One of the most fundable startups in the U.S. is developing a new category of anti-inflammatory treatment for the market. Perytor Therapeutics is commercializing its discovery of a substance that combats inflammation and has the regenerative properties stem cells possess.
The San Antonio-based startup was named one of Pepperdine University Graziadio Business School’s 20 Most Fundable Companies in 2020.
Perytor founder and chief executive officer (CEO) Ramon Coronado said the active agent in stem cells provides the dual benefits of reducing inflammation and stimulating tissue regeneration. The Perytor treatment is a new category of therapeutic that helps patients with many conditions, such as degenerative joint disease and more severe conditions like inflammation of the lung from chronic obstructive pulmonary disease (COPD).
The startup launched in June 2020 to produce the active ingredient as a biologic, rather than using live stem cells. A biologic is a product produced from living organisms or one that contains components of living organisms.
Coronado said the options available now are either a cortisone shot or surgery for patients with a degenerative joint injury. Steroids like cortisone are anti-inflammatory, but its long-term use can also kill healthy cells. Stem cells possess properties that are both anti-inflammatory and regenerative. The Perytor proprietary process extracts the potent biologic out of human placenta tissue.
“We offer patients a third option that not only reduces pain and inflammation, it promotes the regeneration of tissue,” Coronado said. “We essentially invented a new case of regenerative nonsteroidal case of drugs.”
Perytor’s ongoing three-month blind trial with 30 patients has shown promising results. “For people with, say, tennis elbow on both arms, one arm got the treatment, and the other gets a placebo,” Coronado explained. “We saw significant improvement after one treatment.”
Coronado, an experienced biomedical engineer, started investigating how to induce the stem cells’ benefits without using living stem cells themselves five years ago. He brought medical diagnostics entrepreneur Joshua Shaver onboard as a co-founder and chief of operations. The company also employs a chief medical director with clinical trial expertise and chief of financial operations based in California.
The company has an established relationship with a regional tissue bank. At scale, developing an affordable Food and Drug Administration (FDA) approved biologic for the entire U.S. market would take less than 100 placentas a month, Shaver said. The San Antonio startup’s long-term plan is to make a synthetic version of its biologic without using any human tissue.
“Our business model is based on developing this as a biologic,” Shaver said. “Approaching the FDA regulatory pathway as a biologic and not a drug is important because that’s a more manageable and affordable commercialization pathway.”
In looking at all current FDA clinical trials, none are testing novel kinds of anti-inflammatory treatments, Coronado and Shaver discovered. New drugs coming to market either target pain like opioids or inflammation like steroids.
“We can get the same benefits from using live stem cells at only 1% of the cost with our therapeutic,” Coronado said. “There’s no issues with cold storage to keep the stem cells alive, and that saves on production costs because live stem cells are expensive. It also reduces patient treatment costs — instead of going to infusion centers, they can receive this in a doctor’s office.”
The discovery helped Perytor Therapeutics win a spot on the Pepperdine Grazino Business School list of most fundable startups for 2020.
Amy Wood runs Pepperdine’s Most Fundable Companies program, which launched in 2018. The Most Fundable Companies program uses a stringent process to consider companies across the country for each year’s list.
“Over 4,500 startups from 50 states were screened into 20 of the nation’s top startups selected for our annual list,” Wood said. “These companies have risen to the top this year based on the viability of their business model, size of the addressable market, management team expertise, the board of advisors, and competitive advantage in their market.”
Wood described what the Pepperdine screening panel found compelling about Perytor as one of the nation’s most fundable companies.
“What’s exciting is their use of amniotic tissue and how they’re reintroducing stem cells as a product for the modern day,” Wood said. “This nonsteroidal therapeutic is a new category of drug. The team has five years of research, patents pending, and non-dilutive-grant and friends-and-family seed funding — all of which makes Perytor an attractive investment option.”
The Perytor team is raising a seed round of $1.5 million that will be used to submit an Investigational New Drug Application or IND for FDA approval. Coronado is looking “to bring a new solution to an old problem” and help raise San Antonio’s national profile in regenerative medicine in the process.
“San Antonio is known for developing medical devices, but it doesn’t have as long a history in pharmaceuticals,” Coronado said. “We can do that here, especially when it comes to developing a new therapeutic in the inflammatory space.”
The featured image is of placental stem cells—image courtesy of Perytor Therapeutics.