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Egor Melnikov is the founder and CEO of the innovative biotechnology company ARNA Genomics (USA), founded to develop technologies for liquid biopsies.
Yegor is an experienced economist, entrepreneur and manager. As founder, co-founder and CEO he has been involved in the creation of start-ups in various economic sectors: Advertising and production activities, international logistics, integration of IT solutions for large public and private customers.
In an exclusive interview, Yegor says
First of all, we find it important to look for a super-correct, super-accurate experience. Then we try to choose the right team. Not everyone does. We preach the principle of specific action. Half measures have no place here.
Maybe you don’t have to be motivated every day. Maybe you should focus on your own internal biological circuit. Sometimes we go up, sometimes we go down. It changes from day to day. The important thing is it’s the whole thing. A great goal ensures a great success.
Read on to learn more about Yegor Melnikov and his career path.
Tell me about your personal experiences and what motivated you to work for your company.
Yegor Melnikov: For ARNA, as founder and co-founder, I have set up several start-ups in different areas: international logistics, development, IT integration. I founded my first company in 2000.
Yet 20 years of my life experience are related to the Moscow State University. My parents met while studying at the University’s Faculty of Biology and then moved to the very first Soviet Institute of Biological Physics in the famous Russian scientific centre – Pushchino. My family, my friends, most of the ARNA team is from this town.
In 2013, a friend of mine asked me what my real motivation was. The answer was easy: I want to set up a company based on the development of my father Anatoly Melnikov for the early detection of cancer based on DNA methylation. This conversation took place on the stairs of the university – although at the time I had nothing to do with the faculty: I’ve just lived and worked in the neighborhood.
And it’s not just about ambition. It’s a passion to help others.
Exactly 7 years ago we founded Biomarker-RU LLC together. ARNA Genomics US was registered in 2018. My best friend from my childhood, Georgi Nikitin, is now co-founder and COO of the company.
What is your current main product and can you give a product sales history?
Yegor Melnikov: The project started after 10 years of research by my father in institutions such as Chicago, Northwestern University, Rush University and private companies. The results of the system tests showed an accuracy of no more than 80%. It’s a fantastic level, even now. But not for him.
Then a new approach and a new idea were formulated. With this new concept we moved the laboratory to Moscow.
The first idea was to perform a universal test, without localization, without specificity. I only answer the question whether there is an ontology or not. After receiving the expertise in Skolkovo, we realised that such a product is interesting, but that there is no answer to the question of how to proceed. Just take a look? It’s possible, but it’s not an option. We have therefore decided to limit the scope of the measures.
We focused on British Columbia because it’s a serious need, a serious problem. Breast cancer is a group of diseases. Otherwise, difficult to diagnose. We also had a good plasma collection back then and we had a base to work from.
When we called our first genetic protocol RNA 2, we thought it worked well for the biological breast cancer subtypes Luminal A, Luminal B and Her2/neu. However, we haven’t been very good with triple negative breast cancer. On this basis, it was necessary to formulate a new task – the development of a separate laboratory protocol for recording the triple negative result. A new approach has emerged – the ARNA 3 protocol for proteins.
How much money have you raised so far? When was the last financing cycle?
Yegor Melnikov: We’ve raised a total of about $5 million. This summer, ARNA closed a $3.5 million Series A deal with Xploration Capital as lead investor. Before that, we had raised and spent about $1.5 million in seven years. Initially, some money was invested by the founders at an early stage and then the money was put on the market.
What are the internal decision-making processes that determined the start of fundraising and what logistics are involved? And how many investors did you meet, how did you get to know these investors and which channels worked best for you?
Yegor Melnikov: Fundraising in the field of biotechnology is a continuous process until the product is listed or marketed. Because we initially developed strong business skills in the project, with experience in attracting investments and completed transactions, it was transparent enough for us to raise funds on an ongoing basis. To do this, it is necessary to think directly about development, about a product, about marketing. It became clear to us that we had to master the first phase of the investment with our own resources. When the first prototype was developed and the first clinical trials were to begin, we were able to raise money from public funds.
We were constantly looking for platforms such as Skolkovo, demonstration days, investor days and we were looking for a way to present a project. This is an ongoing process: We submit funds, update presentations, take part in various competitions. One of our successes in 2019 is the fact that we participated in two races and won first place twice. It helped us get attention. However, a serious discussion with investors began after we conducted a pilot study on the ARNA breast test, which showed an accuracy of over 90%.
What are the main challenges and obstacles in the fundraising process? If you had to start over, what else would you do?
