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With New Funding, TAI Diagnostics Set to Launch Post-Transplant Test

Xconomy Wisconsin — 

TAI Diagnostics, a Milwaukee-area startup developing a non-invasive test to monitor patients’ health after they’ve received heart transplants, plans to begin selling its test early next year, says CEO Frank Langley.

Launched in 2015, Wauwatosa, WI-based TAI—whose name stands for “Transplant and Immunology” and is pronounced “tie”—has raised about $13 million from investors so far, Langley says. The company is currently raising more money to augment its $8.3 million Series A funding round. If all goes as planned, the extension could bring TAI’s total outside financing to $21 million, Langley says.

The startup’s test measures levels of cell-free DNA, genetic material released by the transplant recipient’s new heart that can enter the bloodstream, to assess whether he or she is in danger of rejecting the organ.

A simple blood draw is all that’s required for the test, which would improve upon current practice. For heart transplant recipients, the current invasive biopsy procedure involves inserting a wire in the neck, running it down the body through a vein, and collecting tiny pieces of the heart. While biopsies remain the most common and reliable method for monitoring organ acceptance, they can be expensive when compared with a non-invasive test, and carry a risk of infection.

Last year, TAI completed construction on a reference laboratory near its offices, where the company will analyze blood samples and prepare reports to send back to physicians and transplant center workers who order the test, Langley says. That work will likely begin in the first half of 2018, he adds.

While Langley declined to reveal TAI’s current employee count, he says his startup plans to expand its sales and marketing teams ahead of the commercial launch.

“We will be going directly to transplant centers to sell the test,” he says. “That’s part of the build-out of our commercial infrastructure.”

TAI is offering its diagnostic as a lab-developed test, meaning the company can sell it without having received FDA clearance, Langley says. Under an FDA regulatory exemption, a company that develops and uses tests in-house may do so without needing the agency’s approval.

TAI plans to seek FDA clearance for its test in the future, but probably won’t begin the process until 2019 or later, Langley says.

Initially, the startup will sell its test under a centralized, service-based model, Langley says. With this approach, samples are shipped from draw sites to TAI’s lab for analysis, and the company sends back a report to the health system or transplant center.

TAI could later move to a test kit-based sales model—putting tests in boxes with instructions, and allowing customers to examine samples themselves. Langley calls the potential shift a “future strategic consideration”; he declined to comment when asked if TAI has concrete plans to change its business model over time.

One of TAI’s competitors has already reached the market. Brisbane, CA-based CareDx’s (NASDAQ: CDNA) AlloMap product, which the FDA approved in 2008, was the first blood-based cardiac transplant monitoring test to become widely available.

Langley says that TAI eventually wants to make its test more versatile, so that it can be used on patients who have had other types of organ transplants.

“It’s our plan to further develop the test for other solid organs, [including the] kidney, lung, and liver,” he says.