Exited founder Sean Kevlahan, PhD tells the story of Quad Technologies and how an interesting polymer contributed to the explosion of cell therapies in the last decade. Sean gives great advice for biotech founders and investors, and joins Armon Sharei in my pantheon of chemical engineers who are gifted communicators.
Highlights:
Sal Daher Welcomes Sean Kevlahan, PhD, Founder of Quad Technologies
“...how do you release a cell from a substrate [underlying substance] without killing a cell?”
“Magnetic beads have been around for a while. Researchers use them to separate cells.”
How Do You remove the Magnetic Beads without Killing the Cell?
Quad Technologies’ Polymer Made It Possible to Remove the Magnetic Beads
“When we first started out Quad, we focused on the academic markets.”
The Success of CAR T-cell Therapies Opened Up an Opportunity for Quad -Help Multiply the CAR T-cells
Emily Whitehead, the First Patient Treated with CAR T-cell Therapy, Is in Remission for Ten Years
The Aha Moment that Put Quad Technologies on the Map
Sean Kevlahan’s Epiphany Led to a Pivot and Product/Market Fit
Ran Into Someone from Bio-Techne at the JP Morgan Conference & Discovered the Strategic Fit
Bio-Techne Acquired Quad Technologies in July of 2018 – Investors Did Very Well
Sal Daher Is Eager to Learn About Sean Kevlahan’s Stealth Startup
“Even in biotech winter exited founders who have had this kind of success are very much in demand.”
Sean Kevlahan’s Grandfather Was an Entrepreneur, a Successful Restauranteur
Sean’s Entrepreneurship Activated by Hitting the “3-Year Wall” Doctoral Students Experience
Quad’s Polymer Used to Be Just Coating for Microfluidics Chips; Sean and Adam Hatch Imagined Many More Uses
“We went from obviously, biotech, which just makes the most sense to coating the undersides of boats for marine biofouling.”
Due to MassChallenge, Quad’s Tech Was Used in the International Space Station
Sean Kevlahan Speaks Well of Northeastern University’s Tech Transfer Office
Quad Raised $ 6 Million Which Qualifies as Angel-Scale
The Vital Importance of Clear Messaging by Life Science Founders – Lose the Jargon!
“...I have to do a mental check, and making sure that I'm not being too jargony.”
Biotechnologies Are Multiplying and Creating a Cascade of Opportunities
Quad Raised $ 6 Million from Fifteen Angel Investors
Siamab Raised $ 14 Million from More than Forty Angels
Going from Biotech Founder to Biotech Executive: Compare and Contrast
Jeff Behrens Recommends that Prospective Biotech Founders Get Experience at Big Biotech Companies
Parting Thoughts from Sean Kevlahan, PhD
ANGEL INVEST BOSTON IS SPONSORED BY:
Transcript of, “Polymers, Pivots & Exits”
Guest: Founder Sean Kevlahan, PhD
Sal Daher: I'm really proud to say that the Angel Invest Boston podcast is sponsored by Purdue University entrepreneurship and Peter Fasse, patent attorney at Fish & Richardson. Purdue is exceptional in its support of its faculty; the faculty of its top-five engineering schools in helping them get their technology from the lab out to the market, out to industry, out to the clinic.
Peter Fasse is also a great support to entrepreneurs. He is a patent attorney specializing in microfluidics and has been tremendously helpful to some of the startups in which I'm involved, including a startup that came out of Purdue, Sovereign Technologies. I'm proud to have these two sponsors for my podcast.
Sal Daher Welcomes Sean Kevlahan, PhD, Founder of Quad Technologies
Welcome to Angel Invest Boston, conversations with Boston's most interesting founders and angels. Today, we are privileged to have with us Sean Kevlahan, founder of Quad Technologies. Welcome, Sean.
Sean Kevlahan: Thank you Sal for having me. Really appreciate it.
Sal Daher: Sean Kevlahan, PhD, founded a company called Quad Technologies, in which I was very interested to invest but too foolish to pull the trigger on, on the investment. It was a tremendous success and Sean is here to tell us about it. Sean, tell us what problem Quad Technology was addressing.
