Changing Partners

In an update on Energimyndigheten’s website dated 2014, they stated:

The founders and initial investors have managed to bring Pastair to the initial commercial phase. However, it is believed today that Pastair lacks the muscles and organization to bring the system to the market globally. Therefore, the technology/patent is for sale.

As Pastair AB had very little resources in house, including scientific knowledge in house, Sjöholm maintained closed contacts with universities, such as

through research reports from the universities. Contacts were established through events and meetings, which lead to collaboration with professors from the universities in Copenhagen and Lund. The closeness and sharing of skills with the universities and the closeness with customers and market knowledge were equally important. Sjöholm felt that the ability to speak and have contact with the customers was important because one will not meet their real needs if one just sits in the laboratory and remains far from the market. However, when it comes to dealing with food ingredients and products, there remains much to take into consideration: it has to taste good, it should be healthy, it has to be packed in a certain way, it should take into consideration the perspectives of consumers, and it should be sensitive to the waste handling of product packaging in terms of environmental issues etc.

When it comes to finances, the uncertainties were more apparent. Though Pastair had received funding and grants for certain stages of the innovation process, it still depended largely on Sjöholm’s own investment. The years 2008 and 2009 were difficult years as his capital diminished rapidly. It reminded him of the period when he was working for Hans Rausing under Tetrapak to develop a package for Ecolean, a lightweight packaging company based in Helsingborg. They grew from two people to 40 people in one year, and then to 105 people. He sold it off and suddenly he had a terrible situation where he lost 10 million in a company. He had the debt collector at his back at one point in 2006 and he was alone because the rest of the employees had left the company. When he came up on his feet again, he was very careful about money from then on. He emphasized the universities as a key part to his innovation, more specifically the skilled people and knowledge that he did not possess himself, like microbiology, etc. He felt that he had an advantage in being so close to the University.

Sjöholm updated that while he had run out of money to keep the patent going, which is why the patent was up for sale, he also mentioned that he had met a professor who sparked in him the idea to change the application of the innovation. He had shared with him the issues he had when pasteurizing milk, but this problem was actually a good solution for application in the medical field.

You always have to be open minded and look at opportunities. And I met Lennart, this professor. He talked about blood and certain things in a way that I didn’t. But you know I listen and I go back home and I think about it what he said. Can this be used in one way or another? In the beginning, you know a lot of people are not so open-minded. Lennart was not open-minded at first.

Johan Sjöholm, personal communication, March 2015 The industry chosen to launch the innovation is also something that Sjöholm is realizing now. He has shifted the application of Pastair’s technology to be used in the medical field. When Sjöholm approached the venture capitalist again regarding this new direction, they were quite positive. The medical area is one where people are more enthusiastic to do something, because there is more money in it. There is a saying according to Sjöholm that, “If it’s a medical project, it costs at least 50 million, whereas a food project is one or two million.”

Lennart Ljunggren was connected to Sjöhom through his fellow colleague who is the CEO (and an old friend of Sjöholm) where Ljunggren is part owner in the business venture Vitrasorb AB at Medon Science Park in Malmö.

Vitrosorb AB is a Swedish medical device company that develops, produces, and markets immunoadsorption columns aimed to eliminate the blood group barrier of organ transplantation. Sjöholm was discussing the problems for asepsis processing with the CEO, as Pastair did pasteurization for milk, and Sjöholm felt this could be used for human application. Sjöholm had shared during the interviews that one of the ways he got knowledge was through reading the news a lot, and that was where he frequently got his ideas for his inventions. The CEO colleague connected Ljunggren and Sjöholm together, as Ljunggren was a professor in analytic chemistry at Malmö Högskolan.

Ljunggren knew more about chemistry than the CEO colleague, but when he first heard about the technology for Pastair that uses ozone, he did not think too much about it. He thought using ozone in the medical area was a “crazy”

idea in the beginning. Then Ljunggren did some research on the use of ozone on humans and found various interesting articles, especially from the Eastern countries and South European countries that have used ozone for certain human diseases, especially in spa treatments. Applications of ozone for human treatments include uses for intestinal diseases and where treatment of blood transfusion is required in countries like Ukraine and Italy. There are also companies that have been working with ozone. This, then, did not make Sjöholm’s idea so “crazy” after all, although using ozone to kill the bacteria in

the blood was not the application that Sjöholm had initially thought about.

