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Breakout Labs Funds Lab Screening Startups and Stress Tracker System

Xconomy San Francisco — 

[Corrected 2/11/15, 10:50 am. See below.] “The Art of Detection” could be the theme for the three new companies just awarded funding by Breakout Labs, the San Francisco seed-stage investing unit supported by PayPal co-founder Peter Thiel.

Two of the new recipients announced today are Bay area companies that have developed lab methods to detect proteins and compounds with potential as cancer drugs. The third, a Boston company, has a system to detect that powerful-but-elusive human response—stress.

These are Breakout Labs’ new portfolio companies:

1) Menlo Park, CA-based E3XBio is trying to open up a range of new drug treatment opportunities based on discoveries about a family of enzymes called the Ubiquitin E3 HECT ligases. These enzymes are implicated in the development of cancer, neurodegenerative disease, and other disorders, but they’ve been called “undruggable” targets because it’s difficult to discover which compounds might block their activity.

E3XBio has developed streamlined methods to screen potential drug candidates for their ability to inhibit or activate the Ubiquitin E3 HECT ligases, says E3XBio co-founder Lori Rafield.

“We are convinced that we’ve discovered a new paradigm for high-throughput screening and are thrilled that Breakout Labs has provided us with the support to develop our proof of concept,” Rafield says.

2) Danville, CA-based Ion Dx has adapted a chemical screening technology so that it can detect small variations between proteins—finding distinctions that could help ensure quality control in the manufacture of biological drugs, improve the accuracy of diagnostic tests, and guide drug development.

Ion Dx founder and CEO Henry Benner modifed a screening method called ion mobility spectrometry, which is already used to detect molecules smaller than proteins. The TSA (Transportation Security Administration) uses these scans to flag dangerous chemicals. Ion Dx can identify variations in the shape, or “conformation” of proteins, which can fold into different configurations depending on conditions. A change in the conformation of a protein can change its biochemical activity.

3) Boston-based Neumitra assembled a technology toolbox to measure stress and correlate it with life activities. It includes biosensing watches that track nervous system responses, mobile apps that record the conditions that triggered stress, and algorithms to look for ongoing patterns over time.

Wearers of Neumitra’s “biomodules” receive alerts and access to biofeedback methods to cope with stress. Researchers and employers can use anonymized, aggregated data from the system to identify risk factors for stress among large populations, says Neumitra CEO Robert Goldberg. Neumitra has also received funding from Rock Health, a San Francisco seed fund that focuses on digital health. [An earlier version of this story described Rock Health as an accelerator program.]

Breakout Labs frequently looks for innovative companies that combine technology and biotechnology, but it has also funded projects in speech recognition and novel energy sources. Its portfolio companies receive as much as $350,000 in exchange for an equity stake and a pledge to return a 3 percent royalty once revenues exceed $100,000. The royalties are capped at three times the funding contributed by Breakout Labs.

Counting its three new portfolio companies, the seed fund has backed a total of 22 companies since it began making investments in 2011. One of those companies, Troy, NY-based SkyPhrase, was acquired by Yahoo in 2013. SkyPhrase developed software to help computers understand human language.