Taking the Plunge! 

Sue Rees in conversation with Mike Davies

Dr Mike Davies MD, FRCRS, FRSPSG is the founder and CEO of Manchester-based Carocell Bio. This startup biotech firm is developing novel peptides and a nanoparticle delivery system to get them into cells, switching off and preventing the activation of inflammation. This exciting new technology has the potential to provide a safe and ongoing treatment of a wide range of inflammatory diseases, including debilitating conditions such as eczema and inflammatory bowel conditions. Early results for a cream treatment for dermatitis and related skin conditions are very promising indeed without the concerns around topical steroids. 

Sue Rees: Mike, Carocell Bio is an exciting young company that you founded just four years ago, is that right? 

Mike Davies: Yes, indeed. I started the business and I’m the CEO. It’s still early days, but we’ve already grown a little bit. I’m joined on the board by our chairman, John Nicholson, and we’ve currently got three employees who are doing fantastic work for us. 

SR: So what made you take the plunge and set up a new business in this space?

MD: It was the opportunity to develop something really exciting! And the fact that this has the potential to make a huge impact on the lives of many people living with inflammatory conditions is a powerful motivator. 

There’s also even wider potential for these novel compounds. At the moment, we have received an Innovate UK grant to look at their effect on burns, and if they can switch off the inflammation that follows a serious burn and which tends to lead to bad scarring. Positive results here could also lead to the potential for the compounds to reduce scarring from other wounds, including surgical operations. 

There’s also potential for this to be used in other conditions which start or increase via inflammation, including reducing the spread of cancers, which is another potentially very exciting area for research. 

SR: I can see why you’re so excited! So, given that you’re an early start-up and in the midst of some exciting research and development, what impact has the COVID-19 pandemic had on the business?

MD: It’s been massive, because our business model before the pandemic was to contract things out. We couldn’t afford to hire the best people, so contracting out meant we could get some of the best people to do the work for us. Of course, when lockdown happened we then didn’t get much work done for us at all. In fact, it’s only just started to pick up again in the last couple of months, so it has impacted our timeline greatly. 

It’s also hit us from the point of view of our grant-funded burns research. Our trial was going to involve tissue taken during elective operations where skin is burnt under anaesthetic as part of the procedure. We could then use that tissue for testing. During the pandemic, almost all elective procedures were stopped, so we needed to have a rethink. One of the reasons for not using tissue from accidental burns victims was the variability of the burns and therefore the reproducibility of the exact type of tissue damage. So that was a problem we have had to solve. 

Contracted lab work on the formulation also stopped, and despite signing a contract for this last August, we’ve only just had notification that some of our formulations have finally been made. Of course, without the formulations, we can’t start to get the data we – and potential investors – need. 

But we are now seeing movement in everything again, albeit slow, and hopefully, it won’t get stopped again so that we can get things back on track and pick up speed again shortly. 

SR: And I understand you received some investment from Deepbridge Capital this year?

MD: Indeed, we received a seed-stage investment of £250,000. They were fantastic, and I would recommend them for startups based on our experience with them.

SR: You mentioned that the lockdowns caused you quite a few issues. Now that things are getting back on track, what are the challenges that are keeping you up at night at the moment?

MD: I’m lucky – nothing keeps me up at night, I sleep like a log no matter what’s going on!  I’m not really a worrier. My philosophy is that worrying doesn’t benefit me, so why do it? Yes, days are long at the moment – of course they are. And I spend a lot of time chasing people over things like contract fulfilment. But these aren’t things that I let get to me. 

And working on the theory that all our contractors can hold to their promises, we should be getting data by the end of the year. If we don’t? Well, I’ll probably jump in the car and go and bang on peoples’ doors and say “let’s get it done, what’s the hold up” rather than sit and worry about it.  

SR: Does the reliance you’ve got on contractors and the unforeseen delays caused due to the pandemic make you worry about ongoing investment?

MD: I’m not worried, but I’m certainly interested in the next round of investment! Our current investors have given us good hints that they would be interested in additional investment, and I’ve been speaking with other potential investors – lots of calls. Most people are saying “come back and speak to us when you’ve got the data” and I understand that. Getting people to take the risk earlier is more difficult, even if it’s potentially more lucrative for them.

SR: So what do you see as your three biggest challenges moving forward?

MD: I would say our three biggest challenges are… investment, investment, and investment! Many things are bubbling around, they just need to come to fruition. It would obviously be better to have a longer runway, and getting sufficient investment to provide longer-term funding makes planning and decision-making a little easier. 

SR: If you were to give any advice to a startup founder at the moment, what would it be?

MD: Listen to what everyone says because there’s lots of information you can glean from other people who’ve been there before you. 

The most important thing is money – no matter what anyone else says. It’s very difficult to do anything without money, even if you’ve got the best idea in the world. 

Speak to as many people as possible – you never know where making connections will get you and who you can be introduced to that might make the difference between success and failure for your business.