Francis Moran & Associates — We bring technology to market

This is the first article in a continuing monthly series that will chronicle the growth path of Genevolve Vision Diagnostics, a life sciences startup based in Albuquerque, NM that is commercializing cutting edge genetic research to develop new diagnostic tests and gene therapies for colour blindness.

By Francis Moran and Leo Valiquette

When a startup’s underlying intellectual property has already been hailed by Time Magazine as one of the year’s top 10 scientific discoveries, it may foster the perception that the road to commercial success is already assured. But president and CEO Matt Lemelin and the team at Genevolve Vision Diagnostics have learned that a great discovery is only the beginning of a long and challenging journey.

“We are creating a new market with an advanced technology that many said was not possible,” Lemelin said. “We’ve been labeled as pioneers, a term that concerns me ever since I heard a seasoned veteran state ‘pioneers get slaughtered, settlers prosper.’”

Genevolve Vision was founded in 2009 to commercialize non-invasive molecular diagnostic assays and treatments for clinical applications in the colour vision industry. It operates in two segments: licensing its IP to third parties and establishing partnerships to develop new products; internal R&D to create and commercialize novel diagnostic tools and treatments.

After two years of commercialization activity, Genevolve is a few months away from its product launch. In this first post, we will explore how the startup has reached this point and what has been learned along the way.

The tale of two colour-blind monkeys

In 2009, husband and wife research team Jay and Maureen Neitz and their colleagues at the Eye Institute of the University of Washington in Seattle used gene therapy to treat colour blindness in two adult monkeys. They had injected the genes responsible for producing colour-detecting proteins into the monkey’s eyes, allowing them to see red and green for the first time.

The breakthrough earned the team a writeup in Nature and other leading scientific publications, as well as that recognition as a discovery of the year from Time Magazine.

Not only had this successful experiment illustrated that gene therapy could be used to treat colour blindness, it laid the ground work for a genetic test that could diagnose colour blindness in a far more accurate and thorough manner than existing tests. The most common colour blindness test, the Ishihara test, is almost 100 years old. It presents patients with a picture filled with a field of dots in which is hidden a number or letter that is formed by a pattern of dots of a different colour. The problem with this test is that it can be fooled and it can’t be used to determine the severity of the patient’s condition.

Lemelin learned of the Neitzes’ work from his contacts in the industry. At the time, he was already a serial entrepreneur and was working as marketing director for a company that supplied conventional colour vision testing products to doctors and clinicians.

“My time as a marketing director allowed me extensive interactions with practicing clinicians,” he said. “These interactions gave me some first-hand insight into what the problems are facing the industry … the market pain was clear to me. We are competing against, albeit cheaper, but extremely outdated products which can misdiagnose or simply not diagnose patients.”

A few discreet inquiries led to some “long and shrewd negotiations” with the patent holders that resulted in an exclusive world-wide license to commercialize the Neitzes’ inventions through a startup venture – Genevolve. Today, the Nietzes continue their research work at the University of Washington, while Genevolve also operates a clinical laboratory in New Mexico.

“Our genetic test is highly accurate, provides substantially more information (compared to conventional tests), cannot be cheated and is reimbursable by insurance companies,” Lemelin said. “Most importantly, our product saves doctors time, and time is everything to these guys.”

When an angel investor tells you to bootstrap …

But these competitive differentiators have not easily translated into investment capital.

“The capital needed to commercialize our technology was badly underestimated,” Lemelin said.

He made the decision at the outset to not involve venture capitalists and bootstrap the startup with personal assets and friends and family money. When he did approach angel investors, the response was “you need to bootstrap it and form more strategic partnerships.”

Lemelin took that advice to heart and secured partnerships with a few major players in the industry, took a sales job to keep a roof over his family’s head rather than drain capital out of the business and tapped into seasoned mentors and coaches who provided him with invaluable advice, including a lawyer who has provided legal services for a nominal fee.

“I find that there is an abundance of assistance out there if you are willing to find it and most importantly ask for help,” he said. “I hope to one day repay, in a big way, the people who have sacrificed, looked beyond bottom lines and have guided me along. This mindset will never be forgotten and it will be implemented in my company’s culture.”

The technology has continued to move closer to market thanks to the support of a few private investors, including one who is a practicing optometrist, which has added credibility to the venture.

Levering existing relationships with eye-care practitioners has also been a key piece of the puzzle.

“I have a core of eye doctors that I have built relationships with over the years,” Lemelin said. “This handful of doctors returns critical information to me about the product and if we are hitting the mark or not. We can then go back and tweak things and try again.”

The team has also taken advantage of the wealth of free market data available online, industry blogs and social media polls to get the pulse of the market.

“We are a marketing-based company,” Lemelin said. “We have to be. Without a strong marketing push, failure is likely. The advent of social networking has changed everything, especially in the biotech arena. It’s a new kind of openness that traditional industry insiders are not accustomed to.

“To take a technology to market, you can’t just throw up a website and hope for the best; the arsenal must be filled with Facebook, Twitter, LinkedIn, blogging and other tools for customer engagement. When I first started I was holding on to every tidbit of data and not going public with anything, now I am an open book. I am working towards becoming the authority in my space.”

Where is Genevolve today?

After two years of effort, Genevolve is aiming to make its first product, the Eyedox Genetic Test for Color Vision, available for clinical use by the end of 2011. Considering that insurance reimbursement can take two to four months to process, the startup is aiming for profitability within eight months of its product launch.

“Our revenue targets are quantified best by enrolling vision clinicians into our system,” Lemelin said. “Our goal is to enroll 50 eye doctors per month through our various marketing efforts. We have other targets as well – distribution, opening international markets, regulatory goals, striking strategic partnerships.”

The startup is in fact running behind its original launch target. This is due to a decision mid-course to change from a widely used gene-sequencing platform to one that was more robust to reduce costs, and improve efficiency and accuracy.

“On one hand we improved the results of the test, thus improving the appeal to doctors but substantially delaying revenue generation,” Lemelin said. “On the other, we afforded our marketing team more time to clarify strategies and better define our path.”

But regardless of the science involved, the heart of Genevolve, as it is with any startup, is the collective vision and fortitude of the team.

“We know we have the sure thing,” Lemelin said. “Just ask any entrepreneur. Living the dream isn’t just dreaming, it’s tossing and turning.”

In the coming months, we will explore in more detail aspects of Genevolve’s path to market and track how the stars are aligning for its product launch.

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