Persevering and Pivoting - The Entrepreneur's Companions with Joe Landolina - Mastering Medical Device

Episode Transcript
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Patrick Kothe (00:31):
Welcome! I've had a lot of plans presented to me
that show a graph with astraight line, moving up into
the right.
Often with a hockey stick.
Hey, I've been guilty of thattoo.
My experience is that real worldperformance never looks like
that.
There's going to be hills andvalleys caused by things that

(00:52):
are outside of our control, orthings that we did a poor job of
predicting or executing on.
The real chart usually looksmore like a roller coaster with
the timeframe longer thanoriginally expected.
Call it false optimism, or maybetelling someone what they want

(01:12):
to hear, but predictions rarelymatch reality.
The problem is that plans setexpectations and then other
plans are built with yours as abaseline.
When you're at a startup andfinancial plans are even more
important, the stakes becomeeven higher.

(01:35):
Our guest today is Joe LandolinaCEO of Cresilon, a company
that's developed a technologyand product intended to stop
bleeding quickly and reliably.
Joe has a very interestingstory, which we'll share in a
few minutes.
What you're going to hear is howhe and his team have persevered
and pivoted.

(01:56):
Leading to huge changes fromtheir original plan.
How they manage the businessduring this time is also very
interesting and contains somegreat lessons.
Here's our conversation.
Joe, startups are really prettyeasy, aren't they?
You have an idea, you go intothe backyard and shake the money

(02:17):
tree and get all that you needand you bring your friends along
and, then in a few months, uh,the cash is rolling in.
That's, That's kind of yourexperience, isn't it?

Joe Landolina (02:27):
Definitely.
I wish it was that easy,especially in a regulated
industry like biotech, but it'sa lot of fun.
I'll say that.

Yeah.
So we're going to, we're goingto talk about, perseverance and
pivoting in this episode, but toget started, tell me a little
bit about your background.
How you got involved in thetechnology that you're involved
in.

Of course, I have a bit of an unorthodox
background.
I'm a chemical engineer bytraining.
I did my undergrad and mygraduate work at NYU in New
York, but before that I waslucky.
My grandfather was a formeremployee of Hoffman LaRoche, who
in retirement had a secondcareer as a winemaker.
And I grew up on a vineyard witha chemistry lab a few paces

(03:09):
across the street from my house,and a grandfather had learned
lab safety in the 60s, and thatmeant that the day I learned how
to walk, I was thrown into a laband said, the best way to learn
chemistry is to mix some thingstogether and hopefully don't
blow yourself up.
I had a really early exposure tochemical lab research and my
parents were not as thrilled asI was, that I had that exposure
so that they cut a deal with me,which was, do anything you can,

(03:32):
but first go and learn labresearch the right way.
And so when I was about 14 yearsold, I got to do a summer
program in chemical research atColumbia University, where we
were working in tissueengineering in the early days,
which is just taking a plantbased scaffold and using that
scaffold to grow a patient stemcells into a target tissue.

(03:52):
And in my case, it was cartilageand like any 14 year old, I
decided, what I was going to dofor the rest of the summer was
go home and make my owncartilage and,

I can tell you at 14, that's not what I was
thinking.

tell me about it.
I had a very interestingchildhood, but needless to say,
I came nowhere close to makingcartilage on my own.
but what I did come across wasthis blend of two
polysaccharides, so long chainsof sugar that were derived from
algae.
And the only reason why I wasworking with algae is that my
chore as a 14 year old, whenevermy parents were angry at me,
which was basically all thetime, was to go and rake all of

(04:27):
the ponds of algae, so that theywould look nice for customers
coming into the vineyard.
and effectively, what Idiscovered out of that was this
material that would stick toskin and wouldn't let go until
he wanted it to.
And I had this idea, which was,could you take that and use it
to at least stop a bleedingwound for a patient that had a
gunshot wound or a stabbing?
So you can get them to the nextlevel of care without them

(04:49):
bleeding out and dying.
And over the last 13 years, thatidea became Cresilon, the
company that we founded back in2010.

So did you move right from university into this
company?

So I, I was 17 when I started this company, so
I was a freshman at university.
I was admittedly not the beststudent, because it was us
working a nine to five orwhatever in the startup world
that actually becomes maybe morelike eight to eight or something
like that, and then going toclasses in between.
But this was effectively myentire academic career was us

(05:24):
launching the company, gettingit to a point where we had a
prototype.
And then when I graduated fromboth programs in 2014, we went
full time immediately on thecompany.

That's not a pathway that you find from a lot
of entrepreneurs.
What was that like?
It must have been, challenging,lonely, scary, all the above.

It was definitely very interesting.
I think the benefit that I hadwas that as a 17 year old
starting this, the biggeststrength you have is naivete,
not realizing the challengesthat lie ahead.
And so you're perfectly happyrunning into a brick wall
headfirst over and over again,because you think that the brick
wall you've run into is thelast.

(06:04):
And it makes it really easy notto realize how rocky a road
would lie ahead.
And I think if 17 year old meknew that it would cost nearly a
hundred million dollars and adecade, to be able to get this
product to market, I would havebeen dissuaded because that
would have seemed impossible.
But instead, taking it piece bypiece made it manageable.

(06:25):
And instead we were solving onechallenge at a time, as opposed
to looking at the entire worldor the entire path ahead of us.

At 17, you typically don't, know the value
of mentorship.
Did you have mentors at thatpoint?

So we were amazingly lucky.
I think that one thing that wedid well from the very beginning
from day one was that werecognized that at least my
strength as CEO and co founderwas that I could build a team of
people who knew more than I did.
And so we launched by joiningtheir venture competition.
We took first place at theengineering school and second

(07:02):
place at the business schoolwhere my co founder Isaac was a
student at the time.
And the thing with thatcompetition is they required you
to take at least three mentorsthrough their network, and that
was amazing.
In fact, one of the mentors thatwas assigned to us in 2010 is
still an advisor to the businesstoday.
He's 88 years old, and we havebreakfast every single Wednesday

(07:25):
morning.
And we have for the last 13years, and it's been amazing to
have that consistency ofmentorship, but the one thing I
will say is that as businesseschange in stage and in size and
scale and the types of problemsthat you solve change, the types
of mentorship that you needchange, and so that's a rare

(07:46):
example that we have a mentorthat was able to support us all
the way through, but, we'vealways supported ourselves and
surrounded ourselves with peoplewho have done this before, at
least in the parts that we'reable to find.

