South San Francisco-based Crescendo Bioscience has raked in $56 million today for a technology to help doctors and patients better decide which drug is best for them—especially when tens of thousands of dollars are on the line.
Crescendo said today it has raised a total of $56 million in new capital, through a $31 million Series C venture financing, plus another $25 million of strategic investment from Salt Lake City, UT-based Myriad Genetics (NASDAQ: MYGN). The venture round was led by Aeris Capital AG and included existing investors Mohr Davidow Ventures, Kleiner Perkins Caufield & Byers, and other investors. The money from Myriad is structured as long-term debt, and gives Myriad a three-year option to acquire Crescendo at a predetermined amount that depends on Crescendo’s sales performance.
The cash is going toward supporting Crescendo’s first product, called Vectra DA, which the company says is “the first blood-based molecular diagnostic test available that can determine the level of disease activity in patients with rheumatoid arthritis.” The company’s test is supposed to help doctors and patients determine whether the inflammatory disease can be controlled over time with cheap medications like methotrexate, or whether the patient responds better to more expensive products like Amgen’s etanercept (Enbrel) or Abbott Laboratories’ adalimumab (Humira).
Crescendo is betting that its information will be very valuable to patients, doctors, and insurers. The top biotech drugs for rheumatoid arthritis can cost $20,000 a year, and while they can be highly effective, they also don’t work for everybody in the same way. And prescribing by trial and error can be a costly endeavor. About 1.3 million people in the U.S. have rheumatoid arthritis, according to the Arthritis Foundation, and these drugs make up a global market that was worth $12.7 billion in 2010, according to visiongain, a London-based market research firm.
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