PropThink interviewed Jordan Plews, PhD. co-Founder and CEO of Elevai Labs. Dr. Plews completed his postdoctoral and business school training at Stanford University after completing degrees in the UK in Biochemical Engineering & Bioprocess Development, and Stem Cell Research & Molecular Biology. His research has focused on stem cells and regenerative medicine and has been published in a variety of well-respected scientific and medical journals such as Nature Methods and the Journal of Cellular and Molecular Medicine
PropThink
Thank you for joining us, Jordan. Tell me a little about your background and the motivation for starting Elevai. Where did you see an unmet need in this medical aesthetics field?
Dr. Jordan Plews, CEO of Elevai
My background is in biochemical engineering and human stem cell research. I initially saw a lot of brands in this space, the physician dispense skin care space, where you're going into a doctor's office or a high-end med spa and you're speaking to a skin care professional. There's a handful of brands in that space and what they were touting as “cutting edge technologies” were mostly based on peptides, growth factors and conditioned media.
The latter is more or less when you're growing cells in a laboratory and you're feeding them a liquid food. As they're growing in that liquid, they're metabolizing, they're kicking things off into that liquid, that media becomes “conditioned” and they're taking everything that's coming out of those cells, and using that “conditioned media” as an ingredient.
A lot of these companies that were the leaders in space were using a model that I feel is antiquated and it's still the most popular model today. It's what we refer to as the “hero ingredient model.” It's where a scientist will go in a laboratory and often create a synthetic compound or will extract something out of a plant, or screen for a peptide, and then build a story around this single “hero” ingredient. These products tend to only be effective to a minor extent, falling short of the story built around them.
With the advent of regenerative medicine, scientists and doctors are able to approach things in a new way. What is going on in healthy tissue? What's happening in healthy, young skin? Why is it that we transition from this naturally perfect young skin into a place with a dysfunction or dysbiosis? As we have this transition occur, we're slathering on all these different creams to try to deal with it, when really I think the proper approach is to look at what is changing over time and can we top up what is missing or diminishing?
Our body is going through daily wear and tear. Our ability to deal with that wear and tear is going down over time. Our ability to heal and repair is going down over time. What we're able to do here is leverage what we've learned from stem cell research and regenerative medicine research to create these topical products that are the next generation of skin care. They’re really about supporting the skin and nourishing it with what is otherwise diminishing with age and natural wear and tear. This builds on the move from synthetic chemical compounds to things like peptides, which are meant to represent biological compounds, and we’re getting closer to what the skin needs and wants but is not really being produced anymore as we get older.
PropThink
Let's talk about this next generation approach and using exosomes. Can you explain what exosomes are, how they differ from stem cells and other extracellular vesicles? What benefits have exosomes shown?
Dr. Jordan Plews, CEO of Elevai
Exosomes are essentially “envelopes” that protect and carry messages from cell to cell, you’ve got billions of these flowing through your body right now, everyone does. They are a type of extracellular vesicle that was previously thought to be cellular ‘garbage’, but is now understood to be an important way that our cells protect precious cargo and ship it to from one cell to another throughout the body. So it is not that exosomes themselves are always special, just as the envelope isn’t special, but it’s about the message in the envelope. When you capture the right message, at the right time, from the right cells, such as stem cells, you can then apply it strategically and the exosome protects that message, helping it survive and get to where you want it, just as lipid encapsulation and microencapsulation technologies before it have done.
If you've been following the path of evolution of high end skin care products, you'll have seen that in the last 20 years or so there have started to become more and more products that were either peptide or growth factor based. A growth factor is a type of protein, while a peptide is a shorter, smaller version of a protein. Peptides are meant to have similar activity as a protein but be much smaller.
What they found with these sorts of products is that the skin is a good barrier. Things that are often the most beneficial are typically large and difficult to get through the skin. What has been done previously is to wrap them in a lipid ‘bubble’ to get them through. So, you'll see products that have “lipo-encapsulation”. Then the next generation after that was what we call “micro-encapsulation”, where they're making even smaller lipid bubbles with these compounds in them to increase absorption.
Now with exosomes, this is really nature’s nano-encapsulation system. We’re going in an order of magnitude smaller and enabling even better delivery of arguably even better molecules to support the skin.
