Flagg Flanagan’s life as an Entrepreneur, Chairman, and CEO of DiscGenics

My name is Flagg Flanagan. I am the CEO and Chairman of DiscGenics, a leading edge biopharmaceutical company focused on developing regenerative cell-based therapies that alleviate pain and restore function in patients with degenerative diseases of the spine.

I have spent the last 40 years in the medical device field as an entrepreneur, executive and advisor. In 1981, I founded Flanagan Instruments which became a leading neurosurgical device distributor. In 2005, I sold Flanagan Instruments to Itochu International. I am on the boards for the Neurosurgery Research & Education Foundation, TrueDigital Systems, Peleton Medical, and Steribite. I have also served on the boards of the Alliance for Regenerative Medicine, as well as TrueVision Systems, Image Stream Medical, and Triad Life Sciences, which were acquired by Alcon, Olympus, and Convatec, respectively.

I started in college with an eye towards becoming a professional tennis player at the University of North Carolina while also in pre-med. After realizing that I wasn’t going to break into the top 50–100 tennis players, I made the decision to re-shift my focus and transition to a business degree with concentration in the medical space.

While at the University of South Florida I began working in a lab, doing work around cardiovascular research with small animals. I also began helping the management professor at USF design a case cart system for the supply and replenishment of supplies at the VA Medical Center in Tampa. Fate seemed to be pushing me toward medicine once again.

Early Career

My first job out of college was working at a very small hospital in Anniston, Alabama, where my father and grandfather started a company called Flagg Utica. I became an administrative assistant in a seventy-two-bed hospital, where they were equipping an operating room for an additional two rooms. This was my first opportunity to buy a lot of surgical equipment, and when I was buying the equipment, many of the regional managers would say “Hey, you’re on the wrong side of the desk, you need to be over here with us selling equipment.”

I moved to Little Rock, Arkansas to work for Richards Manufacturing to distribute ENT and orthopedic products. About a year and a half later I was recruited by V Mueller, a division of American Hospital Supply Corporation, which has since merged into Cardinal Healthcare, and worked up to becoming a distributor for them. After my non-compete was honored I decided to start Flanagan Instruments.

Launching Flanagan Instruments

Flanagan Instruments was a regional surgical specialty distribution business focused on Zeiss surgical microscopes and other microsurgery and spinal products. Our initial emphasis was on ophthalmology and ENT, but we quickly expanded our offering to the plastic/reconstructive and neurosurgery specialties for use in both cranial and spinal procedures.

The use of the surgical microscope in spine began to accelerate in both neurosurgical and orthopedic spinal procedures as more minimally invasive approaches were developed. With this penetration into the spine marketplace, we made a strategic decision to expand our offering around other products in the spine space, including plates, rods, screws, and fusion biologics for use in fusion surgeries for both lumbar and cervical applications.

Pursuing Higher Education

While still running Flanagan Instruments, I fulfilled a promise to my grandfather that I would pursue further education and enrolled in Harvard’s Owner/President Management Program (OPM 26) in 1998. With knowledge gained from Harvard, I built a master distribution business for a privately-held surgical device company, where I delivered an out-sized return. Soon thereafter, in 2003, that company was sold to a well-known medical device company.

Looking Beyond the Surgical Microscope

Before selling Flanagan Instruments to Japanese Itochu International in 2005, we grew from a small, two-state distribution business to a successful eight-state, $30 million business, becoming Zeiss’ largest U.S. distributor.

Although medical and technical expertise had advanced drastically from 1990 to 2005, I was still amazed at how invasive these surgeries were. I have often thought, “I’m thankful for the business, but there’s got to be a better solution.”

A New Leading Edge Therapeutic Technology

In late 2007, while still managing Flanagan Instruments (now owned by Itochu), I received a call from John Robertson, who was the chair of neurosurgery at the University of Tennessee. He introduced me to Valery Kukekov, PhD, who was the scientist working on a cell culture method that would later become DiscGenics’s platform technology. Dr. Kukekov explained that this technology was being developed for the ability to take cells from disc tissue, drive them to a progenitor state and then put them back into the disc, which fascinated me.

I knew that for the venture to be successful the cells would need to be allogeneic in nature, which would allow us to select, enrich, and expand those cells for use in any other human being. This would allow us to create an affordable and scalable solution for degenerative disc disease (DDD). Dr. Kukekov demonstrated to me that the cells were immune-privileged and allogeneic, and I was convinced that the technology would be something worth investing my time and resources in. It became my life mission to use this technology to address the unmet needs of the many, many patients I knew I could help get relief and avoid a surgical intervention.

The rest, as they say, is history. Today, we are manufacturing allogeneic discogenic progenitor cells for DDD. We recently completed two clinical trials in the U.S. and Japan, respectively for our investigational therapy, known as IDCT (or rebonuputemcel), and are working to scale up production of our cells to meet anticipated demand.

The future of DiscGenics is very bright. We believe that we can make 2,500 to 4,000 doses per donor lot from our built for purpose manufacturing facility in Salt Lake City, Utah. While there are still many challenges and hurdles that must be overcome before we get to that point, the impact that we envision having by helping this massive patient population encourages us to spend every day working towards that goal. This technology is poised to provide a safe and more effective solution to a problem that has lowered the quality of life for millions of people worldwide.