Healthcare has been moving in a direction to provide more precision medicine. One aspect of this focuses on taking a person’s genetic composition, lifestyle, environment, and behavioral habits into account. Another focus is on utilizing precise delivery mechanisms for treatments that increase the concentration of medication in target areas, thus reducing side effects and minimizing the impact on unaffected cells. At the forefront of this next generation of delivery is Bionaut Labs, a startup that is pioneering the use of microscale robots (the size of a grain of rice) propelled by magnets to access specific areas of the body that have been traditionally impossible or difficult to target. The company is initially focused on using its remote-controlled novel delivery system for the treatment of central nervous disorders and diseases. Founded by the same team that built the precursor for FaceID used on iPhones, Bionaut Labs spent six years developing the technology that’s been shown to be safe to use in pre-clinical studies and plans to move to the clinical stage in 2024. With nervous system conditions like Parkinson’s and Huntington’s having very few effective treatment options, Bionaut’s treatment system is poised to bring unprecedented opportunities to solve some of the medical profession’s biggest challenges.
LA TechWatch caught up with Bionaut Labs Cofounder and CEO Michael Shpigelmacher to learn more about the business, the company’s strategic plans, latest round of funding, which brings the total funding raised to $62.2M, and much, much more…
Who were your investors and how much did you raise?
We raised $43.2M in a Series B round led by Khosla Ventures, bringing our total financing raised to date to $63.2M. Also participating in the round are new investors Deep Insight, OurCrowd, PSPRS, Sixty Degree Capital, Dolby Family Ventures, GISEV Family Ventures, What if Ventures, Tintah Grace, and Gaingels, along with all existing investors – Upfront Ventures, BOLD Capital Partners, Revolution VC, and Compound.
Tell us about your product or service.
Bionaut uses microscale robots that are the size of a grain of rice to navigate (via magnetic propulsion) into the depths of the human body and brain (like the midbrain) to treat central nervous system (CNS) diseases and disorders. These Bionauts can target specific sites, and safely deliver treatments — as opposed to the systemic use of toxic drugs (e.g. chemo). To remove the barriers of localized treatment & detection of diseases, Bionaut deploys micro-robots to reach difficult or impossible-to-reach places deep in the body to perform medical interventions that cannot be attained via current treatment modalities. Bionauts’ ability to deliver therapies and treat conditions in inaccessible locations in the body aims at solving some of the most pressing and unaddressed problems within medicine. By reaching the midbrain safely, Bionaut aims to develop solutions to treat the most debilitating conditions including Parkinson’s disease and Huntington’s disease, malignant glioma, and hydrocephalus.
What inspired the start of Bionaut Labs?
I founded Bionaut with Aviad Maizels in 2016. We are two robotics entrepreneurs from Israel and prior to starting Bionaut Labs, we founded PrimeSense, a revolutionary robotics company allowing machines to see the world in 3D. Today PrimeSense’s technology is embedded in every iPhone, providing the facial recognition capability known as FaceId.
Later down the line, my work on Reformulation strategy for McKinsey seeded the idea behind the foundation of Bionaut Labs. Reformulation is a process in which a pharma company changes the delivery mechanism of a drug (e.g., turning an oral drug into a transdermal patch). I decided it was time to disrupt the
century-old pharma paradigm of one-size-fits-all systemic treatment. This realization inspired me to later found Bionaut Labs together with Aviad, developing remote-controlled microrobots that can diagnose and treat medical conditions locally with unprecedented precision and safety.
When we both set on this journey in 2016, we partnered with an academic team at the Max Planck Institute of Science in Germany which had an interesting early-stage technology of magnetically actuated particles. We saw the potential of this technology to seed the concept of remote-controlled medical micro-robots (Bionauts). Over the span of the next 6 years, the Bionaut team took the technology from academic proof of concept to a full product design which has been shown to be safe in pre-clinical studies, currently on the way to clinical studies to treat debilitating neurological disorders.
How is it different?