As for your second question, exosomes shouldn’t be confused with stem cells. They are not alive. They are not a cell. They do not divide or have nuclear DNA or chromosomes. These are very very tiny lipid encapsulated particles. If you think of the cell about the size of a basketball, we're talking about something the size of a grape or a marble. Roughly 1/200th the size of a cell and they do not divide or have characteristics of cells other than their lipid membrane is similar to that of the cellular membrane that makes up the cell wall of our cells.
Exosomes should really be thought of as a protective nano encapsulation system where the cargo inside is determined by the cell they originate from and how it was treated.
This is another example of where scientists have long tried to accomplish something that nature has already perfected. Rather than try to create more synthetic ways to deliver things, we are instead going back to the biology and asking it to produce this for us, avoiding synthetic or artificial synthesis that at best approximates what nature does even better. For example, products have previously hit the market that are an approximation of a human growth factor or an approximation of a protein, like a peptide, wrapped in a man-made lipid capsule. Now we're talking about a much smaller lipid capsule with a message that's likely much better matched to what our cells naturally use or need.
PropThink
So if the quality of the exosomes is wholly, or at least partially, dependent on the donor cell sources, the culture method, and the isolation techniques. Where does Elevai source exosomes for their products and how do you ensure that the quality and consistency throughout the manufacturing and distribution process is standardized?
Dr. Jordan Plews, CEO of Elevai
So we're going about this in a scientific and logical way. With my background as a biochemical engineer, and having previously worked at places like Pfizer in their bioprocess development group, we are applying that same level of rigor to a cosmetic manufacturing process. Consistency is key. We want to make sure that each batch is the same every time. We limit variability or damage by being very thoughtful and controlling as much of the process from the acquisition of stem cells through to the generation of exosomes, to purification of exosomes, to the careful formulation and packaging of the final formulations as we can. Overall, we refer to our platform technology that covers a lot of this as our “PREx technology platform”, which enables us to not only make our current products with a very high level of consistency, but is also the basis from which we can more easily develop additional, equally innovative products.
To give a bit more color, we are getting consent from donors to acquire the umbilical cords. Within the umbilical cord there's a gelatinous substance called “Wharton’s jelly”, which is our source of mesenchymal stem cells. These mesenchymal stem cells act as little factories for exosomes. Importantly, they're essentially an ethically derived “age 0” source of stem cells. These are umbilical cords coming from full-term live healthy births, typically a c-section because that's more of a surgical procedure and we have more control on the cleanliness.
They go through a very rigorous process to isolate the stem cells from the umbilical cord, because the umbilical cord is not pure stem cells. The donor and the cells are tested for communicable diseases to make sure that there's no viruses being passed along. It's also tested throughout the process many times for any potential contamination by bacteria or fungus, what we call “microbial contamination.”
The cells are then specifically isolated using this proprietary process in a cGMP lab environment. Step one is to do our checks and tests to make sure that we have the right stem cell, a very specific type of stem cell called a mesenchymal stem cell. We don't just use one umbilical cord and churn through umbilical cords one after the other. Instead, we take a mixture of 10 different umbilical cords from 10 different donors and those cells are blended together to create what's called a “master cell bank.” You get enough cells in that cell bank to make consistent exosomes for a very long time, potentially resulting in years worth of products.
The important reason for doing this sort of blend is that you can imagine if you've got 10 people lined up, everyone's got slightly different genetics. If there's one gene out of thousands that is turned off, the other 9 are very unlikely to have that same issue. So, you are getting normalization and you're going to get basically 90% of what you would get instead of a 100%, if there’s 1 out of 10 has some aberrant gene expression.
While in a perfect world we might have 10,000 donors to make it even more normalized, we have to be realistic. This is why 10 donors is considered a way to get at a master cell bank that's a very high quality and balanced. I'm not aware of any other company in our space that's looking at it this way. Usually, they get one donor, and that donor could be at any age. Many companies try to say that they're trying to get a younger donor but you know it's unclear if that's even possible because they're pulling maybe fat or blood. Obviously, you're not going to pull fat or blood from an age 0 source. That would be quite unethical.
By going for the umbilical cord, we are getting the youngest ethical source of mesenchymal stem cells available today and processing it in a very specific proprietary way that allows us to start with the very best starting material. From there it's about what we call our PREx technology platform. This is a proprietary process that we run in our labs in California. This is all US based. We're effectively asking the stem cells to release exosomes that are tied to the proteins that we want for the benefit of the skin, the benefit of these topicals that we're creating. By starting with the best cells, you're going to get the best exosomes.