“...how do you release a cell from a substrate [underlying substance] without killing a cell?”
Sean Kevlahan: To give a little context of Quad Technology, the technology came out of Northeastern University. Really what we aim to address, was a simple question is how do you release a cell from a substrate [underlying layer] without killing a cell? We developed a really interesting dissolvable polymer to address that. Then there's a whole slew of applications that we were focused on in the early days of Quad but we really focused on addressing the how do you actually activate and expand T-cells and not have a magnetic bead attached to them? That's what Quad really addressed with our technology.
Sal Daher: Let me step in here just a little bit and catch [up] listeners a little bit on the magnetic beads. Could you expand on what the magnetic beads are used for in the life sciences?
“Magnetic beads have been around for a while. Researchers use them to separate cells.”
Sean Kevlahan: Sure. Magnetic beads have been around for a while. Researchers use them to separate cells. You can imagine very small cells having magnetic beads attached to them, making those cells magnetized. You can move them and manipulate them around. You can also use those magnetic beads to activate cells to grow them but the problem was, with those magnetic beads, is they're actually harmful to cells.
How Do You remove the Magnetic Beads without Killing the Cell?
You actually need to be able to have the ability to remove those magnetic beads from cells. That's what Quad aimed to solve. It was the how do you remove those magnetic beads from cells without actually killing the cell in the process? We developed that really clever polymer technology that dissolves and effectively releases the magnetic beam. That's where we commercialized.
Quad Technologies’ Polymer Made It Possible to Remove the Magnetic Beads
Sal Daher: Awesome, it's like the 3M stickies for magnetic beads.
Sean Kevlahan: Yes. Except you can get the stickies off.
Sal Daher: Easily. The point of the sticky is that they come off easily. It sticks but you can take it right off. It doesn't mar the surface or anything like that. By imposing this polymer between the bead and the active molecule that you coat the bead with to cause it to bind to cells, you can just dissolve the polymer, and then the cell, that molecule is attached to the cell but it's not a noxious molecule. What's noxious is the magnetic bead. Iron, not a good thing to have attached to cells.
Anyway, this was solving a huge problem. The magnetic beads [is] something that's been around for decades. It's well established. There are libraries, all kinds of beads attached to all kinds of cells and you can order that. It's a very established industry. You made a great improvement in that. Tell us a little bit about, I understand that your company pivoted a little bit. The original plan was one and then you went to a slightly different direction before you actually hit pay dirt.
“When we first started out Quad, we focused on the academic markets.”
Sean Kevlahan: Yes. Sal, as you can appreciate, especially being early stages in a startup, there's a lot of ebbs and flows especially when you're trying to get product-market fit. When we first started out Quad, we focused on the academic markets. Academics need to use research tools like magnetic beads to manipulate cells and they also wanted to remove the magnetic beads from the cells. We decided, as our first product, to actually take a magnetic particle and then coat them with our polymer and then essentially sell kits or reagents to researchers.
I would say in the early days, we got some traction, we had some really nice academics but we found was is that we really weren't hitting the mark in the market and we needed to focus on something a little more broad. We were asking ourselves a question because pharma and biotech are much larger than academic settings, what's going on in pharma and biotech.
The Success of CAR T-cell Therapies Opened Up an Opportunity for Quad -Help Multiply the CAR T-cells
At the time, cell and gene therapy started to take off and specifically CAR T. For those who don't know what CAR T is, it's a really a revolutionary cell and gene therapy where you take one of your immune cells that fight infections and you extract them from the body and genetically modify them to then go after cancer like leukemia and unbelievable successes in the clinic.
What we found was when we worked with pharma, they had a problem where they couldn't expand T-cells for those immune cells in a culture. They also had a magnetic bead problem.
Sal Daher: What does it mean to expand?
Sean Kevlahan: Just to grow T-cells.
Sal Daher: To have them multiply.
Sean Kevlahan: To multiply exactly.
