Dan Rhodes
Ann Arbor-based cancer testing and sequencing company Strata Oncology Inc. has closed on the largest funding round for a biotech company in the state’s history, pushing it closer to a likely initial public offering.
Strata on Wednesday announced a $90 million Series C funding round, likely the last round of private financing the company will raise, according to co-founder and CEO Dan Rhodes.
The Series C round comes in ahead of the $77 million Series D round for Kalamazoo-based Ablative Solutions in 2019, but lags behind two larger rounds for Detroit-based e-commerce company StockX LLC, according to data provided to Crain’s by EntryPoint, an Ann Arbor-based entrepreneurial research nonprofit.
Rhodes, in an interview Wednesday morning with Crain’s, said the funding will be used in a two-fold manner: to take the company’s current cancer testing technology to market, while also allowing the company to undertake new product development.
The company’s research aims to better identify biomarkers, or general indicators, of whether someone may or may not have cancer.
Taken together, the Series C financing allows Strata Oncology “to really take take a big step in this field of cancer genomic testing and to step into market leader status,” Rhodes said. “That’s our goal.”
A valuation for the company was not disclosed, nor was a revenue figure, but this newest round of capital brings Strata’s total funding to more than $130 million, according to a news release.
Strata Oncology employs about 85 people, with about half in the Ann Arbor area, but plans to grow to around 200 over the next year or so, according to Rhodes.
The Series C round was led by investment firm Wellington Management Co. LLP out of Boston and other new investors included Monashee Investment Management and Highside Capital Management, according to the release.
Existing investors who participated in the round included Pfizer Ventures, Merck Global Health Innovation Fund, Deerfield Management, Baird Capital, as well as Renaissance Venture Capital Fund and Arboretum Ventures, both based in Ann Arbor.
The involvement of a large investment firm like Wellington — which declined comment for this report — with upward of a $1 trillion in assets under management, speaks to the appetite for investors that may typically operate in public markets willing to get into “crossover” deals for pre-IPO companies like Strata, according to Rhodes. The CEO said he envisions the company going public, likely through a traditional public offering, by late 2022 or early 2023.
“Companies with disruptive technology and very large market opportunities, I think, are winning the attention of investors,” Rhodes said.
Strata Oncololgy earlier this year announced it had partnered with pharma giant Pfizer Inc. out of New York City to roll out the PATH trial, or Precision Indications for Approved Therapies. Terms of the deal were not disclosed, but plans call for the companies to study how existing cancer drugs can be used to better treat patients.
The Pfizer partnership is just getting underway, said Rhodes, who added that Strata will have another pharmaceutical partnership to announce in the coming weeks.
Source link : https://www.modernhealthcare.com/finance/ann-arbor-based-cancer-testing-company-strata-oncology-sets-state-record-biotech-capital
