From a PhD to Entrepreneurship: Using Tech Transfer Experience to Found a Hardware Company Improving Infectious Disease & Alzheimer's Research

Thousands of scientests around the world are studying infectious diseases and Alzheimer's, trying to find cures and better understand our bodies. Living organisms are a fascinating area of study, but often the challenge is being able to identify and separate populations in order to study or target them. CBio has developed hardware that separates populations based on bio-physical properties, meaning scientists can deterministically study them, the inverse of current methods. We sat down with CBio co-founder and UC San Diego alum David Charlot to discover his journey from a PhD to multiple startups using tech transfer.

Tell us about your background and your co-founders

I'm David Charlot, CBio's co-founder and Chief Innovation Officer. I’m joined by Kathleen Moore who's CBio's co-founder and President. She and I attended Delaware State, a historically black university, and also received graduate degrees from other institutions. I have my PhD in Bioengineering from UC San Diego and Kathleen has her MBA from Wilmington University. Kathleen has worked in marketing and sales at the Veterans Association, ATT, Dell SecureWorks and has a specialty in converting technically difficult things so that customer want to buy them (she’s generated $150M in revenue for her respective companies). My PhD research focus was automation in live cell imaging for drug discovery.

How did your company come to be?

Kathleen and I incorporated CBio in October 2016 to remove big challenges impeding progress for infectious disease and Alzheimer’s research. Our hardware solution will ultimately lead to better outcomes for patients and drive down the cost of healthcare.

Prior to October 2016, I had a fun ride consulting at a few start-ups and also had a great experience at an oncology diagnostics company I co-founded out of graduate school in 2010. The company is based in San Diego and I was CTO and president of the company from its inception until April, 2016. While there, I learned a lot about the research challenges that impede progress in the clinical practice of treating complicated diseases like cancer. I interacted with many of the big biotech companies and talked to hundreds of oncologists about their problems. I found that many of the issues are still on the research side of the aisle because we still have so much to learn about ourselves and our cells.

After leaving, I met with some professors who had some innovative technology in their labs but who didn’t have capabilities to easily start companies. Because of my background, it seemed like a great idea to help them. I had my doubts. Startups aren’t exactly easy. There is always risk. However, my wife, Blane, convinced me to take the dive and instead of using our savings to buy a house in SoCal we started CBio and it’s been a great ride since then.

What problem(s) are you tackling?

In short, CBio makes bioanalytical tools that solve really difficult challenges for pharmaceutical companies. Drugs are made to target a specific subpopulation – let’s take bacteria for example. To develop a new drug, I need to have a specific target bacteria, but first, I need to know and isolate said bacteria – easier said than done. Right now, the process of doing so is done non-deterministically. As researchers manipulate populations of bacteria, they don’t know if they have 5 populations or 1, so they start researching and testing drugs thinking they have 1 population only to discover there are 5 and they have to go back to the drawing board. CBio is changing that process: we can now do formulaically with more deterministic outcomes. Now that you know you have two different things, as you manipulate, you know why they respond differently. We can identify different bacteria populations earlier so it’s not guess-and-check, it’s more Newton’s law. You can develop a drug more efficiently for a specific bacteria subset with confidence that there’s only that subset.

Our first product, cellPhoresis™, is rapid litmus test for drug resistant bacteria. With it, researchers studying diseases like Alzheimer’s and Antimicrobial Resistance have a better way to characterize bacterial organisms implicated and make better treatments. The current hardware available to them is not sufficient for their development needs.

Our product allows researchers to identify that there are drug resistant bacteria in their population without harming the bacteria, therefore they can recover the bacteria to continue studying it. You know that you have a particular species, and now you can track it rather than kill it or modify it.

What product or service have you developed?

We make hardware. We are a hardware company. Our product is a desktop printer-sized microscope system plus microfluidics in a nice sleek package that solves drug discovery and cell analysis problems. We designed a device that doesn’t take up a lot of precious lab real-estate and also adds tremendous value to the research push. Our products are easy for researchers to use such that they don’t need a high level of technology training to generate data.

Which kind of researchers would be interested in CBio and why?

Our live cell analysis platform will be very appealing to researchers characterizing bacteria and other cell species who want to learn more about them. The challenge with existing tools is there is a requirement to label and know certain things about the cells to study them. PCR, sequencing and mass spectroscopy are excellent tools but force you to not study cells. You study sub cellular components and correlate the findings to the dead cells. You have to kill the cell to get to the nucleic acids or proteins.

Our product separates based on biophysical properties and there’s no need for fluorescent antibodies or tags which are expensive. It’s difficult to decide what cells need which antibodies or tags if you don’t know what you have in the first place, so researchers are essentially going in blind a lot of the time. We allow researchers to separate their cells and figure out what they are by allowing them to conduct further study on the separated materials. Researchers who do DNA sequencing are particularly interested in us because you can separate and sort cells first, then look at their DNA, so we reduce the time to figuring out the nuanced bioinformatics problems that creep up often in DNA sequencing.

