Saturday, May 27, 2023

How two ex-chemistry profs are building a potential game-changer

Starting a business is hard, gritty, unglamorous work. You’re raising money to make it another six months, finding cheap space, and navigating the patent process. You may be managing people for the first time, if you’re lucky enough to afford them.

Sue Mecham

“The whole startup thing is not for the faint of heart,” says Dr. Sue Mecham, CEO of NALA Systems, a young, six-employee company in Research Triangle Park.

Her company is trying to develop a less costly desalination process.  The key

is how to improve the membranes that are used in desalination plants to turn, for example, sea or brackish water into something people can drink or farmers can use for irrigation. Big plants use thousands of them. The plants push water through them to trap salt and other contaminants, a process called reverse osmosis. The problem is that the membranes get broken down by chlorine and also get clogged – “biofouled” – is the term, and have to be cleaned or replaced.

Judy Riffle

What Mecham and her mother and fellow polymer scientist Dr. Judy Riffle are developing is a membrane that stands up better to chlorine and biofouling. The benefits are obvious. Membranes will perform better, less energy will be needed to push water through them, and plants won’t have to be shut down for maintenance as often. Mecham thinks their membranes can save plants 20 to 30% in operating costs.

Making desalination more affordable will help address one of the world’s biggest problems, a looming shortage of water available for drinking and agriculture. More than 3 billion people live in agricultural regions facing water shortages. This is the kind of problem that leads to wars.

To understand NALA Systems, you have to understand polymers. Polymers are chemicals made up of repeating units of, for example, carbon or hydrogen, or other atoms like nitrogen, linked together. When scientists started figuring out nearly a century ago how to make new products out of synthetic polymers, it revolutionized commerce. We got nylon stockings. Styrofoam cups. Light-emitting diodes. Teflon. Thousands of products.

As Mecham explains it, the polymer used for most of the reverse osmosis membranes on the market today is a polyamide, commonly used in textiles and the automotive industry. But the chlorine used to pre-treat feed water eventually breaks the polymer’s chains, and the membranes fail.

Riffle, a retired Virginia Tech professor, tried to see if a different polymer – known as polysulfone – would do better. “And what she figured out,” says Mecham, “was a way to decrease the salt permeability, so that we could get high water permeability, low salt permeability, and be stable to chlorine.”

Mecham got her Ph.D. from Virginia Tech in 1997 in synthetic polymer chemistry, did a couple years of post-doc research and then spent 11 years in private industry.  In 2010, she returned to Blacksburg to manage a lab for one of her mentors, renowned polymer scientist James E. McGrath. But McGrath died in 2014.

Joe DeSimone

At the funeral, she ran into another former McGrath student, Joe DeSimone, who got his polymer chemistry Ph.D. from Virginia Tech in 1990.  DeSimone by that time was a serial entrepreneur and one of the most well-known scientists in North Carolina, an academic superstar, holding prestigious faculty positions at both UNC Chapel Hill and N.C. State.

“Joe was a graduate student in Dr. McGrath’s group when I was an undergraduate doing undergraduate research,” recalls Mecham.  “I think I actually made my first polymer with him as my graduate student mentor.”

DeSimone had just launched another company, called Carbon, in California, and needed help managing materials projects in his UNC lab, which was ideal for Mecham. While she was doing that, she could plan the next phase of her career,  learning how to start up her own company, with guidance from one of the country’s best scientific entrepreneurs.

“One of the main reasons I took the position with him is because I wanted to learn how to do that,” says Mecham.

NALA was launched in 2018, with Mecham as CEO and Riffle as chief technical officer, and Dr. Benny Freeman, a former N.C. State chemical engineering professor who is now at the University of Texas conducting research on water purification membranes. They got a deal on space at BioLabs North Carolina in downtown Durham in the old Chesterfield building.

Then they won a Small Business Innovation Research grant from the National Science Foundation, a $225,000 award, and the company moved into larger space at the First Flight Venture Center in RTP in June 2019.  NALA raised $700,000 in a seed round that closed in January led by Good Growth Capital, with support from N.C. angel investors at RTP Capital and WALE, and investment from Oval Park Capital.  That enabled NALA to buy roll-to-roll manufacturing equipment to make prototype membranes. In April, NALA won a $1 million Phase II SBIR grant from the NSF.

“We anticipate having prototype spiral-wound membranes by the end of the summer,” says Mecham. “Then we’ll be able to put those in systems. So, we’re building small test rigs that can actually process water through the membrane just the way a big system would.  As close as we can, from a small scale.”

DeSimone, who is one of NALA’s four business advisors, joined the faculty at Stanford in 2020. Last week, he said that when he evaluates a startup, he looks at several things: 1) Is the company addressing an important problem, and what is the market potential or need? 2) What is the technological approach “and is it distinguished?” Is it patent-protected? And 3) What kind of team does the new company have?

“What I love about Sue and her effort, I’m excited about them on all three fronts,” says DeSimone. “I’m sitting here in drought-ridden California, and water’s really important. It’s going to be increasingly important.”

The membranes used in desalination plants have been on the market since the 1980s. “They have well over 95% of the market right now. They’re really well established,” says Mecham.  “So the companies that make them and the companies that sell them, they have pretty low incentive to make a different membrane that would compete with that domination of the market.”

But if NALA membranes can deliver the cost savings that Mecham anticipates, it can potentially disrupt a market that could be worth more than $5 billion by 2024 and is dominated by players like DuPont.

“They won’t have to have all the pre-treatment. They won’t have to protect the membranes as strictly. They won’t have to have all the chemical management that they have to now.  So there’s a lot of things that would allow these to be used in more decentralized systems.” Smaller cities could better afford desalination, for one thing.

Meanwhile, NALA is looking at one more expansion at First Flight and then it likely will need bigger quarters, so Mecham’s already talking to commercial realtors. There will probably be another funding round towards the end of the year, she says.

“It is a different world from any other world I’ve been in,” she says of the startup experience.

“You’ve just got to get down and take your confidence in hand and say, ‘OK, I’m going to do this. And just do it.’”

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