$2 million funding boosts progress of UAB biomedical startup

Apr 20 2018

A $2 million investment is the latest step forward for the biomedical startup CNine Biosolutions LLC, which is headed by former University of Alabama at Birmingham postdoctoral fellow Theresa Schein, Ph.D., and retired UAB microbiology professor Scott Barnum, Ph.D. This funding comes from a Denver angel investor group.

The two entrepreneurs are using technology they developed at UAB to create a rapid and simple test to distinguish bacterial meningitis from meningitis caused by viral infections. The technology is licensed from the patent holder, UAB.

"Viral meningitis generally is not serious and often is treated symptomatically," Barnum said. "In contrast, bacterial meningitis requires immediate intervention and treatment with antibiotics because of the serious and potentially life-threatening nature of that infection."

The existing gold-standard to detect bacterial meningitis gives 10 to 30 percent false negatives, and its laboratory tests, along with a one- or two-day hospitalization for the patient, are expensive, Schein and Barnum say.

The $2 million investment to CNine comes as two milestone payments. The first, already achieved, is $400,000 for development of its lateral flow immunoassay to measure levels of an immune complex called soluble membrane attack complex, or sMAC. The second milestone of $1.6 million will be upon submissions to the Food and Drug Administration seeking approval to conduct a clinical trial of the test.

The membrane attack complex, formed from immune proteins naturally present in blood, kills bacterial pathogens by making holes in the bacterial membrane. sMAC levels increase in response to an active bacterial infection, and the complex can be measured in cerebral spinal fluid. This fluid already is collected via spinal taps in the standard screening for bacterial meningitis, so portions of that fluid could be used in a clinical trial.

"Things are looking very good," Schein said of CNine's progress. Schein is the chief executive officer and co-founder of CNine.

"Our test is in development, and we should have a prototype device this year," said Barnum, co-founder of CNine and its chief scientific officer.

Funding streams
CNine refers to one of the complement proteins, C9, that makes up a majority of sMAC.

The company was formed on paper in 2013 and got $250,000 seed funding from the Children's of Alabama Impact Fund, a special donor fund supported by the community for leading edge initiatives, in 2015. At Children's, Schein and Barnum worked with James Johnston Jr., M.D., an associate professor in the UAB Division of Pediatric Neurosurgery, Department of Neurosurgery. Johnston treats patients at Children's of Alabama and consults with CNine as chief medical officer.

In a 2016 study of children with brain shunts published in JCI Insight, the trio showed that their investigational biomarker outperformed the current "gold standard" test for detecting bacterial infections in the shunts.

Working with data from that study, CNine then secured a $350,000 Lab to Marketplace, Small Business Innovation Research grant, or SBIR, from the National Institutes of Health. The NIH SBIR program funds early-stage businesses that are trying to commercialize innovative, and potentially lifesaving, biomedical technologies.

The SBIR grant allowed Schein to leave UAB in April 2017. CNine signed a license agreement with UAB in August, and Barnum left UAB in October when CNine found its Denver investors.

Landing CNine's latest level of funding was a challenge. "It's difficult," Schein said. "You knock on a lot of doors. But the saying that 'money begets money' is true. After the SBIR grant, people were more interested in investing."

In their pitch to the Denver investors, Schein stressed the humanitarian angle, noting how the test can be used throughout the world, especially in lesser developed areas of sub-Saharan Africa, India and Asia. "It's quick, easy to use and does not need refrigeration," she said. "And in the U.S., it will mean health care cost savings."

The CNine executives say they plan to sell their technology to a diagnostics company if they succeed with their FDA approval.

Steppingstones
Schein and Barnum say Douglas Ayers, Ph.D., a marketing associate professor in the UAB Collat School of Business, taught them some basics that helped get CNine off the ground.

"Our ability to pitch to investors really started with Doug and his class at UAB," Barnum said. "That gave us the ability to write a business plan and tell our story. Without that start, we couldn't have done it."

At Collat, Ayers teaches the three-hour MBA 673 course, "Planning and pitching a new business concept," that is part of Collat's certificate program for technology commercialization and entrepreneurship. The class covers all the steps to transform technology-based intellectual property into a new technology venture.

"The focus is on writing a business plan, and helping students understand how the investment community will look at their idea," Ayers said. "Theresa and Scott were already working on their startup. They were the best kinds of students to have -; they were there to get something out of it."

Schein says assistance from Erik Schwiebert, Ph.D., CEO and chief scientific officer of DiscoveryBioMed Inc., a Shelby County life sciences and biotechnology company, has also been invaluable. This includes mentoring Schein in her role as CEO and connecting CNine with other business support in Birmingham.

"Erik set us down in front of our first potential investors," Schein said. "We can't sing his praises enough."

Schwiebert, a former UAB researcher who launched DiscoveryBioMed about 11 years ago, informally aids several startups, including CNine. "We are advising Theresa and Scott," Schwiebert said. "My CFO does bookkeeping for them."

Ecosystem
Schwiebert says he is helping create an ecosystem where newly launched biotechnology companies can piggyback on more established companies. "I'm spending a lot of time helping folks like that get going," he said. The assistance includes a service to help small startups write SBIR applications for funding.

For seven years, Schwiebert taught or directed two courses in technology entrepreneurship like the one that Ayers now teaches. He had taken similar classes taught by a former business professor when he was a UAB faculty member and found them invaluable.

Schwiebert worked to resurrect the classes after that early teacher left. He says the classes that worked best were ones with a mix of students -; engineers, health sciences researchers and business majors.

"It's incredibly important," Schwiebert said, "that these classes continue at UAB, for faculty, postdoctoral fellows and graduate students."

Teleconferencing
To run CNine, Schein and Barnum work out of their homes, connecting with vendors, consultants and investors via the internet. Schein has moved to Kodiak Island, Alaska, where her husband is a regional pilot, and the couple cares for their 1-year-old toddler. Barnum lives in the Forest Park neighborhood of Birmingham.

Their virtual offices recently featured a teleconference call across five time zones connecting participants in New York, San Diego, Texas, Maryland, Denver, Birmingham and Alaska.

"Our path has been both exciting and challenging," said Schein, who also earned her Ph.D. at UAB. "It's very rewarding -; you never want to look back and say, 'What if?' Even when the problems seem unsolvable, I remember to be happy with what we've done and where we are now."