Exosome Diagnostics has $27M to become a 'pillar of personalized medicine' in 2014

Exosome Diagnostics is announcing Tuesday morning it has raised $27 million and will go to market this year with its first fluid-based diagnostic test, a noninvasive urine sample designed to detect prostate cancer without a biopsy.

Qiagen ($QGEN) and Arcus Ventures led the Series B round. NGN Capital and Forbion Capital Partners, who led Exosome's $20 million Series A back in 2010, returned to participate.

The exosomes for which New York-based Exosome Diagnostics is named are a type of vesicle, a small bubble within a cell. When they are released from cells, they contain full-length nucleic acids.

"They were originally thought to be the cellular garbage bin, but what we discovered is these things contain nucleic acids which are transferred from cell to cell as well as being disposed of," CEO James McCullough said in an interview. Exosome has identified those nucleic acids as "a new source of disease-specific material" in the body's fluids, he said.

This NIH video explains how exosomal RNA (exRNA) works.

Diagnosing diseases in fluids removes the potential location bias of a biopsy. It's also easier than a biopsy, enabling frequent tests--what McCullough calls "a continuous flow of information" over time.That supports personalized medicine's goal of treating a disease uniquely in each patient.

"The ability to move into the fluid and out of the tissue is one of the pillars of future personalized medicine," McCullough said.

Other companies are working on being that pillar. Chronix had some preclinical data to show last fall for its cell-free DNA cancer test. Janssen's CellSearch ($JNJ) has a circulating tumor cell test that may accomplish the same goal.

"A lot of these technologies are complementary," McCullough said. "The nucleic acid content of the exosome will prove to be unique and valuable. I think we need to take a holistic approach."

Exosome's partners so far include Qiagen, Mount Sinai Medical Center and the Michael J. Fox Foundation. Exosome has been tied up with Qiagen since 2013, and the two companies have two joint initiatives. The first is a push to develop and commercialize co-branded kits designed to grab and process RNA and DNA from blood, urine or cerebrospinal fluid without the need for a tissue biopsy. In January, the two announced that effort will develop noninvasive molecular in vitro diagnostics to detect lung cancer and other malignancies.

Launched in 2008, Exosome had 25 employees as of last August. The number is about the same today, McCullough said, with plans to hire about 15 to 20 more this year. He said he wouldn't discuss the company's valuation in the new round. Exosome has raised over $53 million in all, including a small round it reported in February 2012, that reached $6.5 million by last June.

McCullough said the company is now looking to add partners--especially those that have disease-specific specialties. He acknowledged that, a pure-play company, Exosome might be a target for acquisition by a larger firm. "Will we be a standalone company in three, four or 5 years? I don't know," he said. "We're certainly open to different strategic pathways."

- read the Exosome press release

Suggested Articles

Johnson & Johnson Vision announced that the worldwide president of its surgical business, Tom Frinzi, plans to retire at the end of this year.

Philips looked back on 15 years of data from one of its telehealth-equipped intensive care units, where centralizing operations reduced mortality.

Sanofi will look to pull back from its three-year-old relationship with Verily and their virtual diabetes clinic, Onduo.