Diagnostics startup raises $30 million

SAN FRANCISCO (Private Equity Week) - Seattle-based Integrated Diagnostics announced recently it raised a $30 million Series A round that president Paul Kearney expects will take the company through its next three years of product development.

The company attracted a motley crew of investors for its first round of institutional funding, including InterWest Partners, a Menlo Park, Calif.-based. venture firm; Dievini Hopp Biotech holding, an investment company run by the founder of German software giant SAP; The Wellcome Trust, an organization that claims to be the United Kingdom's largest charity and invests just under $1 billion annually in biotech research; and the Grand Duchy of Luxembourg.

If the investor syndicate seems unusual, it may be because the company poses an unusual opportunity. Luxembourg was interested in diversifying its economic base away from financial services and reached out to top biotech researchers to help stimulate the formation of a local tech industry there, Kearney said.

Overall, it's unknown how many patients could be saved simply by knowing that they had the early signs to a disease coursing through their veins. But Kearney says that the benefit is clear for some diseases more so than others. For example, when lung cancer is detected early, which is considered a stage one or stage two development, the five-year survival rate is 80-95 percent, he said.

"If you detect it at late stage two or stage three, the five-year survival rate is only 5 percent," he said.

Kearney said the technology lends itself to diseases that require blood-based tests (such as multiple sclerosis, Alzheimer's or other central nervous system diseases), compared to prostate or breast cancers in which a biopsy is required.

The company's technology could halve the cost of the standard development time for diagnostics and could reduce the cost of tracking certain proteins to less $1 per measurement, according to the company.

However, Integrated Diagnostics still has a lot to work out before its technology finds its way into the doctor's office. It needs to narrow its focus, said investor Doug Fisher, a principal at InterWest.

The technology the company is developing emerged from a public-private partnership between the nation of Luxembourg and three U.S.-based research institutions, including the Institute for Systems Biology in Seattle.

Integrated Diagnostics is using protein blood markers to monitor the health of various organs in the body. It is working to develop tests on those blood markers that will help identify changes associated with various diseases. Kearney said that the technology has the potential to reduce the cost of diagnosis and to help doctors spot problems sooner.