A must-make move

A fallen tree. A rock. A sharp turn. Another paddler. When you’re a white-water kayaker like Mick Lautt, you face obstacles and challenges all the time. That’s the rush, that’s the bliss, that’s the fun.

“When I’m on a high-intensity river, that’s when I’m in my state of flow,” says Lautt, Scimar’s Chief Executive Officer. “There are real risks, of course. Paddling at this level often demands quick adaptations and split-second decisions in order to survive.”

He calls those kinds of decisions “must-make moves.” You either adapt with confidence or face severe consequences. And for Lautt, that’s not just a lesson for the water, it’s a lesson for life, and a lesson for business.

In 2009, Lautt realized that establishing and incorporating Scimar with his parents — Melanie and Dr. Wayne Lautt — was a must-make move, because type 2 diabetes was a must-solve problem.

Dad had made this groundbreaking discovery some years prior, and was struggling through a flawed commercial relationship with an incubator group to bring the work to market,” says Lautt. “He had a science-backed plan to solve type 2 diabetes. What he didn’t have was a viable way to complete the research or the dollars to take it to trial and commercialize the discovery.”

The discovery, made in 1996, was a previously unknown hormone produced by the liver. Dr. Lautt originally called it hepatic insulin-sensitizing substance (the HISS hormone), and renamed it “hepatalin” in 2021. Dr. Lautt concluded through in vitro and in vivo research, that when adequately produced, hepatalin stimulates the body’s ability to partition glucose into muscle. When the liver does not produce enough hepatalin, the pancreas produces additional insulin, which causes nutrient energy to be partitioned into fat. It was a revolutionary discovery because it offered a new way to detect, prevent, treat, and even reverse type 2 diabetes, a condition that affects nearly half-a-billion people worldwide.

By 2009, Mick Lautt was living in Dauphin, Manitoba, but spending stretches of time in Winnipeg for his consulting work in leadership, management training, and community development—work that also took him across western Canada. He was also teaching at the Asper School of Business and was in the process of selling a kayaking school he had built from scratch. His parents set a room aside for him in their St. Vital condo, and he would overhear them planning their next move as they struggled with their business relationship with the incubator group.

Starting Scimar

“To make a long story short, I said, ‘let me help; let’s start our own company; I’ll be the CEO,’” says Lautt. “‘Let’s build this into something real and let’s solve type 2 diabetes.’ I think Mom and Dad were excited, relieved, and grateful.”

And so, the journey began.

Lautt made up a company name, cobbled together some promotional material, and quickly joined the Life Science Association of Manitoba (LSAM), now known as Bioscience Association Manitoba. Within a couple of weeks, he arranged for his Dad to present his work at a conference in Minneapolis and they all went to the conference together as part of an LSAM-subsidized trip.

“We’re on the Greyhound and everyone’s going around introducing themselves and I introduced myself as the CEO of Scimar and explained that we were looking to change the type 2 diabetes paradigm through the lens of new science,” says Lautt. “At that point, on that bus, it suddenly felt real, but it also felt very natural.”

Dr. Lautt impressed the audience with his presentation at the conference and invited people to speak to the new company’s CEO in the crowd for more information and to discuss investment opportunities. Mick Lautt stood up and waved and was soon approached by an interested member of the crowd. A handshake led to a lunch, and that lunch led to a $350,000 cash infusion to keep the company moving forward.

“The focus of the first few years was securing control of the intellectual property with my Mom, who is a skilled lawyer,” says Lautt. “We also started to envision what the product pipeline could become as the research moved forward.”

There was still some preclinical research going on in Dr. Lautt’s University of Manitoba lab, largely paid for by the Lautt family themselves, but the CEO felt that the focus needed to expand from not only validating the science, but also to building a solid corporation to support the next round of research and the complex regulatory path to market.

“We closed the university lab, instituted a publication freeze, and laid off our staff until we could secure the IP, develop a viable business plan, and confirm some investors,” says Lautt.

Grassroots to growth

In 2015, Lautt’s brother-in-law and “wingman” John West left his senior management position at IBM to become Scimar’s Chief Development Officer. Lautt and West got to work and entered into an arrangement with a former colleague of Lautt’s in the Cayman Islands to explore securing international investors and venture capitalists. On reflection, Lautt says, the timing wasn’t right, so Scimar and their Cayman Island partners had an amicable parting of ways. At the end of 2016, the brothers-in-law rolled up their sleeves, developed a sophisticated business plan and an online data room for prospective investors in Canada, and started knocking on doors on their own.