This is most recently evidenced by a journal article that came out in the Journal of Aging, out of a group in France, where they were looking at exosomes from older skin cells and looking at exosomes from younger skin cells. What they found was that older skin cells released more exosomes, but the quality of those exosomes was lower. When they took the exosomes from older cells and put them on younger cells, it actually had a negative impact. Whereas if you took exosomes from younger cells and put them on older cells, it had a positive impact. This is something that we've known for a long time and we've built that into our process.
I think a lot of the folks in the industry now are still learning as they go. I have the benefit of being involved in stem cell research for over 15 years and have been able to combine that with my background in biochemical engineering, to build a process that's arguably much more advanced than what we're seeing from others in the market. This is really going to be the differentiator for us long term - being able to create the highest quality products in the topical exosome space, built on science, for the physician’s dispensed skin care market, where our customers really do care about having the best products, products that really work and they feel confident in recommending.
PropThink
You mentioned previously that Elevai doesn't make any medical claims. Exosomes are currently not approved by the FDA to treat or diagnose any diseases and their use, therefore, is rather limited. In 2020, the FDA even issued a consumer alert on the potential risks and claims of unregulated exosome therapies. How do you view the FDA stance on exosomes?
Dr. Jordan Plews, CEO of Elevai
Companies like ours need to work with the FDA and within the confines that they set. I think there is remaining confusion around what these consumer alerts and FDA messaging really means.
The FDA has a wide purview, and they can more or less do what they want. Historically, we've had had companies that create products or treatments where cells are injected. Those uses have been banned by the FDA, for any kind of medical or injectable use. Then what we've seen following that is the development of products where cells are used in the process, but do not include those cells, and the resulting products are not used via injection, just topically, and that’s generally been an area that’s been allowed to flourish.
If we go all the way back to 1995, there was a company called Isologen that was taking a little piece of skin from behind your ear. They would grow that out in the laboratory, grow out an individual’s skin fibroblasts in the lab, and then they would inject them strategically around your face. They showed that those fibroblasts would spur the production of collagen and give you a renewed look. This was an expensive procedure that initially was marketed as an aesthetic procedure and the FDA came in and said it needed to go through clinical trials.
What came later was a company called SkinMedica. They were also taking skin fibroblasts, growing them in a laboratory in a dish, and they were feeding those cells a liquid growth medium. As those cells grew and divided, they excreted all sorts of things into into the liquid media around them thereby “conditioning” the media. All these cell secretions, collectively known as the “secretome”, were captured a “fibroblast conditioned media” and they then put that into a product that SkinMedica made called “TNS serum”. That was in 2001 I believe. That went on to be purchased by Allergan, which has gone on to be purchased by Abbvie. That topical skin care product is still on the market today and still has quite a bit of market share. The FDA has basically left it as a topical cosmetic product for 20-some years. I think it is an important landmark for the industry.
Although fibroblasts, which are a component of skin, are interesting, they are not the primary cell type that is involved in healing and repair of the skin. That's the mesenchymal stem cell. You'll remember, although George Bush banned a lot of stem cell research in 2001, by 2008 Obama came in and overturned that. The mindset around stem cells shifted from fear to people starting to realize the power of stem cells, particularly mesenchymal stem cells, aka adult stem cells. These are the ones from the umbilical cord, from fat tissue, from bone marrow. People started to inject those in all kinds of medical clinics throughout the country and throughout the world.
The FDA, just like with Isologen, stepped in and basically said, ‘no, you cannot inject live cells into individuals. That is medical. That is a drug. You have to go through clinical trials and get approval first.’ So, they shut down or at least warned a lot of these clinics.
The FDA has been more open to doctors taking cells from an individual and then putting them back into that same individual, the same day, whether it's moving fat around or moving stem cells around, or blood products, such as platelet rich plasma-- that has been more or less allowed as long as the cells are no more than “minimally manipulated.” That's the terminology the FDA uses.
