ChromaCode, a Carlsbad-based molecular diagnostics company announced it closed a $38 million Series C funding round to pursue low-cost testing platform for coronavirus and other illnesses.
The new infused cash came from Bill Gates-backed Adjuvant Capital which invested $10 million in the round. Additional existing investors include Northpond Ventures, New Enterprise Associates, Domain Associates, Windham Ventures, Okapi Ventures, Moore Venture Partners and the California Institute of Technology. In total, the local company has raised nearly $50 million in venture capital.
Founded in 2012, ChromaCode’s founder and executive chairman Alex Dickinson, is a serial entrepreneur who worked with Caltech researchers spinning out companies since the early 2000s.
The technology was based on research conducted by California Institute of Technology graduate student Aditya Rajagopal. A former researcher at Google working on novel medical imaging methods, Rajagopal is the inventor of HDPCR, the tech at the heart of ChromaCode’s product.
Its most recent success comes after developing a proprietary signal processing method for molecular medical tests. In 18 months, the team took its prototype technology into validation, “productized” its latest solution and is now working towards commercialization.
ChromaCode’s platform can boost the performance of commonly used molecular diagnostics instruments and reagents, powered by data science technology and cloud computing algorithms.
Low Cost Solution
“The key to our technology is not only its low-cost but it also has very high throughput, meaning labs can run a lot of samples through in a short period of time,” said ChromaCode CEO and co-founder Greg Gosch.
Unlike giant legacy diagnostics companies, its technology offers low cost testing and can detect for multiple disease targets in a single process. Its data-driven approach enhances the performance by as much as five times, saving time and money on testing that is critical to patient care, the company said.
“What we do that’s different from others, is we utilize existing platforms or instruments that are already in the laboratory,” Gosch said. “As a result of that, clinical labs today can instantly bring up sophisticated tests like the one for the COVID virus immediately. Whereas, if they go to other technologies, they typically have to buy an expensive instrument, expensive reagents, and do a lot of other things.”
More significant is the ability for ChromaCode’s technology to identify other illnesses alongside COVID-19, one major disease the company is doubling down on is antibiotic resistance.
“Take superbugs for example, they are resistant to basically all antibiotics and they’re becoming a real problem. If you’re in a hospital, it can now spread where it becomes life threatening for many people,” Gosch said. “We have a test that lets you detect multiple different types of antibiotic resistant organisms, allowing you to protect people and treat them accordingly.”
Testing Market a $15B Industry Worldwide
In terms of the market opportunity, the testing sector is a multi-billion industry with estimates ranging from $2 billion to as high as $15 billion worldwide.
ChromaCode’s track record so far includes, developing single-run tests for nine tick-borne diseases, strains of drug-resistant bacteria in hospitals, and is now awaiting formal Emergency Use Authorization from the U.S. Food and Drug Administration, for its COVID-19 test.
Its technology works with traditional molecular instruments from Thermo Fisher, and Roche, among others. To date, the company has about 80,000 of these machines in service worldwide.
The company generates revenue by selling its technology to clinical reference labs that conduct clinical specimen reports and large hospitals that run tests themselves. Revenue numbers were not disclosed but the company said sales were growing exponentially.
The use of ChromaCode’s technology could expand available testing capacity threefold. Meaning instead of testing 32 individuals using existing PCR equipment, labs would be able to perform 96 tests at a time.
Once COVID-19 passes, Gosch predicts more people will seek testing more frequently, not only for COVID-19, but other disease states as well.
“It’s an evolving question for everyone.” said Gosch. “If you think about things as simple as going back to work, back to school, those discussions, never happened before with other diseases. I also think the molecular diagnostics testing market is going to change dramatically.”
Moving forward, ChromaCode aims to build on its COVID-19 test to add flu strains, respiratory syncytial viruses and others in a single test ahead of the coming flu season. The money also will be used to scale its production with local manufacturers for its coronavirus tests.
ChromaCode employs 40 local staffers and is actively expanding its business outside the U.S.
“We believe ChromaCode’s platform will help reduce healthcare costs and improve health outcomes for communities that are resource-challenged in both the developing and developed world,” said Adjuvant Managing Partner Jenny Yip. “From a global health perspective, ChromaCode’s technology ability to be installed in the existing technology base is very powerful.”