This Startup Is Freezing Bone Marrow From Deceased Donors To Save Cancer Patients’ Lives

Montrail Moore was 48 years old when he was diagnosed with leukemia last year. His doctors at Franciscan Health in Indianapolis gave him bad news: The disease was aggressive. They hoped to do a bone marrow transplant, a procedure in which healthy donor cells replace a patient’s damaged ones. But there was no match among his family or on the living donor registry.

Then Moore learned from his oncologist about a new, cutting-edge option: He could get a transplant from a deceased donor that had been cryopreserved at a biobank in Indianapolis. In January, Moore had the procedure, and his health started to improve. He now considers the transplant date his new birthday. “It gave me a new life,” he tells Forbes.

Moore’s surgery is one of 29 procedures completed with bone marrow from Ossium Health, the startup that pioneered the technology to retrieve it from deceased donors and freeze it. All of the surgeries, which were part of clinical trials or compassionate use programs, were successful. Earlier this year, the San Francisco-based firm even did its first pediatric patient, a 14-year-old boy. Ossium is now preparing to commercialize its bone marrow from deceased donors for blood cancers next February, and then start building out a portfolio of other stem cell therapies.

“There were a lot of people that told us that what we were doing was nuts, and particularly a lot of doctors told us it was nuts,” says Ossium cofounder and CEO Kevin Caldwell. “Doctors had never considered getting bone marrow from a deceased donor and they just assumed it would not be as good or it would not work.”

Hearts and lungs must be transplanted within hours of a donor’s death, and they can’t be cryopreserved due to the damage caused by freezing and thawing. (Research efforts to enable this are ongoing.) Bone marrow, by contrast, can be frozen successfully because of the unique properties of stem cells. But doctors had always relied on living donors and needed to be convinced that there weren’t additional risks to patients for using frozen marrow. All bone marrow transplants carry significant risks, including graft-versus-host disease and organ damage.

A decade ago, Caldwell, a 40-year-old former McKinsey healthcare consultant, teamed up with cryopreservation expert Erik Woods, 54. They believed that storing bone marrow from deceased donors—material that was previously discarded by the organ donor organizations—could save patients’ lives by letting them get treatment pretty much on demand without having to worry about finding a match.

Since then, Ossium has raised $158 million from investors that include First Round Capital and General Catalyst at a valuation of $300 million (as of its last raise in 2023). Revenue is expected to reach $35 million this year, up 75% from last year’s $20 million. Caldwell figures next year will be Ossium’s breakout year, with revenue surpassing $120 million. He expects the number of transplants to surpass 60 next year and close to 200 in 2028—on the way to eventually handling 10,000-plus patients a year as the amount of bone marrow it banks increases along with doctors’ willingness to use it.

Ossium’s current bone marrow isn’t FDA regulated because the agency has determined that it falls under the same rules as that of marrow from living donors. Ossium decided to run clinical studies anyway to accumulate data that could convince doctors it both worked and was safe to use.

They’ve found that not only is their bone marrow as good as that from a live donor, it actually may be better. That’s because the vertebral bodies, the bony segments of the spine, contain an extremely rich supply of active red bone marrow. But doctors can’t collect from there in living donors—going into the spine would be too risky—and instead get the material primarily from the back of the hip bone.

So far, Ossium’s bone marrow has been used to treat blood cancer and, in one case, severe aplastic anemia, a rare and serious condition where the bone marrow stops making enough new red blood cells. But Caldwell and Woods have ideas for how to produce variants of it, like by changing the ratio of different cells in it, that could be better suited to treat additional diseases.

In addition to its bone marrow, Ossium also uses leftover bone material to produce cryopreserved bone matrix grafts, called OssiGraft, for repair, replacement and reconstruction of the spine, pelvis and extremities in orthopedic surgery. It also signed a contract worth up to $125 million in 2024 with the federal Biomedical Advanced Research and Development Authority, known as BARDA, to keep bone marrow stored in case of a radiologic or nuclear emergency. Those numbers helped Ossium gain a spot on this year’s Forbes Next-Billion Dollar Startups list, our list of companies we think most likely to reach a $1 billion valuation.