When it became clear that the stem cell injections were illegal under the FDA, as with injection of fibroblasts before, there were companies that came out and said, let's grow the stem cells in the dish like SkinMedica did. Let's take that conditioned media, that liquid they're growing in, and let's throw that into a bottle and make a product around it. I think the first products in this realm were developed by a company called Lifeline. There's been a number of others since, and I've been involved in the development of those type of products. This was between 2005 and 2010 initially, and then a lot of products came after and there is still a number of them on the market today.
With exosomes, we're taking a highly purified sub-component of conditioned media. As the science has progressed, rather than take all of the secretome, all of the media or liquid that the stem cells are growing in, we’ve focused on a small portion of that. These are the exosomes, and these are approximately 30 to 150 nanometers in diameter. They’re a small, but very important portion.
Like stem cells and fibroblasts before, doctors initially injected exosomes, but the FDA stepped in and again said no to injection. For about 4 or 5 years there were practitioners that were getting away with injecting, but now the FDA has been very clear that any injectable requires a clinical trial process just like anything else, just like Botox or fillers. So, we're back to where we were with TNS serum and topical condition media products, where if we can stabilize these exosomes and put them on topically, this is an area that the FDA has traditionally allowed, and we’ve seen many growth factor and cell derived conditioned media products flourish.
That is the path that Elevai has taken. Taking exosomes and putting them into a topical. It is a large and historically successful area of aesthetics, which is using cell derived components topically. We also have stringent manufacturing practices that go above and beyond the minimum requirements as well as do studies that show that the products improve the appearance of skin and that they're safe. We have had no adverse reactions to date, despite having an estimated >10,000 users out there today.
PropThink
Elevai’s products are sold through physician clinics or medically directed businesses with medical professionals on staff, like medical spas. Why did you target this physician dispensed market rather than going directly OTC?
Dr. Jordan Plews, CEO of Elevai
Great question. First and foremost, we have a product that we believe is the very best product out there
when it comes to a topical cosmetic skin care product. But, if you go out into the broader skin care world, you'll notice a lot of people saying or implying that. So whose opinion really matters? In this case, we believe it's the skin care professional – a dermatologist or a plastic or cosmetic surgeon. Someone who's day-to-day business is making people’s skin look as best as possible.
We see the market like a pyramid where at the very top of the pyramid the most difficult to convince people are going to be the high-end dermatologists and plastic surgeons. If we can convince that part of the market that what we have to offer is superior, we're confident that it will trickle down into the broader market over time.
The other kind of business angle to this is the fact that if you go into a skin care professionals office, you won't see a thousand skin care brands. You won't see even a hundred. You see 10, maybe 20 at most. These brands are owning the shelf space. In clinics across the country, and often across the world.
What we're really trying to do is not compete with thousands of brands. But instead compete for shelf space amongst the 10 to 20 brands that exist out there in the most discerning kind of skin care professional’s offices. We feel like if we can do that, not only can we do that with a lower investment of marketing dollars, but we can solidify a really strong foundation. This has been proven out by other brands before us.
If you look at the M&A activity in this space, you'll see in just the last 3 years the acquisitions of ZO Skin Health by Blackstone, Alastin Skin Care by Galderma and, most recently, Skinbetter Sciences by L'Oreal. These are great examples of companies that started with a small team and focused technology. They really focused on being the providers for physician dispensed skin care. I think on the surface people think this is not a very big market. But these are companies that were acquired for hundreds of millions of dollars and when larger companies come in and acquire them, they tend to commercialize them much more broadly.
We see this market as a beachhead, and as a proving ground for the very best technologies out there.
This is why we went after it. We see ourselves as a leader in that next generation of skin care innovation.
When L'Oreal acquires a brand, it’s likely going to sell the acquired products in all of its locations and channels around the world, where before these products were traditionally only sold in the doctor’s offices.
What does that mean for the doctors that were carrying those products? Well, now they're competing with everywhere else that these big brands are selling. Oftentimes a customer that used to have to come back to that doctor or go through that doctor to get these products, now they can go to a major retailer. Now they can go on the internet to buy. They can get them from a million other places, and thereby decreasing the amount of revenue that an individual doctor that was selling it through their office gets. So that doctor is arguably losing out.
It's part of our business plan to help the doctor, to really be on the side of the physician. By really addressing the needs of the physician office and helping to expand their individual revenue per clinic, and we can come in and take up a lot of this white space that has opened up thanks to larger companies buying up these physician dispensed brands in the last 3 years.
