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Kerecis, the sole manufacturer of commercial medical fish skin products, was founded in Iceland on October 24, 2007, by husband and wife Gudmundur Fertram Sigurjonsson and Fanney Kristin Hermannsdottir.
The company, originally called FnF, began as a vehicle for Fertram’s entrepreneurial projects and consulting activities. With roots in the fishing village of Isafjordur, 20 miles south of the Arctic Circle in North-West Iceland, Fertram developed a career with roles in a variety of businesses ranging from FinTech, renewable energy, and medical-devices in his home country of Iceland, as well as in Denmark, New Zealand, Asia and the United States.
Fertram’s bachelor’s degree was in chemistry from the University of Iceland. His master’s of Engineering degree, was from the Technical University of Denmark, where the focus of his studies was on financial engineering, product management and innovation.
While working in medical device companies, Fertram developed an interest in diabetic wounds and human-tissue trauma. During his career, Fertram developed several products, ranging from software for the FinTech industry, which he sold through his own company in Denmark to medical devices for human tissue repair, developed as an employee within two medical device companies. Based on his professional experience, coupled with his upbringing in the fishing village of Isafjordur; he came up with the concept of using fish skin to heal damaged tissue.
To help develop his idea, Fertram organized a multidisciplinary team of wound care specialists he had worked with during his career. The team consisted of medical doctors Baldur Tumi Baldursson and Hilmar Kjartansson, U.S. patent attorney Ernest Kenney, lawyer Baldvin Bjorn Haraldsson, and Fertram’s own father, Sigurjon N. Olafsson, Associate Professor of Chemistry at the University of Iceland. In addition, the team also included Fertram’s wife, Fanney, a pharmaceutical regulatory specialist.
In late 2008, FnF changed its name to Kerecis, a name inspired by the words keratin (a principal constituent of the top layer of the skin) and genesis (which means formation). In fall of the same year, Fertram applied to Iceland’s Technology Development Fund for a small pre-project grant. He was successful in securing funding, which he used to create a proof-of-concept prototype of a wound-healing material made from fish skin and a preliminary business plan. During this process, a connection was made with the governmental research organization Matis1, which provided laboratory services to the project over the course of prototype development. The whole team were extremely supportive to Fertram during those initial stages; in particular, Baldur Tumi, an Icelandic dermatologist, but also Kjartansson, Kenney, Haraldsson and Fanney provide input when appropriate. On the basis of the results of the pre-project grant, a second, full-project proposal was then submitted to the Technology Development Fund in February of 2009.
During the course of 2008 and 2009, initial patent applications were filed to protect the invention and related chemical processes which had been developed. Since this time, the company has regularly applied for patents, and now have multiple patents awarded, with many more new patent applications pending2.
In the summer of 2009, Fertram submitted Kerecis’ business plan to the Regional Development Agency of the Westfjords business plan competition. As a result, the Kerecis won the first prize of ISK 3 million (USD 25,000), as well as coaching and office accommodation.
Later that year, Kerecis was awarded the full-project grant of ISK 8.9 million (USD 70,000), which enabled the company to start developing its fish skin technology. Iceland’s Technology Development Fund grants are 50:50, which means that recipients need to match the amount given to make up the total required. Fertram used money from the regional development agency award as well as his own capital and other contributions, to match the ISK 8.9 million grant awarded.
With funding secured, Kerecis hired its first three employees in the fall of 2009. The first of whom was Dora Hlin Gisladottir, a chemical engineer. Work then began on developing a commercial-scale processing method for the fish skin, which would go on to form the basis of FDA regulatory filing applications and the commercial future of the business.
In September 2009, Fertram pitched Kerecis as an investment opportunity at Seed Forum Iceland . As a result, in early 20106, the New Business Venture Fund (Nýsköpunarsjóður atvinnulífsins) became the first investor in the company, providing it with convertible loans.
Prior to closure of this investment, Kerecis awarded shares to Baldursson, Kjartansson, Kenney, Olafsson and Haraldsson in recognition of their support. Fertram refers to this group as the Kerecis co-founders although officially they joined the company after it was founded.
Upon completion of the seed round, Fertram and Fanney retained 61% of the shares, the co-founders held 24%, and the remaining 15% lay with the New Business Venture Fund. Over the next months, the fund increased its stake to 35% as Kerecis reached specific milestones defined in the investment agreement. This 35% would then go on to be diluted by the A round.
In February 2010, Kerecis opened an office in Reykjavik and hired three more employees. Fertram managed the company part-time while still consulting.
The Kerecis A investment round had multiple closures connected to specific milestones in 2011 , 2013 and 2014 . The A round attracted several new investors, including some fish processors in Isafjordur, the Novator-affiliated investment vehicle Omega3 ehf, businessmen Haraldur Jonsson and Marino Marinosson, through their investment company 1924 ehf, and ex-investment banker Sigurbjorn Thorkelsson.
