March 25, 2011 source: VentureWire by Timothy Hay
AssureRx Health Inc. has raised an $11 million series b round from Sequoia Capital and Claremont Creek Ventures for its testing system that helps psychiatric patients find the most compatible medications, according to an investor.
“This could be one of the biggest diagnostic companies of the decade, in my estimation,” said John Steuart, a Claremont Creek co-founder and managing director who takes a board seat at the Mason, Ohio-based company as a result of the round. “They just need to execute.”
Jim Burns, AssureRx's chief executive, said the company previously raised about $7.5 million in equity in several funding events from Allos Ventures and individual investors. The company rolled these up into a Series A round, but it considers the Series B its first actual, institutional round. Undisclosed existing investors took part in the new round.
Burns said AssureRx is the first company to bring recent advancements in genetic testing to the psychiatric field.
As scientists have become more adept at mapping human genetic code, doctors in various fields have gotten a clearer picture of whether certain medications will help–or hurt–certain patients.
Oncologists and cardiologists, for example, often test patients' genes to make sure a heart or cancer patient can tolerate a certain kind of medication. In cardiology and oncology, prescribing a medicine that a patient can't tolerate can be a costly and dangerous error.
But genetic testing of this kind hasn't yet reached psychiatry, Claremont's Steuart said.
“Psychiatry is unlike every other branch of medicine,” he said. “In psychiatry, you talk to the patient. It can be hit or miss. This is the second-most-expensive class of drugs, after oncology drugs, and a lot of them end up going in the trash can.”
At the same time, psychiatric patients needing help often go without medication that would aid them, or suffer side effects from taking pills that don't, Steuart said.
AssureRx is using diagnostic technology from the Mayo Clinic and the Children's Hospital of Cincinnati, CEO Burns said, and the company sells its service to both institutions.
The company expects to reach profitability next year, he added.
Doctors using the system simply swab a patient's cheek and send the swab to AssureRx, Burns said. The company runs the result of the swab through its software algorithm, where the patient's genetic makeup is compared to some 26 commonly prescribed drugs for anxiety, depression, ADHD and other conditions. The company comes up with a sort of ranking system for which drugs will and won't work for a given patient, Burns said.
AssureRx has 17 employees. Burns declined to give a valuation for the company.