Sal Daher: Now, with CAR T, just a question here for my friend Lila, she's going to have a question about this. When you say, CAR T versus some other kinds of cell transfection, CAR T what they're doing is, if I understand correctly, is they are putting on the outside of the cell, a receptor, which the T-cell does not have. You have this beast that has the legs of one animal and the head of another animal.
It's not a normal cell. It's a cell that has a receptor that your T-cell does not have because the cancer is very good at disguising itself and fooling your T-cells. This is different from some of the transfection technologies such as what SQZ [Biotech] does, which is in effect, they are getting a material into the nucleus and transforming the cell as a whole. It's reengineering the cell in a different way. Is that correct?
Sean Kevlahan: Sal, I think you hit the nail on the head. Really, at the end of the day, you're transforming these T-cells to effectively be trained and express things on the surface to go after different cancers. That's CAR T in a nutshell.
Sal Daher: CAR T as well now has gotten pretty well developed. It's maybe like a half a decade that we've been having, maybe a decade we have CAR T-cell therapies already.
Emily Whitehead, the First Patient Treated with CAR T-cell Therapy, Is in Remission for Ten Years
Sean Kevlahan: Yes. It's been about a decade now. Emily Whitehead, who is one of the first pediatric ALL patients that were treated with CAR T, I think just celebrated her 9th or 10th birthday in being in complete remission right on that [on May 10th, 2022 Emily was 10 years in remission].
It's a fantastic story because pediatric ALL prior to CAR T was a really difficult indication for those particular patients. This really, really changed the game for that particular patient population. It's unbelievable. The work that's been done within CAR T has been fantastic.
Sal Daher: Back to your narrative, you were getting nowhere in the academic space because there just wasn't enough interest. It's small, at the same time, CAR T is taking off. How did you take advantage of that market?
The Aha Moment that Put Quad Technologies on the Map
Sean Kevlahan: As you recall, Quad's whole platform technology was this really cool polymer that you could dissolve away. You could put things on the surface that can attach to cells and those things on the surface that can attach to cells can also stimulate or activate or grow T-cells. We thought to ourselves, "Hey, CAR Ts take off," and then we dug into their process a little bit.
As I mentioned, you have to pull the T-cells out, you have to then modify them and expand them somehow. We found out how they expand those T-cells, that they use magnetic beads. I was like, "Hold on." I was like, "Wait. They use magnetic beads?" I dug a little bit deeper into it and I looked into the QC metrics and part of their release criteria.
Sal Daher: QC, quality control.
Sean Kevlahan: Yes. Quality control. Part of the release criteria essentially before they dose a patient with this CAR T therapy, is that they have to count the amount of residual magnetic beads because those residual magnetic beads are a tox. They're toxic to patients.
Sal Daher: They have to control the toxicity of the magnetic beads. It's basically iron, right? They're made of iron.
Sean Kevlahan: Yes, exactly. Then we said, and this was the aha moment. I remember talking to my VP of R&D, I said, "Well, what if we took, let's take magnetic beads out of the equation? Why don't we just make a polymer particle that dissolves using our platform? We'll put the same stimulatory or same molecules on the surface to grow those T cells and then we just add them, you can add them to a culture and you can expand the T cells and then pharma doesn't have to worry about magnetic beads.
There's no magnetic bead clearances, there's no tox event, there's no anything where you have to worry about these challenging magnetic beads in the process." That was the big pivot.
Sal Daher: Oh, wow. Forget releasing the magnetic beads. No beads.
Sean Kevlahan: No beads. Yes. That was the big aha moment.
Sean Kevlahan’s Epiphany Led to a Pivot and Product/Market Fit
Sal Daher: It doesn't work for magnetic separation but for stimulating the cells, it works. Awesome.
Sean Kevlahan: It worked. There's a really funny story. My VP of R&D at the time was like, "I don't know if it's going to work." I said, "Just do me a favor, just run it in the lab and see what happens." Then, no joke, four days later, I get a selfie from my VP of R&D with cells growing in it and him giving a thumbs-up, and I was like, "There it is." That was it. That's where we found product-market fit.
We just said, really the hell with beads and just moved forward with some new particles that didn't have magnetic beads. Pharma just got super geeked out about it. That's where it took us.