“Unlocking the power of bone marrow is really compelling,” says Lawrence Barclay, managing partner at VC firm Manta Ray (founded by Polish billionaire Sebastian Kulczyk), which invested in Ossium. “Other body parts have been used intelligently. This wasn’t.”

At the world’s first bone marrow biobank in Indianapolis, Ossium staff decked out in white spacesuit-like outfits, goggles and chainmail gloves hack with surgical saws at the bones taken from a deceased donor’s spine. Getting to the bone marrow and safely extracting it is slow and rather excruciating.

At the end of this process, which takes four to six hours, Ossium will have bags of light red liquid. These go into giant tanks that can store up to 850 bags at negative 150 degrees Celsius until patients need them. One donor can treat three patients on average.

Ossium holds 15 patents on its process for bone marrow retrieval and storage. “You have to be very careful in every step of the process,” Woods says. “We’re asking these cells to populate the patient’s immune system for the rest of their lives. That’s the power of the stem cell transplant, but you need to give them quality cells or this process will not work.” As a result, Ossium can currently handle just four donors a day.

The question now is how to scale that up. At the Indianapolis biobank, Caldwell shows off a machine that has a working edge that looks like a big piece of steel wool. It will be used for “debriding,” the removal of unneeded material from the bone, and could shave 30 minutes off the process.

He thinks that technological advances in the works could get the prep work down to two hours, allowing the Indianapolis facility to process a few thousand donors a year—helping thousands more patients. “The idea is over the next decade to become the dominant source of bone marrow cells for transplants and improve the outcomes for patients,” Caldwell says.

Caldwell grew up in Tennessee. His parents were young when he was born, just 19 and 16. He spent many childhood days traveling from Nashville, where they lived, to his paternal grandparents’ farm in the west Tennessee countryside. The first in his family to go to college, he studied physics and economics at MIT and then got a law degree from Harvard. “I got into astrophysics because I was alone with the sky at night and got a telescope,” he recalls. But Caldwell decided he didn’t want to be a physicist or a lawyer. After school, he instead joined a friend at Bridgewater Associates, the hedge fund founded by Ray Dalio, where he became a currency trader during the 2012 financial crisis. Two years later, he switched gears again and joined the healthcare team at McKinsey, consulting for global pharmaceutical companies that were looking at acquisitions.

“There were a lot of people that told us that what we were doing was nuts.”

Kevin Caldwell, Ossium cofounder and CEO

At the time, new immunological approaches to treating cancer were emerging. But while these treatments, like CAR-T cell therapies, were groundbreaking, they were complex and expensive. A single treatment required collecting a patient’s immune cells, reengineering them and then infusing them back into the person’s body—a complex, personalized process that can sometimes cost more than $1 million. “I thought the industry needed an approach that was designed to be industrialized, where you could build the capability that would let you treat hundreds of thousands of patients, and potentially millions, over time,” Caldwell says.

Woods, Ossium’s chief science officer, had the technical background in cyropreservation and stem cells. He earned a Ph.D. in biomedical engineering from Purdue University, then completed a postdoc at Indiana University School of Medicine focusing on enhanced methods of umbilical cord blood stem cell isolation and cryopreservation. (Bone marrow is one source of stem cells, umbilical cord blood another.) Before Ossium he cofounded General BioTechnology, which ran a commercial cryobank and was acquired by Cook Medical, the medical device firm owned by the billionaire Cook family, in 2012. “I actually pitched the idea of Ossium to them,” he says. “I sent them a bunch of emails. They said, ‘No, we don’t want to do this.'”

The world of people interested in cryopreservation is small, and Caldwell and Woods met through a group called the Organ Preservation Alliance that Caldwell had helped start while still at McKinsey. At a meeting at Stanford in 2015, they started talking about the possibilities for preserving bone marrow, and decided to launch Ossium together in 2016.

“We quickly became really close, almost like brothers,” Woods says. (A third cofounder, Sebastian Giwa, left the company in 2018.) Both are fitness obsessives: Woods is a licensed personal trainer and three-time marathoner who works out five days a week, while Caldwell slimmed down from 240 pounds to 190 pounds, and now walks two miles to work and back wearing a 50-pound backpack.

