Integrated Diagnostics, Leroy Hood’s Latest Startup, Pockets $10M After Hitting Early Goals

7/22/10Follow @xconomy

Integrated Diagnostics has done what it told its investors it would do, at least in its early days.

The Seattle-based developer of predictive diagnostic tests has secured a $10 million financing, which represents the second installment of a three-part, $30 million Series A venture deal announced last October. As part of the deal, a newly formed investment group in Luxembourg called BioTechCube Luxembourg is replacing a German firm, dievini Hopp Biotech, in an investment syndicate that also includes InterWest Partners and the Wellcome Trust. Integrated Diagnostics, aka InDi, received the second tranche of cash after hitting a series of six progress milestones that investors said they wanted to see at the beginning, says CEO Al Luderer.

“The first thing really is that I didn’t screw anything up since I joined,” Luderer says, explaining how he nailed down the money.

Kidding aside, it sounds like InDi has been hard at work the past few months trying to execute on the big idea of its co-founders, Leroy Hood and David Galas of the Institute for Systems Biology and Jim Heath of Caltech. The vision, which I last wrote about here in March, is to create a new class of diagnostic tests that can spot specific proteins that can be shown to be early warning signs of certain cancers, or Alzheimer’s disease. Hood, the biotech pioneer, has said he hopes this could shake up the healthcare system by making it possible for doctors to detect diseases much earlier than they can be caught today, giving them more information before they make hard decisions about treatment.

This program is still in its early days, and the milestones were chosen carefully by the founders to make sure they were both “meaningful and achievable,” Luderer says. The company has essentially settled on its first two market opportunities, in the early detection of lung cancer and Alzheimer’s disease, Luderer says. It has filed for U.S. patents on its lung cancer diagnostic test, done a lot of market research and studied the health economics, and laid the technology foundation for a test that could be ready to perform in its first rigorous clinical trial before the end of next June, Luderer says.

Albert Luderer

Albert Luderer

The $10 million financing is enough for InDi to operate at least another 16 months, Luderer says. By that time, it should have data to demonstrate the value of its test at predicting lung malignancies. The company hasn’t yet signed its contracts with medical centers, but it envisions a retrospective study that will analyze existing blood samples from more than 700 people. These patients came in to the hospital with a variety of chest ailments, and had CT imaging scans that showed small lung lesions of between a half centimeter or 2 centimeters, Luderer says. Doctors are often reluctant to do a lung biopsy, an invasive procedure, when the lesions are likely to be benign.

That’s why InDi sees this is an ideal proving ground for its test. By taking a simple pinprick of blood, InDi’s instrument will look for telltale proteins that ought to indicate whether a lesion is benign or malignant. The medical history on these patients is already loaded with data on what the CT scans showed, what biopsies revealed, and how sick the patients got over time. InDi hopes that it will see clear differences in the blood between patients who got serious lung cancer, those who had benign growths, and those who got some other malignancy. In everyday clinical use, the pinprick test would be an early warning sign, which a doctor would verify with CT imaging and a biopsy before making a definitive declaration that a tiny cancer is on the move.

“If we can rule in or rule out the cancer, we’ll spare people a lot of grief and waiting,” Luderer says. “We might catch patients when they still have a chance” to cure the disease by surgically removing the tumor.

Because these blood samples already exist, and the trial would look back in time, InDi doesn’t need to spend time enrolling patients, establishing its prediction, and then waiting for a period of time to see whether it was on target. That sort of prospective clinical trial design might be considered more valuable in the eyes of the FDA, and InDi is carefully considering how it may or may not go about doing such a study in the future, Luderer says.

First things first: InDi hopes to have an answer from its first study of 700 or more patients, possibly by the end of 2011, Luderer says. The strength of that data, plus more results from a validation study, could form the basis of an FDA approval. It’s possible InDi could establish what’s known as a central CLIA-certified laboratory without getting FDA approval, although the company plans to consult with the FDA on whether it should get the agency’s blessing first because of the seriousness of the diagnostic conclusions it seeks to reach.

InDi’s second product candidate, an early warning test for Alzheimer’s, is further behind in development, partly because it doesn’t have the same rich set of data to sift through like the blood samples from lung patients. The disease, which robs cognitive ability and memory from people as they age, takes a long time to progress, and there’s no standard blood-based diagnostic for it today. That means doctors and regulators will probably going to want to see a forward-looking study that takes blood samples, and follows people for years to see who gets the disease and who doesn’t. At a minimum, InDi will need to find samples on Alzheimer’s patients over time, which could be hard to do. It plans to start to establish its test through a retrospective study, then follow up with a combination of retrospective studies with a “small” prospective component, Luderer says.

Advancing into clinical trials like these means that InDi is going to need to hire a few more people with medical experience. The company has added an organic chemist recently, and a couple of mathematicians to help with the bioinformatics algorithms needed to offer the predictive value of the test, Luderer says. “That’s where the rubber hits the road for us,” he says.

The proof of this idea will be in the clinic, and InDi says it hopes to be there within a year. If it can generate some evidence over the next year and a half that validates the founders’ vision, then InDi shouldn’t have trouble nailing down the last installment of its $30 million financing, and then some.

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  • Saumitra

    Hey Luke: Was wondering if there are any updates on this 700 patient retrospective study from InDi.