This story originally ran on Aug. 4.
Integrated Diagnostics announced last week that it has secured $10 million in the second of three tranches of its Series A financing round.
The company said it will use the money on verification studies designed to establish clinical feasibility for at least one, and possibly both, of the two protein biomarker panels it is developing — one each for early detection of lung cancer and Alzheimer's disease — Integrated CEO Albert Luderer told ProteoMonitor.
Completing clinical feasibility studies for one of the two indications is one of the company's key second-tranche milestones, Luderer said. Currently Integrated is "fully planned out in lung cancer," he said, and will be launching a "full-fledged verification trial on approximately 1,000 patients sometime next year," in hopes of having data from the trials in hand by the fourth quarter of 2011.
Comprising more than 750 proteins that could be useful as biomarkers for the disease, the study will set out to develop "the largest lung cancer assay ever created," Paul Kearney, president and chief scientific officer of Integrated, told ProteoMonitor. "We're quite optimistic going into this verification study that we're going to find a set of proteins, whether it be five or 10 or 20, that will be diagnostic for the early detection of lung cancer."
Verifying the company's Alzheimer's biomarkers will probably be somewhat more challenging, Kearney said, due to the difficulty of gaining access to patient samples.
Luderer added that the lack of a consensus diagnosis for the disease also makes development of an Alzheimer's biomarker panel more complicated.
"It forces you into a longitudinal type trial where the patient becomes their own control," he said. "For longitudinal trials you have to plan way ahead. So what we're doing is talking to those agencies, private and government organizations, that have thought ahead to do this. I believe it will take us a little more time to secure that."
"We already have a dataset that demonstrates we can differentiate between age-matched Alzheimer's patients and their controls – that data is in-house already, as well as the fact that the markers move according to the success or failure of treatment," he said. "But because [the field] is kind of new, there's less molecular [data] on it, less analytics on it, so you need to work very carefully to make sure you're progressing the right way and not down some crazy path."
When it launched last October, Integrated raised $30 million in a three-tranched Series A financing round led by InterWest Partners that included investors the Wellcome Trust and Dievini Hopp BioTech (PM 10/16/2009). With the release of the second tranche, it has now received a total of $17.5 million of this funding. The third tranche is expected to close within the next 15 months.
Concurrent with the second tranche, BioTechCube Luxembourg, a newly formed Luxembourg-based investment company has joined the Series A investors, taking control of Dievinis' stake in the company. Luderer said the move was part of the original financing plan.
"It was planned this way because Luxembourg needed time to establish its legal venture capital entity, so Dievini stood in and was very helpful," he said.
Friedrich von Bohlen, a Dievini managing partner and former CEO of onetime bioinformatics company Lion Bioscience, has stepped down from Integrated's board, with BTC Luxembourg chair Patrizia Luchetta taking his place.
Luxembourg's relationship with Integrated stems from a public-private partnership the country has established with Lee Hood, who founded Integrated and Institute for Systems Biology, based in Seattle. Integrated has first rights to license any intellectual property developed within this partnership, InterWest principal Douglas Fisher told ProteoMonitor.
A Strategy of Outsourcing
Following a business model based on outsourcing much of the biomarker discovery and assay creation work and focusing instead on later-stage product development steps, the company will use the second funding tranche largely for securing samples and clinical sites for the planned verification studies, Kearney said.
"Part of the benefit of the executives and the co-founders on the table is that we know a lot of people and we know where a lot of assets are that are already amortized," he said. "So we're trying to access those and we're pretty good at managing remotely."
"You're not going to catch us building a $25 million facility," he added. "We don't want to put money into brick and mortar; we want to put it into science and data, clinical trials, and product creation."
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According to Fisher, "our model for [Integrated] from the beginning was to in-license the discovery assets and to do what's our strength, which is really getting the data and doing the interpretation and analysis of it and building the clinical studies that will have an impact on the market. It's a bit of a different model from what other people do, but that was our investment thesis from the beginning."
"When you look at diagnostic investing, going from early-stage discovery all the way through [to market] is very difficult for a diagnostic company," he said. "Most of the companies I've seen try to do it in-house, and I think the jury is still out on whether these will generate real diagnostics."
One thing Integrated probably will keep in-house is a CLIA-certified laboratory for running assays it does develop, according to Luderer.
"We're likely to do that ourselves," he said. "We wouldn't preclude a favorable relationship if it makes sense, but we want to control that part." He added that the company would decide how proceed with regard to the CLIA-facility either late this year or early next year.
Building such a facility would also require Integrated to settle on a mass spec vendor to provide machines for its assays. The company plans to develop all its diagnostics using MRM mass spec, which, Kearney said, offers a level of multiplexing unavailable with immunoassay-based approaches. To date, the firm has been using data and assays developed on a variety of platforms.
"We'll begin assessing different vendors," he said. "But we don't have a preferred relationship at the moment."
When it launched, Integrated announced that it hoped to have its first test on the market within four years. It now hopes to beat that goal, Luderer said, projecting that the company will be ready to begin US Food and Drug Administration validation trials for its lung cancer test in the first half of 2012.
"It'll depend on the strength of the verification data, but we will be prepared as soon as the third tranche is pulled down to move into the FDA validation. That will be an extremely large, multicenter trial. But it will be done quickly and then a decision as to file with the FDA will be made," he said.
Integrated has identified several other indications it hopes to develop diagnostics for going forward, Kearney said, although he declined to name them. He did, however, cite several requirements for any future targets, including having mass spec-based discovery sets and the existence of a large potential market.
"At this point we're not prepared to indicate which indications we want to pursue in more detail, but they exist," he said.