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With $26M in Series B Funds, HealthTell Prepping for AutoImmune Dx Launch in 2017


NEW YORK (GenomeWeb) – Having announced this week the close of a $26 million Series B financing round, diagnostics developer HealthTell is now working to build out its planned CLIA lab and commercial infrastructure with the aim of launching its first test next year.

The company has not announced the specific disease it plans to target with its test but it will be in the autoimmune space, CEO Bill Colston told GenomeWeb.

While HealthTell has investigated a variety of diseases, including cancer and infectious disease, with its peptide array-based platform, the company has determined that autoimmune conditions represent the best opportunity for its technology, he said.

The data the company has generated in autoimmune disease "has been really clear and really strong," but cancer presents a somewhat muddier picture, Colston said.

"In cancer there are all these subtle mechanisms by which cancer hides and turns things on and off and vice versa," he said. "The immune response in that evolving battle is difficult to predict, so we have seen that the signal is a little bit weaker [in cancer]."

"It's possible to get to [a clinically useful signal], but you would have to run a lot more samples to average out the noise," he said.

Colston also noted that, from a commercial perspective, cancer diagnostics is a rather crowded field. Additionally, while autoimmune conditions are all typically handled by a single class of doctor — rheumatologists — "in cancer, if you have, for instance, one product in ovarian cancer and another in prostate, they are totally different doctors, different guidelines, different conferences. So it is very inefficient from a sales perspective."

HealthTell has generated very solid data in infectious disease with its platform, Colston said, and, indeed, infectious disease is currently the main area of focus for the company's academic partners at Arizona State University. However, he said, given that quality molecular tests already exist for many infectious diseases, the commercial opportunity for HealthTell in this space is less clear.

Between Cepheid and all the other companies working in that space there are lots of options, and the molecular tests work pretty well," he said. "If you have a molecular test that works at 90 percent accuracy and costs 50 bucks, why do you need something else?"

On the other hand, good diagnostic and prognostic tests are still lacking in the autoimmune space, Colston said, noting that it can take years for patients to receive a diagnosis, during which time many are subjected to rounds of testing and sometimes ineffective treatment.

And once a patient is diagnosed, additional tests are needed for monitoring and managing their treatment, he said. "It is an ongoing disease that requires constant data and information to make good decisions."

Colston said that HealthTell plans to target a variety of points in patient care pathways with its tests, including the initial diagnosis, monitoring of flare-ups and progression, and predicting response to therapy.

Additionally, the company hopes in the long term to leverage its pharma services business for the development of companion diagnostics to specific autoimmune drugs, he said. HealthTell is currently involved in eight to 10 pharma collaborations with another 20-plus in the pipeline, he noted.

Launched in 2010 as a spinout from ASU's Biodesign Institute, San Ramon, California-based HealthTell's platform is based on the immunosignaturing technology developed by Biodesign researchers and company co-founders Stephen Johnston, Neal Woodbury, and John Rajasekaran.

Immunosignaturing uses random-sequence peptide microarrays to capture antibodies in patient blood samples. Based on the levels and patterns of antibody binding, researchers build antibody expression profiles that can then be correlated with various disease states.

The method has potential advantages over conventional protein biomarker-based tests in that it detects broad immune responses, which may provide a more comprehensive picture of disease states than a smaller set of markers. Further, the immune cell replication involved in immune response provides a natural amplification of the signal, making it possible to detect disease earlier than with conventional protein markers.

Beyond identifying and validating markers using the technology, one of the main challenges for HealthTell to date has been developing processes for reproducibly manufacturing its peptide microarrays.

"That was the bane of my existence for the last three years," Colston said, noting the complexity of the synthesis process, which he said involves three to four days and thousands of individual steps. The company's arrays each feature 130,000 peptide elements.

While there is still room to improve the process, "we are seeing very good results from initial feasibility [studies], so we are willing to lock this process and get it out there in the market as we continue to improve things," Colston said, adding that HealthTell's Chandler, Arizona manufacturing facility can currently produce around 75,000 arrays per year.

While the arrays are challenging to produce, once made they are highly stable, Colston said, which makes them amenable to shipping in a kit format down the line. The company plans initially to run its tests out of the CLIA lab it is building, but it intends to begin the process of taking its tests through the US Food and Drug Administration starting in 2017 or 2018, he said.

The Series B round announced this week was led by Third Point Ventures and follows a $14 million Series A round the company closed in 2014. The funds will go toward supporting the company's upcoming commercial push as well as bringing to fruition some of the pharma services deals currently in its pipeline.

HealthTell currently employs 30 people, a number Colston said the company plans to more than double in the next two years as it builds its sales force and CLIA lab. It also plans to significantly expand its bioinformatics staff as its focus turns from developing its platform to analyzing the data it generates, he said.