This is due to the fact that bacteria in the human blood seldom ran in the blood stream in a circulation that made it possible to be processed like pasteurization of milk. Bacteria more often reside in a fixed spot in the body, which causes problems for the humans. Nonetheless, it was a project that was interesting to start and they got some funding to start thinking about how the technology from Pastair could be transformed into an application to be used in the medical area. The challenge was different for the food industry and the medical fields, because food ingredients may be heated up and cooled down without many side effects, but not so in the medical industry. It is not easy to cool down people, and to “reheat” them has not been done before. That was the biggest challenge. Another challenge was to adapt to the low flow rate in the medical application as compared to the food industry that normally processed liquid products or ingredients in large volumes (e.g., 20 liters per minute). The low flow rate is also important for the treatment of blood since it can be problematic in humans if gas bubbles are formed in circulating blood.

Their progress thus far (as of May 2015) was a redesign of the Pastair machine. They have so far tested with a water solution, which seemed to work fine, and plan to proceed to further testing with blood as Sjöholm has managed to secure funding for the next phase of testing. The machine is able to handle adjustable temperature and the flow rate of 50ml per minute, and also the gas flow that is tolerated in the recirculation system using water for testing. The next stage is to use blood plasma for testing and subsequently some form of real blood, such as from pigs, to detect mechanical problems, if any. Thus far, the system seems good, and Ljunggren has found some publication that is using ozone as a form of aseptic treatment. Ozone, while still having somewhat of a dubious reputation due to its inherent properties, in Ljunggren’s opinion still holds biological effects and potential that may not have been explored. He felt that innovation in the medical field tended to concentrate on the latest technology instead of basing on what (still) works:

I think people in research fields; they are running like for clothing, they ran for the latest models of everything. The same is for the research, they are running for the new technique and forgetting old things, which are still working.

Lennart Ljunggren, personal communication, 2015 Ljunggren is also an entrepreneur himself. Vitrasorb AB is about four years old and has previously provided solutions for the preservation of stem cells. It has changed to the current business model in which they are improving the

product and aim to enter the market again after withdrawing the products following some patient reactions to the product. Ljunggren is a professor but he has experience working in the medical device industry for 20 years (Gambro AB) before. He entered the university in 2002 when an ex-colleague in the medical device industry contacted him to explore setting up a company together. That company, Alteco Medical, deals with asepsis treatment and is on the stock market. Ljunggren had some ideas after the company went public and spoke to the chairman of Alteco Medical about them. The chairman suggested that he should approach the doctors to discuss his ideas, which he chose not to due to his experiences of the discussion of ideas with others in the industry. He has had unpleasant experiences both personally and from observation in a private and academic context on the loss of ownership of one’s idea to others. That was why he had started Vitrasorb AB to develop his own ideas further.

Ljunggren found it relatively easy to work with Sjöholm and that they had a somewhat similar style. He knew about the history of Pastair AB, and being an entrepreneur, he saw that he could work with something and contribute in some way to Pastair’s evolution. In this manner, he has appreciated the initiative and enthusiasm of Sjöholm in driving this project forward, because they had only just met a few times but things have moved fast. He is also working with Sjöholm on his other innovation, PamPad, which Sjöholm had gone to Malmö Högskola for use in biomolecule sensors for sweat and urine.

Having the financing for an interesting project with a novel technological application was what made him commit to this project with Sjöholm.

Ljunggren brought with him market knowledge of the medical device industry and the medical field, as he had experience both working in the industry and also setting up companies that were part of this industry, where Pastair is evolving to be in too. The funding will come at different phases of their progress; as they currently have funding for the proof of concept and for the upcoming stages, it is envisioned that a new company might be formed with funding from LUIS and Malmö Högskola, and owned by the inventors of these concepts, etc.