So let's talk about Cresilon, talk about the
problem that, that you'resolving.
Tell me a little about theproblem, a little bit about the
customers.
Where the application is, thisproduct is.

So the problem is bleeding, put simply, whether
that's traumatic bleeding,things like gunshot wounds or
stabbings, motor vehicleaccidents, et cetera.
Or just routine surgicalbleeding.
You make an incision and thepatient believes you need to
stop that bleeding.
As a young kid, I assumed thatin either of those cases, the
world would have a standard ofcare that just worked and did

(08:30):
effectively and consistently.
And the answer to that problemis that really there's nothing
that really works that well, andso the average way to stop
bleeding takes at least fiveminutes with pressure.
And if we're talking trauma, andwe look at just the U.
S.
military, 91 percent ofbattlefield mortality is owed to

(08:51):
what is called preventablehemorrhage, meaning it's a bleed
that could have been stopped ifonly there were a more efficient
product on the market.
And if we look at the surgicalsuite, especially in animal
health, which is a market thatwe've, that we started out in
and that we've had great resultsin our products, have now been
used in over 45, 000 proceduresacross the world, in veterinary

(09:12):
surgery.
And the vast majority of costand waiting is just sitting
there waiting for the patient tostop bleeding.
In animal health what welovingly call pressure in a
prayer, where you pay someone anhourly wage to sit there with a
finger on a bleed becausethere's nothing else better to
do.
Whenever a patient is bleeding,it's additional risk to that
patient, it's cost to thehealthcare system, and it's

(09:33):
taking up space in an OR or anER where the next patient can't
be treated.
And so there's a massive problemin being able to stop bleeding
quickly and effectively with atechnology that is not
overcomplicated, meaningsomething that could be used
right out of the package withoutspecial preparation that can be
used on anything that'sbleeding, from gunshot wounds to

(09:53):
neurosurgery to, small nicks andscrapes and everything in
between.
And that's where our technologycomes in.

Bleeding is obviously, something that's been
going on for, for, since, youknow, Time started.
What have been the challengeswith coming up with a solution
to stop bleeding?

Really interestingly, we took a very
odd path through innovation, andI think one of the common
threads that we'll be talkingabout today is Cresilon's
unorthodox path.
We did a lot of things, quote,the wrong way, and I think that
a lot of our success comes tothe fact that we didn't follow
the preordained path that mostbiotechs or medical device

(10:38):
companies follow.
But with regard to this product,instead of finding a target and
saying, We're really interestedin improving the efficiency of
factor 12 activation orsomething like that, and finding
some drug or some API thattargets that or some material
that mediates a pathway.
We instead found this material,I stumbled onto it, I was 17

(11:00):
years old, that 10 percent ofthe time inexplicably did things
that I had never seen or heardof.
We could take this material andput it onto an actively bleeding
wound and it would immediatelystop it.
But 90 percent of the time itwould do nothing.
And so this innovation pathwaythat we got was that we knew
that we were on to something.
We had this platform, but wedidn't know how it worked.

(11:22):
We didn't know what was lendingthat effect to it.
We didn't know how to control itor what the variables at play
were.
And so the earliest years ofinnovation here, it wasn't us
chasing a pathway.
It was us finding this materialand trying to learn the secrets
of the material itself.
Find out how to control it, howto quantify it, and how to be

(11:42):
able to deliver that at thelevel of quality and level of
quantity that the market andcustomer would eventually
require.
And so it was a bit of, it was abit backwards compared to how
typical pharmaceuticaldevelopment goes.

When you think about, everyone as an
individual, everyone, everywound is slightly different.
the mechanism for clotting, maybe different in, in, in
different people.
So you've got all of thesevariables and you're trying to
come up with the one solution.
Talk to me a little bit abouthow you develop something in

(12:19):
such a, such a strangeenvironment but that you have
all these variables.

So bleeding is one of the most difficult
situations to attend to as anengineer, right?
Because it's a highly dynamicsystem.
Everything is moving.
Your patient is breathing.
There's blood in the way.
And so one of the challengesthat we deal with as a team is
that you can do as best you canon the bench to replicate what a

(12:45):
bleeding environment or what ableeding injury looks like, but
you're never actually going toknow whether the product works
until you implant that productinto a patient because every
patient is different, just asyou said.
And so 1 of the 1 of the tenantscore tenants that we built
Vetigel and our technologyplatform around is this
understanding that we will notover engineer.

(13:07):
There, there's a level ofsimplicity.
It's effectively two sugars inwater, that make up the product.
There's not a lot of engineeringthat goes into it necessarily if
you zoom all the way out.
Now, when you look into themicroscopic or the atomic level
of the product, it's acompletely different story.
It has to be, it has to bedesigned to perfection, but it
allows this responsivity, whereit's a material, that it doesn't

(13:29):
matter if you're bleeding water,it doesn't matter if you're a
dog or a whale or a dolphin, orsome exotic bird, that neither
you nor I have heard of before.
It just works, because it's asimple material that does
nothing other than build amechanical barrier in response
to an injury.
And it allows us to have thisgreat versatility, that again,

(13:51):
if we were looking for it, If weset out on a journey to find
this, we likely wouldn't havefound it.
We stumbled onto the buildingblocks that, that got us there.
Really the R& D that we do isabout honing it in the right
way.

You've got, priorities.
you've got a, a traumatic wound.
The first priority is to stopthe bleed.
But once the bleed is stopped,now you've got material there
that could have longer termimpact.
I think, yeah, correct me if I'mwrong, but I think Krazy Glue
was used in the Korean War,invented in the Korean War, I

(14:25):
believe, that would immediatelystop things.
But...
There were some issues withKrazy Glue after it was stopped.
Is that correct?

