This story originally ran on Dec. 14.
Australian diagnostics firm Healthlinx announced last week that it has inked a convertible note financing deal with California-based La Jolla Cove Investors for up to $9 million over four years.
Healthlinx will use the funds to move its protein biomarker-based ovarian cancer diagnostic OvPlex into the US, as well as accelerate expansion into other markets around the world, the company said in a statement.
“The company is particularly keen to enter the US market, and this funding will assist us to continue to work towards achieving this goal in a timely manner,” CEO Nick Gatsios added.
The US is by far the largest potential market for Healthlinx's OvPlex, representing a roughly $330 million market according to numbers provided by the company. In May, the company hired Aurora, Colo.-based CPC Clinical Research to help it prepare a pre-IDE submission to FDA and coordinate meetings between it and the agency.
Intellectual property concerns could complicate the company’s move into the US, however. A valuation of Healthlinx done in June by Australian consulting firm Acuity Technology Management noted that OvaCheck, an ovarian cancer diagnostic developed by now-defunct diagnostics firm Correlogic, includes three of the five proteins comprising the OvPlex panel. Given that Correlogic's OvaCheck patent was filed prior to Healthlinx's OvPlex patent, "there remains a risk that not all claims [related to OvPlex] will be granted in all jurisdictions," the Acuity report said.
Based on statements made by Healthlinx in a September shareholder update, it appeared the company was considering a purchase of Correlogic’s assets (PM 10/14/2011). This month, however, diagnostics firm Vermillion purchased Correlogic’s assets for $435,000 in cash (PM 12/2/2011).
Healthlinx launched OvPlex commercially in Australia in October 2008, expanding to the UK and Singapore in 2010 and to Malaysia in October of this year. Additionally, the company has distribution deals for the test in Israel, South Korea, India, Indonesia, Thailand, and Vietnam.
The La Jolla Cove funding will be provided in up to three notes of $3 million each. Each note will have a repayment term of four years with 4.75 percent interest payable monthly.