Yegor Melnikov: It’s not easy. How do you pass a technology audit involving external experts? On the one hand, it provides a degree of comfort and understanding for our development and technology, while on the other hand, important intellectual property is only made public if we protect it. This is the most complex issue in the field of biotechnology. How can one present a project without revealing its know-how?
What are the milestones for the next cycle? And what are your goals for the future?
Yegor Melnikov: With the money raised, we will collect samples for clinical trials to demonstrate our effectiveness on a more biostatistical sample.
Secondly, we will file new patents relating to our new fundamental discoveries. We think we’ve opened up a new class of protein.
We also plan to develop an intellectual property protection strategy together with professionals.
We also plan to partially robotize the entire laboratory protocol in the most common part, where human error is possible. Robotisation is necessary for further implementation, market penetration and global expansion.
How did you attract users and what strategy did you use to grow your business from start to finish?
Yegor Melnikov: We have a somewhat special situation that is different from other start-ups. We’re positioned in the blue ocean market. We have no competitors in the field of breast cancer screening by liquid biopsy. We are well aware that this is the technology of the future – a huge emerging market. Because we believe we are among the first to go in this direction, our marketing strategy consists of entering into partnerships with professional players in the market for genetic diagnostics.
Our model is marketing. In general, we are first and foremost a scientific company that aims to develop innovative products, conduct research and demonstrate effectiveness. Our model consists of the interaction and creation of venture capital companies with regional or local market players in the field of diagnostics (networked clinics) or at state level to launch regional pilot projects for inclusion in state-covered insurance programmes.
In our case, the users are not customers or final recipients of the service. We sell our project to doctors and experts: Doctors, geneticists or molecular biologists. We have two areas – regulatory studies to obtain a marketing authorisation, which gives the right to sell the product in certain countries.
On the other hand, we work together with opinion leaders, doctors and experts. They require extensive clinical studies, followed by publications demonstrating the effectiveness of our test against analogues and existing technologies. We let ourselves be guided and look for the right niche in collaboration with doctors.
Which software has been the best marketing tool to help your start-up grow, and why?
Yegor Melnikov: The expert community is interested in having the most reliable date possible for the studies that will lead to these data. We are in the process of developing our start-up into a quality management system and ISO 13485 standard. We are currently developing our own LIMS software for the management of patient and measurement data in our laboratory. Of course, it’s all anonymous.
That most starters are usually wrong about marketing?
Yegor Melnikov: First of all, we find it important to look for a super-correct, super-accurate experience. Then we try to choose the right team. Not everyone does. We preach the principle of specific action. Half measures have no place here.
How would you like to develop your activities worldwide?
Yegor Melnikov: ARNA presented its field of interest for the first time when it applied for its first patent in 2016. Our goal is to go through the national phase and penetrate the following markets: Europe, the CIS, the United States, China, India, South Korea, Israel. FDA approval and European CE marking is one of our primary objectives. The first expansion plans concern Germany, France and the United Kingdom.
Once registration certificates have been received from these regulatory authorities, it will be easier to enter China, India and Brazil. We will approve clinical trials in local markets with selected partners.
What are the most common mistakes companies make in their global expansion?
Yegor Melnikov: I can’t speak for everyone. Some may make the mistake of covering too many areas and want to cover everything at once. My advice is to start by assessing the actual possibilities.
How do you manage the Kovid 19 flash situation to ensure the survival of your company?
Yegor Melnikov: We’re fine. Compliance with the safety measures by consulting the general recommendations. Our international activities are now temporarily suspended, so we have made some adjustments to our priorities. We are currently doing extensive research here in Russia. We file patents and communicate with our foreign colleagues. We can all communicate remotely with our colleagues.
What is the best advice you have ever received? And what advice can you give to someone who wants to do similar things with you or go in a similar direction?
Yegor Melnikov: My best advice is not to do all this, because it’s a thousand moves. And when you do, believe in her and hang on to the end. At the same time, we always question everything that can be questioned and checked. The best advice I’ve been given is that if our product can be killed, we should do it as soon as possible. Always check it. But if it can withstand all these tests and trials, it’s worth putting it on the market.
How do you maintain your motivation on a daily basis?
Yegor Melnikov: Maybe you don’t have to be motivated every day. Maybe you should focus on your own internal biological circuit. Sometimes we go up, sometimes we go down. It changes from day to day. The important thing is it’s the whole thing. A great goal ensures a great success.
What are the three most important life lessons your (future) sons and daughters need to know?
Yegor Melnikov: We have to be honest and humane. You have to be smart and cunning. You have to work with your head.
Why do you want to be remembered?
Yegor Melnikov: For growing a company that has grown at Unicorn. Despite the investment situation in Russia. We made a breakthrough and did a good job.
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