He Raised $100 Million To Develop A Portfolio Of Miniature, Long-Term Implants To Deliver Drugs More Efficiently And Consistently

In the bustling world of biotechnology and venture capital, few stories are as captivating as that of Adam Mendelsohn, the CEO of Vivani Medical.

Adam’s journey demonstrates an inspiring blend of vision, perseverance, and adaptability required to navigate the complex landscape of building and scaling a company–particularly one that transitioned from a private entity to a publicly traded powerhouse.

In this interview, Adam talks in detail about the very interesting sequence of events when it comes to reverse mergers and transactions and how to articulate the value of what you’re selling and your business.

Listen to the full podcast episode and review the transcript here.

A Californian Beginning

Adam Mendelsohn’s story begins in the picturesque city of Santa Monica, California. “Growing up in Santa Monica, it’s hard to complain,” he reflects, recalling the year-round sunshine, vibrant community, and inspiring people that shaped his early years.

Enriched by local public schools, Adam’s childhood gave him a solid foundation and a unique perspective on the world. During these formative years, Adam’s dual passions for music and physics began to take shape.

From Music to Science

Adam’s early exposure to music, starting with piano at age five and violin at eight, initially set him on a path toward a professional music career. However, a pivotal shift occurred during middle and high school when he was inspired by a dynamic science teacher and a chemistry instructor.

This new-found fascination with science and technology and what they could achieve, coupled with early exposure to the world of medical devices through his father’s connections, steered Adam toward a different destiny.

His father connected Adam with incredible medical device entrepreneurs, including Alfred Mann. Alfred was a visionary entrepreneur and billionaire behind groundbreaking medical devices like insulin pumps and hearing restoration technology.

While in high school, Adam had the incredible opportunity to get to know him and work in one of his companies. The experience inspired the desire and interest in finding a way to make an impact in health care with technology.

The Inspiring Experience of Working With Alfred Mann

Working with Alfred profoundly impacted Adam, particularly after Adam learned about Alfred’s perseverance when inventing the insulin pump for Type I diabetes.

Despite facing skepticism about the technology and how it could affect the efficacy of treatments on patient outcomes, Alfred persevered and went ahead with the idea.

Once the product was released and demonstrated dramatic improvements in patients, it attracted huge interest. Ultimately, Alfred’s company, Minimed, was acquired by Medtronic in 2001 for $3.7B.

“Al’s perseverance and innovative spirit were eye-opening,” Adam shares. The scientist’s approach taught him the importance of conviction and resilience in the face of skepticism and long development cycles, lessons that would become crucial in his entrepreneurial journey.

Unlike technology companies building software, medical technology or biopharmaceutical innovations don’t get instant traction with users, quickly identifying whether or not the product is going somewhere.

Not only does product development take time, but innovators must also go through a very lengthy and expensive regulatory approval process. However, Alfred’s inspiration spurred Adam to stay willing and motivated to continue working on his ideas.

PhD and the Birth of a Startup

Adam’s academic path took him to UC San Francisco and UC Berkeley, where he pursued and completed a PhD in bioengineering. His objective was clear–familiarizing himself with new science and technology, particularly related to drug delivery because that’s what his company was working on.

Adam’s time in the lab, surrounded by cutting-edge research, ignited his entrepreneurial spirit. The lab was at the intersection of micro and nanostructured materials and how they can be applied to studying biology, tissue engineering, and drug delivery.

At Berkeley, Adam met his future co-founders, Kayte Fischer and Lily Peng, who were pursuing their PhDs in the same lab as Adam when they decided to prepare for a business plan competition for nanotechnologies.

Working late, they came up with the idea to apply nanoporous membrane technology for sustained continuous medicine delivery from a small implant.

Winning the UC Berkeley Business Plan Competition

Their business plan won first place at the UC Berkeley Business Plan Competition and provided the confidence and momentum needed to launch Nano Precision Medical right after finishing their PhDs. Adam remembers taking it around the country and getting positive feedback.

In retrospect, Adam recalls having written about the concept separately in one of the courses he took through the management of technology certificate program at the Haas School of Business at UC Berkeley.

The school that hosted the program allowed graduate-level engineers and MBA students to take it together. Adam had written about applying a new type of nanoporous membrane as part of a new drug delivery technology for helping chronic diseases to be treated more easily and conveniently.

Winning the competition helped the co-founders understand the market beyond science and technology. Thanks to the encouragement they received, Adam was ready to leverage his degree and knowledge to go back into the industry.

Adam wanted to work for a company developing a product or start his own. He immersed himself in all the networking opportunities possible, joining all the entrepreneurial organizations at UC Berkeley and UC San Francisco.

Adam and his co-founders attracted limited funding and started researching how to manufacture and test the novel material to be used as part of the drug delivery implant. In the initial few years, they worked in inexpensive facilities that the university, or its affiliations, enabled them to rent.

They started with a bench and a desk in the basement of the bioengineering building at UC Berkeley and then moved off campus. Once they demonstrated the practicality of their thesis, they attracted strategic investment from one of the large pharmaceutical companies, AstraZeneca.

Navigating the Public Market

Transitioning from a private startup to a public company is challenging, and Nano Precision Medical’s journey is a case in point. The company’s path to publicly traded involved a reverse merger with Second Sight Medical Products, resulting in today’s Vivani Medical.

Second Sight, known for its pioneering prosthetic retina, had received FDA authorization but struggled commercially, though it retained valuable assets and potential.