“John estimates that I did 1,000 meetings and presentations in 2017,” says Lautt. “I was telling people we had a pill that could reverse type 2 diabetes and offering them a look at the data, and yet they would turn me down. I realized that to get the momentum going, I needed to start with people who knew me personally.”

Over many years, Lautt had developed a large and diverse personal network through his consulting and teaching, but also through his impressive community development activities, including work with youth-at-risk in Winnipeg’s core area, work with Indigenous youth throughout Manitoba, life skills training, and wilderness adventure-based learning.

By 2017, Lautt had also developed strong connections in Dauphin and all around Manitoba’s Parkland Region. The community had seen what Lautt could do as a business leader and community advocate. While building a strong client base in the region for his consulting practice, he also took on leading roles in launching and developing a paddling club, a skate park, a network of four-season bike trails, and a professional development and networking program through the local chamber of commerce.

Lautt and West booked Dauphin’s Countryfest Community Cinema on a chilly December afternoon. They invited 30 guests; all 30 showed up. They projected an impressive plan (affectionately remembered as “the subway”) on the Countryfest screen, showing Scimar’s pathway to market. They explained how they were planning to de-risk the venture and gave their guests a crash course on the science of hepatalin and nutrient partitioning.

“Most important, we had answers to their questions and we were transparent about the challenges and risks,” says Lautt. “After all, we were setting out to change a century-old diabetes paradigm. But people were very interested.”

Before long, Scimar’s seed round gained traction, raising close to $3 million, mostly from that cinema crowd. Those initial investments allowed Scimar to open a private independent lab, bring back Dr. Lautt’s original research team, build a national contractor team, and produce prototypes of Scimar’s diagnostic and preventative products. The seed round investment and the work it enabled ultimately leveraged even more private investment. At the time of writing, Scimar has raised close to $15 million. These funds are supporting marketing outreach, clinical trials for all four products, and further lab work with a focus on producing the purest hepatalin sample possible. The funds have also allowed the Wellness Transformation Network (WTN) to take shape. The WTN is Scimar’s community outreach initiative and clinical trials platform, designed to promote community well-being through lifestyle interventions measured and understood through the hepatalin paradigm.

Science to market

“To remain authentic and true to our vision, we have to remember that our goal is not to create products. Our goal is to eradicate a disease. The products will play a critical role in fulfilling our mission,” says Lautt. “We are creating value for all stakeholders, not just shareholders. But shareholders will benefit, too. When you work ethically and with higher purpose, there is indeed money to be made. This is money that will provide returns to investors and can also be re-invested into more science.”

The work continues for Lautt and company as they navigate the clinical trials process, speak to more prospective investors, develop more marketing collateral, engage with potential pharmaceutical industry partners, launch a social impact bond, and design measurable lifestyle interventions for individuals and communities.

Lessons to liftoffs

The days are long, but Lautt is fuelled by the process. He’s excited about the next steps, and humbled by the lessons he has learned along the way. That humility and the lessons that came with it are driving a new Scimar initiative known as the “Manitoba Moonshot Studio.”

“Getting to where we are has been challenging and a lot of fun, and we’ve been learning a lot along the way. I have taken companies from zero to one a few times, but I haven’t been part of a team solving type 2 diabetes before,” laughs Lautt. “It’s been said before, but sometimes building a business like this feels like jumping off a cliff and building the plane on the way down.”

Lautt and his colleagues are establishing the Manitoba Moonshot Studio as a one-of-a-kind, full-service incubator where people can get the help they need to test and commercialize their scientific discoveries.

“After these years building Scimar, we think we have some wisdom to share,” says Lautt. “We are trying to build a platform—a one-stop resource—where people can get the support they need to complete their research, collaborate with related academics, develop marketing collateral, engage with investors, attract non-dilutive funds, explore routes to commercialization, access clinical trials, and more. We are eager to share what we know and to learn more along the way ourselves.”

As the research into hepatalin reaches its next milestones and the WTN launches, helping others accelerate their impacts on human well-being through the Manitoba Moonshot Studio is one of Scimar’s next must-make moves.

“The Studio marks the next step in building life sciences capacity in Manitoba. It will support our own work while helping others succeed as well,” says Lautt. “If the industry flourishes in Manitoba, we all benefit.”