[Clarification—1/12/10, 1 pm ET] Nadya Suleman, aka the Octomom, grabbed headlines this time last year when she gave birth to octuplets conceived through in vitro fertilization (IVF). Now, Molecular Biometrics is grabbing venture dollars for technology that could help other IVF users avoid a similar fate.
The Norwood, MA-based firm raised $12.5 million in a Series B round of venture capital to begin sales of its product that identifies the most viable embryos produced in IVF, according to the company. The technology could help doctors reduce the number of embryos they need to transfer to the mother to produce a successful pregnancy—and fewer embryos should mean fewer women wind up carrying triplets, quadruplets, quintuplets, or more babies.
Atlas Venture of Waltham, a new investor in Molecular Biometrics, led the new round of financing, and Atlas partner Peter Barrett has joined the company’s board of directors. The round also included backing from Boston-based venture firm Oxford Bioscience Partners and Safeguard Scientifics (NYSE:SFE), a Wayne, PA, holding company that invests in life sciences and technology firms. Oxford and Safeguard invested in Molecular Biometrics’s $12 million Series A round, which closed in fall 2008. The company, which earlier raised about $3 million in a seed round, has attracted a total of $27.5 million since it was incorporated in 2005.
Jim Posillico, president and CEO of Molecular Biometrics, said in an interview that the new financing will enable his firm to begin shipping its “ViaMetrics-E” system for sales in the IVF market in Europe next month. The firm will sell the system, which consists of a near-infrared spectroscopy device and single-use test cartridges, through distributors. The firm also plans to use the capital to ramp up an ongoing clinical trial of the product in order to gain the FDA’s permission to sell it in the U.S., hopefully by the first or second quarter of 2011, Posillico said. Molecular Biometrics will also use some of the new funds to produce its products through contract manufactures.
The potential global market for the IVF product—which is one of multiple uses for the firm’s technology—is believed to be hundreds of millions of dollars, said Atlas’s Barrett. “It’s a significant opportunity,” he said, “and all the thought leaders that we talked to said that anything you can provide an increased chance of a pregnancy, people will be willing to pay for it.” [Clarification: This paragraph was changed to clarify the estimated global market for the company’s IVF product, which Barrett says is hundreds of millions of dollars, not $100 million, as we first quoted him saying.]
Atlas was drawn to Molecular Biometrics’s technology for the reproductive market because it allows doctors to test the nutrient solution in which an embryo is grown before being transferred to the mother, meaning that no cells from the embryo itself are required to gauge whether it is likely to lead to a pregnancy. The system also includes disposable test cartridges, giving the company the potential to receive recurring revenue from sales of the cartridges used in each spectrometry machine it sells (an example of the battle-tested “razor-razorblade” business model).
Another big plus is that the firm could be the first company in years to come out with a new way to test the viability of embryos used in IVF. Posillico explained that fertilization labs typically examine the embryos under microscopes to look for visible indications that they would lead to pregnancies, a subjective method that can yield very different results depending on the person doing the examination. Molecular Biometrics’s system, on the other hand, tests for the levelsof certain small molecules that embryo cells produce from metabolizing nutrients. Then algorithms are used to compare the results to those of more than 3,000 previously tested samples—embryos whose molecular, or “metabolomic,” signatures most closely match those of previously tested embryos that produced successful pregnancies are then chosen to be transferred back to the mother.
Posillico said that his firm’s technology increases the chance of a pregnancy by 15 to 33 percent, and it hopes that helping doctors select the most viable embryos will reduce the total number of embryos that they transfer to each IVF patient. Using multiple embryos is a common technique for boosting the chance of a pregnancy, but organizations such as the American Society for Reproductive Medicine have provided guidelines to limit the number of embryos in efforts to reduce twin, triplet, and higher-multiple pregnancies. Such multiple pregnancies can be medically risky for both the mother and the babies.
Posillico knows the IVF and reproductive health markets well. Prior to founding Molecular Biometrics, he co-founded and served as CEO for a developer of reproductive treatments and medical devices called Sage BioPharma; in 2002 he sold Sage to Trumbull, CT-based Cooper Surgical for an undisclosed sum. Posillico has also been a senior executive with other life sciences firms such as Swiss biotech company Serono (now Merck Serono) and Canadian biotech InterMune Life Sciences.
Molecular Biometrics says that its metabolomic technology is also in development for testing the health of fetuses during pregnancies as well as for use in tests for pulmonary edema and other conditions.