Ann Arbor, MI-based precision medicine startup Strata Oncology announced last week that it has raised a $12 million Series A round. Arboretum Ventures and Baird Capital led the financing, with participation from Michigan eLab, a returning investor.
Strata is on a mission to make tumor sequencing for cancer patients more accessible. As personalized genetic therapies to treat cancer advance and increasingly make their way into the clinic, Strata CEO Dan Rhodes said the challenge is finding the appropriate patients to treat.
“Today, tumor sequencing is generally not reimbursed by insurance carriers, so most U.S. patients don’t do it,” he explained. “They don’t know if they’re eligible for clinical trials of precision medicine. From pharma’s perspective, we need to identify patients to enroll in clinical trials and if it takes too long, it affects the medicine getting to market. This is an opportunity to really accelerate precision medicine.”
The company’s goal is to recruit 100,000 advanced cancer patients and offer them free tumor sequencing, which will determine if they have genetic mutations that can be treated with precision medicine. If they meet the criteria, Strata will act as a middle man of sorts, connecting eligible patients with the pharmaceutical companies that are developing precision medicine-based treatments.
To tackle this nationwide undertaking, Strata has entered into a collaborative partnership with Thermo Fisher Scientific, a global service provider that “accelerates life sciences research, solves complex analytical challenges, improves patient diagnostics, and increases laboratory productivity,” according to the company’s website. Thermo Fisher will serve as Strata’s technology provider, contributing next-generation sequencing systems and assays. To offset the cost of free tumor sequencing, pharmaceutical customers will pay Strata once a patient is successfully matched to a clinical trial.
Rhodes said part of the $12 million investment will go toward getting Strata’s lab up and running by the end of the year. “We’ll have the capacity to sequence 50,000 patient tumors in a year,” he said. “It will make us one of the highest-capacity sequencers in the world.”
Rhodes, who led Compendia Bioscience, a cancer genomics company that was acquired by Life Technologies in 2012, co-founded the 15-person Strata Oncology team in 2015 with Keith Flaherty, an oncologist from Harvard medical school and Massachusetts General Hospital, and pathologist Scott Tomlins from the University of Michigan medical school. Rhodes described Flaherty as an expert in precision oncology clinical trials who served as a principal investigator for the National Cancer Institute’s Match program, and said Tomlins is a “prominent thought leader” in tumor sequencing and molecular pathology.
Nicole Walker, a principal at Baird Capital, said the strength of Strata’s founding team is one reason her firm chose to invest. Baird, she said, is also interested in startups working to help increase efficiency in the process of bringing drugs to market.
“The pharmaceutical industry is under a lot of pressure to bring new drugs to market faster,” she added. “Strata’s service is a really interesting way to solve the problem. Strata manages the workflow, gets the patients screened, and finds the proper clinical trial. The Strata team knows the problem [of getting drugs to market quickly] from the science perspective, but they also have patient management skills.”
Baird is not disclosing the specific amount of its investment in Strata, Walker said. As part of the deal, Walker, Arboretum’s Jan Garfinkle, and Jeff Williams, founder and CEO of NeuMoDx Molecular, will join Strata’s board.