Exactly.
So there are lots of things thatstop bleeding.
There are lots of chemicalthings.
there's everything from crazyglue to pit viper venom, that
instantly curtles blood.
There was a product on themarket for years, that worked
by, Inducing a severe exotherma,effectively boiling the blood,
to cauterize the wound, in achemical fashion, which

(14:56):
obviously creates more harm, butif you're alive, then at least
you've survived the injury.
And so there are lots of thingshere, that have applicability,
but they all have severedrawbacks.
And so one of the benefits ofthis material, because it's
plant based, and in fact, wedidn't, I didn't mention this
earlier, but the two polymersthat we're using are not novel

(15:17):
in any way.
The novelty in them is the waythat we purify them and the way
that we mix them, but these arethings that have been used for
50 plus years across the woundcare industry and so the
toxicology profiles, thebiocompatibility, the
reabsorption profiles are wellunderstood.
And so, as a young team in thebeginning, there was a lot that

(15:37):
we didn't need to rebuild.
We were standing on theshoulders of work that had been
done over the course of decadesprior to us actually taking on
this project.

So when you started taking it on, did you
build out, these are the userneeds, these are, based on
history, these are the thingsthat, we've learned, these are
the things to stay away from,these are the things that we
need in this particular product.
Did you have a fullunderstanding of the user needs
and design criteria for theproduct?

So one of the things that I've, I was a big
proponent of in the beginning,and I still am today, is that,
the customer is king.
In this, right?
We as engineers cannot make ourown design criteria because what
an engineer thinks is valuablefor a clinician or for a patient
sometimes will translate over.
But most of the time you have tostart with the customer and

(16:29):
start with the customer's needs.
And so one of the very firstthings that we did as early as 2
years into the founding of thebusiness was we were buying
booths at every exhibition thatwe possibly could for trade
organizations.
Things like the AmericanVeterinary Medical Association
or EMS World, which is a largeEMT conference and convention to

(16:52):
allow us to get in front ofcustomers and present the data
that we had and say, hey, we'rebuilding this.
What do you like about it?
What don't you like about it?
Where are your pain points?
I talk my way into ORs.
I talk my way into training.
alongside military medics,through TCCC, which is tactical
combat casualty care, just tosee how are our competitors used

(17:13):
today?
What are the drawbacks?
What are the benefits of theseproducts?
And how can we best engineer ourtechnology to support the needs
of the customer?
And so that was with us fromnearly the very beginning.

We're going to get into all of the steps to get
there, but what does the productlook like today?
How is it delivered?
What is it?
What exactly is the producttoday?

Sure.
So our flagship product, isunder the brand name Vetigel,
which is an animal health broadindication hemostatic device.
And so that, that meanseverything from neurosurgery to
trauma and anything in between.
And it is a pre filled fivemilliliter syringe, that's
filled with this beige paste.
It funnily enough, looks likehummus, both in color and in

(17:57):
consistency.
And all you do is you take thesyringe out of the pouch that it
comes in.
It's provided entirely sterile.
You uncap the syringe and thenyou deploy that product onto
whatever's bleeding.
And in under 10 seconds, thebleeding stops, and then you can
peel off the gel and underneaththe gel, there's a clot that the

(18:17):
patient has formed.
So none of our material staysbehind.
It's all the patient's ownfiber.
And then that surgeon can moveon with the surgery, whatever
that surgery may be.

it goes on, 10 seconds later, the bleeding has
stopped.
Immediately at 10 seconds, youcan pull your product off and
the patient's own, compensatorymechanism has, stopped, stopped
the bleeding.

So again, it is a little bit more nuanced than
that.
It depends on the health of thepatient, right?
But as an example, in spinesurgery, which is one of the
most critical areas forhemostasis, because if blood is
obscuring the spinal cord, yourun the risk of hitting the
spinal cord while you're doingsurgery and causing harm to the
patient.

(19:02):
In that case, the product isleft in for 10 seconds.
It's peeled off and you have anentirely dry field, meaning that
there's no blood in the way andyou can visualize what you're
looking at.
In something a little bit moretraumatic or larger, something
where you don't know what thepatient's clotting abilities
are, because again, thisrequires the patient to be able
to produce their own fibrin forit to be working that quickly,

(19:24):
the gel will always stopbleeding within about two or
three seconds.
The removal could be as long asfive minutes if the patient is
clotting compromised.

How would they know whether it's going to be
ten seconds or five minutes?

So typically, about 95 percent of the surgery
is where it's done.
The product is resorbable, itwill be left in the injury, and
sewn over.
And so they're not actuallygonna remove it at all.
In some of the cases like spinesurgery, then you've done, for
that type of surgery, it's suchan expensive and critical
surgery that you've doneextensive testing before the

(19:58):
patient is in surgery.
You know exactly what theirclotting ability is and you can
plan around it and we provideguidelines for our clinicians on
that.

So the product is out in veterinary application.
Where do you stand with humanapplication?

So in June of this year, we've, we received
our first FDA clearance for usein humans and that's just a
minor external bleedingindication.
We see that more as a steppingstone, and then two days later,
after that, after that clearancecame through on June 30th, we
submitted for a product by thename of TraumaGel.
And TraumaGel is Cresilon'smajor trauma product.

(20:35):
So that's for external moderateto severe hemorrhage.
So think gunshot wounds,stabbings, both military use as
well as emergency medicine use,and that's currently under
review by the agency.
And so if all goes to plan, thenassuming that product is cleared
by the FDA, we intend launchingthat into the human market in
the US next year.

And as far as surgical use, is that covered
under the trauma, or is that aseparate application?

So that's a separate application.
And so again, that's 1 of thebenefits to what we're doing
with Vetigel on the animalhealth side, because we can see
every indication that wepossibly can under that 1
product umbrella.
In the human side, things haveto be applied for a little bit
more sequentially.
And so that product is currentlyunder investigation for human

(21:24):
use in surgery, and we, intendto file that at some point in
the near future, but we're notquite there yet.

So let's, let's go back.
Let's get in the time machineand head back 13 years, because
you had a lot of things going onthroughout, through that
development cycle.
So 13 years ago when you startedthis and you're 17 years old and
you think, you know, a couple ofthings, what did you think the

(21:52):
pathway was going to look like?

