A group of Buffalo-based investors has put $1 million into a startup company in Florida that is creating novel medical products made from the skin of a Mexican salamander known for the ability to regenerate lost limbs and other body parts.
The products in development by NeXtGen Biologics show promise in the field of post-surgery wound treatment and the initial approval from federal regulators could come by the end of this year, said Mark Hamister, chairman and CEO of the Hamister Group.
“We think this product will eventually replace surgical mesh,” he said.
Hamister is one of the founders of Buffalo Capital, formed to bring investment opportunities to the attention of its members. Scott E. Friedman, an attorney who is chairman and CEO of the Lippes Mathias Wexler Friedman law firm, typically identifies the potential investments, Hamister said.
In addition to Hamister and Friedman, the investors include: Jerry Jacobs Jr., co-CEO of Delaware North; Dr. Elad Levy, a neurosurgeon; Brian J. Lipke, former chairman of Gibraltar Industries; Buffalo attorney Gerald Lippes; and Ted Pierce, a Florida-based investor whose family owned the former Niagara Envelope Co.
Friedman initially was contacted about NeXtGen. The company explores uses for medical products made from the skin of the Mexican axolotl – pronounced ACK-suh-LAH-tuhl – salamander. It was formed in Gainesville, Fla., in April 2014 by CEO Jonelle Toothman and Jamie Grooms, and relies on the work of researcher Ryanne Early, according to the Gainesville Sun.
The company is working on a soft-tissue-healing mesh, based on the skin of the axolotl, which can regenerate its skin and limbs. The mesh would be used in surgeries such as abdominal and hernia repair, dermal replacement or a heart graft, the newspaper reported.
NeXtGen outsources the raising and harvesting of the salamanders to the University of Kentucky, according to Hamister and the Sun.
Hamister said the group was drawn to NeXtGen and its products because this was an area without a lot of competition, it was a product that filled a real need, it could improve people’s lives, it had enormous potential for growth and it could provide a high return on their investment.
“We thought the product was extremely novel,” he said.
The members invested with NeXtGen directly and not through Buffalo Capital, he said.
They provided $1 million of the $1.28 million raised in this round, the third round of fundraising brought in by NeXtGen since the startup’s founding. NeXtGen has raised just under $3 million in all, Hamister said.
In addition to their investment, Hamister and Levy took seats on the board of the company.
If all goes well, the U.S. Food and Drug Administration could approve the first NeXtGen products for use in humans by the end of this year, and the first products could be available for commercial use by the first half of 2017, Hamister said.