owner.”
Though it’s a shell company at the moment, Matariki, which is about to appoint a chairman and finalise its investment statement, has a lot more behind it than a typical biotechnology company, says Domigan. The technology has strong early trial and animal data — strong enough to allow patents to be filed in the US and Japan. Plus, diagnostics is a far less risky area than drug development, with a far shorter time to market. All going well, the stroke diagnostic kit should be on the market within 24 to 30 months, he says.
“It’s a way of building a company step-by-step without having a large upfront spend. It allows you to grow in line with the capital you have.”