The MX Q&A: Chris Hobson, Isis Biopolymer

Isis Biopolymer has decided that the smoothest path to developing its “intelligent” transdermal patch technology is by treating wrinkles. And the company has hired a new chief executive who began his career in beauty care at Procter & Gamble to lead the effort.

Chris Hobson became president and CEO of Isis, which is based in Providence, RI, on October 1. Hobson takes over from David Poor, who held the position of interim chief executive following the death of Emma Durand, the company’s founder. Ms. Durand launched the company in 2006 and had been serving as co-CEO and CTO when she passed away in October 2010.

Designed for next-generation drug delivery, the company’s IsisIQ platform is a transdermal patch that uses microelectronics and the iontophoresis process for the controlled transfer of medication or bioactive agents by electromotive force through the skin. The wireless technology combines microprocessors, thin film batteries, biopolymer, and proprietary adhesives.

Rather than drug delivery, the technology’s first application is an anti-wrinkle patch called Biobliss. The company’s research showed a “massive” market for anti-wrinkle treatments, Hobson says, so Isis decided to base its business development strategy on pursuing that path. The new company head says he had forgotten from his time at P&G the strong demand for skincare products, particularly among women.

The Isis patch features hyaluronic acid, collagen-stimulating peptides, and vitamin B5 as active ingredients. The noninvasive nature of the Biobliss patch contrasts with Botox treatments and gives the first Isis product a tremendous upside, Hobson believes. Eventually, the IsisIQ platform could be used to treat medical conditions such as ADHD and Parkinson’s disease, he says.

“That’s the company strategy—to get cash out of the beauty care market and invest that into drug delivery. We see that as a huge opportunity,” Hobson says. In 2010 MDDI selected Isis as one of the 50 top companies-to-watch in the device industry.

Hobson came to Isis Biopolymer from TxtEagle, where he served as COO. He is also a cofounder of Bandgap Engineering, a developer of nanostructured-silicon solar cells. Hobson holds a BA from McGill University and an MBA from Harvard Business School.

Hobson says his concerns about how the company “would deal with a new person coming in” following Ms. Durand’s passing were allayed during the interview process. Since he became CEO, the “team has really jelled,” he says. “In the 30 to 35 days since I’ve joined they’ve very much made me feel part of that family.”

In this MX interview, Hobson discusses the pragmatic thinking behind the Biobliss strategy, potential drug delivery applications, the importance of the human factor in product development, and the company’s expansion plans.

MX: You began your career at P&G in beauty care, and before coming to Isis Biopolymer you were COO of TxtEagle. What attracted you to the device industry and to Isis Biopolymer in particular?

Chris Hobson: The way I describe my career is: I help technologists turn their technology into a business. That means there are three big things I focus on. One is the go-to-market strategy and the actual go-to-market; figuring out the value proposition for a product or service, doing the initial market research and customer development to understand how the customer views that value proposition, and how we generate value for a customer. Then it’s executing the sales, marketing, and business development to actually make that happen. I also have raised a lot of investment dollars, venture capital, and angel dollars in my career. The third big thing is building the team.

What attracted me to Isis was that here we have great intellectual property, a product that works, a team that is very solid that created this product in the first place, a whole manufacturing facility that could do tens of millions of dollars in revenue a month, and an active market they’re going after in terms of the first application of this patch, which is the beauty care market, one that I know a little bit about from my time at Procter & Gamble.

It’s the perfect situation for me to come in to help a technology with a great set of raw materials and turn that into a business.

You became CEO on October 1. Is there anything in particular that has stood out or surprised you since you took the job?

I was in the beauty care business about 11 or 12 years ago. I guess I had forgotten the length to which women will go to deal with wrinkles and with looking beautiful. This is reminding me of how massive this market is and how massive this problem we’re addressing is. In our market women will go so far as to have a doctor inject needles into their face for hundreds or sometimes thousands of dollars just to get rid of a wrinkle. It’s just surprising to me how pervasive that is. Now when I go to cocktail parties it’s amazing how I can tell, “Oh yeah, she does Botox,” or “she’s filling in her fine lines and wrinkles with some sort of injectable product.”