It had raised $75M after having significantly downsized and was evaluating its next steps without its former leadership team with unclear prospects regarding the future of its technology.

The merger allowed Nano Precision Medical to access crucial capital and resources, significantly advancing its mission. The collaboration also happened because some of the directors of Nano Precision Medical were also directors of Second Sight Medical Products.

Second Sight formed a special committee of non-conflicted directors to evaluate Nano Precision Medical as an investment opportunity.

Their objective behind the merger was also to combine the residual team from Second Sight with Nano Precision Medical’s leadership team to try and bring the technology behind the prosthetic retina on a path toward success.

Adam reflects on the experience, noting the unexpected nature of the reverse merger and its timing. “Negotiating the merger at the peak of the market in December 2021 was fortuitous,” he admits.

The collaboration primarily focused on long-term drug implants for chronic disease treatments, primarily for weight management and diabetes, with the very exciting GLP-1 class in which Ozempic and Wegovy are household names today.

Despite the subsequent market downturn, the capital infusion provided by the merger helped sustain Vivani Medical through turbulent times. Adam explains that assets from Second Sight Medical Products have been transferred into a wholly-owned subsidiary called Cortigent.

Before the merger, the team had identified a different application of the technology, stimulating the visual cortex and making it applicable to many times the number of patients. The technology, which was an FDA-authorized application, may now be able to have a commercially viable business.

Adam reveals that they filed an S-1 for Cortigent and are exploring the possibility of independently financing the subsidiary around a new application of that technology. However, they primarily focus on drug implants for chronic disease treatments, which Vivani Medical has been working on.

Adam talks about starting clinical studies with the funding they’ve received. They have also acquired FDA IND clearance for one of their programs and expect approval to conduct obesity studies and programs shortly.

The Public Company Experience

Being a public company CEO presents a unique set of challenges. Adam describes the experience as both exhilarating and demanding. “Being public means constant scrutiny, but it also offers visibility and opportunities for growth,” he explains.

Vivani Medical has leveraged its public status to attract further investment and support for its innovative drug delivery systems, focusing on chronic disease treatments such as weight management and diabetes.

The company’s public status also necessitates shifting how value is communicated to investors. Adam emphasizes the importance of articulating the value proposition effectively.

“Initially, I would lead with technical details, but now I focus on the market opportunity and the problems we’re solving. Investors care more about the impact and the team’s ability to execute than the technical details.”

Currently, Vivani Medical has an internal project called Project Radar Screen. Adam explains how they want to get the company on the radar so people know what it is developing.

“Serving as the CEO is like drinking from a fire hose,” Adam notes. He has been navigating the full cycle of quarterly and annual reports, attending investor conferences, and cultivating analysts to write research reports–typically unnecessary in a private company.

However, he appreciates the value of these activities and the opportunity to learn a new skill set and considerations.

Fundraising Insights and Future Prospects

Adam’s insights into fundraising reflect a deep understanding of the complexities involved. Aside from the Second Sight $50M funding, Vivani Medical has raised around $50M from other sources, including friends and family, pharmaceutical giants, and public market investments.

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Each fundraising phase brought challenges and lessons, from cultivating relationships with investors to convincing people that they are a good investment to navigating the inefficiencies of private funding.

Adam also emphasizes the importance of having a management team that is seen as credible and trustworthy from the investor perspective.

He also stresses agility and the ability to pivot when necessary to demonstrate to investors that they can assess the situation and make intelligent decisions about what the next steps should be as they go forward.

Vision for the Future

Looking ahead, Adam is optimistic about the future. The company’s focus on innovative drug delivery systems and the potential for new applications of technology, such as the Cortigent subsidiary, positions them well for continued success.

Adam’s vision for the future is a world where people with chronic diseases need not worry about taking pills and injections to live their lives freely and be healthy. They can rely on a tiny implant that is easy to get and replace.

Adam would also want the company to scale operations internally to enable them to have multiple programs developing products to improve treatment options for chronic diseases. They have already built a lot of infrastructure and will build more moving forward.

In retrospect, Adam would have liked to be better prepared for the uncertainties and challenges from the financing, technology, manufacturing, and regulatory perspectives.

He would also have ensured that he was prepared to address challenges associated with working with people, including assessing new employees for long-term compatibility with the company and its culture.

Conclusion

Adam Mendelsohn’s journey from Santa Monica to leading a public biotechnology company is a remarkable story of vision, resilience, and adaptability.

His experiences offer valuable lessons for entrepreneurs navigating the complexities of building and scaling a company, especially in the dynamic field of biotechnology.

As Vivani Medical continues to advance its groundbreaking technologies, Adam’s leadership and insights will undoubtedly play a pivotal role in shaping the company’s future.

Listen to the full podcast episode to know more, including:

• Adam’s journey from Santa Monica to bioengineering was shaped by early exposure to music and influential science teachers.
• Working with Alfred Mann taught Adam the importance of perseverance and innovation in entrepreneurship.
• Nano Precision Medical’s success began with a groundbreaking drug delivery technology and a winning business plan competition.
• The reverse merger with Second Sight Medical Products provided crucial capital and resources for Nano Precision Medical.
• Transitioning to a public company, rebranded Vivani Medical, involves heightened scrutiny and offers increased visibility and investment opportunities.
• Adam emphasizes focusing on market impact and execution when communicating with investors rather than just technical details.
• Despite market fluctuations, Vivani Medical remains optimistic, with plans to leverage its innovative technology in upcoming clinical studies.

 

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