So what I'll say first and foremost is that I
tend to be, by role, I have tobe an optimist, but the engineer
in me, is a pessimist.
I like to be very data based.
And so when I started thiscompany, it started mainly as an
academic project.
I had to be convinced of itsefficacy myself, before I could
go out there and realize thatthis would be a viable business.

(22:16):
And so when I started thiscompany, in my mind, it was,
this is a mechanism for me toget into a better medical
school.
I wanted to be a surgeon myself,and I thought that gaining
experience here, while it likelywouldn't be viable and most
startups would fail, it wouldn'tbe, it wouldn't be something
that would take up 13 years ofmy life or something like that.
And very quickly, as we startedprototyping and testing the

(22:39):
product, we realized that wereally had something special.
And so the early years werereally characterized.
by two things.
So the first of which was thisrealization that there was
something this technology had tooffer that we were not
necessarily in control of.
It was just there.
We had stumbled onto somethingthat had, as I say to my team

(22:59):
today, a responsibility of goodstewardship.
When you see technology that isso differentiated, and so
different than what's comebefore, there's almost a
responsibility to pull thethread to the end.
To make sure that it can getinto as many hands as possible.
And we started seeing that asearly as the first couple of
years of development oftechnology.

(23:21):
And that's what kept us going.
And the second thing, which wewere very lucky with, was that
some of the early experimentsthat we had run were posted on
the internet.
They went viral, and so we gotquite a bit of attention, both
in our local communities, butalso internationally.
And that brought in investorsand supporters and potential

(23:41):
employees that allowed us tohave the resources to do what we
needed to do from a very earlystage.

Things don't happen without money, so you
talk about investors.
So you start it off as aproject, it's in a lab, you're
funded, you're able to do somethings, but as you start to
bring people in and start tomake a company, you need
investment.
A investor investing in a 17year old or 18 year old is a

(24:10):
pretty risky proposition.
So tell me about the early daysof fundraising.

Definitely.
And so it was the earliest days,frankly, were pretty standard.
We diverged from that patharound about 2015, when we'll
get to that point in the story,but that was about five years in
to, to the development.
But the earliest years, wefought tooth and nail for

(24:36):
investment.
It was, it was very difficult,because obviously being 17 years
old, you have to prove yourself.
We obviously didn't haveresources of our own to pour
into the business.
We were struggling andsubsisting off of meal swipes at
the, at our residence halls, andthere wasn't a lot that we could
do to move the business forward.
But we were lucky enough to havebeen able to leverage our

(24:58):
university network.
And so, uh, NYU wasinstrumental, in at least giving
us a platform to get in front ofpotential angel investors, but
still our first couple of,whether it was 100, 000 came
primarily from family andfriends and people that, were in
our network, that, believed inwhat it was that we were doing.
And I remember our firstinvestment check, we were told,

(25:21):
look, we want to see proof ofconcept that this will work.
And we want to see a patent orat least a provisional patent
that shows that you've made someeffort towards protecting this.
And at the time from prizewinnings that we had received
from winning business plancompetitions, we had exactly
enough money to pay for half ofeach or at least one of the two

(25:43):
things.
And so, uh, I made one of themost uncomfortable gambles that
I ever made, which was, I putdown payments on both of those
things and just hoped that itwould come through.
And it turns out that the testthat we needed to prove that,
that the product would work, atleast at that, that very small
scale worked.
Maybe a complete fluke, maybesome luck, maybe a little bit of

(26:04):
good science or some combinationthereof, and it allowed us to
cash that first investor checkand start moving forward.
And then as we started growingfrom there, we were helped quite
a bit by virality.
We, around.
2013 we had a video that wasposted on the Internet that had

(26:24):
over 140 million views on it,and that had about 8000
investors reach out to us to tryto invest in the business in
some way.
And so we hired a full timeemployee, who was at the time in
her MBA program, whose entirejob is just to interview
investors and select investorsthat would be most additive to

(26:45):
Cresilon's mission.
And at that time we were raisinga small seed round of only a
couple of million dollars, andwe closed that out in just a few
short weeks, and that was,something that could only happen
in 2014, 2015.

Do you realize now how unusual that is that
you're interviewing investorsand not the other way around?

I call it the pre Theranos days.
And so you could get a lotfurther, with just a, with a
compelling pitch and someinteresting technology with some
data backing it.
And, and so nowadays, and,things are very much different.
And when I advise entrepreneurswho are going through their
first fundraise, it's such adifferent world today, but we

(27:27):
were very lucky that we wereable to avail ourselves of that.
And so those investors that camein and ended up, we didn't know
it at the time, but being ableto grow with the business.
We were just, finding angelinvestors that were putting in
high five figure low six figurechecks into the business.
And we built a raise that wassomewhere around 4 million.
The intention with that 4million was to go out and find

(27:50):
partners to do everything forus.
To merge with the orthodox pathof MedDevice.
And what that means was find acontract manufacturer who could
do this for us.
Find a CRO that could do thetesting for us.
Find regulatory consultants andadvisors that could advise us
through the process, and thenfind a commercial partner that

(28:11):
would eventually take this tomarket.
And in our minds, we would beable to do everything with the 4
million that we had raised, andwe could at least bring this
through the first 510(K), and wecould ride off into the sunset
and partner this off and, andthen go move on with our
careers.
We couldn't have been moreincorrect on that, and the very
first wrench that was throwninto the works was

(28:32):
manufacturing.
It turns out that the very thingthat makes this product work,
is, destroyed by gamma radiationor by any sterilization method
by that means.
And so what we were left with iseffectively hummus in a syringe
that needs to be made like avaccine.
And we realized that there arelots of vaccine manufacturers in
the world and lots of hummusmanufacturers, but none that

(28:55):
were dumb enough to try to do ittogether in one product.
And so we were alone.
And effectively, given thiscrossroads, which was either
shut down the business or becomean aseptic manufacturer as a
bunch of college kids.
And we obviously chose thelatter path, but we didn't
exactly know what we weregetting into when we went down

(29:17):
that path.

We're going to get into that a little bit more,
but before we do, where did the,where did you discover the
technology and who owned thetechnology?