Again, that just speaks to our value proposition, where we can deliver these active ingredients transdermally, and so we can open up a much larger market to enable us to avoid those negative side effects.

That was one thing that surprised me. And then I think it’s very common for CEOs to talk about the quality of their teams, and I had a sense coming in for my interviews that we had a good quality team here. But I’ve just been amazed to a person at the family [atmosphere], and how willing people are to pull together on tight timelines and go above and beyond the call to make things happen.

Isis describes its technology in terms of drug delivery. How did the decision to first use the single-electrode technology for the Biobliss patch come about as opposed to a straight medical application?

It’s mostly a pragmatic view. To go the FDA route with drug delivery you’re looking at years of approvals, you’re looking at phases one, two, three, and then you’re looking a millions of dollars to get there. We certainly have the capability to go down those roads. We have a great investor group that has been very supportive of the company.

We also have this near-term opportunity and the initial testing was sort of “wow!” We did a market-size study. We had L.E.K. Consulting come in to look at this market and help us figure out how big this market can be. And there was the wow factor, [as in],“Wow, people actually spend almost $3 billion a year on anti-wrinkle [treatments]!” From a regulatory perspective we don’t have to go down the path of approval. With the right set of claims we can launch with our product the way it is today, a product that drives immediate efficacy in a massive market.

Overall, it was just a pragmatic view.

You have to deal with FTC regarding claims, though. Correct?

Correct. Everything that we do we run through our counsel in terms of claims we make on the product. They’re well-versed in FTC [requirements].

Where is Biobliss available?

Our approach has been to sell into the high-end spa and salon market. If you’re at one of those really high-end spas or salons in selected markets, there’s a good chance you’ll see us available. We’re not widely distributed yet. We only launched the product in July. It’s only been five months since we’ve been up and running with it. The focus geographically is where those high-end spas and salons are concentrated [such as] Southern California [and] southern Florida.

How much does it cost?

There are two different ways the consumer can access the Biobliss patch. One is to go to their esthetician at a spa and have a Biobliss anti-wrinkle facial. That costs as low as $50 to $75, and we’ve seen it as high as $200 to $250. It depends on how much a basic facial costs at that spa and then how much they’re going to upcharge for the addition of the Biobliss anti-wrinkle patch.

The other way a consumer can access the patch is by buying at the spa or at retail to use at home. There again, the pricing ranges. We’ve seen it in the $20 range; we’ve seen it in the $40 range for a patch.

Does the patch use the programmable technology in the same way as a drug-delivery device would use it?

The answer to that is yes and no. Yes, in the sense that the core technology—this single-electrode, iontophoretic device that is driven by a small, wearable microcomputer—is the same. But in terms of programming that, the Biobliss patch uses a fraction of the capability. With this wearable computer that’s on-board the Biobliss patch we have the ability to do time-release delivery, scheduled released, and modulated delivery, so, based on the current, we can crank up and turn down the amount of active [ingredients] being delivered. We have the ability to let the user self-dose, and also make sure that the user doesn’t over–self-dose or under–self-dose. We can sort of say, hey, it’s a nicotine patch, you can give yourself a [dose] whenever you want one, but you can’t give yourself more than one [dose] every two hours.

All those things are programmable and doable with our technology, but for the beauty application you really just need to turn the system on and then turn it off. In fact, we’ve even got a program to turn itself off after the treatment is done.

Is the personal care market segment one that other device companies could exploit as well? Is the Isis Biopolymer patch unique?

It’s extremely unique. You asked what surprised me when I came here; this didn’t surprise me. Again, there are about 30 million women a year who address this anti-wrinkle problem. They have two choices. They can either go to creams, where you spend a lot of money even for your cream that you buy at the drugstore. Or you can go all the way to Botox.

