Biotech startup returns to St. Louis for scientific, business and financial support
This article first appeared in the St. Louis Beacon, March 11, 2012 - Chad Stiening acknowledges that there is some degree of irony in the name of his company. After all, Kypha isn’t some quirky nomenclature that comes from a sci-fi nerd’s love affair with an obscure TV show nor is it a futuristic moniker inspired by the cold machinations of some corporate focus group.
It’s simply short for Kentucky Pharmaceuticals.
“Interestingly enough, two years later we’re not in Kentucky anymore and we’re not doing pharmaceuticals,” chuckles Stiening, “but the name Kypha stuck.”
Kypha’s evolution may have brought it more than 200 miles from its Louisville roots, but Stiening feels perfectly at home. The Waterloo, Ill., native grew up here and was happy to move near family again — and bring his new company back with him. Spearheaded in 2009 by Stiening and partner Paul Olson, Kypha is yet another piece of the growing local biotech infrastructure that local corporate, academic, entrepreneurial and scientific leaders are working to construct.
If Kypha’s story is any indication, that effort is meeting with some measure of success. Family wasn’t the only reason Stiening returned to his hometown.
“I did quite a bit of benchmarking for technology and bio entrepreneurship around the country when I was in Louisville,” he said. "I had come to recognize what some of the standards were and what other communities were doing, and BioGenerator was really unique. They were able to offer some support in terms of business guidance. They also have scientific expertise on staff and were able to invest in the companies. And with the facility upstairs they were able to offer lab and office space.
If what the area’s BioGenerator, a scientific incubator initiative founded in 2003, offered was just what Kypha was looking for, the company isn’t alone. Kypha is one of 27 investments the biotech organization has made since its inception, most of them since 2009, putting up millions of its own dollars and leveraging tens of millions more from private sources.
“Overhead can be a killer at an early stage for companies like us,” Stiening said. "To minimize that and help provide some of the support for operational things, while the company is focusing on the science and the technology, was huge.”
Huge is exactly what Stiening hopes Kypha’s signature product is going to be. Thin, plastic and disposable, it’s not much bigger than a stick of gum but he’s hoping his “CompAct Test” will become a go-to product for hospitals, doctors and emergency medical technicians coast to coast. The device is a type of “lateral flow assay” a small diagnostic unit that works on a similar principle to a diabetic’s glucose test. With a single drop of blood and about 20 minutes, CompAct displays lines that indicate the presence of certain components in the blood that give something of a quick window on the body’s protective systems and natural inflammatory reaction.
“What we’re really looking at is the center of the immune response,” he said. “What’s really valuable about this innovation and this test is it’s measuring biomarkers that are informative to any disease or disorder that is going to involve the host defense response. That could be infection or injury.”
CompAct is simple enough that soldiers might be able to perform tests on the battlefield to see how badly a comrade is hurt.
“You could immediately start measuring the inflammatory response, which would be an indication of how severe the injury was,” he said, “as well as the patient’s recovery and return to health, which is going to be a function of the immune system and the inflammatory marker. Now, you can continue to monitor that patient using a very simple test that can be done almost as frequently as you want.”
In the meantime, Stiening intends to aim his small device at auto-immune disorders like lupus or rheumatoid arthritis.
The idea came from Olson’s experiences in his previous company. It was developing a drug that targeted immune and inflammatory response in the back of the eye as part of treatment for macular degeneration, a leading cause of blindness. The company tried every test on the market but found none met its needs.
So, it did the next best thing and invented one. After a year of work, the company had its test and the future founders of Kypha had an idea for transferring the concept from a benchtop-based lab test to a simple, disposable stick.
“There’s a demand for this,” he said. “We weren’t the only company that needed to be able to measure this system and we know that this system is involved in a whole host of disorders and diseases.”
It was that demand, as much as the science, that drove Stiening and Olson.
“That’s one of the pieces of the story I love to tell because as scientists and researchers, it’s easy to be driven by scientific curiosity and make a discovery without any consideration as to whether there is a market for it,” he said. “Then you have this beautiful, scientifically elegant discovery that is searching for a market.”
Still, it’s anything but an easy road to get to that market once you find it. Biotech startup ventures require large infusions of money as years of research and development burn through cash without producing an immediate profit. Despite being in existence since 2009, Kypha is still “pre-market” having raised some $2 million, mostly from federal grants and other sources like regional economic development groups.
That’s perfectly normal. In fact, as much as that may seem like a lot of cash, Kypha may be on the less costly side of the spectrum. Because it’s producing a device instead of a drug, the regulatory process is significantly quicker and not as expensive. Drug development can easily run well into the tens, even hundreds, of millions of dollars.
It’s an industry Stiening calls both unique and nerve-wracking.
“There are those days when people ask you questions about two, three, four years down the road and you look at them and think, ‘we’re worried about the next six months,’” he said. “It’s a path that’s really all about getting the funding to get you to the next milestone.”
These days, however, Stiening has less to worry about. For Kypha, most of those milestones have been met and most of the unknowns dealt with. The company expects to bring CompAct to market by the latter part of next year. Kypha is working on regulatory clearance now.
Stiening is glad to be able to build his future in his hometown and he’d like to keep it here.
“If you do succeed, you don’t have to ship out to the coasts,” he said. “You can actually grow it here and keep it here. I think St. Louis has really put themselves in a position to be able to do that.”