What is your business model?

We have a printer / ink business model. For the printer, we sell capital equipment to research groups. Our system is called Vision™. For the ink, we selling a single time use consumable we call cellPhoresis™. We anticipate an active lab using about 500 consumables a year. We plan to add data analysis services to our offering as we gain a larger customer base.

What impact do you envision achieving?

In terms of helping research, being able to study living systems without killing them is an answer to the observer effect – you don’t have to know what you’re studying to see there are different populations and once you see a difference, you can separate the populations and study them. We have an affordable solution that will really help the bottom line for research groups and pharmaceutical groups. More importantly, we help researchers study better because they aren’t facing the black box problem anymore so they’ll speed up their research, reduce their costs, and hopefully develop better diagnostics and better drugs.

We can also help the healthcare system save a lot of money and here’s an example. Hip and joint replacement surgery is a routine operation and there are about 1.2M surgeries a year in the US. There are 60,000 bacterial infections that happen during the operation. 15,000 of those patients need a surgery to fix the infection problem. This costs a lot of additional money and is very burdensome to patient and hospital administration. We believe our platform can help detect the presence of any strange bacteria during the first surgery operation and be used as a screen to identify if there will be a potential for infection down the road. If something is found, doctors can take the appropriate action, patients are healthier, and it saves the healthcare system a lot of money because it’s costly if a patient comes back to be retreated.

Your product has been applied to Biotech, Agtech, and Cleantech. Could you give us an application example of each?

One of biggest challenges in cleantech is nonbiodegradable material like plastic; we can’t degrade it and we can’t burn it, so we dump it. Researchers have identified bacterial species that can degrade plastic, but they haven’t identified a way to characterize the bacteria to use them in an optimal way. There could be catastrophic side effects….if we haven’t isolated the bacteria or understand them, who knows what else they could degrade! Our platform can help researchers hunt for the best plastic-eating bacteria without killing them so they can find the super bacteria to deploy to eat plastics.

In talking to AgTech groups, some are interested in creating strains of corn that can grow in different climates with a view of improving food logistics. In the biotech industry, a research group, Dr. Hayes’ team at ASU, has been working with has a project studying neurological disorders such as Alzheimer’s and Parkinson’s. They use the alpha prototype platform to study stem cells and track how they are converted into different types of neurons. The goal is to create stem cell therapy that can help regenerate tissues damaged in patients that have disease like Alzheimer’s, Parkinsons, and Traumatic Brain Injury (TBI).

Key partners? Awards?

I spoke at the United States Patent Technology Officer as part of their patent examine technical training program in May 2018. We did a fast-track patent which was issued in January 2018 and the USPTO appreciated nature of the IP we generated so we were invited to speak. It is a great honor to have been invited to speak at such an event. We were also selected to speak in the San Francisco Bay Area as part of Alliance for SoCal Innovation. We’ve had a lot of other speaking opportunities and a couple more awards coming.

What resources within the UC system have been beneficial to you and why?

We were part of WayFinder, an incubator at The Cover at UC Irvine and started in October 2017. The folks at Wayfinder really helped us focus on customer centricity. They said don’t just make something and think people will come: go and talk to people! Customer feedback has refined how we develop out product. The teaching and resources helped us build our MVP and refine our business plan. Wayfinder is a great place and they really help you hone what it means to commercialize technology. My specialty is in making technology…I’m not a businessman, so I went through training to think about things not the from the how-it-works perspective but the perspective of how it adds value in the commercial marketplace.

Now CBio is at Magnify, an accelerator at UCLA. We have wet lab space to test our hardware…we need it because we can’t do our work at Starbucks. Magnify gives us the space to operate and I’ve saved over $500,000 in capital expenses. We’ve been talking to tech transfer offices at UCI and UCLA. They’re working with us on our patent strategy and getting insights from well-trained professionals was helpful.

Patents? Funding?

We’ve developed and patented our IP and have licenses from Arizona State University and the University of Washington. We also have options agreements for IP from UC San Diego and are in talks with UCLA and UC Irvine. We’re in funding mode right now and are looking to raise about $3 million. Our first round was friends and family, and now it’s time to expand.

What advice would you give to fellow entrepreneurs?

If you’re not adding value, get out. If you don’t realize how you add value, focus your core thesis on how you add value. Funding and business plans become easier once your core thesis is about how you add value. Also, take less money and work harder. It’ll be worth it in the end.

 

Sign up for the UC Innovation and Entrepreneurship newsletter for more interviews with UC founders as well as opportunities to be included as a UC founder.