At Ossium’s office, Caldwell points out photos of himself on the wall at different weights. “Our company charter is to improve the health and longevity of human beings. What would it mean to internalize that mission, and live and breathe it?,” he says.

The late Nobel Prize-winner E. Donnall Thomas did the first bone marrow transplant back in 1956. Today more than 1.5 million people have had one. “It’s the original immunotherapy before all these splashy drugs we have in oncology,” says Dr. Sager Patel, an associate professor of medicine at the Huntsman Cancer Institute at the University who has worked with Ossium on its clinical trials.

But there are big problems with relying on living donors. At least 70% of patients that need a bone-marrow transplant don’t have a family member that matches and need an unrelated donor. While doctors can search registries for a match, not all patients will find one. The odds for Black and South Asian patients are worse because of a lack of diversity among donors. Time is also a problem. Cancer patients who need treatment may not have the two to four months it can take to find a living donor. Ossium commits to getting its bone marrow to patients within 72 hours. “Many patients will relapse or die while they are looking for a donor,” Caldwell says.

Caldwell and Woods started on a shoestring budget and rented space in the back of a friend’s lab. Caldwell raised $650,000 from First Round Capital in 2016. He emptied his 401(k) retirement funds, while Woods sold his house. “There’s no wealth in my family that I could have drawn upon,” Caldwell says. “There wasn’t a rich uncle to help out. It was make-or-break.” In 2018, Ossium raised a $10 million Series A led by First Round.

The next step was to get their hands on some spinal columns so they could experiment with extracting and freezing the marrow. For that, they needed sign on from some of the 55 national organ procurement non-profits, organizations that recover organs after people who’ve signed up to donate die. Caldwell had previously met the CEO of one such non-profit, Houston-based LifeGift, and the organization signed on in 2016. Then he started flying around the country to meet with heads of other non-profits in Colorado, Tennessee, Arizona and elsewhere.

“It’s the original immunotherapy before all these splashy drugs we have in oncology.”

Dr. Sager Patel, Huntsman Cancer Institute at the University of Utah

While it often took multiple meetings to cut through the bureaucracy and convince them that a startup could be trusted, the non-profits were open to the idea. “I would lay out the shortage of bone marrow and how patients were dying everyday, and instead of using it, it is getting buried or incinerated,” Caldwell says. “If your mission is to use this donor to save lives and you are throwing part of it away—how do you say no to that? Virtually everyone said yes.”

Today, Ossium has partnerships with 60% of all organ-donor organizations in the U.S., representing around 7,000 to 8,000 potential donors a year. “He’s very, very brilliant,” says Dorrie Dils, CEO of Gift of Life Michigan, which now works with Ossium. “It’s an opportunity to provide something to donor families that can make a difference in the lives of thousands of people.”

In 2024, a 68-year-old Detroit woman with leukemia who had no other options available received the first transplant. “It was theoretically going to work, but you are sweating until the first patient,” Woods says. “She was our true pioneer.”

Ossium is now focused on preparing to take its bone marrow commercial, so any doctor would be able to transplant it for their patients. But Caldwell and Woods have big ideas for the future. One possibility is using their marrow to reduce rejection among organ transplant patients. Ossium also hopes to expand the bone marrow’s use beyond cancer to sickle cell anemia, which affects 8 million people worldwide, and even autoimmune conditions, such as type-1 diabetes.

Because of the risks, a bone marrow transplant has largely been a treatment of last resort and used for serious, often fatal conditions. “In theory, any disease of the immune system could be cured with a bone marrow transplant. The key is that you have to prove the side effects don’t outweigh the benefits,” Caldwell says. “We want to make these blood and immune diseases a thing of the past.”

Ultimately, Caldwell hopes to be able to use frozen bone marrow for longevity. But he figures that is likely a good decade off. “What we are envisioning is someone generally healthy, but around 70. We would use this future optimized transplant and essentially reset their immune system back to 25.” Would he personally want to reset his immune system like that? “Oh yeah,” he says. “No doubt.”

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This article was originally published on Forbes.com