So again, it, fascinatingly, it was, so I
discovered it in my, at my homelaboratory, right?
And again, this is where I wasvery lucky, to be able to have
the resources that, that I had.
NYU had no claim on thetechnology itself, so the
intellectual property was whollyowned by me.
And we'd made the choice,because at that time, the tech

(29:53):
transfer wasn't as welldeveloped or as entrepreneur
friendly as it is today, andthat's changed for the better.
And in fact, NYU was one of theuniversities that spearheaded
making tech transfer better forthe, for the entrepreneur.
But at that time, it was verydifficult.
We couldn't just transfer itinto the university without
losing a decent portion of theintellectual property.

(30:14):
And we weren't willing to dothat.
Between 2010 and 2012, 2013, wewere using a combination of my
family laboratories, which, andwhen I say family laboratories,
glorified kitchen counter and awinery with a bunch of equipment
that was borrowed from HoffmanLaRoche in the late 70s.
It was not fancy by any means,it was just a dedicated space

(30:36):
with some beakers and balancesand hot plates and other things
like that were designed forwine, not for this type of
chemical lab research.
And then a few scientists in thecommunity that were nice enough
to donate some of their space tous, or let us borrow some bench
space.
One of the front runners, orpeople who were most generous to
us, was Dr.

(30:57):
Dan Grandy.
who was at the FeinsteinInstitute in North Shore, LIJ,
out on Long Island, who let ususe some of his research
facilities in the early daysbefore we could afford to go out
and get our own.
Eventually in 2013, we decidedthat we needed to do research
ourselves.
And so I did what any goodBrooklyn boy would do.
And I went on Craigslist and Ifound an old 1930s school house

(31:18):
that was broken down.
And, we took over that building.
It was in December of 2013.
And I found an old dairy farmthat had gone bankrupt and we
rented a U Haul and we pulledcasework out of the walls of
that dairy farm, and we dideverything from the flooring to
the sheetrocking to the labs andeventually the clean rooms in

(31:40):
that first space.
And so we did it ourselves, andthat was, again, only something
that could have been done in2013, 2014, but it was very
Brooklyn.
It was very do it yourself.
And it let us move forwardwithout having to spend millions
of dollars in overhead or inconstruction costs.

So you own the IP.
you did some of the work at theuniversity and then you pulled
it out and, formed a space forit.
When you were at the universityand you're developing things,
was any IP developed while youwere at the university?
Was there any issue there usinguniversity facilities and
developing technology?

So I wasn't using university facilities, besides
maybe, running an experiment ortwo in my dorm room, which I,
probably wasn't terribly wellsanctioned, at that time either.
Actually, there's a video of us,doing tests on, on pig blood,
that I'd got from a localBrooklyn butcher.
If you look in the background ofthat video, you can see dorm

(32:41):
room furniture in the back.
So we were, at the very leastplaying with blood in a dorm
room.
But, all of the research wasdone off site because we
couldn't get access withoutgetting into tech transfer, in
some way.
Maybe naively, I didn't want todo that, and so we wanted to
hold everything ourselves, andso we kept it close to the
chest.

Did you know, did somebody tell you that?
Or is that something that, thatyou thought about?

So it was a bit of both.
There were a handful of tenuredfaculty members that as we
started pulling this aside, andone of them, I'm not going to
name them by name, but shepulled me aside and said,
Listen, Joe, my biggest piece ofadvice for you is keep this out
of the university.
Don't entangle yourself withthis because as an

(33:29):
undergraduate, you're free andclear of any obligation and you
don't want to do anything thatwill make this seem otherwise.
And that came very early on inthe development of this project.
I think it was the summer afterwe'd, after we'd launched the
company.
And she called me on my personalcell phone and said, listen,

(33:50):
before you do anything, I wantto have this off the record
conversation.
And it was, incredibly helpful,to see that before we walked
into a pitfall.
And again, I'm not knocking thetech transfer process, right?
For companies that need theresources or can avail
themselves of the resources ofuniversity in many places that's
well worth it.
It's just for us, and we were,we were very Brooklyn and, and

(34:13):
very, very hell bent on doing itourselves.
And the path that we choseworked for Cresilon.

Very valuable, advice that you got from that
professor.
So often, when things getintermingled, it just stops
everything.
And, pulling, things out of auniversity is not a trivial
matter.

Definitely.

2013, you're, you've set up...
A, manufacturing or researchfacility.
Are you still in college at thatpoint or have you graduated?

I graduated in May of 2014, and so this was at
the very end of college, whichis why my senior year, I had a
very special type of senioritis,which was, running the
calculation of how manyhomeworks I needed to do in
order to get a D or a C in aclass, in, in order to pass,
and, and, and I, I was, all in,by that point, but at that time,

(35:08):
Cresilon still was not, we hadopened that site to be able to
solve the research problem.
Also, the fact that all of ouremployees at that time were NYU
students.
And so we needed somethingcommutable from the, from the
campus so that we can get ourstudents or the student
employees that we had to andfrom our offices while they were
also going to classes.

(35:29):
And that first research site,was about four subway stops away
from the engineering campus ofNYU, compared to the lab that we
were using on Long Island, whichwas a two hour journey each way,
with no cell reception.
When you got out there, or myparents winery, which was at
least a 90 minute drive, notaccounting for traffic, and so,
uh, we needed something closeand local.

(35:51):
And then I remember it wasChristmas Eve of 2013 when we
got hit with the news that wecould not manufacture this with
a partner.
We had to do it ourselves.
And again, that crossroads cameup, which was either shut down
or do it ourselves.
And the only place that was openwas a clean room manufacturer on
the West Coast because it wasstill business hours.

(36:12):
And I called and I made agamble.
I remember the first clean roomwe bought was$14,000 in parts
that we had to assemble andbuild ourselves.
And without thinking, I boughtit.
And just to show you how naivewe were, our labs were on the
second floor of this building.
There was no elevator.
And, I assumed the clean roomswould come in boxes.

