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Pathwork Diagnostics Closes $30M Series C Round, Plans Investments in Sales Team, New Tests

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This story was originally published on Oct. 8.

By Justin Petrone

Pathwork Diagnostics will use the proceeds from its latest round of financing to expand its sales and marketing activities and grow its menu of microarray-based tests.

The Redwood City, Calif.-based molecular diagnostics firm last week raised $30 million in a Series C financing. The round was led by new investor Alta Partners, based in San Francisco, with contributions from existing investors Abingworth, Advent Venture Partners, Novus Ventures, Prospect Venture Partners, and Venrock.

Director of Marketing Debbie Corazzelli told BioArray News last week that the firm intends to use the proceeds of the recent financing to intensify the marketing of its flagship Tissue of Origin Test. "We will grow the sales team, and increase marketing in the US and abroad," Corazzelli said in an e-mail. "The short term focus is the US."

Additionally, Corazzelli acknowledged that Pathwork will use the funds to support the development of new tests. "We have programs underway within and outside of the Tissue of Origin product family," she said. Corazzelli declined to elaborate.

The Tissue of Origin Test, which is manufactured by Affymetrix and runs on the array company's GeneChip platform, compares the expression of more than 1,500 genes in a tumor sample against 15 known tissues that represent more than 60 morphologies in order to identify the source of cancers that are difficult to classify and increase oncologists' confidence in their treatment approaches.

Pathwork claims the test can provide an objective, probability-based score for each potential malignancy. The test is meant to be used with the patient's clinical history and complementary diagnostics, such as immunohistochemistry.

Pathwork received initial US Food and Drug Administration clearance for the test in 2008 for use with frozen tissue samples, and this June it received a second clearance to use the test with formalin-fixed, paraffin-embedded samples. Pathwork had been offering its test for FFPE samples as a laboratory-developed test through its US Clinical Laboratory Improvement Acts-compliant lab since 2009 (BAN 6/15/2010).

Pathwork said in June that a Tissue of Origin Test kit for use with FFPE samples would become available by the end of this year. This week, Corazzelli said that the kit will launch next year instead. "We plan to make a kit available in 2011," she said. "Since we have FDA clearance that allows us to sell the kit, exact timing is under our control and based on discussions with partners."

Founded in 2004, Pathwork raised $12 million in Series A financing in 2006, and $20 million in Series B financing in 2008. Corazzelli said that it is possible the firm may seek additional capital as it moves forward with its business plans. "We will always look at attractive opportunities to bring capital into the company to meet our business objectives," she said.

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