PORT SHELDON — A biotech startup will use $1 million in capital to pay for preclinical trials on an innovation it has developed for use in orthopedic surgeries.
Magnesium Development Co. LLC, operating out of a small office in Ottawa County’s Port Sheldon Township, uses an alloy material licensed from a Livonia company, Nano Mag LLC, to develop screws used in orthopedic procedures.
The company intends to focus first on screws for surgeries to replace a torn ACL in knees, President and CEO Rob Ball told MiBiz. Screws used today for ACL surgical grafts are made from either a permanent metallic material or an absorbable polymer.
Using elements found in daily multi-vitamins, Magnesium Development’s material is designed to gradually dissolve and absorb into the body but it “provides the mechanical properties and a stronger fixation of the metallic devices,” Ball said.
Preclinical trials in animals planned for this spring and the second half of the year will seek to validate the innovation, he said.
Founded in 2014, Magnesium Development is a portfolio company of Genesis Innovation Group LLC, a firm Ball started to cultivate and commercialize technologies.
Genesis Innovation Group led the $1 million capital raise for Magnesium Development. Other investors include Grand Rapids venture firm Start Garden LLC, the Biosciences Research & Commercialization Center in Kalamazoo, and venture capital fund Novus Biotechnology Fund I in Kalamazoo.
Ball estimates the company is “at the earliest” probably two years away from commercializing its first product, the ACL screws, which represent a potential $500 million market. Under its exclusive license with Nano Mag, Magnesium Development intends to develop additional devices for orthopedic surgical procedures that have a market potential of $2 billion to $3 billion.
“There are many, many other applications for the material outside of the ACL,” Ball said. “We will make a variety of products for the knee and the shoulder and the foot and ankle — all from the same or similar alloys.”
The partners behind Magnesium Development want to commercialize the device on their own, although they would consider licensing it out or selling the intellectual property.
“All three of those are options, but we are building a company that would take the device to market itself,” Ball said.
Although successful in recruiting investors, Magnesium Development still had a difficult time raising capital, despite the growth of venture capital and angel investing in Michigan over the years, Ball said.
A veteran of the medical device industry, Ball moved back to Michigan in 2013 to work on commercializing innovations and “my expectation is the funding environment in Michigan would have been more supportive than I found it to be,” he said.
“We found it really challenging to do the fundraising that we did,” Ball said. “We’re really excited that we did get it done, but it was more challenging than I had expected.”