Sal Daher: Awesome. Do you want to tell the rest of the story? You made the pivot and pharma goes crazy about it and then the rest of the story is you get acquired.
Sean Kevlahan: Yes, exactly. That's what happened. We had this big pivot. We just grabbed a new GMP manufacturing facility in Woburn and while I was going out to pitch--
Sal Daher: GMP, Good Manufacturing Practice. That's when you can produce stuff that can be used in clinical trials in humans. You're producing a substance that can be used in human trials. Yes. Please, continue.
Sean Kevlahan: I was at the JP Morgan healthcare conference and for those who don't know, that's the big conference where a lot of pharma are just doing their deals.
Sal Daher: That's the South by Southwest. That's the CES conference of health care.
Sean Kevlahan: The Bonnaroo or the Burning Man of healthcare. It's one of those two. It's at the St. Francis Hotel every year in San Francisco, and we're out pitching--
Sal Daher: It's not like Burning Man because there are a lot of people with bow ties.
Ran Into Someone from Bio-Techne at the JP Morgan Conference & Discovered the Strategic Fit
Sean Kevlahan: Yes, sure. [crosstalk] It's true. It's not. Not quite. It's a little more professional than Burning Man. Needless to say, we were pitching our Series B. We had a couple of leads and then we had some strategics that came to us and one of them was with Bio-Techne and there's unbelievable overlap with their ligands or what you would put on a particle.
Sal Daher: A ligand is a substance that you use to connect a molecule to some something else to create some compound that does something special.
Bio-Techne Acquired Quad Technologies in July of 2018 – Investors Did Very Well
Sean Kevlahan: Exactly. It's a really nice strategic fit and we decided to partner with Bio-Techne and the rest was history. Then we closed that in July of 2018.
Sal Daher: Are you at liberty to disclose the outcome of the acquisition in terms of how many X I missed out by not investing in Quad Technologies?
Sean Kevlahan: I will say that everyone did very well. I'll leave it at that but everyone did very, very well and was very pleased with the outcome.
Sal Daher: Sal is beating himself for-- anyway, that's a great story. Then you were acquired by Bio-Techne and then you spent some years running the division that bought the technology that you developed.
Sean Kevlahan: Yes, and it's spot on. When they bought Quad Technologies, I ran the cell and gene therapy business at Bio-Techne for about three years, really helping to position that whole organization within the cell and gene therapy market that was starting to emerge and has been emerging. That was about a three-year journey and I actually recently just left to start the next thing that it's currently in stealth mode that I'm pretty excited about.
Sal Daher Is Eager to Learn About Sean Kevlahan’s Stealth Startup
Sal Daher: Well, I am on tenterhooks to find out about this new project. Needless to say, I have my checkbook here if you need funding. Of course, when somebody's had the kind of exit that Sean has had, he has a very long conga line of people, "Oh, you have checkbooks, I want to invest in you." Anyway, just putting my hand up.
Sean Kevlahan: Thanks, Sal.
“Even in biotech winter exited founders who have had this kind of success are very much in demand.”
Sal Daher: Even in biotech winter exited founders who have had this kind of success are very much in demand. That's very good. Sean, let's talk a little bit about...step back before you started Quad Technologies. How is it that you decided to become a founder? You were an academic, you were doing work at Northeastern University, what was your cliche entrepreneurial journey? How did you do this crazy thing instead of getting a job in pharma that pays very well and have no late nights and no worries?
Sean Kevlahan: That's a great question, Sal. It was a pretty big aspiration of mine to start something. I'm a builder by heart. I love to build things. It was something that I was unbelievably passionate about. I think it was between building and then as I think everyone in their grad work that hits they call it the grad student wall if you will, where you are like three years where you having that existential crisis in a microscope room, you start to think a little bit but it's something that I've been deeply passionate about, is starting something from ideation to bringing things into fruition. It just so happened at, go ahead.
Sal Daher: No, no, no. I was just curious if you have a model in your family. Was your dad an entrepreneur, your mom?
