Fred Dinger, the incoming chairman of the board of StemBioSys, spent more than a decade working in San Antonio at a time when the biosciences sector here was in its infancy.
He remembers negotiating with Northeast and Bay Area-based investors who weren’t particularly interested in San Antonio-based companies.
One group told him they would invest if he promised to take some of the proceeds to move the company to another part of the country where it would be easier to recruit top talent.
Dinger respectfully declined — and he ultimately won those investors over.
Today, thanks to the growth and rising profile of San Antonio’s biosciences sector, it’s easier to pitch a company like StemBioSys, which has developed several stem cell technologies and is now working to expand the global market for its products.
StemBioSys and CEO Bob Hutchens “haven’t had a problem getting the right resources,” Dinger said, one of the many reasons he was interested in leading the board to help accelerate StemBioSys’ growth.
Today, StemBioSys employs about a dozen people and has raised roughly $20 million since its inception, said Hutchens, who joined in 2014.
“The company has great potential,” said Dinger, who will help market the company’s products more broadly. Many were developed with specific customer needs in mind, he said. “What we really need to focus on now is letting other people know we have this technology.”
Dinger and Hutchens spoke to the San Antonio Report Wednesday about this next stage in the company’s development, how a new law could make their products more valuable to stem cell researchers and the state of the biosciences industry in San Antonio.
Innovation from frustration
The company grew out of the frustration of Dr. Xiao-Dong Chen, a tenured professor at UT Health San Antonio. While performing research on a type of stem cell, he kept finding the cells were losing their ability to become multiple types of cells when he used a common lab material to culture them.
To solve that problem, Chen created what would become the patented CELLvo Matrix, a substrate the company says replicates the “physiological microenvironment in the body,” allowing stem cells to expand while retaining their stem properties. With co-founder Steven Davis, Chen obtained licensing rights to the technology from UT Health San Antonio and launched StemBioSys in 2012 to commercialize it.
Today, the company has developed five different matrices, including one for the growth of neural cells, which also behave differently in a lab environment, complicating research into diseases like Alzheimer’s and Parkinson’s. The company also offers 10 cell lines — groups of cells that can be maintained in culture for an extended time.
A new law could bolster researchers’ use of StemBioSys products, he said. The FDA Modernization Act, which had bipartisan support and was signed by President Joe Biden in 2022, ended a 1938 mandate that required animal testing for every new drug development protocol.
The company’s human-derived stem cells, and the matrices it developed, can now be used as an alternative to animal testing, Dinger said, because researchers can study cells in this “human” environment in a lab rather than having to test on animals.
Dinger, who replaces longtime board chairwoman Cathy Burzik, will bring decades of biotechnology expertise to the company. The COO of Aerin Medical in Austin, Dinger has led three start-up medical device companies through product development, FDA clearance, market commercialization and sale.
$44 billion and growing
Dinger worked in San Antonio from 2002 through 2013, and so had a front-row seat to what has become a rapidly growing health care and biosciences sector. In 2021, the most recent year data is available, health care and biosciences generated an estimated $44 billion, making it one of the top drivers of San Antonio’s economy. The biosciences, which include biomedical research, testing and biotechnology companies, make up almost 40% of that total.
On Wednesday, Hutchens took part in a meeting hosted by BioMed SA with senior leaders from across the industry to talk about its current strengths and weaknesses. The ultimate goal is to create a series of recommendations to enhance what is already one of the top drivers of the region’s economy. BioMed SA was formed in 2005 to promote and expand health care and bioscience in San Antonio.
Leaders in the meeting identified a lack of local venture capital as one weakness in the sector, Hutchens said. It also agreed that the path young companies need to take to get from a university lab to full commercialization could be strengthened.
A strength, he said, is the level of collaboration in San Antonio among heavy hitters in the sector, including Southwest Research Institute, UT Health San Antonio and the Texas Biomedical Research Institute, plus military and commercial companies. That level of collaboration is something San Antonio boasts that other leading cities in biosciences don’t, he added.
“It’s remarkable,” Hutchens said.
This story has been updated to correctly reflect the number of people employed by StemBioSys.