What doesn’t exist is an efficacious, noninvasive solution to this problem. The creams are expensive, but if you read Consumer Report there’s questionable efficacy there, especially on first use. With Botox, fillers, and injectables, you’re injecting a needle into the face. I knew coming in here that the real opportunity is that we’ve got something clinically proven to be efficacious but also is delivered transdermally, so we’re addressing that other issue around the invasiveness of the treatment.

Could other device companies exploit [this market]? That’s a pretty broad question, so I would imagine there’s somebody out there that has some sort of product that could go into the personal care market. We believe that within anti-wrinkle [products] specifically we’ve got a unique combination because, again, we’ve got the clinically proven efficacy. We have a technology that can deliver that efficacy with no side effects. The other big thing that is sometimes underestimated by technology companies and potentially medical device companies as well is that we’ve got a great marketing team. Building the Biobliss brand is not traditionally something you would do if you’re just trying to get a medical device through FDA.

I assume men could use it, too.

Absolutely. For the most part it’s women, but we do have examples of men using the patch. It provides this near-instant reduction in the appearance of your wrinkles after a one-hour use. There are special occasions that both men and women go to. A man going to his daughter’s wedding or to his 30-year high school reunion may want to look that little extra bit younger. So we see those kinds of applications.

I was thinking about the acting community as well. MX is based in Los Angeles after all.

Right. Well, you live in the land of Botox.

That’s true, especially on the Westside here. But let’s talk about the long term. My understanding is that Emma Durand’s initial vision—and that of the company’s technologists and backers—was to view this concept as a drug delivery device. How far in the future would you say is the development of technology for drug delivery and what might the first such device application be?

We’re a small company, so we’re focused on this beauty care market. We have proof-of-concept on delivery of things like lidocaine and nicotine, where we’ve done animal testing and Franz Cell testing to determine what percentage of the actives are being delivered. We’ve also done work with methylphenidate on ADHD as an application. There are things that we have on the longer-term list, like a way to go after Parkinson’s disease. There’s an application where some of the fuller capabilities of the system could really be in use in terms of RFID, tracking, and those kinds of things.

Speaking of RFID, the Isis concept integrates several technical capabilities, and you mentioned tracking software as one. What technological or business challenges are there in developing a hybrid product like this one?

It’s a very dynamic and changing landscape. Our technology takes it into account, especially as we’re developing it for wireless. You mentioned RFID. RFID is one way to do wireless communication, but there’s also Bluetooth. ZigBee. So there’s a changing landscape in terms of that one aspect of the technology. On the other side we’re doing transdermal and drug delivery, and there’s a changing landscape on the active ingredients, the size of molecules, and different innovations around that as well as science that goes into our hydrogels and what can be suspended in what matrix.

This a very multidisciplinary problem. Keeping track of all that and managing all that to the maximum effectiveness is certainly a challenge, but that’s why you have a great team and you address that.

Is there any one of those technological aspects you mentioned that’s most problematic?

I don’t think that any one of those is the most problematic. I think it’s the combination of all the above. I wouldn’t say it’s problematic, but that’s certainly something that is a challenge for us. With our Biobliss application we’re less worried about RFID or wireless or anything like that; we’re really becoming experts in this specific application. There’s our platform, which is the wearable computer and the hydrogel that encloses the actives. But then what are the actives and what are the ingredients and how do they interact with the hydrogel and how do they interact with each other and how should they be released over time to deliver the maximum efficacy for the anti-wrinkle consumer? That’s really where we focus, so that’s the main challenge for us.

Is there something you can learn in this first application that could be used down the line for drug delivery? I mean, this is a test in the field in essence.

Right, it’s certainly a proof of concept of our technology. In so many cases technologies win or lose in the market not because the technology was right or wrong or a breakthrough but for human factors: Is it easy to use? Is it comfortable to wear? Does somebody know that they actually turned it on? And so, our interactions with thousands—and one hopes ultimately millions—of consumers will make us by far the experts in how to do wearable computing for transdermal drug delivery.