(36:35):
And in fact, it comes in onemassive crate, the size of a
Volkswagen.
And I didn't order lift gateservice on the, on the freight
service.
And we ended up having to haveone of our team members sit on
3rd Avenue to make sure thatnone of our friendly neighbors
walked away with the copperwiring in our clean room.
We disassembled it on thestreet, broke it up piece by

(36:55):
piece and reassembled it on the2nd floor.
And that was our 1st pilotplant.

I'm curious about your mental state at that point.
Mental state meaning you had adream of being a surgeon.
You started this project and atsome point in time you made a
switch to say the surgeon thingeither I'm going to put it in

(37:21):
the back burner or it's over.
When did that occur?

Just to be very clear, I consider myself one of
the luckiest people alive.
Because if you had asked me as akid what I wanted to do truly,
it was that I always wanted torun my own business, and I
wanted to do it in a field thatsolved a problem that mattered,
that affected patient lives, andI just assumed that I had to
follow a traditional pathway inorder to be able to do that.

(37:46):
My assumption was that I wouldbecome a surgeon, and then one
day, as a surgeon, I would comeacross a problem that was
solvable and I would start acompany and that that was always
the end goal.
and so even today, if you ask mewhat is my dream job is doing
exactly what I do today.
And so in that time period,2014, we had just come off of
this massive media rush.

(38:06):
We were in mediainternationally.
I became a TED fellow.
We were giving talks.
We were on talk shows.
We were solving a problem thatmattered.
And we had built a team that wasdoing good work and we were
moving forward towards ourgoals, and we had never hit, or
at least to that point, wehadn't yet hit any major hiccup.
It was all up into the right.

(38:28):
And so I was on top of theworld, at that point, and I was
doing exactly what I wanted todo and there was the only fear
that was there was that, at somepoint, we would find something
that would cause it to all comecrashing down because I truly
enjoyed the things that I wasdoing.

You hit this inflection point and you decide
we're going to try and solve theproblem.
We're not going to walk awaywith it.
We're going to try and solve theproblem.
At that point,$4 million, youthought that was going to be it.
You mentioned before you're ahundred million into this thing.
So obviously a huge change.
And you had angel investors whowere in, in the deal at that

(39:07):
point.
Now you've got a completelydifferent deal.
What was that like to be able togo to your existing people and
then go to new people and say,you know what?
This is the new plan.

I've skipped a step here.
The 2014 step wasn't where weneeded more capital.
We actually were able tocommission the pilot plant, make
nine batches of sterile product.
And then, that was when thereckoning happened.
To give a bit of detail on that,over that next year, I
graduated, we had all thismedia, we raised all of the

(39:39):
money that we raised, the 4million, we found a customer
base, and so in that same, 8,000 investors that tried to
reach out to us, over 15 percentof the entire US animal health
Market reached out to us to tryto buy the product.
And we had a waiting list thatwas 4, 500 customers strong.
The product worked.
We had a final working prototypethat solved all of the needs of

(40:00):
our customers and in our pilotplant, which was a 10 foot by 10
foot sterile room in aschoolhouse in Brooklyn, we made
nine batches of product.
And at that time we had apartner in the UK that was
gearing up to do distributionfor us in Europe, and so I took
the first six of those batches,and 50 percent of all the

(40:22):
syringes we manufactured, wesent to one of the top labs in
the country to test forsterility.
And all 50 percent of thosesyringes came back as sterile.
And so we threw a party, we hadgreat celebration, right?
That was the last, that was thelast step.
And I shipped the first threebatches to the UK.

(40:42):
I get a call at 3 30 in themorning, New York time from one
of the team in the UK they said,Joe, we have a problem.
We've opened up the first crateof syringes and all of the
syringes have turned black and,uh, to put it into context, the
only way that a Vetigel syringeturns black is through a
contamination, some sort ofsterility event.
And, this was the top lab forthis type of testing in the

(41:05):
country.
So I ran an experiment.
I told them, hold on everything.
I took the last three batchesthat hadn't been tested yet, and
I opened up a few of the testsyringes, and I licked them, and
closed the syringe.
Sent them to the lab, and theycame back as sterile.
And at that point, I realizedthat sometimes when you have
novelty in a material, you can'tuse an off the shelf standard,

(41:28):
right?
And this is one of the hardestlessons that I ever had to learn
is that, as a kid, you think ofthese large institutions as
infallible in a lot of ways, andthen you start seeing them make
mistakes and mistakes that canput your entire business at
risk.
And so in 2015, I made thehardest decision that I ever had
to make, which was I pulled theentire plug on the launch.

(41:50):
We were ready.
We had the waiting lists.
We had our investors excited.
We could have gone off to theraces, and I pulled the plug and
said, we're not launching underthese circumstances.
I won't put a patient at risk.
And if we're going to do this,we have to build these labs
ourselves.
I don't trust external labs.
And in order to do that, we'llneed at least 10 times the
capital.
And so in early 2016, after Ipulled that launch, we went out

(42:13):
to market and we immediately gotterm sheets from household name
venture capitalists.
But all of those term sheets,because again, this type of life
sciences investing was new, it,we would have been the first
venture deal for this type ofbrick and mortar manufacturing.
And nowadays there's a lot moreof that, but these teams didn't

(42:34):
really have a full understandingof what was required here.
And so there were lots of hooksin the contracts and things that
we weren't terribly comfortablewith.
And I, at the time, went to talkto an investor of mine who had,
put in a couple hundred thousanddollars, and he said, listen, if
you don't want to take that termsheet, I have some extra
liquidity, I'll make areinvestment.

