Counsyl, armed with $28M, begins big rollout of BRCA and other predictive genetic tests

California genetic testing startup Counsyl aims to become a diagnostics player that can help patients predict their susceptibility to certain cancers and also identify what diseases they might pass on to their children. Potential challenges await, however, from rivals such as Myriad Genetics ($MYGN). Regulatory risks also loom from the FDA as the company pursues its business plan and rolls out its new products. Crucially, $28 million in new Series D Financing will help kick all of this into high gear.

Goldman Sachs Asset Management and Rosemont Seneca Technology Partners co-led the new round. To date, the South San Francisco company says it has pulled in about $93 million.

With news of the new funding round, Counsyl is formally launching its Inherited Cancer Screen, a BRCA1 and BRCA2 predictive diagnostic that determines whether men and women have a high, inherited risk for breast, ovarian, prostate and pancreatic cancers. The company relies on robots and sophisticated software to get the job done with either blood or saliva samples.

As the San Francisco Chronicle reported, Counsyl preemptively sued to ask a federal court to declare certain patents owned by Myriad Genetics in the BRCA space invalid. Myriad has had a virtual monopoly in the BRCA gene testing market. But last year, the U.S. Supreme Court invalidated some of its patents and upheld others, opening the door to BRCA test competition. A number of rivals have now unveiled competing products, making the BRCA testing space pretty crowded in a period of months. Myriad has sued most of them, and others have countersued. Even as Counsyl releases its BRCA tests, it is awaiting a decision on the matter in federal court, according to the story.

Another part of Counsyl's business involves its Family Prep Screen sequencing technology that can help couples who plan to have children determine what diseases they risk passing on to their children. The San Francisco Chronicle pointed out that this enters a space filled with potential peril. 23andMe, for example, stopped selling all health-related genetic tests in the U.S. nearly 5 months ago, after the FDA asserted it had not fulfilled regulatory requirements to allow the tests to be sold.

But the San Francisco Chronicle explained that Counsyl potentially avoids the FDA pitfalls because it registered as a clinical laboratory, unlike 23andMe and its direct-to-consumer model. Also, the company has committed to working with physician and scientific experts who can interpret the test data, and it won't perform a test unless it has a physician's OK. What's more, the company has launched an online portal that allows physicians to give results to patients via a private online account, and patients can also watch a video explaining what they mean. Additionally, customers have the option, for a fee, of scheduling sessions with certified genetic counselors, according to the story.

Ramji Srinivasan, Counsyl's co-founder and CEO, said in a statement that the company envisions its products as giving patients an easy and affordable option to get screened for a wide variety of things that can help them make health decisions.

If it can pass competitive, legal and potential regulatory hurdles, Counsyl at least has a shot at getting there.

- read the San Francisco Chronicle's take
- here's Reuters' version
- check out FierceMedicalDevices' coverage