In late 2011 the FDA rejected Kerecis’ initial regulatory application, asking for a more thorough trial than is usually required for medical devices. This was likely due to the fact that the FDA had never evaluated a medical device made from fish skin before. In addition, Kerecis had meagre cash reserves at this time, and so in order for the company to survive, Fertram moved the Kerecis office into his home, and the company had to maintained only a skeleton crew while the trial was underway.
The double-blind, randomized trial compared fish skin with a pig tissue based product. The study was run by the University Hospital of Iceland, and Dr. Baldursson was the lead investigator for Kerecis, supported by Dr. Kjartansson. The study, which completed in May, 201310, found at the study’s endpoint that twice as many more wounds healed with the fish skin than with the pig-tissue treatment 11.
The results, which were published in the Journal of Lower Extremity Wounds in 2015, were crucial for FDA’s approval of the fish skin, and went on to be a key data point in helping to drive the adoption of Kerecis’ products within its target markets.
At that point, investments from the A round came to fruition, and as a result, Fertram began to work full-time at Kerecis10, and has remained as CEO ever since.
In August 2013, Kerecis appointed a Scientific Advisory Board, which consisted of world-leading scientists Dr. Robert S. Kirsner (University of Miami), Dr. David Margolis (University of Pennsylvania), Dr. Magnus S. Agren (University of Copenhagen), and Madeleine Flanagan (University of Hertfordshire, UK). In 2017, the board expanded to include Dr. John C. Lantis II (Mount Sinai West) and Dr. Lee C. Rogers (now at the University of Texas Health Science Center at San Antonio).
In November 2014, Fertram participated in the Northern Future Forum , an informal meeting of leaders from nine nations: Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway, Sweden, and the United Kingdom . He directly interacted with the prime ministers of the participating nations and discussed both educational and economic issues.
In late 2014, Fertram and the co-founders acquired all of the New Business Venture Fund shares in Kerecis .
In 2015, the company applied for, and received, grants from the U.S. Department of Defense (DoD) Office of Naval Research to adapt the fish skin technology for battlefield conditions.
Later that year, a successful B round attracted new investors, including the French family investment fund Tonipharm . Additionally, Kerecis opened an office in Arlington, Virginia (Washington, D.C. area) and hired Chris Harte as Chief Operating Officer to manage the DoD grant project and prepare for forthcoming commercial sales in the U.S.
Fertram decided to focus on the U.S. market and moved its global sales, marketing and medical-affairs headquarters to Arlington in late 2016 , And medical doctor Gunnar Johannsson also joined Kerecis at that time. Manufacturing continued to be conducted in Isafjordur, with product development in Reykjavik, Iceland.
The market for wound treatment products is often split into three segments; traditional wound products consisting of gauze; advanced wound care, consisting of polyurethane foams and other advanced materials; and the skin-substitute market, consisting of processed tissues from human and animal donors. When Kerecis arrived on the U.S. market, the skin-substitute market was still in its infancy, with human amnion tissues (the sack surrounding the fetus as it develops within its mother’s womb) products possessing the largest market share. In general, doctors are conservative and need solid reasons to change their therapeutic practices, and so emerging skin-substitute products were mainly being used by doctors defined as early-adopters.
To get achieve even better clinical data on the effectiveness of the fish skin, Kerecis started a new randomized, double-blind study, directly comparing the fish skin with amnion tissue . The study initiated in 2018, was performed by the University Hospital of Iceland, and was supervised by Drs. Baldursson and Kjartansson. The results were very favorable, and at the study’s endpoint, 78% more wounds treated with the fish skin were healed. To this day, this study continues to be an essential data point for Kerecis marketing worldwide.
In April 2019 and August 2020, Kerecis closed a U.S. $21 million financing deal consisting of $16 million equity and a loan facility from Silicon Valley Bank . One new investor was the Silicon Valley company Emerson Collective, which is owned by Laurene Powell Jobs.
In 2019, Kerecis acquired the operations of the Switzerland-based company Phytoceuticals, acquisition giving Kerecis control of its plant-based, fatty-acid technology. In conjunction with the acquisition, Kerecis set up a regional headquarters in Switzerland to facilitate European direct sales .
Kerecis’ third randomized, double-blind, controlled study started in early 2020. The main purpose of this study was to increase Kerecis’ reimbursement coverage within private U.S. insurance companies. Since 2015, the products have been covered by the government’s Medicare program, which insures all Americans who are over 65 years of age. The study compared the use of fish skin with the 3M product Fibrocol, which benefits from a comprehensive reimbursement coverage. Kerecis’ medical doctor, Dr. Johannsson, managed the study on behalf of Kerecis. The study’s results were favorable, with 106% more patients being fully healed at the study’s endpoint .
As of March 31, 2022, Kerecis had almost 300 employees worldwide, about 200 of which were in located the United States.
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