Dx Deals: More than $62 Million Invested in Startup Labs in Recent Weeks

Late summer tends to be a slow period for mergers and acquisitions, but venture capital investments in startup lab companies were prominent over the past several weeks, with three startups raising more than $62 million combined.

The funding

Clarapath

The biggest haul was attributed to Clarapath, a Hawthorne, NY-based company that focuses on automating laboratory processes. It received $36 million in its second funding series.¹ Backers included investment arms of major hospital systems, including Mayo Clinic, Ochsner Ventures, and the CU Healthcare Innovation Fund. The latter two backers are associated with Ochsner Health in Louisiana and the University of Colorado Anschutz Medical Campus. Clarapath has received $75 million in funding to date.

Clarapath has vowed to essentially automate a significant part of the process of preparing samples for pathology review, which has become a burdensome task in recent years as shortages of qualified laboratory personnel continue to grow.

“As labs adopt digital pathology downstream, automation in prior steps is crucial to establish consistent results and provide best-in-class samples for diagnostic review,” said Clarapath chief executive officer Eric Feinstein in a statement. “Our automation and new digital tools capture and aggregate never-before-seen data, ultimately benefiting patients with faster results and less subjectivity.”¹

The funding round will be used to further develop and market its SectionStar^™ platform, including an expansion of its sales staff and a fine tuning of the manufacturing process, according to the company.

PreciseDx

PreciseDx also received a second-round infusion totaling $20.7 million to help it build out its breast cancer detection platform.² Backers included both national labs Labcorp and Quest Diagnostics, as well as GenHenn Capital Ventures. The round was led by Eventide Asset Management. The New York City-based PreciseDx has raised $31.5 million to date.

PreciseDx has developed the PreciseBreast^™ histopathology platform, which uses AI to predict recurrences of breast cancer over a six-year period after initial diagnosis and treatment. A study conducted by PreciseDx concluded that following the treatment pathways resulting from data generated by PreciseBreast reduced annual treatment costs by about 13 percent. That figure considers factors such as the cost of testing, adjuvant therapy, recurrence, adverse events, surveillance, and end-of-life care.³

“This capital infusion sets the stage for our next phase of continued in-depth clinical trials to validate PreciseBreast™ in a specific clinical setting and market entry point,” said Eric Converse, a PreciseDx founding board member, in a statement.²

Though management at both Clarapath and PreciseDx initially promised interviews for further comments, they could not be reached at press time.

Precision Epigenomics

The third recipient of funding was Precision Epigenomics. It received $1.5 million in funding in a round led by Shaffer Capital to help with the further development of its EPISEEK^™ multi-cancer detection test, which the company has claimed can test for more than 20 different types of cancer from a single blood draw, relying on an analysis of specific cancer-related DNA methylation patterns unique to tumors. The test can also detect cancers in their early stages, the company said. The Tucson-based company, which has raised nearly $4 million in funding to date, said in a statement that it has recently built and staffed a CLIA-certified laboratory and is moving into the “revenue stage.”⁴

Other large funding rounds for laboratories this year include binx health, which received $65 million,⁵ and Valar Labs, which received $22 million.⁶

References:

1. https://www.businesswire.com/news/home/20240724156249/en/Clarapath-Closes-36M-B-Round-to-Transform-150-year-old-Laboratory-Processes
2. https://www.prnewswire.com/news-releases/precisedx-secures-20-7-million-series-b-to-advance-ai-powered-cancer-risk-assessments-302226795.html
3. https://www.prnewswire.com/news-releases/precisedx-announces-publication-of-its-cost-impact-study-payer-impact-of-precisebreastpdxbr-to-identify-breast-cancer-recurrence-in-the-journal-of-medical-economics-302203518.html
4. https://wreg.com/business/press-releases/ein-presswire/742408092/precision-epigenomics-announces-closing-of-1-5m-series-a1-funding/
5. https://mybinxhealth.com/news/Growth
6. https://www.valarlabs.com/in-the-news/series-a

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The following mergers, acquisitions and joint ventures were announced by laboratories between late August and early September:

Mergers and Acquisitions

Strategic Alliances