Bionaut is the only company in the world developing micro-robotic technology for the treatment of devastating conditions/diseases. By treating each disease locally, instead of broadly flushing the body with medicine (even the healthy parts), Bionaut is able to treat diseased areas of the body with precision. The company is tackling the biggest challenge, taking it from the research stage to a safe, clinically approved product.
What market are you targeting and how big is it?
We currently lack a way to deliver local therapies to the deep center of the brain. Drug exposure and uptake at the disease site remain a significant challenge to the successful development of therapies for many brain conditions. We are targeting those experiencing neurodegeneration, as it is one of the most common conditions in the world today led by Huntington’s and Parkinson’s disease. With no cure, treating the most common neurodegenerative diseases has proven ineffective and costly. The neurodegenerative disease market is expected to reach $53B by 2030 and it is estimated that neurodegenerative diseases cost $655B a year in medical expenses and economic loss worldwide.
We currently lack a way to deliver local therapies to the deep center of the brain. Drug exposure and uptake at the disease site remain a significant challenge to the successful development of therapies for many brain conditions. We are targeting those experiencing neurodegeneration, as it is one of the most common conditions in the world today led by Huntington’s and Parkinson’s disease. With no cure, treating the most common neurodegenerative diseases has proven ineffective and costly. The neurodegenerative disease market is expected to reach $53B by 2030 and it is estimated that neurodegenerative diseases cost $655B a year in medical expenses and economic loss worldwide.
What’s your business model?
As we are preclinical, we are not currently generating revenue. We are aiming to start clinical trials in 2024. However, we are making great progress in recruiting leading neurosurgical centers in the country to conduct clinical trials on our technology – setting up for success for both ourselves and the millions of patients around the world who can benefit from this paradigm-shifting technology.
How are you preparing for a potential economic slowdown?
We’re being strategic with our funding. This fresh round supports further development of its proprietary Bionaut™ treatment platform, pre-clinical and clinical research, expansion of clinical targets, and progression through two accelerated FDA designations. Funds will be used to advance the clinical development of the company’s lead programs against malignant glioma brain tumors and Dandy-Walker Syndrome (a rare pediatric neurological disorder). Since we are not a revenue-stage company at this point in time, the economic slowdown is not expected to have a material impact on our plans for the next few years.
What was the funding process like?
The funding process was fundamentally driven by our results and our data. Once we were able to demonstrate our pre-clinical data and technical progress to investors, the round materialized fairly quickly. We have been able to consistently deliver on our technical milestones so far, which made it easy to get our insiders to double down, and also helped them bring interested new investors into the mix.
What are the biggest challenges that you faced while raising capital?
We are turning science fiction into science fact. We are working to cure diseases nobody thought could be cured. This is a new technology for the entire industry and investors need to see proof and credibility. We’ve brought in a very scientific and credible team – experts across robotics, neuroscience, biology, and drug development to showcase our product and see for themselves how it works.
What factors about your business led your investors to write the check?
We are a highly skilled team building a regulated product to treat real patients within less than 2 years. The team’s experience, credibility, the technology being developed, and the promise of curing devastating diseases is what drove our investors to participate.
What are the milestones you plan to achieve in the next six months?
We plan to continue pre-clinical research for Bionaut’s lead programs, especially focusing on Dandy Walker Syndrome and Glioma, as well as expand our research into Neurodegeneration.
What advice can you offer companies in Los Angeles that do not have a fresh injection of capital in the bank?
My advice (which is shared by most VCs today) is to secure any option of financing available before the looming downturn. Debt financing is an option that may be available as well. In addition, now is a great time to increase operational efficiencies and right-size the business.
Where do you see the company going now over the near term?
In the near future, Bionaut Labs will release a major pre-clinical data package from IDE and IND enabling studies in 2023, with the goal of initiating human clinical trials in 2024.
What is your favorite restaurant in LA?
Mizlala West Adams and Sushi Beluga in Playa Del Rey.