Sean Kevlahan’s Grandfather Was an Entrepreneur, a Successful Restauranteur
Sean Kevlahan: Actually, my grandfather was. My grandfather on my dad's side actually is from Ireland and he came over I think it was in the '50s and he started, he was in the restaurant business and he started and sold I think over his lifetime about six different restaurants. I would watch him when I was young. Having had three different places that he'd be jumping between. He was a big people person. It was really, really, really interesting watching him build things when I was young.
Yes, there's a lot of entrepreneurship within--
Sal Daher: You're a builder, your grandfather was a builder, built restaurants, you're building biotech companies. Please continue the story. You hit the wall.
Sean’s Entrepreneurship Activated by Hitting the “3-Year Wall” Doctoral Students Experience
Sean Kevlahan: Hit the three-year wall. My colleague who was one of the primary inventors on the hydrogel polymer-based technology that Quad was founded on, this gentleman, Adam Hatch, a good friend of mine said to me around I think it was around the two-year mark. He said, "Hey, I discovered something really pretty cool." I was like, "Oh, well, let's take a look at it." He published on it and I said, "Yes, this is a fantastic platform."
Quad’s Polymer Used to Be Just Coating for Microfluidics Chips; Sean and Adam Hatch Imagined Many More Uses
At the time, and you would appreciate this, Sal because you've been diving into microfluidics for a little bit but at the time, that polymer was only using coating microfluidic devices. There was a pretty significant microfluidic piece of this. I just remember just putting on my building hat on. Adam and I would be sitting on his back porch in Cambridge and we're just spitballing ideas and just saying, "Okay, what can we do with this polymer?" We put so much stuff on the whiteboard. It was crazy.
“We went from obviously, biotech, which just makes the most sense to coating the undersides of boats for marine biofouling.”
We went from obviously, biotech, which just makes the most sense to coating the undersides of boats for marine biofouling.
Sal Daher: Oh wow.
Sean Kevlahan: We were across the spectrum. It was a lot of fun. I just saw the opportunity of the tech and I'm just like, it's like one of the things I get, and my colleagues make fun of me, I get unbelievably obsessed, I get excited and then obsessed about something. I was just like, "This is what I got to do. I got to take this technology out. I can't stop thinking about it, and that was it. That was the impetus of Quad in getting it out of academia.
Sal Daher: This reminds me of Semyon Dukach saying people come up to him and ask him, "Should I start this company for this?" He says, "Look, you know you can't live any other way, you're going to start it. It's like an itch you have to scratch. It's like you're fated to do this thing that is so incredibly irrational and crazy, but you've got to do it because you got to do it."
A tremendous thing to observe. Humanity owes so much to this fact that people have this drive, this irrational drive which a lot of times if people fail it's not for the... Most founders don't succeed but they still want to take a stab at it because they have to do it, it's a compulsion.
Sean Kevlahan: Oh, yes.
Sal Daher: Did you go through I-Corps or some kind of a program that helped you build out the business side of things?
Sean Kevlahan: We went with-- We didn't do I-Corps, we did MassChallenge. We went to the 2013 cohort.
Sal Daher: Oh, wow, you went really there for the big time?
Due to MassChallenge, Quad’s Tech Was Used in the International Space Station
Sean Kevlahan: Oh, I went for big-time, yes. We were in the top, it was this, I guess at the time it was called the silver winners, part of the top 10 finalists. We actually got some money from CASIS which was the commercial arm of NASA to send some of our tech up to the International Space Station, that was a pretty cool thing. I remember getting a call from my wife saying, "I don't have any rules for you, but you have to stay on earth."
[laugher]
Sean Kevlahan Speaks Well of Northeastern University’s Tech Transfer Office
Sean Kevlahan: It was an ironic joke but that was actually a really cool project. Basically, some components of our manufacturing process up to the International Space Station. That was actually fun, but yes, we did MassChallenge. That was I think the big accelerator. Then at Northeastern, they had some programs out of idea which had gap funding which helped a lot on product development. There was the tech transfer office, super supportive as well, and there was some grant money there too as well. It was a really supportive community at Northeastern.