(42:54):
And so it was our existinginvestors, our angel investors
that had come in for a hundredgrand a piece or so, that ended
up coming in for a couplemillion a piece or so.
And so we have a large investor,who started as a hundred
thousand dollars check, who'snow written up to$25 million,
into Cresilon.
And so we took a very unorthodoxpath where our investors doubled

(43:17):
down on us.
And it wasn't always easy.
in fact it was hard because wewere raising capital in, in
drips and drabs and not in majortranches that allowed us to
tackle it.
But it took us from that pointforward from 2016.
It took us until October of 2020before we had built 25,000
square feet of state of the artmanufacturing and not a

(43:38):
schoolhouse in Brooklyn andrecruited a team that had done
this before and that built stateof the art laboratories and
developed our own assays andvalidated those assays that we
could do this quote, unquote,the right way, and, we're better
off for it.
It was definitely, it was apainful four or five years of
trying to get this togetherbecause it's not easy asking

(44:01):
investors to pour capital intosomething that's highly capital
intensive before we've evenproven that we can do it.
The entire four years there wasa question to whether or not we
could even make sterile productat the end of this.
And if it was sterile, would itdestroy the efficacy?
But, by 2020, we'd solved thatproblem, and we chose the best
time in the world to launch a, anew life science product that

(44:23):
requires in person training,right at the height of the COVID
pandemic.
But that's maybe a differentstory for a different podcast,
but it was, it was harrowing tosay the least, but we pulled
through and we're lucky that,that we had partners that
allowed us to get this done.

So Joe, that, that four year period, you're
getting ready to launch, you'vegeared up, I'm assuming
personnel, you've geared uppersonnel, you got all that
going, you decide not to, you'rerun, now you're running out of
money, trying to get it.
Did you have to lay people off?
What did you do to manage yourresources?

So we never once did a layoff.
I have a very strong philosophy,toward, towards hiring, which is
that, we do not treat people asresources that can be turned on
and off at will.
If you add someone to the team,they're a mouth to feed, they're
part of the family, and if youshow them that loyalty,
hopefully they show you thatloyalty in return.
there were years in 2019,especially as we were getting

(45:21):
closer to the finish line, whereI took no salary.
I was paying payroll out ofpocket for several payroll
cycles, and some of ourinvestors were stepping up and
effectively floating us on amonth to month basis as we were
getting closer to the finishline.
And then, as we got to the veryend, as we started doing that
manufacturing, we were able toconvert the advantage and open

(45:41):
the floodgates and pullourselves out of that holding
pattern that we were in.
But it was difficult because youcan't argue with this type of
biological testing.
And so when you make a processchange, it's at the very least
14 days before you know whetheror not the change was affected.
And so you make a change, youwait 14 days, and if it fails,

(46:04):
then you're SOL.
You have to go back to thedrawing board and you have to
make another change.
And so we couldn't tellinvestors whether it would be
another two years before we goton market or another two weeks.
And so it was a very difficultperiod of time because there
was, there was a lot ofdevelopment, a lot of wait and
see, a lot of, trying to findthe root cause of things, in

(46:27):
order to get this type ofmanufacturing up.
Because, I didn't mention it inparticular, but the fact that
this project is so novel, itmeant that every single piece of
equipment had to be customdesigned and custom tested.
And there were things like, ifthere's a certain screw that
wasn't taken out and wasn'tsterilized in the proper way,
that can kill an entire batch inan aseptic process.

(46:49):
And so you have to know your wayaround this equipment, and if
you make one process change, itcan affect six other things
downstream.
And so there was a lot oflearning, and you can't iterate
rapidly, and that was the mostdifficult thing for us, because
funnily enough, in Brooklynwater, there's a certain,
there's a certain organismthat's a slow grower.

(47:09):
And what that means is that youhave to have specifically
trained operators to identifythat organism.
And it only shows up on days 11and 12 of testing.
And you have to look for it, youhave to know what you're looking
for.
and that's the canary in thecoal mine.
And so it took us years tofigure out that was the marker
to look for.
And it took us people far moreexperienced than me.

(47:31):
I'm just more so the conductor.
I make sure people have whatthey need.
There was a woman who joined theteam who we pulled out of
retirement, who had designedmajor vaccine quality programs.
And she was the one who, atfirst identified that canary in
a coal mine, and anotherexecutive of ours who came out
of Ethicon, who found the silverbullet that was able to put that

(47:52):
issue to rest.
And between the two of them, andall the scientists that worked
tireless hours, we were able tosolve the problem.

So you mentioned you're the conductor and a
conductor has a fewconstituents.
You've got the audience, youget, you've got the band.
as the conductor of a startup,you've got your employees, but
you also have your investors andinvestors are typically not

(48:23):
patient people.
They'll be patient for a periodof time and then it becomes,
hey, you can't tell me this,I've been in this for so long.
Tell me about how youcommunicate and manage investors
to keep them on your side andalso how you communicate with

(48:47):
your employees to keep themmotivated.

So what I'll say is that it's never perfect.
It's always a work in progress.
But my strong philosophy here isthat it's about communicating
often and communicating in full.
And so when there are risks in aprocess, being up front about
those risks is the mostimportant thing to do both to

(49:12):
investors and to our employees.
Again, it's always verydifficult, right?
Especially when problems arefinancial and not necessarily
technical, right?
And especially in the middle ofthese issues where you're
constrained in cash, sometimesyou can't afford to greenlight
six different projects at once.

(49:32):
You have to pick the best.
Or most likely thing to work andtake them sequentially, because
if you flip on six switches at atime, you're going to break the
bank, right?
And so to employees, it's veryhard to build level of
confidence while also tellingthem that you're running out of
capital and striking thatbalance is tricky.
I can't say that I always didthat well, but at the very

(49:55):
least, I think that we struck agood cadence with our team,
where we were able to be veryupfront about the challenges
that we were facing, and bringthem into the discovery process
with us.
And the same thing is true forinvestors where, you know,
making sure that those investorsare brought into the process

(50:16):
with you.
That they show that you share intheir frustration.
Or do they see that you share intheir frustration?
And I think that was one of themost important lessons where
there's, as a young CEO, youfeel the need to always know the
path forward.
And I think sometimes the bestthing to do for your investor
base is to show if somethingpisses me off, I'm not going to

(50:40):
hide it.
If something frustrates me, ifthere's a risk or something
that's keeping me up at night,I've realized as I've done this
now for 13 years that the bestthing I can do for my investors
is to tell them, here are thethings that keep me up at night,
here are the things that arefrustrating me in this process,
and here are the resources thatI need.
We were sending out frequentinvestor letters were the last

(51:04):
section of that investor letterwas a list of resources that we
needed.
And we were lucky that we hadsuch a broad investor group that
our investors were able to, evenif they couldn't help
financially, they were able tohelp in other ways to get us
over the line.
And so it was just aboutbuilding that community.
Again, it didn't always work.
And frankly, it's a testament tothe personalities of the

(51:24):
investors and employees that weattracted.
Because even the bestcommunication, It doesn't mean
that'll win everybody over,right?
And whether we're talkingemployees or investors, it's
about selecting, for theindividuals.
And I think we had gotten verylucky that we were very
selective in the beginningbecause the investors we chose
have been supporters and havebeen patient, frankly more

(51:44):
patient than, than they probablythought they would need to be,
from the beginning, even now.
with Cresilon, I'm seeing anupswing of success.