PropThink
Let’s talk about the shifts that are happening in this physician dispensed cosmetic skin care market. Are you seeing a push for more biotech driven, efficacious technologies that the large players like Galderma, L’Oreal, Allergan are getting into, either by M&A or internal development?
Dr. Jordan Plews, CEO of Elevai
Absolutely, 100%. There has been a market shift towards what’s being called “regenerative skincare”. A general shift towards longevity and supporting our own biology.
I think people have always wanted to live longer and appear younger for longer. I think we're starting to see more widespread adoption of a holistic approach to aging. It's one thing to live beyond a hundred, but if you feel you're beyond a hundred, you may not want to, right? The new paradigm shift that's occurring is how do we extend the functional life of our bodies? How do we support our skin and our bodies, inside and out, to be as effective biological machines as possible.
As a regenerative medicine researcher, a biochemical engineer, and stem cell scientist, I see the body as a sort of biological robot. The problem with a robot is when something breaks, you have to replace that whole piece. We regenerate, we repair. If our repair systems remained as good as they were when we were children, I think we would last a lot longer, and be a lot happier. While there are, of course, other consequences to that, I think this is generally attractive to most people.
Before it was this idea of aesthetically pleasing skin. We were making products to cover up issues. I think the new paradigm today is how do we look and feel our best, as long as possible. Some great examples of this are Dior, which is typically a fashion and beauty brand, has recently launched a board of scientists and professionals to focus on aging and regenerative aesthetics. I think this is a really big shift. We didn't see brands like Dior move into that space previously, and now I expect others will follow suit.
You're seeing L'Oreal buy up companies in our space and look at these technologies more carefully.
I think we're going to see more of these sorts of brands that were traditionally focused on beauty
and fashion move into this space because this is clearly where the trend is going.
If you're paying attention on the longevity side, there's experts like David Sinclair, influencers like Tony Robbins, people that are talking about this to a much wider audience. I think traditionally we've seen middle-aged and older women focused on these sort of products. We're starting to see a much broader base of interest in longevity, including women AND men. More men are moving into a space where they're caring about their aesthetics along with caring about the healthy longevity of their bodies.
While we only address the skin care portion of it right now, that is the bigger picture that companies like ours are trying to address by bringing biotechnology ideas to the aesthetic space.
PropThink
Let’s talk about the sales metrics and Elevai’s growing operations. You just generated just under half a million dollars in sales for the first half of this year. Talk about some of the metrics with regards to distribution. How many medical practices are carrying the products? How many SKUs do you have?
Dr. Jordan Plews, CEO of Elevai
We're in over 200 clinics across the US and have distribution agreements signed with Vietnam, Kuwait, Philippines, and Canada. We expect to be in many more countries soon. We started off with limited funding, which meant using sales reps that were commission-only based. These are called 1099 sales reps.
As we really looked at the industry, and again the companies that were acquired that grew to large sizes, they tended to have a salaried W-2 sales force. So, towards the end of last year, we started building out a W-2 salesforce and we have seen that strategy blossom. While we do still employ 1099 reps, we continue to grow our W-2 sales force and following what has been a tried-and-true model in our market segment.
This is in part because we do have a high education product. We do need a dedicated sales force. You might liken it to the way that a lot of medical products are sold. You have a rep that's going in and talking to a doctor and really providing education and we expect that our Q3-Q4 is going to continue on this trajectory of growth that we've seen. We're very excited about what we're seeing, the massive progress that we've made in the short time that we've been around. This is a culmination for me of more than 15 years of work to get here.
In terms of future growth, this is what we feel is a tried-and-true strategy. Going back to those companies I mentioned that were acquired in the last 3 years, and the fact that they all have a W-2 sales force. Another thing that you can notice there is that they all took about 6 to 13 years to get to a point where they were acquired and they really seemed to start to attract a lot of attention when they were doing about 50 million dollars in revenue. We believe that we can actually shorten that time horizon. That we can get to the kinds of revenue that are really more broadly attractive within a shorter time period.
I don't want to say that's our exit strategy, but it is something that we're well aware of and the way that these other companies got there was organically reinvesting their revenues back into growth of their sales force. It was arguably slower because it was based on organic growth.