Sal Daher: You speak well of the tech transfer community at Northeastern, I'm glad to hear that. I hear great things with the tech transfer community at Purdue University, other places not so much. I'll stop there. [chuckles]
Sean Kevlahan: I would say that it's not all tech transfer offices operate the same. It could be very different going from university to university.
Sal Daher: I think Avis, we try harder. Remember the-- I think Hertz was the big player in the rental car business and Avis was always the one that tried harder because if you're the big players in the field, you're used to being courted by pharma, and when a startup comes to you trying to take the tech from the lab to the clinic or industry, maybe you're not as nimble. That's good to hear about Northeastern.
Sean, one of the things that I'm working on is trying to get more angels involved in the life sciences, okay?
Sean Kevlahan: Yes.
Sal Daher: I hear objections to investing in life sciences, "Oh, the holds are very long; takes forever." I think in the case of Quad Technologies if I'd invested in 2015, it would have been a three-year hold. It would have been pretty damn fast. The capital requirements are massive. Can you disclose how much you raised for Quad?
Quad Raised $ 6 Million Which Qualifies as Angel-Scale
Sean Kevlahan: Yes, I think it's on PitchBook or Crunchbase. It's about 6 million over the course of the company.
Sal Daher: This is what I like to call angel-scale. 6 million, with a lot of running around, you can get angels to fund you.
Then, another objection is biotech is really hard to understand. Of course, we all grab that, life sciences art, impossibly hard to understand, but it's because the knowledge is so siloed. If you're somebody who's an expert in one field, you go one and a half fields over in the life sciences and you're wandering in the woods, would you agree with that statement?
Sean Kevlahan: Yes. I think if someone who doesn't really have a lot of experience within life sciences or have a tech degree, I could see that someone could get lost in terms of the nomenclature and what people are talking about, but I think if you partner with a pretty eloquent entrepreneur that can describe technically what problem you're solving, it's easier to pick up, right?
The Vital Importance of Clear Messaging by Life Science Founders – Lose the Jargon!
Sal Daher: This just suddenly hit me. These successful entrepreneur like Armon Sharei super articulate, okay?
Sean Kevlahan: Oh, yes.
Sal Daher: You, your mom would say you're super articulate. I would say the same. I would agree with your mom. I hadn't cottoned on to this. This is a very important factor. I'm thinking of Çağrı Savran. He's really good at explaining things. You're going to meet Çağrı, you're going to find him really compelling. If you're a life science founder and you are taciturn and not given to explaining things really very clearly, taking people in baby steps, it's obvious but that is a really important point.
Sean Kevlahan: Obviously, any investor that's doing diligence on a life science startup has to do their diligence technically and that's where I think you have to pull into your network on how you peel back the onion on if something's technically sound, whether it's an idea or not.
I think the fundamental thing, and this is where I think the biggest gap, especially for entrepreneurs coming out of academia, is to describe an idea in a very elegant and distilled and simple, this problem that you're solving, right?
Sal Daher: Right. The natural temptation I think is my colleagues are going to hear me speaking and they're going to say, "Oh, you're horribly oversimplifying this," but there's this case and there's that case, and all this stuff. You have to resist that temptation. You have to say, "Yes, I'm not talking to a specialist. I'm talking to a layperson and I have to even oversimplify to very accessible sketches that doesn't have all the details so that you can understand." You can show a cell without all the intricate details. You just show the relevant details so that the person can understand what is the value proposition that's being put forward?
Believe me, the complexity is going to be present in the lab, it's going to be present all along the whole process but people have to be able to understand what the promise of the technology is.
I think you put your finger here really well explaining it eloquently. The messaging is really important. It takes a lot of time. Who was it that said, "I'm sorry, I wrote you such a long letter, if I had more time, I would have written a shorter one?" Some great writer.
The message to life science founders is you have to polish your message and make sure that without oversimplifying or glossing over important details, you convey just the essential things in terms that are not laden with jargon and PK and PD and SAD. Explain what you're doing. Dosing studies. You're trying to figure out what the correct dose is or you can try to figure out where the drug goes in the body. Explain it in lay people's terms. Expend three or four more words where you could just say two initials. Watch the jargon. Thanks for highlighting that because that is very true.
