Pipeline: Emulate Inc.

Evaluating the emerging companies within the Organ-Chip Sector

Pipeline is a new thread/series I’m working on where I analyze the science of emerging Biotech companies (from pre-IPO to IPO) in hopes of better equipping potential patients, caregivers, investors, and all those intellectually curious enough to keep reading.

Emulate Inc is a private company based out of Boston, MA attempting to address the deficiencies and limitations of animal and in vitro models by developing chips that are the size of a double A battery that can represent the characteristics and behaviors of organ systems. On September 7th Emulate announced an $85 million dollar Series E round, adding to a now cumulative funding of $225 million. Emulate currently has chips that model the brain, colon, duodenum/intestine, kidney, liver, and lung.

Emulate’s Series A was in 2014 and since then has consistently raised their next round every two years.

Organ-on-Chips represents a faster and more consistent way to bring drugs to the clinical settings for patients. The National Institute of Health (NIH) started their pursuit of this technology in 2010, focusing on a heart chip. The 2021 fiscal year marked the end of the NIH’s direct involvement in Chip development, forcing the 3 labs involved to pursue a self-sustaining financial model or establish private companies. Emulate Inc. was started in 2013 by researchers from Harvard, principally Donald Ingber and Daniel Levner.

Composition of Chips

The ability of a Double A battery sized piece of plastic to sufficiently mimic the environment of an organ system is quite an engineering feat. Essential to the design is the microfluid channels, which present a scaffolding in which human cells from a variety of organs systems can be placed upon. The channels allow researchers to create an environment to mimic structure and function at the organ level. The chip is not just a plate of cells, which is the concept behind in vitro cell line research. In that scenario, scientists would test the effects of a certain drug on the cells that line the human lung in a petri dish. A limitation to this study is that it cannot properly display the mechanical function of the tissue being studied. For instance, the lung is constantly expanding and contracting in the process of breathing, and this is not replicated in a standard in vitro experiment. Thus the ability of Emulate chip’s channels to mimic the actions of cells adds an entirely new, and necessary, layer to research.

Above is a picture from the lab of the aforementioned Harvard Researchers. This demonstrates the lung chip, and is an up-close look at the composition of the chip itself. The cells that line the top of the porous membrane are derived from alveolar cells in the lung. These cells are responsible for a vital exchange of gas in the lung. From the capillary cells, the blood transports oxygen to the lung, while the lung cells “give” carbon dioxide to the capillary cells so they can transport this gas out of the lung to be exhaled. The beauty of the chip is that it affords researchers the opportunity to include the mechanical nature of the lung. The blood is constantly cycled through the chip, allowing researchers to observe how the action of lung and capillary cells is affected by the drug of choice. This provides a depth of research not available if the drug is simply applied to a cell culture.

Previous Applications

The COVID-19 pandemic afforded a unique opportunity for the Lung-Chips to be used. While the aforementioned advantages of Organ-Chips still apply, the novel virus highlights another advantage to this engineering marvel. Organ-Chips provide “rapid repurposing” capabilities. The team at Harvard’s Wyss Institute, where Emulate’s Organ-Chip was born, published a paper in May of 2021 highlighting how the Lung-Chip allowed for potential therapeutics addressing COVID-19, and even went so far as to show the efficacy of treatments like hydroxychloroquine and amodiaquine.

• Enhanced Gene Expression

A noteworthy result described is how the expression of important genes in viral infections differs between cell line models and Emulate’s Organ-Chip model. The researchers showed that the airway epithelium of the Organ Chip expressed higher levels of enzymes that break down proteins compared to the cell line models. The enzymes that are better shown in the Organ-Chip model include the ACE2 receptor, which is the main receptor regulating entry into the affected lung cells.

• Influenza Mimicry

As a means to prove it’s pre clinical utility, the researchers displayed a model of tissue infected with Influenza in the Lung-Chip and treated it with Tamiflu. The effects of Tamiflu as well as its exact concentrations post-metabolism are well known as evidenced by Tamiflu’s widespread use in medicine around the world. Effectively, researchers here proved that the Lung-Chip model resembles what we already knows happens in the lung cells of patients. The importance of this exists in that readers no longer have to wonder whether the chip translates to the actual organ system and all it’s physiologic complexities. Researchers went from a more complex model (the human body) and showed that their organ-chip accurately reflects the effects of Tamiflu in this synthetic model.

Pharmaceutical Relationships

The next two steps in growth for Emulate is that their Organ-Chips:

1. Are used in the top labs around the world

2. The chips can represent ANY organ system or condition

Luckily for Emulate, their users already include 18 of the top 20 pharmaceutical companies. This situation bodes well for the future of Emulate. Their work has also been championed by the likes of regulatory agencies such as the FDA and funded by the NIH.

Broad Market

In 2020 the organ-chip market was valued at $50.8 million and projected to grow to almost $700 million over the next 8 years. Given the recent research pushed out by the likes of Emulate and their competitors, the sector as a whole has a small sample that would appease regulators. Few things would save the pharmaceutical industry more money than the ability to quickly repurpose drugs and proactively avoid the administration of long-term toxic products.

Competitors

Tissue Dynamics (TD)

TD is a small startup based out of Jerusalem, Israel developing organ-chip models. TD differentiates themselves via patented micro sensors within their product. In one proof-of-concept TD showed how their sensor-integrated chip tracked metabolic dysfunction before cellular effects were observed. The value of this technology is immense in retrospect. For instance, the FDA approved a cyclosporine, however it was later found to cause kidney problems. With TD’s chip, they propose they could evaluate cyclosporine more accurately than animals models did and provide guidance on how to block it’s toxic effects

Nortis

Nortis derives its advantage in the industry from what is calls its “plug-and-play” design. The limitations of other companies like Emulate is that researchers must grow the tissue themselves. On the other hand, Nortis ships chips with tissue already “pre-seeded so as to take this difficult process out of the hands of researchers. In this way, Nortis positions itself as a convenient player in the industry. There are drawbacks to this approach. First, Nortis will have to establish a track record for reliability. The last thing that a company who advertises for convenience wants to find out is that their pre-seeded tissues were wildly variable and yielded inconsistent results, nullifying the research of their customers. Second, it is likely that customers have highly specific tissue needs. As a result, Nortis will likely have to build out a massive tissue library to address the needs of a variety of customers. As of June 15, 2021 Nortis has done just over $4 million in venture funding.

Mimetas

Mimetas is a Dutch Organ-Chip company, which just over 10 different products available to consumers. Mimetas is the largest of Emulate’s competitors, with entities across Europe, The U.S., and even Tokyo. They did a $21 million dollar Series B in 2018, and the Dutch Biotech company Galapagos (Ticker: GLPG) was Mimeta’s launching customer. Unique to Mimetas is their initiative to establish independent tissue production facilities and merge their products into the personalized medicine marketplace.

Hesperos

Founded by Michael Shuler, the Hesperos founder coined the term “animal-on-a-chip” in the 1990’s. Schuler and his associates were apart of the intial conglomerate that was funded by the NIH to develop Tissue Chips. Hesperos differentiates itself from competitors by putting together a multi-organ system chip, better resembling the entire physiologic conditions of the body. They term this “human-on-a-chip”.

Long Term Outlook

Looking forward, organ-chips provide a sensible and in some ways advantageous alternative to animal and in-vivo models. Past this, studies by Emulate Inc. even showed promise that the utility of these chips far exceeds that of the other two models. Given the novelty of this technology, it will likely take over a decade for this chip method to take a firm position in protocols and research across industries.