NeuMoDx and Jeff Williams Capitalize on Lessons Learned at Handylab

5/15/14Follow @XconomyDET

Jeff Williams is one of Michigan’s most successful biotech entrepreneurs, with two of Michigan’s biggest exits—Accuri and Handylab—on his ledger. Now he’s hoping the third time’s a charm, too.

Williams’ new molecular diagnostic startup, NeuMoDx, just closed a $21 million Series B round in April. Pfizer Ventures led the round, with participation from Baird Capital and Venture Investors, both based in Wisconsin, Ann Arbor’s Arboretum Ventures, and the University of Michigan student-led Wolverine Venture Fund.

The company says it will use the cash to further develop the NeuMoDx 500 Molecular IVD system and prepare it for clinical testing. Williams and colleagues say their system, which tests patient samples such as blood and urine for diseases like HIV and Hepatitis C, is far more automated than other diagnostic products on the market.

The major selling points are that lab workers can restock the reagents needed to instigate the test’s chemical reaction the way they would a vending machine, and then they can walk away while the diagnostic system is working.

That might not sound like a big deal, but molecular diagnostics is a hot area of health care and drug discovery, particularly as big pharma moves toward a precise, targeted approach to developing new therapeutics. Making a better mousetrap, so to speak, could save lab workers and drug companies a lot of time.

What differentiates the NeuMoDx platform, says company president Sundu Brahmasandra is that it’s a fully automated, random access platform capable of performing RNA and DNA-based assays.

Traditionally, testing has been very manual, Brahmasandra says. A lot of the work starts up front, with the collection of specimens like blood and urine used for testing. Brahmasandra says that he and Williams developed a system while at Handylab that prepared the sample for polymerase chain reaction (PCR)—the technology used to amplify DNA and generate copies for testing— after matching reagents and then gave the test result. There were no manual steps between loading the prepared specimen into a machine roughly the size of a laser printer and getting the test results. “It was a huge advancement in genetic testing,” Brahmasandra adds.

NeuMoDx’s patent-pending technology builds on that discovery by integrating robotic handling and real-time PCR chemistry in a multi-sample microfluidic cartridge, Brahmasandra explains. This technology automates all of the preparation steps and allows the NeuMoDx platform to process around 500 samples every eight hours, requiring less than one hour to generate the first results. By contrast, the Handylab system was able to process roughly 120 samples every eight hours.

What labs want today, Brahmasandra says, is flexibility. Currently, a lot of manual work is done matching reagents to samples. With NeuMoDx’s platform, once the sample is loaded, the rest of the processing is automated and completed by the NeuMoDx system. “Our whole goal is improving workflow,” he says. “What we want to do is provide the ability for labs to automate their own tests.”

NeuMoDx investor Nicole Walker, a director with Baird Capital, says the technology really differentiates itself by providing a “walk-away window,” meaning lab workers don’t need to hover over the process as it carries out. “The holy grail for molecular diagnostics is an end-to-end solution,” she says. “Jeff and Sunda’s experience at Handylab is very complimentary to what they’re doing now. They know where the challenges are and how to address them.”

Brahmasandra estimates that NeuMoDx is 24 to 30 months from bringing its technology to market. The company’s goal is to develop the NeuMoDx 500 as a stand-alone platform and then find partners for marketing and distribution.

NeuMoDx has chosen to tailor the product for the testing lab, not for healthcare workers to use directly at the point of patient care. Brahmasandra says he doesn’t believe point-of-care testing will move beyond small sections of the overall market. “Quality control is the lab’s domain,” he says. “The specimens might be collected in different settings, but hospitals will continue to be the central test setting, at least in the Western Hemisphere.”

As the company draws closer to launching its product, it expects to double its headcount. “We have confidence that now it’s just an execution challenge,” Brahmasandra says. “We want to grow to 30 employees to help with that.”

Sarah Schmid is the editor of Xconomy Detroit. You can reach her at 313-570-9823 or sschmid@xconomy.com. Follow @XconomyDET

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