A big part of our strategy here of going public early on is to provide an opportunity to the retail investor to catalyze a faster growth. For us to raise more capital, get more reps and educators and to speed up a process that we know works in this space and in an industry that is growing at a double-digit CAGR.
PropThink
You recently completed a $6 million IPO. Can you talk about that process? How do you plan to use the funds? What are expansion plans? You mentioned there is some international presence already. Are you looking to expand further outside the US? Start doing more B2B e-commerce or expand pipeline? There seems to be a lot of different ways to grow. But with $6 million, that is a limited budget. What is at the top of the priority list?
Dr. Jordan Plews, CEO of Elevai
We were aware of all these strategies and our prioritizing accordingly. We’re going to focus on expansion of our topical skin care line, and we have plans to move into hair. The $6 million from the IPO was really made possible by the momentum that we built with our customers, our existing investor base and also in thanks to our great relationship with our investment bank, Univest Securities. They've been integral in helping us to build to this point and enabled us to expedite the process here of going public.
I think most folks saw this and thought, these guys are going public very early. I think we've just become so conditioned to believe that the only way forward is private money and VC money to do these things. You don't usually get an opportunity as a retail investor to invest in a company like ours until it's valued at hundreds of millions of dollars and has been through multiple rounds of VC or private investment. I think it is through our shared vision that we've been able to attract top talent from companies that have built a company like ours from zero to acquisition.
In terms of where we're going to spend the money, use the proceeds, it's what I already have been alluding to here. We want to focus on building our sales force and really expediting that trajectory of growing sales. This is something that we've already figured out from our own building of the W-2 so far and looking at the industry and history there. This is a strategy that is working well for us and so now we're really dumping gas on the fire here by trying to expand that sales and education force more rapidly on the front end to reach higher revenues more rapidly.
We see ourselves as a technology company and don't want to be pigeonholed into just one idea, one technology, one small set of products. We only have 2 SKUs today, but we have plans for many more. Beyond that I do see us continuing to bring in other technologies either through acquisition or licensing.
I'm an unusual CEO in the sense that you usually you don't see PhDs, especially with my type of background, in the CEO role. I think for us it's a distinct advantage to be able to survey the technology in the market and remain one step ahead. While we were really focused on growing the salesforce, building out our skin care line, moving into the hair care space in the near future, we aren't going to pass up opportunities to bring in interesting other technologies.
Recently we put out a press release about a licensing of a technology from a company called the Yuva Biosciences, which specializes in mitochondrial health. This might be foreign for a lot of people, unless you're really paying close attention to the longevity space, in which case this will make total sense. This is a technology that's going to work synergistically with our stem cell exosomes and further differentiate us from all the others in the market.
PropThink
Elevai is now starting to get some third-party validation from prevalent physicians in the space. How have you leveraged these relationships as potential distribution channels?
Dr. Jordan Plews, CEO of Elevai
We have the #1 dermatologist in New York City as one of our top customers, Dr. Doris Day. We also have a laundry list of other doctors such as Dr. Tess Mauricio, who treats celebrities like Paula Abdul, one of the Black Eyed Peas, and she was even involved in removing skin cancer from one of the Kardashians.
Rather than go out and get a celebrity spokesmodel, we are working with the types of doctors that celebrities and influencers are going to. The people that their livelihood depends on their aesthetic, these folks are already fans of our products. We are also in premier med spa chains. Most notably is probably Kalologie. Kalologie has, I believe, over 14 locations today, including all the major MGM med spas in Las Vegas, including Aria and Bellagio. They're known locally as the med spa that treats the “Raiderettes” of the of the Raiders football team. We see chains like that as key partners. As they grow, we're going to grow with them.
If you check our Instagram @ElevaiSkinCare, or my handle @DrPlews, you'll see we repost a lot of the content that our accounts are posting. You'll see that our accounts love us and our products. They are evangelizing the quality and efficacy of these products to their friends on social media. This is not paid promotion, by the way. These are end users that are so excited about the results that they're getting that they're wanting to talk about it. This has been a very powerful word of mouth marketing that has allowed us to, on a very modest marketing budget, make it very far. You can imagine as we're able to raise more capital in the future and do bigger things, how much more successful we will be.
PropThink
Thanks very much for your time Jordan, appreciate sharing your insights and best of luck in your journey of growing Elevai into the next big regenerative medicine skin care brand.
Access This Content Now
Sign Up Now!
