Startup Profile: MicroCHIPS—A Once-Reluctant CEO Moves to Balance Breadth and Depth
When John Santini co-founded innovative biosensor and drug-delivery firm MicroCHIPS eight years ago, he had no expectation of managing the company he helped create. “I was never CEO. It was not my expectation to be CEO,” says Santini, now the company’s CEO. These days Santini, who just turned 35, is finding the role to his liking. Even more importantly, he has laid out a clear strategy for negotiating one of the most difficult dilemmas facing young companies: how to balance the need for breadth (i.e., not putting all your eggs in one basket) with a cash-constrained startup’s need for focus and depth. If he’s successful, MicroCHIPS could soon burst out of the small time and make a big impact on the world of medical devices. “The technology being developed by MicroCHIPS could create a whole new paradigm in the area of drug delivery and/or biosensing,” says MIT Institute Professor Robert Langer, one of Santini’s mentors and board members.
MicroCHIPS makes arrays of tiny reservoirs—for holding drugs or sensors–that can be implanted in the body and activated via preprogrammed microprocessors, wireless telemetry, or other means. The devices promise to give both patients and doctors better information about and treatment-control over a wide range of ailments. Santini formed MicroCHIPS in 1999 after getting his doctorate in chemical engineering at MIT under legendary professors Langer (who’s also an Xconomist) and Michael Cima. He served initially as president and chief scientific officer—hiring the company’s first 15 staffers and raising some $17 million in two rounds of venture financing that brought the company under the umbrella of Polaris Venture Partners, IDG Ventures, and others. But from day one, he served in the president’s role essentially by default, he says, and “with the clear understanding that we were going to find at the appropriate time an experienced CEO to grow the company.”
That time didn’t come until 2003, with the arrival of veteran executive Reed Prior. Santini then concentrated on technical matters (he’s the author or co-author of more than 60 issued or pending patents). Over the next few years, Prior took Santini “under his wing” and the two “worked very closely together,” Santini recalls. They pulled off a key strategic deal with Medtronic. And then Santini led the way in engineering another deal with Boston Scientific. Both companies now hold stakes in MicroCHIPS and have representatives on the board.
It was no small feat to get two top-tier medical device companies to partner together. (“The board meetings aren’t too heated,” Santini jokes.) After that, he says, Prior told him frankly that the company no longer needed them both—that Santini was ready to take over. This time Santini agreed. Prior went off to a new startup. Santini became interim CEO. “The board gave me my shot and formally promoted me last September,” he says.
Santini took the helm of a firm at a key point in its evolution. “We’ve been very successful at raising money,” he says. “We’ve raised approximately $56 million.” Some of this, of course, has been spent. Now Santini needs to make the best use of what’s on hand (the private company doesn’t disclose specific financial figures) in order to take the firm to a place where it can demonstrate its technology in clinical trials.
In plotting a course, Santini says he thinks of MicroCHIPS as a platform company. The word “platform” is sometimes thought as “code for unfocused,” Santini says. “But if you look at our technology at its core, it is a platform. We are creating arrays of little boxes, little cavities, little wells. We can seal things into those boxes and then open them on demand, and that’s the key—and so it is a platform. What you put into those reservoirs is really somewhat generic.” For instance, it can be a solid, liquid, or gel drug—or some kind of sensor. For all these uses, MicroCHIPS employs the same materials, the same sealing technology, and the same method of activation. The only thing that really changes is what goes inside.
“Hence the problem,” says Santini. “We’ve got tons of opportunities.” These include implanted glucose sensors for diabetes patients, potassium sensors for detecting cardiac problems, and sodium sensors to detect renal failure. Similarly, MicroCHIPS devices could be used to control dosages of a variety of drugs for treating disorders like Type II diabetes or osteoporosis, where it would be of immense benefit to deliver specific doses at specific times.
In a perfect world, Santini says, “I want to go after everything. But you can’t—you don’t have enough financial resources, and you can’t have enough human resources, and so you have to choose. It seems counterintuitive, but in order to prove you really have a platform, you need to choose a limited number of applications—in most cases one, maybe two—and focus in on those areas.”
Santini has chosen to focus on one sensor application and one drug-delivery application. Right now, the firm is developing an implantable glucose sensor for patients with diabetes. To make its drug-delivery case, it is focusing on delivering parathyroid hormone to treat osteoporosis. Each of these products represents a billion-dollar opportunity for MicroCHIPS, Santini says. “We’re somewhat fortunate in that we have enough resources to be able to hedge our bet.”
Even succeeding in one area will be a challenge—something Santini readily acknowledges. “I’ve had people come up to me and tell me how hard it is to succeed in the areas we are pursuing,” he says. “I usually just smile at them and tell them that, ‘If it were easy, someone would have done it already.'”