“...I have to do a mental check, and making sure that I'm not being too jargony.”
Sean Kevlahan: I will say it's incredibly hard for someone from academia going into starting a venture and conveying that because, and even for myself, I have to do a mental check, and making sure that I'm not being too jargony. That took years to get that into understanding how to distill a very complex subject down into something that a general audience can understand.
Sal Daher: Right. You need the shortcuts in order to explain these massively complex concepts. It's like a build... It's complexity on top of complexity on top of complexity. This is really extremely valuable. See, what I'm seeing, Sean is that the technologies, we talked about CAR T, we talked about hydrogels, we talked of microfluidics, gene editing, there are gazillion technologies that are just exploding. Their usefulness is growing exponentially, and interacting with each other.
Biotechnologies Are Multiplying and Creating a Cascade of Opportunities
This is hydrogel that used to be used for coating the inside of microfluidics chips. Microfluidic chips, by the way, are these little chips that are used for cell separation, cell transformation, doing all kinds of magical things in cells because of the behavior that the fluid has and certain types of constrictions and so forth. The common thing about this is that these technologies are becoming more and more accessible. We're going to see a lot more startups, a lot more academics taking the technology from their lab to industry to the clinic.
The other thing that's happened at the same time is that the venture capitalists who used to fund these things are now going for moonshot projects, a la Moderna. They're not interested in projects where the $6 million is going to get you to a partnership with a strategic or get you acquired by strategic. They're interested in things where they come up with $2.7 billion and the thing goes public, and it still doesn't really have a product. [chuckles] It gets rescued by this catastrophe of COVID. It transforms, saves a huge number of people by this happy accident that they had.
They're interested in the moonshot projects. They're not interested in these angel-scale projects. By the way, just roughly how many angel investors did you have on your cap table?
Quad Technologies Raised $ 6 Million from Fifteen Angel Investors
Sean Kevlahan: Oh, that's a good question. I think it was close to 15. Yes, I think it was about 15 on the angel side.
Sal Daher: Oh, wow. 15 and you were able to raise 6 million?
Sean Kevlahan: Yes. Couple of those angels are pretty high-net-worth individuals, they would come with pretty large checks.
Sal Daher: Deep-pocketed angels.
Sean Kevlahan: Yes.
Siamab Raised $ 14 Million from More than Forty Angels
Sal Daher: Contrast, this is, Jeff Behrens has been on the podcast. He was a CEO. He was not the founder but the CEO of a startup called Siamab. Various types of cancer therapy based on sugars on the surface of cancer cells. Technology came out of UCSD, University of California, San Diego. They moved here. Jeff came in as a CEO. He ended up raising $14 million. I think he had like 40-something angels on his on his cap table. He also had non-dilutive funding. This is what opened my eyes to the tremendous importance of angel funding to the new wave of these really groundbreaking biotech firms.
The other factor is, because the life sciences are so productive now, you can do such wonderful things. Experienced executives, from pharma, are in very, very great demand. One of the things we're going to have to do is we're going to have to help academics retool as founders and run that.
Going from Biotech Founder to Biotech Executive: Compare and Contrast
You went from founder, and then you went executive at a big biotech firm. What kinds of things that surprised you, that you learned along the way?
Sean Kevlahan: Yes, moving from a founder to a big organization, everything has its pluses and minuses. Being in front of a big organization, you have a lot of support, a lot of infrastructure, a lot of things to draw down to. I think the biggest change, especially being the CEO, is that the buck stopped with me as the CEO of Quad. There was...any decisions that-- they were material enough in terms of direction, that's up to me.
When you're running a pretty large business in a large organization, that has a lot of interdependencies with other groups, you have to implement a lot of consensus building, which is A, not a skill that really is in academia that you learn, and B, not a skill you learn as the first CEO.
Sal Daher: Yes. Exactly.
