PathAI branches into clinical lab services with acquisition of Poplar Healthcare

The pathway between testing for cancer and other diseases and reaching a diagnosis just got a lot shorter.

With its recent acquisition of Poplar Healthcare Management, the management service organization for lab services provider Poplar Healthcare, PathAI will be able to integrate testing services into its existing artificial intelligence-powered pathology platform.

Poplar offers specialized testing services in a range of areas, from oncology to women’s health to dermatology. In 2020, amid the onset of the COVID-19 pandemic in the U.S., the lab developed its own diagnostic test for the virus and became the first to receive emergency authorization from the FDA to conduct pooled testing of up to 20 nasal swab samples at once.

Through the deal, Poplar’s existing staff—including its management team and 350 employees—and facilities will remain based in Memphis, where they’ll serve as PathAI’s diagnostics division.

Financial terms of the acquisition weren’t disclosed, but an unnamed source close to the deal told the Boston Globe it tallied in the eight-figure range.

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“Our mission at PathAI is to improve patient outcomes with AI-powered pathology, and the investment in Poplar allows us to advance that mission by enhancing our ability to provide pathologists with PathAI diagnostic products to support patient care,” said Andy Beck, co-founder and CEO of PathAI.

Beyond merely adding Poplar’s diagnostic testing to PathAI’s platform, the pair will also deploy the latter’s AI technology to digitize Poplar’s lab workflows. They’ll also develop new AI software and algorithms to expand Poplar’s analytical capabilities, all in an effort to help pathologists speed up the time between ordering a test and making a diagnosis.

So far, PathAI’s platform has been used by biopharma researchers, diagnostic developers and digital pathology companies to improve both diagnosis and treatment of cancer and nonalcoholic steatohepatitis, or NASH.

The system analyzes tissue samples using machine learning and deep learning to identify biomarkers specific to those diseases and predict drug reactions. Pathologists can then use that information not only to make a diagnosis but also to develop a treatment regimen that will be most effective for each patient.

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PathAI’s expansion into clinical diagnostics comes amid a period of rapid growth for the Boston-based startup.

Earlier this year, it closed a $165 million series C funding round co-led by D1 Capital Partners and Kaiser Permanente, with additional support from Bristol Myers Squibb, Merck’s Global Health Innovation Fund and Labcorp. The last of these also expanded an existing partnership with PathAI in March to improve its drug development efforts and begin building companion diagnostic devices for those drugs.

And just last month, PathAI recruited pathologist and Roche Tissue Diagnostics alum Eric Walk to serve as its chief medical officer. Walk was tapped to take charge of the company’s broad slate of clinical development work, overseeing its clinical, regulatory, medical affairs and pathology teams.