And as you described earlier, leaders eat
last and, it's painful.
As you said, you're out ofmoney, you're paying for
employees out of your ownpocket.
That's a level of commitmentthat A lot of people don't
understand what a CEO does and,going without, to try and keep
the team together is somethingthat a lot of us have done.

(52:17):
And it's painful and it makesyou question your own commitment
as well.

Definitely.
I mean, you, you get to see newlows.
I think for me, it's somethingI've been, or I try to be very
vocal about is founder mentalhealth, because it's a very
small group of individuals, thattruly understand, what it means
to be on that rollercoaster,because it's easy to look at the
success stories as, as straightlines that go up and to the

(52:45):
right.
I remember I was reading ShoeDog by Phil Knight and I think a
lot of the hardship that I facedwas karma for the thought that I
had when I read the passagewhere he was talking about on
the eve of his IPO, he had tomortgage his house in order to
pay payroll because they hadsuch a low cash position, even
on the eve of their success.
And it was only post IPO thatthey really started growing.

(53:05):
And I thought to myself in the2014 2015 years when everything
came super easily and anythingwe needed was done.
I was like, thankfully we'llnever have to deal with
something like that.
And just a few short yearslater, we were, in a very
similar position ourselves.
And so it's something abouthaving that support system.
And my wife and I, yeah.

(53:25):
We only got married last year,but we've been together, for
about 12 years.
Having a support system, whetherit's family or friends or other
founders, that can be there thatunderstand, or at least can
support through that process,it's critical.
The hardest years, what I'll sayto any other founder that may be
listening to this, was when Iwas trying to shoulder the
burden myself and not sharingwith my team.

(53:47):
And I think that the best thingyou can do is, and again,
there's always a balance, youdon't want to scare people but
saying, hey, this is thechallenge I'm dealing with,
right?
I'm not disappearing for longperiods of time to sit and stare
at a wall.
I'm doing that to arrange backupfunding, or I'm doing this to
make sure that the lights willstay on tomorrow.

(54:07):
And, here are the challengesthat I'm facing.
And this is why I need youoperating on the plan that's
here.
It builds that trust with theteam.
But it also, it allows people toshare in the stress.
And in doing that, it buildscommunity and it helps you be
able to move through that.

Joe, thank you so much for being so open about
your journey.
It's a fascinating journey.
And as I said, it's aboutperseverance, it's about
pivoting, it's about, anentrepreneur having an idea and
through a lot of turmoil,keeping your hand on the rudder

(54:46):
and taking this forward.
So I'm looking forward to yourlaunch in the human marketplace
and seeing where you guys go.
Looking back at your journey,what are you most proud of?
And what are you most lookingforward to accomplishing in the

(55:06):
future?

Both of those things are pretty similar.
I think the proudest moment thatI had, earlier in the
conversation, I said, I'm apessimist, right?
I need to see data.
And the proudest day was when Igot to see with my own eyes, our
product save an animal life anda patient animal life, a patient
that got up and was able to goback to their owners and pet

(55:29):
parents and live a full, happylife.
And I think that lookingforward, what we have on the
horizon is saving our 1st humanlife.
And then that's something thatwe've been working towards since
the earliest years of startingthis company and we're very
close.
We'll very likely see that inthe next 12 months, and that's
something that we're incrediblyexcited for.

How many of you were prepared to take on a
challenge like Joe describedwhen you were 17?
Not me.
I found his story to befascinating.
And there are still a lot ofchapters that need to be
written.
A few of my takeaways.
First when you're 17 mentors.

(56:11):
It's not only when you're 17,it's every, every one of us.
Having good mentors make a hugedifference.
What he did as he sought outpeople that could help him.
Areas where he knew that he wasnot, uh, It didn't have the
knowledge and we've got thoseareas ourselves.
He also had generous people likethe professor that gave him.

(56:33):
Uh, him advice, on keeping hiswork outside of the university.
We have people that come to usas well.
If we're willing to be open tolisten to them and willing to
bring them in, make sure thatwhen someone's giving you
something for free, that youevaluate it and make sure that,
you know, it's good for you aswell.
And the other thing wasconsistency in mentorship.

(56:55):
He's got an 88 year old thathe's been meeting with weekly.
That's giving him advice andmentorship.
The second thing was settingexpectations of communicating.
Uh, he, he described how he grewin that area.
Originally was holding thingsand trying to be, you know, that
person that, that rock But whathe found out was learning and

(57:17):
sharing helped him and all alsohelped us team, including
investors.
So, what he described wascommunicate often and
communicate in full.
That's going to be best to help,help to, to, uh, bring your team
along and set the correctexpectations.
Finally, sometimes you just needto do things yourself.

(57:42):
It can be extremely painful andit can slow things down
considerably, but it may be theonly viable way.
We all look for shortcuts inhere, but sometimes the best way
is taking it in-house.
So he moved manufacturing inhouse.
He learned things that he neededto do on sterility move things

(58:03):
in-house to assure, uh, that hewas doing it correctly.
And what that turns out to is tobe best for the longterm success
of the business.
Thank you for listening.
Make sure you get episodesdownloaded to your device
automatically by liking orsubscribing to the Mastering
Medical Device podcast whereveryou get your podcasts.

(58:25):
Also, please spread the word andtell a friend or two to listen
to the Mastering Medical Devicepodcast, as interviews like
today's can help you, become amore effective medical device
leader.
Work hard.
Be kind.

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Persevering and Pivoting - The Entrepreneur's Companions with Joe Landolina

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.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}Persevering and Pivoting - The Entrepreneur's Companions with Joe Landolina