Sean Kevlahan: It's moving from-- Okay, well, a lot of these decisions, reside for me to, now I have to go build consensus to help build projects forward, and then build my business up in a large organization. It's very different. You have to approach things a bit differently when you're doing consensus building. I think that was probably the biggest learning experience, moving from a small startup to a much larger organization.
What was also different too, is that you don't have to worry about raising money when you're in a large organization.
Sal Daher: [laughs] That part's handled.
Sean Kevlahan: That's handled. It's nice to have infrastructure and not staring at your balance sheet constantly. It's different. It's very different moving from a smaller company to a large company. Moving to a larger company, as a biotech executive, I've learned quite a bit in terms of how deals are done internally and you to use that to understand for the next venture, how to level set on what's going on internally with that other organization.
Jeff Behrens Recommends that Prospective Biotech Founders Get Experience at Big Biotech Companies
Sal Daher: This ties in very much with Jeff Behren's advice to the academic founder who is trying to start biotech firm. His advice was just actually go work at big pharma, at the big strategics. You'll learn exactly what you're talking about. How these collaborations come about, the dynamics, you talked about consensus building. You learn the tempo; you learn how decisions are made in the big firms which could be extremely irrational or counterintuitive let's say to someone in a startup. This is extremely valuable. I'm very grateful that you made time for this.
Sean Kevlahan: No, no, no, I'm happy too. I think going off to your point, Sal is that having an academic understanding, especially when academic is trying to start a venture that's business to business and not understanding the inner workings of what's going on behind the scenes, it's very different.
Even for the Quad story, when we moved from academics to pharma, it's very different transactionally moving from how you sell to academic, to academic labs to how you strike partnerships with pharma and biotech.
Sal Daher: Tremendous. Sean, as we think about wrapping up this interview, are there any other thoughts that you want to leave our audience of founders, people thinking of founding companies, or angel investors?
Parting Thoughts from Sean Kevlahan, PhD
Sean Kevlahan: I think for the founder audience and those who're thinking about starting a venture and you feel like you have an idea, I think there's no better process to learn on how to build a business than founding your own company. I think it's well worth the risk, and I think a lot of people end up saying, "Well, what if I fail, what happens?" I failed...I don't even know how-- Probably a thousand times at Quad in a variety of different forms.
Having understood that, it allows you to really build on some of those learnings. I think it's an invaluable experience especially if you have some really interesting tech. I think for the academic founders, that folks are focused on academia and translating technology out of the lab, is that realizing that the translational bridge from what you're doing in the lab to what would be a commercial, viable product, those are actually pretty large chasms, and I think a lot of people don't realize how large those are specifically require investments and making sure you can get down to some minimum viable product.
Then for the angel investors, biotech is not that scary. It's a lot of fun, it's-- I think having a good counterpart that is tech... has a life science background that can help navigate through the weeds, I think these are really fun investments and obviously they're high risk, but there're also multiple markets within life sciences. You have the pharma biotech market, where your value is predicated on clinical success, but you also have the life science tools market, where you actually have a more conventional, you sell a unit of something to a business or to an academic customer and follow pretty normal business cycles, I would say, that people are used to.
Sal Daher: This is extremely valuable. This is extremely valuable. [chuckles] when I'm with a founder like you I don't want to take too much of your time because I think, "Oops, this guy could be saving humanity instead of talking to me." Anyway, I'm extremely grateful to you Sean Kevlahan for being such a good sport and making the time to talk to us and to share your experience with the audience. Thanks a lot.
Sean Kevlahan: Yes, well thank you for having me, Sal, I'm happy to help and I really appreciate you putting me on your podcast.
Sal Daher: Oh, anytime. This is Sean Kevlahan, PhD, founder of Quad Technologies acquired by Bio-techne and now working on stealth Project X and sometime, I'd love to have you on the podcast to talk about that or other things. If you have things that you want to get across to our audience, you're always welcome here.
Sean Kevlahan: Thank you.
Sal Daher: Thanks again.
This is Angel Invest Boston, I'm Sal Daher. [background music] I'm glad you were able to join us. Our engineer is Raul Rosa, our theme was composed by John McKusick, our graphic design is by Katharine Woodman-Maynard, and our host is coached by Grace Daher.