Predictive Biosciences Pockets $25M Round, Launching First Bladder Cancer Tests
Predictive Biosciences has found a key piece of the puzzle to commercialize its lab tests for bladder cancer. The Lexington, MA-based company has raised $25 million in a Series C round of funding, giving the firm cash to start selling its bladder cancer test and continue research and development of its diagnostics technology, CEO Peter Klemm says.
ProQuest Investments, a Princeton, NJ-based venture firm with offices in San Diego, is Predictive’s new investor that led the round of funding. Also contributing to the round were the company’s previous investors: Flybridge Capital Partners, Highland Capital Partners, Kaiser Permanente Ventures, and New Enterprise Associates. Predictive, which also keeps a small office in San Diego, has snapped up $56.8 million since its founding in 2006.
The new funding round is timely. Predictive, which spun out of labs at Children’s Hospital Boston, recently began an initial launch of its CertNDx lab test that screens urine samples for molecules that indicate whether or not a patient has bladder cancer. In January, the company enhanced its capacity to conduct these tests with its purchase of Cleveland, OH-based OncoDiagnostic Laboratory. OncoDiagnostic has certified labs for testing cancer biopsies and processing molecular diagnostics like the ones Predictive develops in the Boston area. Predictive also has certified diagnostic labs in Lexington.
“The financing that we’ve now received now gives us the capability, along with the platform we have from [OncoDiagnostic], to really have a very successful growth of the CertNDx bladder cancer test,” says Eugene Chiu, the company’s co-founder and vice president of commercial operations.
The firm is doing more studies to provide further proof that its bladder cancer test works. But the promise is to offer a precise method of detecting bladder cancer that is way less invasive than standard procedures, which use a scope inserted into the urinary tract and into the bladder to look for cancer. Predictive plans to market its tests for both patients who are suspected of having bladder cancer because, say, there’s blood in their urine, or for people who have previously had bladder cancer and need regular follow-up tests to show whether the cancer has returned.
The potential annual U.S. market for the firm’s bladder cancer test is about $1 billion, Chiu says. This is based on the firm’s estimates that there are about 2.5 million cases in which the tests could be given per year, and each of those tests would cost between $300 and $400—depending on reimbursement rates. Clearly, two key drivers for the success of the product will be the firm’s ability to get urologists to adopt the test and health insurers to pay the price the firm wants to get for it.
In an early piece on Predictive, Xconomy wrote about how health insurers may be willing to pay a premium for accurate like Predictive’s because it could ultimately reduce overall healthcare costs. For one, the firm’s test would reduce the number of procedures where doctors insert a scope into the bladder to hunt for tumors. Its technology might also be used to diagnose prostate cancer and other tumors that shed molecular evidence into urine.
Predictive had the diagnostic labs, and now has the funding, to market its cancer tests. The next important part of the business equation is lots of customers.