Allegro Diagnostics is well underway with plans to raise between $15 million and $20 million in Series B financing and hopes to close the round by the 2012 fourth quarter, FierceMedicalDevices has learned. The funding would help complete clinical testing for the company's BronchoGen molecular diagnostic test for lung cancer, and also fuel a commercial launch for the product in early 2013.
Michael Webb, Allegro's president and CEO, revealed the news during a conversation with Fierce at the 2012 BIO International Convention in Boston. He began work on the new round in January, he told us, at the J.P. Morgan Global Investor Conference in San Francisco. Webb said that while the process isn't finished, the effort has generated some promising buzz.
"We have had a lot of interest from pharmaceutical company strategic investors and venture firms," Webb said. A lot of that is in part because of Allegro's robust clinical trial plans for the diagnostic test. Allegro, in October, finished enrollment in a 723-patient clinical trial, whose results should be released by this fall. On top of this, enrollment in a 1,300-patient clinical trial is underway, a process Webb said he expects will be completed by the 2012 third quarter.
"We believe we have one of the biggest and robust development programs for lung cancer diagnostics that has ever been conducted," said Webb, who was scheduled to field a company presentation June 20 at the BIO business forum.
Webb said Allegro's likely approval path is also drawing investor attention. Plans call for seeking a CLIA (Clinical Laboratory Improvement Act) approval, which diagnostics companies can use instead of the FDA approval pathway, assuming their diagnostic product also has its own testing services. Importantly, Webb said, CLIA is faster and more efficient than the FDA pathway, but the trial size demands are about the same. Founded in 2006, Maynard, MA-based Allegro has previously raised $9.6 million in Series A venture funding, and $3.1 million in competitive R&D grant funding, according to the company's website.
Webb describes Allegro's diagnostic as a test that can used after an initial bronchoscopy on its own is unsuccessful or inconclusive. After taking cytologically normal tissue from the upper airway, the test is used to conduct a genetic profile that can help diagnose lung cancer that the ordinary, less precise procedure often misses. More than 300,000 bronchoscopies are performed annually in the U.S. alone, with about half coming up with an inconclusive diagnosis, he said.