By Tom Ballard, Chief Alliance Officer, PYA
“I’m happy with it,” says Chad Seaver, Co-Founder and former Chief Executive Officer of Arkis Biosciences Inc., in relation to the recent announcement of the start-up’s acquisition by Integra LifeSciences Holdings Corporation.
“I’m especially happy that the investors are happy,” he told us recently on the heels of the late July announcement that the New Jersey-based global medical technology corporation had purchased the Knoxville-based company founded in 2011. Arkis Biosciences began operations in June 2013, almost six years before the exit.
Seaver’s sentiments were shared by Ken Woody, President of Innova Memphis, an early investor in the company that led its oversubscribed Series A round in 2016. Other firms in the Innova-led syndicate included two Knoxville-based funds – The Angel Capital Group and The Lighthouse Fund – as well as several other angel investors from Tennessee and across the U.S.
“We were very impressed with the team and technology from day one,” Woody said. “I worked closely with Chad and the management team and saw their daily commitment to product quality and compassion for the patients. This was a great outcome for Arkis, and we could not have picked a better company to acquire this lifesaving technology than Integra. I’m very proud of the Arkis team and thrilled with the outcome for our co-investors.”
As we do with any interview with a Co-Founder after a major investment or acquisition, we wanted to know more about the journey and that executive’s future plans. Seaver reflected back six years to 2013 when he decided to make the jump from full-time employment with a well-known global corporation to pursue new implantable technology co-developed with Knoxville Neurosurgeon James Killeffer.
“It was one of the most difficult times to raise capital in healthcare,” Seaver said, citing a shift in angel and venture fund interest from medical devices, which is where Arkis Biosciences was focused, to healthcare information technology.
“Fortunately, we had a very disruptive technology,” he said, one that was enhanced when Arkis Biosciences in-licensed Endexo®, an anticoagulant additive from Interface Biologics, Inc., that Arkis engineered for shunts inserted into humans. “We were the exclusive holder of that technology in the neurological space.”
Why was that important? As Seaver related to us several years ago in this teknovation.biz article, approximately one-half of the shunts used for treatment for patients with intracranial hypertension issues including hydrocephalus, traumatic brain injury and strokes fail in the first two years. That was the focus of the Arkis Biosciences initial product offering. At the time that it licensed Endexo®, that product had been shown to reduce obstructions in other treatment catheters by up to 75 percent.
Seaver said that strategics began looking at Arkis Biosciences about two years ago, and the company and its investors were looking at several options. One would be an outright acquisition, while another could be an exclusive distribution arrangement.
“A lot has to do with timing,” he explained, noting that a strategic partner might have other deals in the pipeline which could result in a misalignment from a timing perspective with the goals of the potential acquisition target.
In addition to the timing piece, something very important to the all of the Arkis Biosciences team was a company that would, in Seaver’s words, “carry this ball all the way down the field.” From the very beginning, our founders intended to make an impact and sell the company as long as we see the acquirer is going to take it where we couldn’t. We wanted to see the technology used, not put on the shelf.”
In late 2017, Integra acquired Johnson & Johnson’s Codman Neurosurgery business for approximately $1.045 billion. Seaver said that alignment “made Integra a dominant player in neurosurgery with a global sales force. That was a large part of the reason we went with Integra (even though) there was a lot of other fierce interest.”
Citing data from the Silicon Valley Bank, Seaver says that the typical exit for a neuro medical device company is six years after it raises a Series A. Arkis Biosciences did it in three. “We were early,” he notes with a sense of pride.
The acquirer is relinquishing space Arkis Biosciences occupied in the private sector building at the University of Tennessee’s Research Park, and those employees who remain will work remotely. As far as Seaver, he says he’s consulting with Integra in the near term while looking at new opportunities to innovate in healthcare long-term.