Do you have a timeline for any drug delivery device? Is it three years, five years? Do you know yet?

It’s sort of in that range, but we’re a private company really focused on this anti-wrinkle product right now. We’re not making any public pronouncements when we’ll be in the market with any of these other applications. As I mentioned, the team is focused on making our Biobliss product a huge success in the market. Our team also has time to work on other applications. But [as far as] the 80-20 rule, it’s certainly not the 80%.

I assume, though, that if Biobliss is as a big a success as you expect you could put some of that money toward developing drug delivery devices down the line.

And that’s the company strategy—to get cash out of the beauty care market and invest that into drug delivery. We see that as a huge opportunity. We think that the Biobliss opportunity in the beauty care category is massive in and of itself. But then when you talk about the ability—not that we do—to deliver insulin transdermally, which is an insanely huge market.

Speaking of money, in March 2010 Isis announced that the company received $3 million. And that amount was in addition to $7 million received in 2008 and another $500,000 the year before that. Are you at liberty give a ballpark figure on just how much has been invested in Isis Biopolymer to this point?

I’m actually not. We’re a private company; we’ve got several large investors, and they’re intensely private about what they’re investing in the company. Frankly, we’re more focused on revenue. As I said, this strategy to go after the beauty care market gives us non-dilutive cash flow. And so our focus is on generating that revenue and on generating that cash flow that we can then invest back into the drug delivery business.

But the company has made these previous announcements. Do you expect investors to continue to support Isis?

Again, our current investors are private and don’t like to publicly announce where they’re at on that. But, yes, absolutely, they will continue to support us. I’ve had conversations even just today with several of our investors, and they’ve expressed their happiness with where we’re at and their support for the company. Again, I would say 90% of my focus is on generating revenue so that the company does not need to go back to investors.

Do you have plans to expand then into additional regions with Biobliss?

We’re already in conversations with folks in India, China, Singapore, Japan, and South Korea. We’ve got lots of different discussions underway, none of which have gotten to the point where we’re ready to announce anything. But we’re definitely looking at all of those options. And even here in the U.S. we’ve got geographic expansion that we can be doing, as well as in the beauty care industry. The way that our patch works is you use it for an hour, and you might use a patch a week. But we also have the ability to complement that patch with a line of creams and serums and lotions that keep the skin hydrated [and] lock in and extend the effects of the patch. That’s a key focus area for us as well in terms of expansion.

How long does the anti-wrinkle effect of the patch last?

We can recommend that you do a patch about once a week. As you well know, any kind of medical device that’s interacting with the human system is going to be somewhat variable [in its effect], and depending on your wrinkle type and your skin type and your level of hydration, there’s going to be a range. Generally, what we recommend is a patch a week.

Isis has seven patents pending. How would you describe the status of your IP security?

We’ve spent a lot of money. I know because I sign those checks every month to the law firms that prosecute our patents. We have seven pending, one issued. And we have filed these patents not only in the U.S. but also in Europe and in China and Japan and Australia—all the major markets where both Biobliss will be available as well as future applications for our technology.

Finally, you stepped in for the founder and the head of the company, Ms. Durand, after she passed away. Is it tough assuming the role of a CEO who died, let alone someone who was integral to the company’s existence in the first place? How did you handle that?

Certainly, it is a challenge. Ms. Durand had the vision to build the initial prototypes of the patch, and one of the things that I was concerned about in joining a team like this is how they would deal with a new person coming in. Through the interview process and then through the early part of meeting with the company, I addressed it head on. The interesting thing is [that] this team has really gelled, they’re very strong; they’re very together.

I asked them all why they still get up every day and are excited to come to work, and almost to a person they used the same word— family. They all have become very close; they see each other as a family. And in the 30 to 35 days since I’ve joined they’ve very much made me feel part of that family. [I would say I dealt with the situation] just by being myself and being candid and honest with them and expecting the same of them.