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Medical diagnostics startup T2 Biosystems Inc. — which boasts a star-studded cast of entrepreneurs and investors — has secured a $10.8 million second round of venture capital and has named industry veteran Stanley Lapidus to its board.
T2 is in the “superparamagnetic nanoparticle-based biosensor” business — which means it is making a device akin to the “tricorder” from the TV show Star Trek, a point-of-care diagnostic testing tool that can detect several types of biologically relevant agents in the body.
The device — now the size of a bread box — is called the NanoDx System and uses nanoparticles, a bit of iron and magnetism to identify specific substances in minutes. T2’s bioengineers are hoping to get the device small enough to be a handheld, portable tool that can used by just about anyone — from first responders, to battlefield medics to perhaps consumers.
“What took my breath away was simply the novelty of it. It substitutes physical measurements for chemical ones, and what that translates to is way ‘faster, cheaper, better’ — where speed or portability is essential,” said Lapidus, who founded life sciences technology firms Cytyc Corp., Helicos BioSciences Inc. and Exact Sciences Inc.
Lapidus called the technology a “possible game changer” in the testing space.
Polaris Venture Partners and Flagship Ventures came back to the table for this second financing after investing $5.5 million in T2 Biosystems’ Series A round in 2006. The new round also included investors Flybridge Capital Partners, Partners Healthcare Inc. and CIA venture arm In-Q-Tel.
T2 Biosystems’ list of founders includes MIT’s Robert Langer; Tyler Jacks, director of MIT’s Center for Cancer Research; MIT engineering professor Michael Cima; David Lee, founder and CEO of Caveo Technology LLC; Massachusetts General Hospital’s Center for Molecular Imaging Research associate professor Lee Josephson, and its director Ralph Weissleder.
But even with such an experienced team, T2 Biosciences will have to cater to a narrow niche in a field that includes lab testing giant Quest Diagnostics Inc., said Benjamin Conway, founder and managing director at Boston investment bank Johnston Blakely & Co.
“The issue they are going to face, at least upfront, is finding a space where there is a critical ‘need for speed’ — not just convenience. And what price will people be willing to pay for that,” Conway said.
Entrenched firms like Laboratory Corporation of America Inc. or Quest can offer discounts to hospitals and doctor’s offices because of the size of their operation, and such economies of scale can hurt young startups, Conway added.
Still, T2’s technology is both sexy and deceptively simple. Normally, tests using blood, urine or other bodily fluids are analyzed in an offsite laboratory, which can take days. In T2’s case, iron particles are woven into nanomaterial, then attached to standard diagnostic agents like an antibody or other biomarker. The sample is placed into disposable cartridges about the size of a key. Insert the cartridge, and the device uses a tiny magnetic resonance component to measure the movement of the hitchhiking iron-attached biomarker.
“If you look at the tests being run in a physician’s office today, we are really back in the ’70s relative to, say, personal computers. I see our instrument as being today’s personal computer in the doctor’s office,” said John McDonough, CEO of T2.
Simon Burnell, head of diagnostics at Cambridge Consultants said issues with testing precision, instrument calibration and outside interference — from cell phones for instance — might pose challenges for T2 early on. However, he said, ultimately what the company is going to offer is the potential to work on “whole blood samples.”
“The fact that they’ve removed any sort of separation or pretreatment to the samples makes this very attractive. It has always been the Holy Grail of assay development to have all the reagents at one point,” Burnell said.
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